SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the registrant (X)
Filed by a party other than the registrant ( )
Check the appropriate box:
( ) Preliminary proxy statement
(X) Definitive proxy statement
( ) Definitive additional materials
( ) Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
( ) Confidential, for use of the Commission only (as permitted by
Rule 14a-6(e)(2))
Gleason Corporation
(Name of Registrant as Specified in Its Charter)
Ralph E. Harper
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
(X) No fee required.
( ) Fee computed on table below per Exchange Act Rules 14a-
6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregrate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
( ) Fee paid previously with preliminary materials:
( ) Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the form or schedule and the
date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
<PAGE>
<PAGE>
Gleason Corporation
1000 University Avenue
P.O. Box 22970
Rochester, New York 14692-2970
March 31, 1997
Dear Stockholder:
You are cordially invited to attend the Annual Meeting
of Gleason Corporation Stockholders to be held on Tuesday, May 6,
at the Company's offices at 1000 University Avenue, Rochester,
New York. Your Board of Directors looks forward to greeting
personally those stockholders able to attend. Enclosed you will
find a postcard to be returned to the Company to reserve a seat
for you at the Annual Meeting. Stockholders must have a
reservation to attend the Annual Meeting.
At the meeting, you are being asked to elect three
directors, to approve an amendment to the Company's 1992 Stock
Plan, and to appoint independent auditors.
It is important that your shares be represented and
voted at the Annual Meeting whether or not you plan to attend.
Accordingly, you are requested to sign, date and mail the
enclosed proxy at your earliest convenience.
Thank you for your cooperation.
On Behalf of the Board of Directors
Sincerely,
James S. Gleason
James S. Gleason
Chairman and President
<PAGE>
<PAGE>
GLEASON CORPORATION
NOTICE OF 1997 ANNUAL MEETING OF STOCKHOLDERS
TO OUR STOCKHOLDERS:
The Annual Meeting of Stockholders of Gleason
Corporation will be held at the Company's offices at
1000 University Avenue, Rochester, New York on Tuesday, May 6,
1997 at 10:00 A.M. for the following purposes:
(1) To elect three directors for three-year terms;
(2) To approve an amendment to the 1992 Stock Plan;
(3) To appoint Ernst & Young LLP as independent
auditors for 1997;
(4) To transact such other business as may properly
come before the meeting or any adjournment or
adjournments thereof.
The Board of Directors has fixed the close of business
on March 13, 1997 as the record date for the determination of
stockholders entitled to notice of and to vote at the meeting.
By Order of the Board of Directors
RALPH E. HARPER, Secretary
Rochester, New York
March 31, 1997
_______________________________________________________________
Please complete, sign and date the enclosed proxy and return it
promptly in the enclosed return envelope, which will require no
postage if mailed in the United States.
_______________________________________________________________
Gleason Corporation, 1000 University Avenue, P.O. Box 22970,
Rochester, New York 14692-2970
<PAGE>
<PAGE>
PROXY STATEMENT
This Proxy Statement is furnished in connection with
solicitation of the enclosed proxy on behalf of the Board of
Directors of Gleason Corporation in connection with the Annual
Meeting of Stockholders of the Company to be held on May 6, 1997.
The principal executive offices of the Company are
located at 1000 University Avenue, Rochester, New York 14692-
2970. The approximate date on which this proxy statement and the
enclosed proxy are being sent to stockholders is March 31, 1997.
The close of business on March 13, 1997 has been fixed
as the record date for determination of the stockholders entitled
to notice of, and to vote at, the meeting. On that date there
were outstanding and entitled to vote 4,979,880 shares of Common
Stock, each of which is entitled to one vote on each matter at
the meeting.
The enclosed proxy, if properly completed, signed and
returned prior to the meeting, will be voted at the meeting in
accordance with the choices specified thereon and, if no choices
are specified, will be voted for the election as directors of the
persons nominated by the Board of Directors, for the amendment to
the 1992 Stock Plan and for the appointment of Ernst & Young LLP
as independent auditors for 1997. A stockholder giving a proxy
has the right to revoke it at any time before it has been voted
by (i) giving written notice to that effect to the Secretary of
the Company, (ii) executing and delivering a proxy bearing a
later date which is voted at the Annual Meeting, or (iii)
attending and voting in person at the Annual Meeting.
ELECTION OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ELECTION
OF THE NOMINEES.
The Company's Board of Directors is divided into three
classes, one of which is elected at each Annual Meeting for a
term of three years and until their successors have been elected
and have qualified. The terms of J. David Cartwright and James
S. Gleason expire this year, and the Board of Directors has
nominated each of them to serve as a director for a three-year
term. The Board has also nominated David J. Burns, Executive
Vice President of the Company, to serve as a director for a three-
year term. The Board of Directors believes that the nominees
will be available and able to serve as directors but, if for any
reason any of them should not be, the persons named in the proxy
may exercise discretionary authority to vote for a substitute
proposed by the Board of Directors.
<PAGE>
<PAGE>
Directors are elected by a plurality of the votes cast
by stockholders entitled to vote in the election. Validly
submitted proxies indicating abstentions and broker non-votes are
counted for quorum purposes but are not counted for or against
the election of directors. The Company's by-laws govern the
methods for counting votes and, subject thereto, vest this
responsibility in the inspectors of election appointed to perform
this function.
The Board of Directors of the Company has an Audit
Committee, a Nominating Committee, and an Executive Compensation
Committee.
The members of the Audit Committee are Robert W. Bjork,
Chairman, Martin L. Anderson, J. David Cartwright, John W.
Guffey, Jr., Donald D. Lennox and Robert A. Sherman. This
Committee is responsible for evaluating audits and the
independence of the Company's auditors and also reviews
accounting principles, internal controls and compliance with
certain Company policies. In 1996 this Committee held two
meetings.
The members of the Nominating Committee are Donald D.
Lennox, Chairman, Martin L. Anderson, Julian W. Atwater, Robert
W. Bjork, J. David Cartwright, John W. Guffey, Jr. and Robert A.
Sherman. This Committee is responsible for identifying,
considering and recommending to the Board of Directors nominees
for election as directors. This Committee held no meetings in
1996.
The members of the Executive Compensation Committee are
Robert A. Sherman, Chairman, Martin L. Anderson, Julian W.
Atwater, J. David Cartwright, John W. Guffey, Jr. and Donald D.
Lennox. This Committee, which held four meetings in 1996,
reviews executive compensation and approves compensation for
senior executives, adopts compensation plans other than those
providing for the issuance of stock, authorizes executive
employment arrangements and administers the Company's incentive
compensation plans.
Directors who are employees of the Company receive no
additional compensation for service as directors. Directors who
are not employees of the Company receive an annual fee of $15,000
for service as directors plus $1,000 for each Board or Committee
meeting attended. Committee chairmen receive an additional fee
of $300 for each Committee meeting which they chair. Each
director who is not an employee of the Company is required to
defer at least fifty percent (50%) of all directors' fees earned
into the Stock Account of the Company Plan for Deferral of
Directors' Fees. This Plan provides that deferred fees are
credited to a hypothetical Stock Account as if used to purchase
shares of the Company's Common Stock. The Plan also permits
deferral of fees that are not applied to the Stock Account into
an account that earns interest at the prime rate. Under the
Company's 1992 Stock Plan, each year each director who is not an
employee of the Company receives an option to purchase 1,000
shares of the Company's Common Stock. These options are
<PAGE>
<PAGE>
exercisable at the fair market value per share on the date of the
grant and are fully exercisable six months after the date of the
grant for a term expiring ten years from the date of grant,
subject to earlier expiration if the grantee ceases to serve as a
director.
During 1996 the Board of Directors held seven meetings.
In 1996 all the directors attended at least 75% of the total
number of meetings of the Board of Directors and of Board
committees on which they served.
The following table sets forth information about the
nominees and those directors whose terms of office will continue
after the Annual Meeting.
Principal Occupations and
Director Term Other Directorships
Name and Age Since Expires Held in Public Companies
Nominees:
J. David
Cartwright (58) 1993 1997 President of Cooper Hand Tools,
a division of Cooper
Industries, Inc., since 1994;
prior thereto President,
Champion Spark Plug Company
(1992-1994)
James S. 1965 1997 Chairman, Chief Executive
Gleason (62) Officer and President of
the Company
David J.
Burns (42) Executive Vice President
of the Company since
August 1995; prior thereto
Vice President - Machine
Products Group of the
Company (1992-1995)
Other Directors:
Martin L. 1995 1998 Director of Supply Chain
Anderson (48) Programs, Babson College since
1996; Affiliate Director of the
International Motor Vehicle
Program, Massachusetts Institute
of Technology since 1996; prior
thereto Associate Director of
the International Motor Vehicle
Program, Massachusetts
Institute of Technology (1993-
1996); prior thereto Vice
President of Gemini Consulting
(1986-1993)
<PAGE>
<PAGE>
Principal Occupations and
Director Term Other Directorships
Name and Age Since Expires Held in Public Companies
John W. 1995 1998 Chairman, President and Chief
Guffey, Jr. (58) Executive Officer of Coltec
Industries since 1995; prior
thereto President and Chief
Operating Officer of Coltec
Industries (1991-1994);
Director: Giddings & Lewis,
Inc.
Robert A. 1979 1998 Retired; prior thereto
Sherman (78) Senior Vice President-Finance
and Administration of Eastman
Kodak Company
Julian W. 1976 1999 Julian W. Atwater, P.C.
Atwater (65) is a partner in Nixon,
Hargrave, Devans & Doyle LLP,
attorneys
Robert W. 1968 1999 Personal investments and
Bjork (70) private consulting with
Jefferson Financial Corp. since
1995; prior thereto Vice
Presiden of Schaenen Wood &
Associates, Inc., an investment
management firm (1992-1995)
Donald D. 1987 1999 Chairman of International
Lennox (78) Imaging Materials, Inc., a
manufacturer of thermal
transfer ribbons for office
equipment, since 1990; prior
thereto Chairman and Chief
Executive Officer of Schlegel
Corporation (1987-1989); prior
thereto Chairman, President and
Chief Executive Officer of
Navistar International
Corporation; Director: Navistar
International Corporation,
Prudential Mutual Fund
Management Corporation
<PAGE>
<PAGE>
PROPOSAL TO AMEND 1992 STOCK PLAN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL
OF THE AMENDMENT OF THE 1992 STOCK PLAN.
The Board of Directors recommends that the stockholders
approve an amendment to Section 16 of the Company's 1992 Stock
Plan ("Plan") to increase the automatic annual grant of options
to each director, who is not an employee of the Company or any
subsidiary, from 1,000 to 3,000 shares.
The Company's Executive Compensation Committee believes
that such increase is desirable to encourage greater ownership of
the Company's stock by directors and to thereby further link
their interests with those of the stockholders.
The Plan presently provides for the grant by the
Executive Compensation Committee of options, stock appreciation
rights and/or restricted stock to key employees of the Company
and its subsidiaries, and, in addition, provides for an automatic
grant on June 1 of each year to each director who is not an
employee of the Company or a subsidiary of an option to purchase
1,000 shares of Company Common Stock. The only amendment that
the stockholders are being asked to approve is to increase that
annual option to non-employee directors to 3,000 shares.
The options granted to non-employee directors are
exercisable six months after the date of grant, and are
thereafter exercisable until ten years after the date of grant,
but only so long as the optionee continues to serve as a director
of the Company, and for three months therafter (one year if he
dies while still a director or within such three-month period).
The option price is 100% of the mean between the high and low
trading price for Company shares in New York Stock Exchange
composite trading on the date of grant. On exercise, the option
price must be paid by delivery of one or more of personal check,
certificates for shares of Company Common Stock endorsed in blank
with a fair market value at least equal to the option price for
the shares so purchased, or a copy of irrevocable instructions to
a broker to promptly deliver to the Company proceeds of the sale
of such shares sufficient to cover the option price.
Such options automatically carry with them conditional
stock appreciation rights and special rights, as do all options
granted under the Plan, which are applicable in the event of a
change in control of the Company, as defined in the Plan.
The Company currently has seven non-employee directors,
each of whom will receive on June 1 of each year, if the proposed
amendment is approved by the stockholders, an option to purchase
3,000 shares of Company Common Stock, and such directors, as a
<PAGE>
<PAGE>
group, will receive options to purchase 21,000 shares. No
options may be granted under the Plan after May 4, 2002.
The Options granted to non-employee directors are Non-
Statutory Options under the Internal Revenue Code. When such an
option is granted to a director, there is no tax consequence
either to the director or the Company. When a director exercises
such an option, the value of the stock on the date of exercise
over the option price will be ordinary income to the director,
and the Company will receive a deduction equal to the amount so
includable in the director's income. When the director sells the
stock, his basis will be equal to the price paid, plus any
ordinary income realized on exercise, and any gain will be
capital gain. Whether a capital gain or loss on disposition of
stock is long-term or short-term depends on whether the stock has
been held for more than one year.
Approval of the proposed amendment will require the
affirmative vote at the Annual Meeting by the holders of a
majority of the shares of the Company's Common Stock voting
thereon at the meeting.
AUDITORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE
APPOINTMENT OF ERNST & YOUNG LLP.
The Board of Directors has recommended that Ernst &
Young LLP be appointed as auditors of the Company for 1997. A
representative of that firm will be present at the Annual Meeting
with the opportunity to make a statement and will be available to
respond to appropriate questions.
<PAGE>
<PAGE>
STOCK OWNERSHIP
The following table sets forth information, based upon
reports filed by such persons with the Securities and Exchange
Commission, with respect to the persons believed by the Company
to be the beneficial owners of more than 5% of its outstanding
Common Stock.
<TABLE>
<CAPTION>
Number of Percent
Name and Address Shares of Class
<S> <C> <C>
Gleason Foundation 679,563<F1> 13.7%
1000 University Avenue
Rochester, New York 14692
The Retirement Plan 385,052<F1> 7.7%
of The Gleason Works
1000 University Avenue
Rochester, New York 14692
Dimensional Fund Advisors, Inc. 334,000<F2> 6.7%
1299 Ocean Avenue, Suite 650
Santa Monica, California 90401
<FN>
<F1> Sole dispositive and voting powers. See also Note
6 to the following table.
<F2> Sole dispositive and, with respect to 192,600
shares, sole voting power. Officers of Dimensional Fund
Advisors Inc. vote an additional 24,700 shares as
officers of the DFA Investment Trust Company and an
additional 116,700 shares as officers of DFA Investment
Dimensions Group Inc.
</FN>
</TABLE>
<PAGE>
<PAGE>
The following table sets forth information, as of March
1, 1997, with respect to the beneficial ownership of the
Company's Common Stock by (a) each of the directors of the
Company, (b) the Company's Chief Executive Officer and its four
other most highly compensated executive officers as of December
31, 1996, and (c) all directors and executive officers of the
Company as a group.
<TABLE>
<CAPTION>
Number of Shares Percent
Name of Common Stock <F1> of Class
<S> <C> <C>
Martin L. Anderson 3,577<F2><F3> *
Julian W. Atwater 12,351<F2><F3> *
Robert W. Bjork 11,844<F2><F3> *
J. David Cartwright 6,487<F2><F3> *
John W. Guffey, Jr. 5,554<F2><F3> *
Donald D. Lennox 16,927<F2><F3> *
Robert A. Sherman 26,109<F2><F3> *
James S. Gleason 215,905<F2><F4><F5> 4.1%
David J. Burns 28,532<F2><F5> *
Ralph E. Harper 24,307<F2><F5> *
John B. Kodweis 33,348<F2><F5> *
John J. Perrotti 18,336<F2><F5> *
All directors and 1,471,689<F2><F3><F4><F5><F6> 28.1%
executive officers as
a group (13 persons)
______________________
* Less than 1% of the outstanding shares of Common Stock.
<FN>
<F1> Except as indicated in Notes 2 and 3, for all shares
listed the person possesses sole voting power and, except
as indicated in Notes 3, 4 and 5, sole investment power.
<F2> Includes stock options which are exercisable prior to May
1, 1997: Messrs. Atwater, Bjork and Sherman - 9,000
shares each; Messrs. Anderson, Cartwright, Guffey,
Lennox, Gleason, Burns, Harper, Kodweis and Perrotti -
2,000, 3,000, 2,000, 7,000, 134,900, 23,011, 18,500,
24,500 and 12,500 shares respectively; and all directors
and executive officers as a group - 257,411 shares.
<F3> Includes 1,577, 851, 844, 3,487, 1,554, 6,927 and 10,112
hypothetical shares (without voting power) credited to
the accounts of Messrs. Anderson, Atwater, Bjork,
Cartwright, Guffey, Lennox and Sherman, respectively,
pursuant to the Directors Fees Deferral Plan.
<F4> Includes 32,855 shares held in a trust of which Mr.
Gleason is an income beneficiary, the trustee of which
has agreed to vote and dispose of the shares only as
specified by him.
<F5> Includes the following number of shares which at March 1,
1997 were subject to restrictions on disposition:
Messrs. Gleason, Burns, Harper, Kodweis and Perrotti -
7,412, 4,235, 959, 3,015 and 4,595 shares respectively;
and all directors and executive officers as a group -
20,952 shares.
<PAGE>
<F6> Includes 385,052 shares owned by The Retirement Plan of
The Gleason Works, the powers to vote and dispose of
which are vested in a committee comprised of
Messrs. Gleason, Harper and Kodweis, and 679,563 shares
owned by Gleason Foundation, a not-for-profit
corporation, of which Messrs. Gleason, Harper and Kodweis
are directors and/or officers. The stockholdings of
these entities are not included above in those
individuals' stockholdings.
</FN>
</TABLE>
<PAGE>
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
EXECUTIVE COMPENSATION COMMITTEE REPORT
Principles of Executive Compensation
The Company's Executive Compensation policy, which applies
to the CEO and all other executive officers, is intended to align
executive compensation with the long-term interests of Company
stockholders. In applying this policy the Executive Compensation
Committee of the Board of Directors (the "Committee") has
followed a program to:
* Establish salary and bonus opportunities to attract,
motivate and retain executive talent necessary for the long-term
success of the Company.
* Integrate cash and equity based compensation so as to reward
executives for performance that enhances the long-term value of
shareholder equity.
Executive Compensation Program
The program consists of both cash and equity based
compensation. Cash compensation consists of a base salary and an
opportunity for an annual bonus under the Annual Management
Incentive Compensation Plan ("AMICP"). The Company participates
in compensation surveys both on a regional and national level,
and retains Ernst & Young LLP to help insure that the Company's
executive compensation program is competitive within its industry
and size. The Committee determines salary ranges for key
executives, and reviews, at least annually, the performance of
executive officers and approves any adjustment in their base
compensation. In addition, the Committee annually considers
awards under the AMICP. Eligibility for a bonus award is
determined by the Company's and the executive's business unit's
(if applicable) return achieved on operating capital versus a
targeted return, and by the executive's personal performance.
The targeted return on operating capital is based on the
Company's weighted average cost of capital as calculated each
year and approved by the Committee.
Long-term incentives are provided through the Stock Plan
approved by the stockholders at the 1992 Annual Meeting. Under
the Plan, the Committee has the authority to determine the
individuals to whom stock options and shares of restricted stock
are awarded, the number of shares awarded, and the terms of the
grant. The amounts of option grants are based on industry
comparisons and position levels. Awards under the Plan
facilitate aligning the long-range interests of executive
officers with those of stockholders by providing executive
officers an opportunity to have a financial stake in the Company
<PAGE>
<PAGE>
that should increase as stock prices reflect improved Company
performance. Julian W. Atwater, who is not a Non-Employee
Director as defined in the Securities and Exchange Commission's
revised Rule 16b-3 pursuant to the Securities Exchange Act of
1934 that became applicable to the Plan on October 23, 1996, has
since such date abstained from any action involving grants or
awards to any person who is subject to Section 16 of such act.
Chief Executive Officer Compensation
The Committee met in December 1995 to determine Mr. Gleason's
compensation for 1996. It took note of the significant
improvement in the Company's sales and financial performance in
1995, reflecting accelerated development of new products and
continuing improved productivity in manufacturing and overhead
operations, as well as greater strength in markets the Company
serves. In addition, recognition was given to the strategic
acquisition in 1995 of the Hurth Company, which had an immediate
positive contribution to Company results, and in the longer term
will greatly augment the Company's ability to serve the
cylindrical gear products market. In view of these and other
factors, the Committee increased Mr. Gleason's base salary by
$25,000 for 1996 to $330,000.
In December 1996 the Committee granted Mr. Gleason stock
options to purchase 16,000 shares. Mr. Atwater did not
participate in the approval of such grant.
In February 1997, the Committee met to consider bonus awards
for 1996 under the AMICP. An award of $188,120 was made to Mr.
Gleason as a result of the Company having exceeded the threshold
targeted financial returns under the Plan in 1996.
EXECUTIVE COMPENSATION COMMITTEE
Robert A. Sherman, Chairman
Martin L. Anderson
Julian W. Atwater
J. David Cartwright
John W. Guffey, Jr.
Donald D. Lennox
<PAGE>
<PAGE>
STOCK PERFORMANCE GRAPH
The graph below compares cumulative total return on the Company's
Common Stock, a major market index and a peer group index over the last five
fiscal years. The comparison assumes $100 was invested on January 1, 1992 in
the Company's Common Stock and in each of the foregoing indices and assumes
reinvestment of dividends. The Company has changed its major market index to
the S&P Small Cap 600 as this provides a better comparison of companies of
similar market capitalization as the Company. It has also revised its custom
peer group index by adding two companies whose principal business activity is
metalworking machinery and which have now been publicly traded for at least one
year, and deleting two companies which have sold or discontinued their business
activities that made comparison to them relevant.
<TABLE>
GLEASON CORPORATION
Comparison of Five Year Cumulative Total Return
vs. S&P 500, S&P Small Cap 600 and Two 8-Company Peer Group Indexes<F1><F2>
Value of Investment ($)
<CAPTION>
Company/Index Name 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
<S> <C> <C> <C> <C> <C> <C>
Gleason Corporation 100 105.92 108.10 108.56 244.02 251.15
S&P 500 Index 100 107.62 118.46 120.03 165.13 203.05
S&P Small Cap 600 Index 100 121.04 143.78 136.92 177.94 215.88
Peer Group Index (new)<F1> 100 145.56 160.73 131.18 155.86 133.20
Peer Group Index (old)<F2> 100 144.89 160.33 132.33 156.20 134.36
</TABLE>
(The above table represents the data points of the Stock Performance
Graph.)
<F1> Includes Bridgeport Machines, Inc., Brown & Sharpe Manufacturing Company,
Cincinnati Milacron Inc., DeVlieg-Bullard, Inc., Giddings & Lewis, Inc.,
Hardinge Inc., Hurco Companies, Inc., and Monarch Machine Tool Company.
<F2> Includes Acme-Cleveland Corp., Brown & Sharpe Manufacturing Company,
Cincinnati Milacron Inc., DeVlieg-Bullard, Inc., Giddings & Lewis, Inc.,
Hurco Companies, Inc., Monarch Machine Tool Company and Newcor, Inc.
<PAGE>
<PAGE>
SUMMARY COMPENSATION TABLE
Set forth below is certain compensation information for periods during
which the named persons served as executive officers of the Company.
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
Securities
Other Restricted Underlying All Other
Name and Annual Stock Options/ Compensa-
Principal Salary Bonus Compensation Awards<F1> SARS tion<F7>
Position Year ($) ($) ($) ($) (#) ($)
<S> <C> <C> <C> <C> <C> <C> <C>
James S. 1996 334,274 188,120 - - <F2> 16,000 14,450
Gleason 1995 308,733 63,168 - - 12,000 13,930
President and 1994 299,139 - - - 18,000 10,570
Chief
Executive
Officer
David J. 1996 175,008 99,723 - - <F3> 10,000 8,037
Burns 1995 138,338 33,466 - 48,750 7,000 7,234
Executive 1994 111,317 - - 7,575 6,000 5,888
Vice President
John J. 1996 141,250 86,318 - 16,500<F4> 7,000 7,768
Perrotti 1995 111,250 25,350 - - 5,000 5,771
Vice President 1994 98,579 - - 45,450 3,500 4,983
- - Finance &
Chief Financial
Officer
John B. 1996 135,907 66,531 - - <F5> 3,500 9,336
Kodweis 1995 126,417 22,350 - 13,000 2,500 7,406
Vice President- 1994 115,808 - - - 4,500 6,955
Administration
and Human
Resources
Ralph E. 1996 135,716 66,531 - - <F6> 3,500 10,364
Harper 1995 127,836 22,350 - - 2,500 9,086
Vice President 1994 117,641 - 12,103 - 4,500 7,060
Secretary &
Treasurer
<FN>
<F1> Holders of restricted stock are entitled to vote and receive dividends
thereon.
<F2> Mr. Gleason held an aggregate of 7,412 shares of restricted stock valued,
as of fiscal year end, at $244,596.
<F3> Mr. Burns held an aggregate of 4,235 shares of restricted stock valued,
as of fiscal year end, at $139,755. The 1995 award was 1,500 shares, 60
of which become unrestricted on each anniversary of the award. The 1994
award was 500 shares, 19 of which become unrestricted on each anniversary
of the award.
<F4> Mr. Perrotti held an aggregate of 4,595 shares of restricted stock
valued, as of fiscal year end, at $151,635. The 1996 award was 500
shares, 17 of which become unrestricted on each anniversary of the award.
The 1994 award was 3,000 shares, 96 of which become unrestricted on each
anniversary of the award.
<F5> Mr. Kodweis held an aggregate of 3,015 shares of restricted stock valued,
as of fiscal year end, at $99,495. The 1995 award was 400 shares which
become unrestricted on the second anniversary of the award.
<F6> Mr. Harper held an aggregate of 959 shares of restricted stock valued, as
of fiscal year end, at $31,647.
<F7> Includes for 1996: $6,000 in defined contribution retirement plan awards
and $1,500 in contributions to the Company's 401(k) plan for each of the
executives named in the Summary Compensation Table and $6,950, $537,
$268, $1,836, and $2,864 in group term life insurance premiums for
Messrs. Gleason, Burns, Perrotti, Kodweis and Harper, respectively.
</FN>
</TABLE>
<PAGE>
<PAGE>
<TABLE>
STOCK OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
Potential Realizable
Securities Exercise Value at Assumed
Underlying % of Total or Base Annual Rate of Stock
Options Options Price Price Appreciation for
Granted<F1> Granted to ($ per Expiration Option Term<F2>
Name (#) Employees Share) Date 5%($) 10%($)
<S> <C> <C> <C> <C> <C> <C>
James S. Gleason 16,000 36.0 29.6875 12/16/06 298,725 757,028
David J. Burns 10,000 22.5 29.6875 12/16/06 186,703 473,142
John J. Perrotti 7,000 15.7 29.6875 12/16/06 130,692 331,200
John B. Kodweis 3,500 7.9 29.6875 12/16/06 65,346 165,600
Ralph E. Harper 3,500 7.9 29.6875 12/16/06 65,346 165,600
All Employees 44,500 100.0 830,829 2,105,483
All Stockholders 93,263,292 236,347,492
All Employee Gains
as % of all
Stockholder Gains .89% .89%
<FN>
<F1> All options are exercisable at market value (average of high and low stock
prices for the Company's Common Stock) at the date of grant. The exercise
price may be paid by cash or by delivery of shares of the Company's Common
Stock already owned by the executive officer.
<F2> Gains are reported net of the option exercise price but before taxes
associated with exercise. These amounts represent certain assumed rates of
appreciation only. These hypothetical rates are specified by the Securities
and Exchange Commission for illustrative purposes and are not intended as a
forecast of future appreciation in the Company's stock price. Actual
gains, if any, on stock option exercises are dependent on the future
performance of the Common Stock and overall stock market conditions, as
well as the optionholders' continued employment through the term of the
option.
</FN>
</TABLE>
<PAGE>
<TABLE>
OPTION EXERCISES IN LAST FISCAL YEAR AND
YEAR END OPTION VALUES
<CAPTION>
Number of Securities
Aggregate Underlying Unexercised Value of Unexercised
Option Options at Fiscal In-The-Money Options
Exercises Year End at Fiscal Year End<F2>
(#) ($)
Shares
Acquired Value
On Exercise Realized<F1>
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
James S. Gleason 5,000 50,938 134,900 16,000 2,219,540 53,000
David J. Burns 0 0 23,011 10,000 287,863 33,125
John J. Perrotti 0 0 12,500 7,000 136,063 23,188
John B. Kodweis 3,000 62,970 25,500 3,500 408,748 11,594
Ralph E. Harper 1,000 17,375 19,000 3,500 295,685 11,594
<FN>
<F1> Based on the difference between the option exercise prices and the average
prices in New York Stock Exchange composite transactions of the Company's
Common Stock on the dates of exercise.
<F2> Based on the difference between the option exercise prices and $33 per
share, the closing price in New York Stock Exchange composite transactions
of the Company's Common Stock on December 31, 1996.
</FN>
</TABLE>
<PAGE>
<PAGE>
PENSION PLAN AND EXECUTIVE AGREEMENTS
To enhance its ability to attract key employees whose
retirement benefits would be limited by their length of service,
the Company has adopted a Supplemental Retirement Plan ("SRP"),
an unfunded defined benefit plan which, when combined with
benefits from other Company retirement plans in which
participants participate, social security benefits and certain
other sources of retirement income, provides participants a
minimum level of total retirement income, up to a maximum of 55%
of final average earnings. Also, the SRP supplements the pension
benefits of SRP participants by direct payment of amounts by
which the participant's benefits under the Retirement Plan are
limited by the Internal Revenue Code. Under the SRP, final
average earnings are determined by reference to the three years
in which the participant was most highly paid in the five years
preceding retirement. SRP participants, who include all the
persons named in the preceding Summary Compensation Table, are
selected by the Executive Compensation Committee of the Board of
Directors. The following table illustrates the annual retirement
benefits payable under the SRP, together with the other
retirement plans in which executive officers participate, without
regard to the Internal Revenue Code limitations, calculated on a
single life annuity basis. These hypothetical benefit amounts
are reduced by certain other sources of retirement income,
including reductions for social security benefits, other
retirement income payable to the employee by prior employers and
employer contributions to the employee's account in the Company's
Savings Plan that apply to the SRP.
<TABLE>
<CAPTION>
Final 10 years 20 years 30 years 40 years
Average of Credited of Credited of Credited of Credited
Earnings Service Service Service Service
<S> <C> <C> <C> <C>
$100,000 $ 30,000 $ 40,000 $ 50,000 $ 55,000
$150,000 $ 45,000 $ 60,000 $ 75,000 $ 82,500
$200,000 $ 60,000 $ 80,000 $100,000 $110,000
$250,000 $ 75,000 $100,000 $125,000 $137,506
$300,000 $ 90,000 $120,000 $150,000 $165,000
$350,000 $105,000 $140,000 $175,000 $192,500
</TABLE>
NOTE: As of December 31, 1996, the number of credited full
years of service for those persons named in the
preceding compensation table were as follows: Mr.
Gleason: 37; Mr. Burns: 18; Mr. Perrotti: 10; Mr.
Kodweis: 17; and Mr. Harper: 24.
<PAGE>
The Company has entered into agreements with each of
the executives named in the Summary Compensation Table providing
for severance benefits under certain circumstances ("Executive
Agreements"). The terms "change in control," "cause,"
"disability" and "good reason" are used in the following
description as defined in the Executive Agreements. If, while
there is pending or within two years after a change in control,
the Company terminates the executive's employment other than for
<PAGE>
<PAGE>
cause or due to death or disability, or if the executive
terminates his employment for good reason, the executive is
entitled to receive: (1) salary through the termination date;
(2) normal severance pay plus a cash payment of two times his
highest annual compensation (including base salary and incentive
compensation) for the three preceding years; (3) a cash payment
to compensate for the additional pension benefits he would have
received had he remained employed by the Company for two
additional years; (4) a cash payment equal to two times the
annual cost of his employee benefits, other than retirement and
stock option plans; and (5) a cash payment of the present value
of his accrued benefit under SRP, including credit for two
additional years of service. Payments are limited to an amount
which will not be subject to the excise tax imposed by Sections
2806 and 4999 of the Internal Revenue Code.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As indicated previously, the members of the Executive
Compensation Committee are Robert A. Sherman, Chairman, Martin L.
Anderson, Julian W. Atwater, J. David Cartwright, John W. Guffey,
Jr. and Donald D. Lennox. Julian W. Atwater, P.C. is a partner
in the law firm of Nixon, Hargrave, Devans & Doyle LLP, the
Company's general counsel.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
In 1996 Donald D. Lennox was late in filing a single
report of Company common stock ownership with the Securities and
Exchange Commission.
<PAGE>
<PAGE>
PROPOSALS OF STOCKHOLDERS
In order to be eligible for inclusion in the Company's
proxy statement and form of proxy for next year's Annual Meeting,
stockholder proposals that action be taken at the meeting must be
received at the Company's principal executive offices by December
1, 1997.
OTHER MATTERS
The Board of Directors of the Company knows of no other
matters to be presented at the meeting. However, if any other
matters properly come before the meeting, the persons named in
the enclosed proxy will vote on such matters in accordance with
their best judgment.
The cost of solicitation of proxies will be borne by
the Company. In addition to solicitation by mail, some officers
and regular employees of the Company may, without extra
compensation, solicit proxies personally or by telephone or
telegraph and the Company will request brokerage houses,
nominees, custodians and fiduciaries to forward proxy materials
to beneficial owners and will reimburse their expenses.
STOCKHOLDERS MAY RECEIVE A COPY OF THE COMPANY'S ANNUAL
REPORT ON FORM 10-K FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION WITHOUT CHARGE ON REQUEST TO THE SECRETARY, GLEASON
CORPORATION, P.O. BOX 22970, ROCHESTER, NEW YORK 14692-2970.
March 31, 1997
<PAGE>
<PAGE>
GLEASON CORPORATION
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints James S. Gleason and
Ralph E. Harper, and either of them, with full power of
substitution, attorneys and proxies to represent the undersigned
at the Annual Meeting of Stockholders of Gleason Corporation to
be held on May 6, 1997, and at any adjournment or adjournments
thereof, with all the power which the undersigned would possess
if personally present, and to vote all shares of stock which the
undersigned may be entitled to vote at said meeting, hereby
revoking any earlier proxy for said meeting.
(To be Signed on Reverse Side)
<PAGE>
<PAGE>
(X) Please mark your votes as in the example to the left.
The Board of Directors recommends a vote FOR the
Election of Directors and FOR Proposals (2) AND (3).
1. ELECTION OF DIRECTORS.
( ) FOR
( ) WITHHELD
Nominees: David J. Burns, J. David Cartwright,
James S. Gleason
FOR, except vote withheld from the following nominee(s):
____________________________________________________
2. PROPOSAL TO AMEND THE COMPANY'S 1992 STOCK PLAN.
( ) FOR ( ) AGAINST ( ) ABSTAIN
3. PROPOSAL TO APPOINT ERNST & YOUNG LLP AS INDEPENDENT
AUDITORS FOR 1997.
( ) FOR ( ) AGAINST ( ) ABSTAIN
4. In accordance with their judgment in connection with the
transaction of such other business, if any, as may properly
come before the meeting.
IF NOT OTHERWISE MARKED, THE SHARES REPRESENTED BY THIS PROXY
SHALL BE VOTED IN THE ELECTION OF DIRECTORS AND FOR PROPOSALS (2)
and (3).
_______________________________________________________________
PLEASE COMPLETE, DATE, SIGN AND RETURN IN THE ENCLOSED ENVELOPE
Signature(s) __________________________ Date _____________,1997
NOTE: Name of stockholder should be signed exactly as it appears
on this proxy. When shares are held jointly, both should
sign.
