EXHIBIT 10.28
 
GRAHAM CORPORATION
 
ANNUAL EXECUTIVE CASH BONUS PLAN
 
(As Amended and Restated Effective March 12, 2009.)
 
Summary
 
The objective of this Annual Executive Cash Bonus Plan (the “Plan”) is to
compensate the Chief Executive Officer and his direct reports for above-average
performance through annual bonuses related to both Company and individual
performance.
 
Eligibility and Participation
 

  1.  Eligible employees shall include the Chief Executive Officer and his
direct reports. “Direct reports” means (a) the Vice President, Finance and
Administration and Chief Financial Officer, (b) the Vice President of
Operations, (c) the Chief Accounting Officer and (d) such other employees of the
Company selected by the Chief Executive Officer to participate in this plan,
subject to the approval by the Compensation Committee of such participation.    
2.  Target participation levels shall be established by the Compensation
Committee before the start of each fiscal year.     3.  Newly hired or promoted
employees are eligible for participation in the Plan upon employment unless
otherwise determined by the Chief Executive Officer for direct reports and by
the Compensation Committee in the case of the Chief Executive Officer.     4. 
Participants who resign before the end of the fiscal year shall receive no bonus
except as approved by the Compensation Committee, in its sole discretion.

 
Establishment and Level of Goals
 

  1.  Financial goals shall be set during the annual budgeting process and shall
be approved by the Board of Directors along with the annual budget.     2. 
Individual goals shall be set on or before the annual budget. The Chairman shall
approve individual goals for the Chief Executive Officer. The Chief Executive
Officer shall approve individual goals for direct reports. The Chairman or Chief
Executive Officer, as applicable, shall determine the number and weighting of
goals.

 
Payment Calculation
 
At the end of each fiscal year, the Compensation Committee shall determine the
extent to which the applicable financial goals and individual goals have been
satisfied and the corresponding goal payout factors. The Compensation Committee
shall then determine each Participant’s preliminary payout value, which shall be
the Participant’s Target Participation Level multiplied by the product of each
performance goal’s weighting times its payout factor. The Compensation Committee
may then adjust each Participant’s preliminary payout value, either upwards or
downwards, in the Compensation Committee’s sole discretion, to determine each
Participant’s final payout value.
 
The final payout values, as determined by the Compensation Committee, will be
paid to Participant’s as soon as practicable after the end of the fiscal year,
but in no event later than 75 days immediately following the end of the fiscal
year.

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Other Considerations
 

  1.  Participants who change position during the fiscal year shall receive
bonus on a pro rated basis.     2.  Special awards may be made to any executive
or employee who has made an extra ordinary contribution to the Company during
the year. Such awards must be recommended in writing by the Chief Executive
Officer to the Chairman of the Compensation Committee and may be approved by the
Compensation Committee.     3.  Extraordinary events that either positively or
negatively affect financial performance may be included or excluded in financial
calculations at the discretion of the Compensation Committee.     4.  Nothing
herein shall be construed to limit or affect the normal and usual powers of
management, including right to terminate any individual at any time.     5.  The
Compensation Committee shall have final and conclusive authority on the
existence and administration of this plan.     6.  In the event of death, a
Participant’s designated beneficiary will be entitled to the Participant’s plan
benefits. If the Participant has not designated a beneficiary, the Participant’s
beneficiary or beneficiaries will be determined in accordance with the
Participant’s will. If there is no will, the beneficiary or beneficiaries shall
be determined by the laws of descent and distribution in the state in which the
Participant was a resident at the time of death.

 
ANNUAL EXECUTIVE CASH BONUS PLAN
 
2010 FISCAL YEAR TERMS
 
Target Participation Levels
 

         
Position
  % Base Pay    
President and Chief Executive Officer
    60 %
Vice President, Finance and Administration and Chief Financial Officer
    35 %
Vice President of Operations
    35 %
Chief Accounting Officer
    25 %

 
Goal Weightings
 

                              Net
    Working
    Personal
 
Position
  Income     Capital%     Goals    
President and Chief Executive Officer
    70 %     20 %     10 %
Vice President, Finance and Administration and Chief Financial Officer
    60 %     15 %     25 %
Vice President of Operations
    60 %     15 %     25 %
Chief Accounting Officer
    55 %     15 %     30 %

 
Average Working Capital% is defined as gross inventory plus gross trade accounts
receivable minus trade payables divided by sales. The working capital
calculation for bonus purposes shall be the average of the end of each fiscal
month divided by full fiscal year sales.
 
Net Income shall be based upon year-end results.
 
Currency exchange rates will be calculated monthly at a fixed rate to eliminate
currency fluctuations from incentive calculations.