NOTES TO FINANCIAL STATEMENTS
ACCOUNTING PRINCIPLES The financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in
the United States of America.
General On July 29, 2010, Graham Corporations (the Companys) stockholders
approved the Graham Corporation Employee Stock Purchase Plan, as amended (the Plan). The Companys stockholders approved an amendment to the Plan on July 27, 2022 to increase the number of shares of the Companys common
stock reserved for issuance under the Plan. The Plan Administrator believes the Plan meets the qualification standards of Section 423 of the Internal Revenue Code of 1986, as amended, pursuant to which the Plan is not subject to taxation. The
Plan is not subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended.
The Plan covers all the U.S.-based employees of
the Company and U.S.-based employees of any U.S. subsidiary of the Company.
Contributions Participants may make contributions to the Plan
through payroll deductions for the purpose of purchasing the Companys common stock. The Plan operates with separate consecutive six-month periods commencing January 1 and July 1, respectively.
The Plan will continue to operate in this manner until such time as the Plan is amended or terminated (see Note 2).
Share Purchase and Withdrawals
Beginning with the offering period commencing on July 1, 2019, participants have the ability to purchase shares of the Companys common stock from the Company at a purchase price of 85% of the lesser of the fair market value of
the stock on the first or last business day of the six-month offering periods ending June 30 and December 31, respectively. Prior to July 1, 2019, participants had the ability to purchase shares
of the Companys common stock from the Company at 95% of its fair market value on the first business day of the offering period. If, prior to the end of any offering period, a participant elects to withdraw from the Plan or if a participant
dies, retires or terminates employment for any reason, the Plan will refund any amounts withheld in that period plus any carryover from the previous period. Security transactions are accounted for as of the trade date. Plan participants purchased
45,638 shares, 18,106 shares, and 20,671 shares of the Companys common stock during the years ended March 31, 2023, 2022 and 2021, respectively. Under the Plan, 183,244 shares remain reserved for future issue. Refunds from participant
withdrawals have not been significant. The maximum number of shares subject to the Plan is 400,000.
Limitations Employees owning shares
representing 5% or more of the total combined voting power or value of all classes of shares of the Company are not permitted to purchase any shares of Company common stock under the Plan. Additionally, participants are prohibited from purchasing
through the Plan shares with an aggregate fair market value in excess of $25,000 in any one calendar year. Participants are also subject to an annual share maximum purchase limit of 5,000 shares.
Plan Administration All expenses for Plan administration are paid by the Company and are not reflected in the accompanying financial statements.
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