Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Base Salary Adjustments
On March 16, 2021, the Compensation Committee (the “Compensation Committee”) of the Board of Directors (the “Board”) of Graham Corporation (the “Company”) approved a 3% increase to the base salaries of certain of the Company’s “named executive officers,” including Jeffrey F. Glajch, the Company’s Vice President - Finance & Administration and Chief Financial Officer, and Alan E. Smith, the Company’s Vice President and General Manager - Batavia, resulting in base salaries of $334,750 and $265,287, respectively.
Second Amendment to Mr. Glajch’s Employment Agreement
On March 16, 2021, the Company and Mr. Glajch entered into the Second Amendment (the “Amendment”) to the Amended and Restated Employment Agreement, dated as of July 29, 2010, as amended on September 12, 2019 (as so amended, the “Employment Agreement”). The Amendment provides that, in the event of a termination of Mr. Glajch’s employment with the Company within two years after a Change in Control, the Company will pay to Mr. Glajch a lump sum (subject to any applicable payroll or other taxes required to be withheld) in an amount equal to 2.5 multiplied by the sum of (i) Mr. Glajch’s salary at the rate in effect at the time of the termination of employment and (ii) the target amount of Mr. Glajch’s bonus under the Company’s Annual Executive Cash Bonus Plan (or successor plan thereto in effect at the time of the termination of employment) for the fiscal year that includes the date of the termination of employment.
The Amendment also provides that the Company will provide continuation of Mr. Glajch’s health and medical coverage pursuant to the Employment Agreement for a period of 18 months following a termination of Mr. Glajch’s employment with the Company within two years after a Change in Control.
“Change in Control,” as used in this Current Report on Form 8-K (the “Report”) and as defined in the Amendment, means: (i) certain corporate transactions that result in a change in the majority ownership of the Company; (ii) the acquisition of more than 25% of the voting shares of the Company by any person or persons acting in concert; (iii) the acquisition of substantially all of the assets of the Company by any person or persons acting in concert; or (iv) 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: (A) individuals who were members of the Board on August 11, 2020 or (B) individuals who first became members of the Board after August 11, 2020 either (1) upon election to serve as a member of the Board by the 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 (2) upon election by the stockholders of the Company 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. No other materials amendments were made to the Employment Agreement.
