GRAHAM CORP — Director's Dealing 2010

Aug 2, 2010

SEC Form 4 — Statement of Changes in Beneficial Ownership

Issuer: GRAHAM CORP (GHM)
CIK: 0000716314
Period of Report: 2010-07-29

Reporting Person: VAN REES CORNELIUS S (Director)

Derivative Transactions

Date	Security	Exercise Price	Code	Shares	A/D	Expiration	Underlying	Ownership
2010-07-29	Share Equivalent Unit	$	A	106.15	Acquired		Common Stock (106.15)	Direct

Holdings (Non-Derivative)

Security	Shares	Ownership
Common Stock	28532	Direct

Holdings (Derivative)

Security	Exercise Price	Expiration	Underlying	Shares	Ownership
Stock Option (Right to Buy)	$2.42	2011-06-04	Common Stock (1250)	1250	Direct
Stock Option (Right to Buy)	$2.34	2011-07-26	Common Stock (5000)	5000	Direct
Stock Option (Right to Buy)	$1.50	2012-10-31	Common Stock (5000)	5000	Direct
Stock Option (Right to Buy)	$1.76	2013-10-24	Common Stock (5000)	5000	Direct
Stock Option (Right to Buy)	$2.50	2014-10-28	Common Stock (5000)	5000	Direct
Stock Option (Right to Buy)	$5.56	2015-10-26	Common Stock (5000)	5000	Direct
Stock Option (Right to Buy)	$7.976	2016-06-01	Common Stock (5000)	5000	Direct
Stock Option (Right to Buy)	$6.90	2017-05-31	Common Stock (5000)	5000	Direct
Stock Option (Right to Buy)	$30.875	2018-05-29	Common Stock (924)	924	Direct

Footnotes

F1: This option was previously reported by Mr. Van Rees and is exercisable pro rata on the first, second, third and fourth anniversaries of the 5/31/07 grant date.

F2: This option was previously reported by Mr. Van Rees and is exercisable pro rata on the first, second, third and fourth anniversaries of the 5/29/08 grant date.

F3: This share equivalent unit was granted under the Graham Corporation Outside Directors' Long Term Incentive Plan, as amended. Under the LTIP, SEUs are credited to each non-employee director's account for each of the first five fiscal years during such director's term in which Graham produces consolidated net income in an amount at least equal to the consolidated net income specified in the budget for each such fiscal year. Such determinations are made annually. Each SEU is valued at the market value of one share of common stock on the valuation date, which is the last day of trading of the first quarter following the end of a fiscal year for which SEUs are to be credited. The number of SEUs to be credited annually is determined by dividing the value of one SEU into $10,000.

F4: Outstanding SEUs accrue dividends quarterly in accordance with Graham's regular dividend policy and such dividends are reflected in each director's account after the end of each fiscal year. The number of SEUs reported represent dividends accrued under the LTIP. Upon termination of a non-employee director's service, but not before, the non-employee director may redeem each SEU for one share of common stock or, alternatively and subject to Graham's discretion, for the cash equivalent at the closing price of the stock on the NYSE Amex on the date of termination of service, subject to certain limitations.