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<SEC-DOCUMENT>0000950152-08-005377.txt : 20080714
<SEC-HEADER>0000950152-08-005377.hdr.sgml : 20080714
<ACCEPTANCE-DATETIME>20080714163317
ACCESSION NUMBER:		0000950152-08-005377
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20080709
ITEM INFORMATION:		Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20080714
DATE AS OF CHANGE:		20080714

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:		08951044

	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>l32448ae8vk.htm
<DESCRIPTION>GRAHAM CORPORATION    8-K
<TEXT>
<HTML>
<HEAD>
<TITLE>Graham Corporation    8-K</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>




<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>WASHINGTON, D.C. 20549</B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>FORM 8-K</B>
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B>CURRENT REPORT<BR>
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Date of Report (Date of earliest event reported): </B><u><B>July&nbsp;9, 2008</B></U></DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>Graham Corporation</B>
</DIV>

<DIV align="center"><DIV style="font-size: 1pt; margin-top: 1pt; width: 38%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

<DIV align="center" style="font-size: 10pt">(Exact name of Registrant as specified in its charter)</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>Delaware</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>1-8462</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>16-1194720</B></TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="5" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">(State or other jurisdiction of
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(Commission
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(IRS Employer</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">incorporation)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">File Number)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Identification No.)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>20 Florence Avenue, Batavia, New York</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>14020</B></TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">(Address of principal executive offices)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(Zip Code)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt">Registrant&#146;s telephone number, including area code: <U><B>(585)&nbsp;343-2216</B></U></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>N/A</B></DIV>

<DIV align="center"><DIV style="font-size: 3pt; margin-top: 1pt; width: 100%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

<DIV align="center" style="font-size: 10pt">(Former name or former address, if changed since last report)</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">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:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><FONT face="Wingdings">&#111;</FONT>&nbsp;&nbsp;Written communications pursuant to Rule&nbsp;425 under the Securities Act (17 CFR 230.425)
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><FONT face="Wingdings">&#111;</FONT>&nbsp;&nbsp;Soliciting material pursuant to Rule&nbsp;14a-12 under the Exchange Act (17 CFR 240.14a-12)
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><FONT face="Wingdings">&#111;</FONT>&nbsp;&nbsp;Pre-commencement communications pursuant to Rule&nbsp;14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><FONT face="Wingdings">&#111;</FONT>&nbsp;&nbsp;Pre-commencement communications pursuant to Rule&nbsp;13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
</DIV>


<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>





<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<P><HR noshade><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<!-- TOC -->
<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000">Item&nbsp;5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers</A></TD></TR>
<TR><TD colspan="9"><A HREF="#001">Item&nbsp;9.01. Financial Statements and Exhibits</A></TD></TR>
<TR><TD colspan="9"><A HREF="#002">SIGNATURES</A></TD></TR>
<TR><TD colspan="9"><A HREF="l32448aexv99w1.htm">EX-99.1</A></TD></TR>
</TABLE>
</CENTER>
<!-- /TOC -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>








<!-- link1 "Item&nbsp;5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers" -->
<DIV align="left"><A NAME="000"></A></DIV>

<DIV align="left" style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>Item&nbsp;5.02.</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers.</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On June&nbsp;27, 2008, J. Ronald Hansen announced his retirement from Graham Corporation
(&#147;Graham&#148;), effective August&nbsp;1, 2008. Mr.&nbsp;Hansen will continue to be engaged by Graham in a
consulting capacity from August&nbsp;1, 2008 through January&nbsp;31, 2009 pursuant to a Professional
Consulting Agreement (the &#147;Agreement&#148;) dated July&nbsp;9, 2008. Under the Agreement, Mr.&nbsp;Hansen will
provide Graham with up to 104 hours of consulting services a month for a monthly consulting fee of
$13,520. Pursuant to the Agreement, Mr.&nbsp;Hansen will also: (i)&nbsp;be reimbursed for out-of pocket
expenses incurred by him during the term of the Agreement; (ii)&nbsp;receive 4/12 of the cash bonus he
would have been eligible to receive had he remained employed with Graham on a full-time basis
through March&nbsp;31, 2009; and (iii)&nbsp;be reimbursed for his COBRA premiums and covered under Graham&#146;s
self-insured dental plan during the term of the Agreement. The Agreement contains such other terms
and provisions, including but not limited to provisions related to non-competition, non-disclosure
and confidentiality, as are customarily found in similar agreements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A copy of the Agreement is attached to this Current Report on Form 8-K as Exhibit&nbsp;99.1.
</DIV>
<!-- link1 "Item&nbsp;9.01. Financial Statements and Exhibits" -->
<DIV align="left"><A NAME="001"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;9.01. Financial Statements and Exhibits.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;Exhibits.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="12%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="85%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Exhibit No.</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Description</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">99.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Professional Consulting Agreement dated July&nbsp;9, 2008 between
Graham Corporation and J. Ronald Hansen.</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<!-- link1 "SIGNATURES" -->
<DIV align="left"><A NAME="002"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SIGNATURES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>Graham Corporation</B><BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">Date:  July 14, 2008&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;&nbsp; /s/ James R. Lines
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">&nbsp;&nbsp;James R. Lines</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">&nbsp;&nbsp;President and<br>
&nbsp;&nbsp;Chief Executive Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>




</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>l32448aexv99w1.htm
<DESCRIPTION>EX-99.1
<TEXT>
<HTML>
<HEAD>
<TITLE>EX-99.1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit&nbsp;99.1
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PROFESSIONAL CONSULTING AGREEMENT</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The parties to this Professional Consulting Agreement (this &#147;Agreement&#148;) are <FONT style="font-variant: SMALL-CAPS"><B>GRAHAM
Corporation</B></FONT>, a Delaware corporation with offices at 20 Florence Avenue, Batavia, New York
14020 (the &#147;Company&#148;), and <FONT style="font-variant: SMALL-CAPS"><B>J. Ronald Hansen</B></FONT>, an individual residing at 9295 Fargo Road,
Stafford, New York 14143 (the &#147;Consultant&#148;). This Agreement is made and executed as of the 2d day
of July, 2008.
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>RECITALS</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;The Company is engaged in the business of designing and building vacuum and heat transfer
equipment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.&nbsp;The Consultant is a highly experienced financial and human resources executive with
significant knowledge and experience directly relating to the business of the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.&nbsp;The Company desires to engage the Consultant, and the Consultant desires to accept such
engagement, upon the terms and conditions set forth below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In consideration of these recitals and the mutual covenants and agreements contained in this
Agreement, the Company and the Consultant agree as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>1.&nbsp;</B><U><B>Engagement</B></U>. The Company hereby engages the Consultant to provide such consulting
services as the Company may from time to time request. The Consultant hereby accepts such
engagement and agrees to provide such consulting services, subject to the terms and conditions of
this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.&nbsp;</B><U><B>Term and Termination</B></U>. This Agreement and the Consultant&#146;s engagement shall be from
August&nbsp;1, 2008 through January&nbsp;31, 2009 (the &#147;Term&#148;). Thereafter, this Agreement shall
automatically terminate, except as specifically set forth herein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.&nbsp;</B><U><B>Consultant&#146;s Duties</B></U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <U>Professional Services</U>. The Consultant shall, during the Term of this Agreement,
provide the Company with up to 104 hours per month of professional consulting services, all as the
Company may from time to time request (the &#147;Services&#148;). The Consultant shall, in good faith use
his best efforts to perform the Services. The Consultant shall provide invoices to the Company in
the amounts and pursuant to the payment arrangements set forth in the attached <U>Schedule&nbsp;A</U>
attached hereto.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <U>Personnel</U>. The Consultant shall not utilize any third party to perform any
portion of the Services without the express written consent of the Company.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <U>Health and Safety</U>. At all times while performing Services at any Company
location, the Consultant will comply with all applicable Company health, safety, security and
environmental procedures, policies and guidelines.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <U>Fees, Permits, Insurance, etc</U>. The Consultant shall provide for, secure, and/or
be solely responsible for any and all required fees, permits, Workers&#146; Compensation coverage,
Unemployment Insurance, Disability Insurance, Social Security contributions, income tax withholding
and any other insurance or taxes, including but not limited to federal and state
taxes, for any person performing the Services pursuant to this Agreement, including the
Consultant and any employee of the Consultant.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->1<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <U>Non-discrimination</U>. The Consultant will comply with all applicable equal
employment opportunity and non-discrimination requirements, including but not limited to those
prescribed by Executive Order 11246, the Rehabilitation Act, and the Vietnam Era Veterans&#146;
Readjustment Assistance Act.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <U>Meetings and Consultation with the Company</U>. The Consultant shall be required to
attend regularly scheduled meetings, or unscheduled meetings on reasonable notice, when necessary
to coordinate and perform the Services. The Consultant shall make himself available at all
reasonable times to consult with appropriate representatives of the Company concerning any Services
performed or to be performed by the Consultant under this Agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.&nbsp;</B><U><B>Reports and Records</B></U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <U>Reports</U>. Upon the reasonable request of the Company, the Consultant shall prepare
and submit draft reports and final reports to the Company as part of the Services.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <U>Records</U>. The Consultant will maintain books, records, and other documentation
reasonably necessary to enable the Company to evaluate the Consultant&#146;s compliance with this
Agreement. All books and records prepared, maintained or retained by the Consultant pursuant to
this Agreement shall be provided to the Company at the conclusion of this Agreement. All of
Consultant&#146;s records pertaining to this Agreement shall be made available to the Company and its
representatives for inspection upon reasonable notice at any time during the Consultant&#146;s regular
business hours.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.&nbsp;</B><U><B>Covenants of Consultant</B></U><B>. </B>The Consultant acknowledges that: (i)&nbsp;the business of
the Company and its affiliates, as currently conducted and as conducted from time to time
throughout the Term of this Agreement (collectively, the &#147;Business&#148;), is conducted by and is
proposed to be conducted on a world wide basis (the &#147;Company&#146;s Market&#148;); (ii)&nbsp;the Business involves
providing design, engineering and manufacture of certain vacuum and heat transfer equipment,
including but not limited to steam condensers, steam jet ejectors, shell and tube heat exchangers,
plate and frame heat exchangers, Heliflow heat exchangers, liquid ring vacuum pumps and rotary
piston pumps; (iii)&nbsp;the Company and its affiliates have developed trade secrets and confidential
information concerning the Business; and (iv)&nbsp;the agreements and covenants contained in this
Section&nbsp;5 are essential to protect the Business. In order to induce the Company to enter into this
Agreement, the Consultant covenants and agrees that:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <U>Agreement Not to Compete</U>. During the Term of this Agreement and for a period of
twelve (12)&nbsp;months thereafter (such period of time hereinafter the &#147;Restricted Period&#148;), neither
the Consultant nor any entity of which 2% or more of the beneficial ownership is held by the
Consultant or a person related to the Consultant by blood or marriage (a &#147;Controlled Entity&#148;) will,
anywhere in the Company&#146;s Market, directly or indirectly own, manage, operate, control, invest or
acquire an interest in, or otherwise engage or participate in, whether as a proprietor, partner,
stockholder, director, officer or employee, any business which competes in the Company&#146;s Market
with the Business as such Business was conducted, or such other business as the Company had plans
to conduct or had taken material steps toward conducting during the Term (a &#147;Competitive
Business&#148;), without the prior written consent of the Company. Notwithstanding any other provisions
of this Agreement, the Consultant may make a passive
investment in any publicly-traded company or entity in an amount not to exceed 1% of the
voting stock of any such company or entity.
</DIV>



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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <U>Agreement Not to Interfere In Business Relationships</U>. (i)&nbsp;During the Restricted
Period, neither the Consultant nor any Controlled Entity will directly or indirectly solicit,
induce or influence any customer, or any other person which has a business relationship with the
Company or any affiliate, or which had on the date of this Agreement such a relationship with the
Company or any affiliate, to discontinue or reduce the extent of such relationship with the Company
or any affiliate in the Company&#146;s Market without the prior written consent of the Company. (ii)
During the Restricted Period, neither the Consultant nor any Controlled Entity will (A)&nbsp;directly or
indirectly recruit, solicit or otherwise induce or influence any shareholder or employee of the
Company or any of its affiliates to discontinue such employment or other relationship with the
Company or any affiliate without the prior written consent of the Company, or (B)&nbsp;employ or seek to
employ, or cause or permit any Competitive Business to employ or seek to employ any person who is
then (or was at any time within six months prior to the date the Consultant or the Competitive
Business employs or seeks to employ such person) employed by the Company or any affiliate without
the prior written consent of the Company.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <U>Confidentiality</U>. During the Restricted Period, neither the Consultant nor any
Controlled Entity will directly or indirectly disclose to anyone, or use or otherwise exploit for
the Consultant&#146;s or any Controlled Entity&#146;s own benefit or for the benefit of anyone other than the
Company, any confidential information, including, without limitation, any confidential &#147;know-how&#148;,
trade secrets, customer lists, details of customer contracts, pricing policies, operational
methods, marketing plans or strategies, product development techniques or plans, business
acquisition plans and new personnel acquisition plans of the Company or any affiliate related to
the Business or any portion or phase of any scientific, engineering or technical information,
design, process, procedure, formula, improvement, discovery, invention, machinery or device of the
Company or any affiliate that is not generally known to the competitors of the Company whether or
not in written or tangible form (hereinafter referred to as &#147;Confidential Information&#148;). The term
&#147;Confidential Information&#148; does not include, and there shall be no obligation hereunder with
respect to, information that becomes generally available to the public other than as a result of a
disclosure by the Consultant or a Controlled Entity or any agent or other representative thereof.
Neither the Consultant nor any Controlled Entity shall have any obligation hereunder to keep
confidential any Confidential Information to the extent disclosure is required by law; provided,
however, that in the event disclosure is required by law, the Consultant or the Controlled Entity
concerned shall provide the Company with prompt notice of such requirement so that the Company may
seek an appropriate protective order. It is understood that in any subsequent engagement, the
Consultant may use his ordinary skill and non-confidential knowledge. The Consultant&#146;s obligations
under this Section 5(c) shall be in addition to, not in substitution for, any common law fiduciary
duties the Consultant has to the Company regarding Confidential Information acquired both before
and during the Term.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <U>Intellectual Property</U>. The Consultant shall communicate to the Company full
information concerning all inventions, improvements, discoveries, formulas, processes, systems of
organization, management procedures, software or computer applications (hereinafter, collectively,
&#147;Intellectual Property&#148;) made or conceived by him either solely or jointly with others, whether or
not perfected during the Term and which shall be within the existing or contemplated scope of the
Business. The Consultant will assist the Company and its nominees in every way at the Company&#146;s
expense in obtaining patents for such Intellectual Property as may be patentable in any and all
countries and the Consultant will execute all papers the Company may desire and assignments thereof
to the Company or its nominees and said Intellectual Property
shall be and remain the property of the Company and its nominees, if any, whether patented or
not or assigned or not.
</DIV>


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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <U>Survival of Covenants</U>. In the event of a termination or expiration of this
Agreement, the covenants and agreements contained in this Section&nbsp;5 and in Sections&nbsp;4(b), 6 and 9
shall survive, shall continue thereafter, and shall not expire unless and except as expressly set
forth in such Section.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <U>Remedies</U>. The parties to this Agreement agree that (i)&nbsp;if either the Consultant
or any Controlled Entity breaches any provision of this Section&nbsp;5, the damage to the Company and
its affiliates will be substantial, although difficult to ascertain, and money damages will not
afford an adequate remedy, and (ii)&nbsp;if either the Consultant or any Controlled Entity is in breach
of this Agreement, or threatens a breach of this Agreement, the Company shall be entitled in its
own right and/or on behalf of one or more of its affiliates, in addition to all other rights and
remedies as may be available at law or in equity, to (A)&nbsp;obtain injunctive and other equitable
relief to prevent or restrain a breach of this Agreement and (B)&nbsp;require the Consultant or any
Controlled Entity to pay damages as the result of any transactions constituting a breach hereof.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.&nbsp;</B><U><B>Indemnification</B></U>. Each party hereto agrees to defend, indemnify and hold the other
harmless from all liabilities, losses, damages, claims, suits, costs and expenses (including court
costs and reasonable attorney&#146;s fees) including, without limitation, injury to any person or damage
to any property, arising out of the indemnifying party&#146;s breach of or failure to perform any of its
representations, warranties, covenants, agreements or undertakings under this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>7.&nbsp;</B><U><B>Prior Agreement</B></U>. The Company and the Consultant acknowledge that the &#147;Term&#148; of the
prior Employment Agreement (dated as of May&nbsp;13, 1993 and as amended by Amendment No.&nbsp;1 on September
26, 1996) will end August&nbsp;1, and that the Consultant continues to be bound by the post-termination
obligations set forth in &#147;Section&nbsp;10&#148; of such prior Employment Agreement. Furthermore, as
additional consideration for entering this Agreement, the Consultant agrees to execute and be bound
by the release of all claims set forth in the attached Schedule&nbsp;B. In the event that the
Consultant fails to execute such Schedule&nbsp;B, or revokes Schedule&nbsp;B according to its terms, then
this Agreement shall be null and void in its entirety.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>8.&nbsp;</B><U><B>Notices</B></U>. Any notice, report, demand, waiver, consent and other communication
required or permitted under this Agreement must be in writing and must be (i)&nbsp;personally delivered,
(ii)&nbsp;mailed by registered or certified first class mail, prepaid with return receipt requested, or
(iii)&nbsp;sent by a nationally recognized overnight courier service, to the recipient at the address
below indicated:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-left: 3%; margin-top: 6pt">(a)&nbsp;If to the Consultant:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 6%; margin-top: 6pt">J. Ronald Hansen<BR>
9295 Fargo Road<BR>
Stafford, New York 14143
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 3%; margin-top: 6pt">(b)&nbsp;If to the Company:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 6%; margin-top: 6pt">Graham Corporation<BR>
20 Florence Avenue<BR>
Batavia, New York 14020<BR>
Attention: James R. Lines, President and CEO
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 6%; margin-top: 6pt">With a copy to:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 6%; margin-top: 6pt">Daniel R. Kinel, Esq.<BR>
Harter, Secrest &#038; Emery LLP<BR>
1600 Bausch and Lomb Place<BR>
Rochester, New York 14604
</DIV>



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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Either party may specify in writing, in the manner prescribed above, another address to
which subsequent notice to such party shall be given. Any notice under this Agreement will be
deemed to have been given (i)&nbsp;on the date such notice is personally delivered, (ii)&nbsp;three (3)&nbsp;days
after the date of mailing if sent by certified or registered mail, or (iii)&nbsp;the next succeeding
business day after the date such notice is delivered to the overnight courier service if sent by
overnight courier.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>9.&nbsp;</B><U><B>Miscellaneous</B></U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <U>Independent Contractors</U>. The Company and the Consultant are independent
contractors with respect to the rights and obligations created by this Agreement, and nothing
herein shall be construed to create any agency, joint venture, partnership or other similar
relationship. In addition, nothing herein shall be construed to authorize either party to
represent or commit the other party in negotiations or transactions with third parties. The
Company shall neither have nor exercise control over the methods by which the Consultant performs
services under this Agreement. Any individual performing any service or operation pursuant to this
Agreement shall be subject exclusively to the direction and control of the Consultant. As an
independent contractor, the Consultant agrees and understands that he and his agents are not
entitled to any other benefits and privileges established for the Company&#146;s employees, such as
retirement benefits (including pension and/or 401(k) benefits), life, accident, disability or
health insurance benefits (except as specifically set forth on <U>Schedule&nbsp;A</U>), vacation and
sick leave with pay, paid holidays, or severance pay upon termination of this Agreement for any
reason, and the Consultant hereby expressly waives any right to any such benefits.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <U>Non-Exclusive Agreement</U>. Except as limited in Section&nbsp;5, nothing contained in
this Agreement shall limit the Consultant&#146;s ability to enter into any agreement to provide
consulting services to any outside party.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <U>Effect of Agreemen</U>t. This Agreement sets forth the entire understanding of the
parties, and except as expressly set forth herein supersedes any and all prior agreements,
arrangements and understandings, written or oral, relating to the subject matter hereof.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <U>Amendment and Waiver</U>. This Agreement may be amended only by a writing executed by
both of the parties hereto. No waiver of compliance with any provision or condition hereof, and no
consent provided for herein, shall be effective unless evidenced by an instrument in writing duly
executed by the party sought to be charged therewith. No failure on the part of any party to
exercise, and no delay in exercising, any of its rights hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise by any party of any right preclude any other or
future exercise thereof or the exercise of any other right.
</DIV>


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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <U>Governing Law</U>. This Agreement shall be governed and construed in accordance with
the laws of the State of New York applicable to agreements made and to be performed entirely within
such State.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <U>Venue</U>. Any action or proceeding brought by either party against the other arising
out of or related to this Agreement shall be brought only in a state court of competent
jurisdiction located in the County of Monroe, State of New York or the Federal District Court for
the Western District of New York located in Monroe County, New York and the parties hereby consent
to the personal jurisdiction of said courts..
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <U>Remedies Cumulative</U>. The remedies granted in this Agreement are cumulative and in
addition to any other remedies to which the parties may be entitled arising from any violation,
default or breach of this Agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <U>Assignment</U>. No party shall assign or attempt to assign any of its rights or
obligations under this Agreement without the prior written consent of the other party hereto.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <U>Binding Effect</U>. Subject to the provisions of Section 9(h) above, this Agreement
shall be binding upon and shall inure to the benefit of the parties and their respective successors
and assigns. This Agreement creates no rights of any nature in any person not a party hereto.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <U>Savings Clause</U>. If any provision of this Agreement is found, by a court or
administrative body of competent jurisdiction, to violate any applicable federal, state or local
law or regulation, then such provision of this Agreement shall be null and void. All other
provisions of this Agreement unaffected by such finding shall remain in full force and effect.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <U>Headings</U>. The headings used in this Agreement are for convenience of reference
only and do not form a part hereof and shall not be used in any way to modify, interpret or
construe the intent of the parties.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) <U>Counterparts</U>. This Agreement may be executed in more than one counterpart, each
of which shall be deemed an original, and all of which together shall constitute the same
instrument.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>IN WITNESS WHEREOF</B>, the Company and the Consultant have executed this Agreement as conclusive
evidence of their acceptance of the terms and conditions set forth herein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><FONT style="font-variant: SMALL-CAPS"><B>GRAHAM CORPORATION</B></FONT>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="51%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="51%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ James R. Lines
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ J. Ronald Hansen</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">James R. Lines
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">J. Ronald Hansen</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">President and CEO</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">7/9/08
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7/8/08</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SCHEDULE A</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For each month during the Term, the Company agrees to pay the Consultant the following
compensation in consideration for the Consultant&#146;s performance of the Services:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A retainer in the amount of Thirteen Thousand Five Hundred and Twenty Dollars
($13,520);</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Reimbursement of all out-of-pocket expenses (other than commuting expenses from the
Consultant&#146;s residence in Stafford, New York to 20 Florence Avenue, Batavia, New York; it
being understood that commuting expenses incurred by Consultant to locations other than 20
Florence Avenue, Batavia, New York shall be reimbursed) incurred in the course of the
performance by Consultant of the Services, provided that such expenses are incurred and
documented in accordance with the Company&#146;s policies regarding reimbursement of expenses;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A payment equal to 4/12 of the cash bonus Consultant would have been eligible to
receive if the Consultant remained employed by the Company on a full-time basis through
March&nbsp;31, 2009, which payment shall be made by the Company to the Consultant in May&nbsp;2009.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Reimbursement of the Consultant&#146;s COBRA premiums incurred during the Term.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Consultant will be covered under the Company&#146;s self-insured dental plan during the
Term.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, at the conclusion of the Term, Consultant shall be entitled to retain the
Company&#146;s laptop computer used by him during the Term, provided that such Computer shall first be
provided to the Company&#146;s IT department for removal of all Company proprietary and confidential
information.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The payments described above shall be rendered without deduction for taxes, costs or expenses
incurred in connection with Consultant&#146;s performance of the Services.
</DIV>


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<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SCHEDULE B</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I, J. Ronald Hansen, am signing this General Release and Waiver (the &#147;General Release&#148;) in
consideration for the benefits provided to me under the foregoing Professional Consulting
Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I agree that in exchange for the consideration provided in the Professional Consulting
Agreement, I hereby forever release and discharge Graham Corporation (the &#147;Company&#148;) and any and
all related subsidiaries, divisions, affiliated entities, successors, and assigns, and any and all
of its and/or their past and/or present owners, officers, directors, employees, stockholders,
insurers, attorneys and agents (collectively, the &#147;Releasees&#148;), from any and all claims, demands,
causes of action, fees and liabilities of any kind whatsoever, whether known or unknown, which I
ever had, now have or may have against the Releasees by reason of any actual or alleged act,
omission, transaction, practice, conduct, occurrence, or other matter occurring up to and including
the date of this General Release.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Without limiting the generality of the foregoing, this General Release is intended to and
shall release the Releasees from any and all claims, whether known or unknown, which I ever had,
now have, or may have against the Releasees, with respect to my employment with the Company, the
terms and conditions of such employment, and/or the termination thereof, and any other claims,
demands, actions, causes of action, damages, and costs of or growing out of known or unknown
claims, including but not limited to: (i)&nbsp;any and all claims under the New York Human Rights Law;
(ii)&nbsp;any and all claims under Title VII of the Civil Rights Act of 1964; (iii)&nbsp;any and all claims
under the Americans with Disabilities Act (ADA&#148;); (iv)&nbsp;any and all claims under the Age
Discrimination in Employment Act (ADEA); (v)&nbsp;any other claim based on any federal, state, or local
law, ordinance, or regulation (whether statutory or decisional); and (vi)&nbsp;any and all claims for
attorneys&#146; fees, costs, disbursements, and/or the like.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nothing in this General Release shall be construed to constitute a waiver of (i)&nbsp;any claims I
may have against the Company that arise from acts or omissions that occur <U>after</U> the date
that I sign this General Release, (ii)&nbsp;my right to participate in any administrative or court
investigation, hearing or proceeding, or (iii)&nbsp;any claims that I cannot waive as a matter of law,
including any claim under the New York Workers Compensation Law. I agree, however, to waive and
release any right to receive any individual remedy or to recover any monetary damages as a result
of any administrative charge, proceeding or lawsuit brought by me or on my behalf.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By signing this General Release, I hereby acknowledge that the consideration provided in the
Professional Consulting Agreement exceeds any benefit or other thing of value to which I am
otherwise entitled under any policy, plan, or procedure of the Company or pursuant to any agreement
or contract with the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I have read this General Release in its entirety, I understand all of its terms and
conditions, and I knowingly and voluntarily agree to all the terms and conditions contained herein.
I agree that I am voluntarily signing this General Release, that I have not been pressured into
agreeing to its terms and that I have enough information to decide whether to sign this General
Release.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->8<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I understand and agree that if, for any reason, I believe that this General Release is not
entirely voluntary, or if I believe that I do not have enough information, then I should not sign
this General Release.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I acknowledge that I am hereby advised to consult my personal attorney about this General
Release.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I understand that I have up to 21 calendar days from the date that I receive this General
Release, or until July&nbsp;29, 2008, to accept the terms of this General Release and return it to the
Company. I understand that I may accept and return the General Release at any time within those 21
days, but I am not required to do so and I may take the entire 21-day period. After I have
accepted this General Release, I will still have an additional seven (7)&nbsp;calendar days in which to
revoke my acceptance. Any revocation of this Agreement must be in writing and must be sent to the
Company, by certified mail, return receipt requested, within seven (7)&nbsp;calendar days after the date
that I sign this General Release. If I do not so revoke this General Release, then it will be
effective on the 8<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> day after the date of my signature, and I may not thereafter revoke
it.
</DIV>

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    <TD colspan="3" style="border-bottom: 1px solid #000000" align="left">                                                 /s/ J. Ronald Hansen
&nbsp;</TD>
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    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><FONT style="font-variant: SMALL-CAPS">J. Ronald Hansen</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
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