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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0000716314-05-000008.txt : 20050309
<SEC-HEADER>0000716314-05-000008.hdr.sgml : 20050309
<ACCEPTANCE-DATETIME>20050309084457
ACCESSION NUMBER:		0000716314-05-000008
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20050303
ITEM INFORMATION:		Entry into a Material Definitive Agreement
FILED AS OF DATE:		20050309
DATE AS OF CHANGE:		20050309

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			GRAHAM CORP
		CENTRAL INDEX KEY:			0000716314
		STANDARD INDUSTRIAL CLASSIFICATION:	GENERAL INDUSTRIAL MACHINERY & EQUIPMENT [3560]
		IRS NUMBER:				161194720
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0331

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-08462
		FILM NUMBER:		05668129

	BUSINESS ADDRESS:	
		STREET 1:		20 FLORENCE AVE
		STREET 2:		POST OFFICE BOX 719
		CITY:			BATAVIA
		STATE:			NY
		ZIP:			14020
		BUSINESS PHONE:		5853432216

	MAIL ADDRESS:	
		STREET 1:		20 FLORENCE AVENUE
		STREET 2:		POST OFFICE BOX 719
		CITY:			BATAVIA
		STATE:			NY
		ZIP:			14021-0719
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>fm8kb305.txt
<DESCRIPTION>FORM 8-K
<TEXT>


                           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):  March 3, 2005

                        GRAHAM CORPORATION
        (exact name of registrant as specified in Charter)


Delaware              1-8462                      16-1194720
- --------              ------                      ----------
(State  or other      (Commission File Number)    (IRS Employer
jurisdiction                                      Identification Number)
of Incorporation)



            20 Florence Avenue, Batavia, New York 14020
            -------------------------------------------
             (Address of principal executive offices)

Registrant's 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  (see  General
Instruction A.2. below):

      Written  communications  pursuant  to  Rule  425  under  the
 --   Securities Act (17 CFR 230.425)

      Soliciting  material  pursuant  to  Rule  14a-12  under  the
 --    Exchange Act (17 CFR 240.14a-12)

      Pre-commencement communications pursuant to Rule  14d-2(b)
 --   under the Exchange Act (17 CFR 240.14d-2(b))

      Pre-commencement communications pursuant to Rule  13e-4(c)
 --   under the Exchange Act (17 CFR 240.13e-4(c))






<Page>2
     Item  1.01.      Entry Into A Material Definitive Agreement
                      ------------------------------------------

     (1)  On March 3, 2005 the Compensation Committee of Graham
     Corporation's Board of Directors and the Board of Directors
     approved increased annual base salary for three of the
     Company's named executive officers, as follows:

<Table>
<Caption>
     <S>                                               <C>
     Officer and Title                                 Salary
     -----------------                                 ------
     J. Ronald Hansen                                  $165,000
     Vice President - Finance and Administration
     and Chief Financial Officer

     James R. Lines                                    $163,000
     Vice President and General Manager - Batavia

     Stephen P. Northrup                               $155,125
     Vice President and Chief Technology Officer
</Table>

     (2)  On March 3, 2005 the Compensation Committee of Graham
     Corporation's Board of Directors and the Board of Directors
     amended the Graham Corporation Outside Directors' Long Term
     Incentive Plan ("Plan").   The Plan credits Outside
     Directors, defined as Directors who are not employees of the
     Company, with Share Equivalent Units ("SEUs") for five fiscal
     years during the term of such a director's service, subject
     to the Company's attainment of certain performance
     objectives.  Upon termination of an Outside Director's
     service, the Director may redeem each SEU for 1 share of
     Graham Corporation common stock or, alternatively and subject
     to the discretion of the Company, for the cash equivalent at
     the closing price of the stock on the American Stock Exchange
     on the date of termination of service, subject to certain
     limitations.

          Amendments approved on March 3, 2005:  (a) change the
     event triggering a grant of SEUs from attaining $500,000 in
     consolidated net income for the fiscal year to attaining
     budgeted consolidated net income for the fiscal year; and (b)
     provide that the cash redemption value of each SEU upon
     termination of service shall be the closing market price on
     the date of termination of service, subject to a limitation
     to the greater of either (i) the closing market price on the
     date the SEU was granted, or (ii) sixteen dollars ($16.00)
     per SEU.

          A copy of the amended Plan is filed herewith as Exhibit
     10.1.






<PAGE>3

     (c)   Exhibits
<Table>
<Caption>
     <S>                      <C>
     Exhibit Number           Description of Exhibits
     --------------           -----------------------

     10.1                     Graham Corporation Outside Directors' Long
                              Term Incentive Plan
</Table>



                            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 thereunto duly authorized.

                                   GRAHAM CORPORATION
                                   (Registrant)



Date:  March 8, 2005            By /s/ J. Ronald Hansen
                                   __________________________
                                   J. Ronald Hansen
                                   Vice President - Finance
                                   & Administration and
                                   Chief Financial Officer




























<Page>4

                              EXHIBIT INDEX
<Table>
<Caption>
     <S>                      <C>
     Exhibit Number           Description of Exhibits
     --------------           -----------------------

     10.1                     Graham Corporation Outside Directors' Long
                              Term Incentive Plan

</Table>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>2
<FILENAME>ex10-1fm8kb305.txt
<DESCRIPTION>EXHIBIT 10.1
<TEXT>
                                                        EXHIBIT 10.1

                      GRAHAM CORPORATION

                       OUTSIDE DIRECTORS'

                    LONG TERM INCENTIVE PLAN

                        Revised 10/31/02
                           and 3/3/05


1.   Share  Equivalent  Units ("SEUs") will be credited  to  each
     outside director's "LTIP Account" for each of the first five
     fiscal   years   in   which  Graham   Corporation   produces
     consolidated net income in an amount at least equal  to  the
     consolidated  net  income specified in the Company's  budget
     for  each  such fiscal year during each outside   director's
     service.   For purposes of this Plan, an "Outside  Director"
     is  a member of the Company's Board of Directors who is  not
     also an employee of the Company.

2.   For  purposes of the determining the number of  SEUs  to  be
     credited pursuant to Paragraph 3 hereof, the value  of  each
     SEU  will  be  the market value of 1 share of Graham  Common
     Stock  on  the  last  day of trading on the  American  Stock
     Exchange  of the first quarter following a fiscal  year  for
     which  SEUs  are to be credited ("Valuation Date"  and  such
     price the "Valuation Date Price").

3.   The  number  of  SEUs to be credited will be  determined  by
     dividing  the  value  of  1 SEU as  determined  pursuant  to
     Paragraph 2 above into 10,000.

          Example:  Stock  at $10.00 on Valuation Date.
                    Number  of  SEUs = 10,000 / 10  = 1,000.

4.   Upon  termination of a Director's service on the Board,  but
     not  before,  SEUs  will be  redeemable for  either:  (a)  a
     commensurate number of shares of Graham Common Stock; or (b)
     subject  to  the prior written consent of Graham Corporation
     acting  in  its sole discretion, cash in the amount  of  the
     Cash  Redemption  Value,  as  hereinafter  defined,  of  the
     director's  SEUs.   The Cash Redemption Value  of  each  SEU
     shall  be the market value of 1 share of Graham Common Stock
     at  the closing price on the American Stock Exchange on  the
     date of termination of service; provided, however, that  the
     cash value for each SEU shall not exceed the greater of  (a)
     the  Valuation  Date Price; or (b) sixteen dollars  ($16.00)
     per share.  A Director may elect to take shares (or cash, if
     consented to by Graham Corporation) at once or to  defer  it
     over a period not to exceed 10 years.  The lump sum, or  the
     first  installment if deferred, must be paid within 30  days
     of termination of service on the Board.

     (Tax  considerations require lump sum payout to  occur,  and
     deferred  payout  period  to  begin,  within  30   days   of
     termination of service.)


<Page>2

5.   The  number  of SEUs credited to each LTIP Account  will  be
     adjusted pro rata in the event of any split in the Company's
     Common Stock.

6.   Each  outside  Director's  LTIP  Account  will  be  credited
     annually  for  dividends paid on the Company's Common  Stock
     during each fiscal year.  Dividend credit will be determined
     for  each  LTIP  Account by (a) multiplying  the  cumulative
     dividend for the fiscal year by the number of SEUs  held  in
     the  account  on the last day of the fiscal  year;  and  (b)
     dividing  the  value of 1 SEU as of the Valuation  Date,  as
     determined in accordance with paragraph 2 hereof,  into  the
     product of (a).

          Example:  Dividend  of  $.05/share  paid  for
                    each   quarter   of  fiscal   year.
                    Director holds 3,000 SEUs  on  last
                    day  of  fiscal  year.   Stock   at
                    $10.00 on Valuation Date.

                    (a)  3,000 x .20 = 600
                    (b)  Number of SEUs = 600 / 10 = 60

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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