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
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)(4) 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: $125.00
(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 30, 1998
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of
Stockholders of Gleason Corporation to be held on Tuesday, May
5, 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 four directors 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 1998 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 5, 1998 at 10:00 A.M. for the following purposes:
(1) To elect three directors for three-year terms, and one director for a
one-year term;
(2) To appoint Ernst & Young LLP as independent auditors for 1998;
(3) 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 12, 1998 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 30, 1998
___________________________________________________________________________
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 5, 1998.
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 stockhold-
ers is March 30, 1998.
The close of business on March 12, 1998 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 10,497,796
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, and for the
appointment of Ernst & Young LLP as independent auditors for 1998. A stock-
holder 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 approximately equal
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. William
P. Montague and Robert L. Smialek were elected by the Board in 1997. Their
terms expire this year. In addition, the terms of Martin L. Anderson and
John W. Guffey, Jr. expire this year.
Robert W. Bjork is resigning before completion of his current term and
Robert A. Sherman is not standing for re-election as a director. Accordingly,
the Board of Directors will consist of nine directors. In order to establish
three classes of directors of equal number, the Board of Directors has
nominated Martin L. Anderson, John W. Guffey, Jr., and William P. Montague to
serve as directors for three-year terms and Robert L. Smialek to serve as a
<PAGE>
<PAGE>
director for a one-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.
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 Corporate
Governance 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. The Audit Committee is responsible for recommending the
outside auditors for the Company subject to approval by the Board and the
stockholders, and for evaluating the independence of the auditors. The
Committee reviews with the auditors the scope of the audit, their fees, and
their comments on accounting procedures and controls including any suggestions
they may have relating to the internal controls, accounting practices or
procedures of the Company or its subsidiaries. It reviews with management
and the auditors the annual financial statements of the Company and any
material changes in accounting principles or practices used in preparing the
statements, and also reviews procedures for ensuring implementation of
recommendations made by the auditors, the status of compliance with laws,
regulations and internal procedures, and contingent liabilities and risks that
may be material to the Company. In 1997 this Committee held two meetings.
The members of the Corporate Governance Committee (formerly 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. The Corporate Governance Committee is responsible for
making recommendations to the Board concerning the appropriate size and
composition of the Board, reviews candidates recommended by stockholders,
conducts searches for candidates for Board membership, and recommends
candidates to fill new positions or vacancies on the Board. The Committee
also reviews possible conflicts of interest of directors, makes recommend-
ations regarding the functions and members of committees of the Board,
compensation of directors, and conduct of Board meetings.
<PAGE>
<PAGE>
In addition, the Committee periodically reviews the Company's Corporate
Governance Principles, evaluates the performance of the Chairman and Chief
Executive Officer of the Company, and reviews with the Chief Executive Officer
the management development and succession plans relating to officer positions
of the Company. This Committee held two meetings in 1997.
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. The Executive Compensation Committee is
responsible for approving the compensation of the Chairman and Chief Executive
Officer, and approving the compensation of other elected officers of the
Company. It also adopts compensation plans, other than those providing for
the issuance of stock, authorizes executive employment arrangements, makes
grants of options and restricted stock pursuant to the 1992 Stock Plan, and
otherwise oversees administration of the Company's incentive compensation
plans. It is also responsible for preparation of the annual Executive
Compensation Report for the proxy statement. This Committee held three
meetings in 1997.
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 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 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 6,000 shares of the Company's Common Stock.
These options are 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 1997 the Board of Directors held eight meetings. In 1997 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.
<PAGE>
<PAGE>
The following table sets forth information about the nominees and those
directors whose terms of office will continue after the Annual Meeting.
<TABLE>
<CAPTION>
Principal Occupations and
Director Term Other Directorships
Name and Age Since Expires Held in Public Companies
<S> <C> <C> <C>
Nominees:
Martin L. 1995 1998 Director of Supply Chain Programs,
Anderson (49) Babson College since 1996; Affiliate
Director of the International Motor
Vehicle Program, Massachusetts
Institute of Technology since 1996;
prior thereto Associate Director of
that program (1993-1996)
John W. 1995 1998 Chairman and Chief Executive Officer
Guffey, Jr. (60) of Coltec Industries Inc., a
diversified manufacturing company
primarily serving the aerospace and
general industrial markets, since
1995; prior thereto President and
Chief Operating Officer of Coltec
Industries Inc.
William P. 1997 1998 President of Mark IV Industries
Montague (51) Inc., whose core technologies
include power transmission, fluid
transfer and filtration systems, and
components for global industrial and
automotive markets, since 1996; prior
thereto Executive Vice President and
Chief Financial Officer of Mark IV;
Director: Mark IV Industries, Inc.
and Gibraltar Steel Corporation
Robert L. 1997 1998 Chairman, President, and Chief
Smialek (53) Executive Officer of Insilco
Corporation, a diversified manufact-
urer of industrial and specialty
consumer products; Director:
Thermalex, Inc. and General Cable
Corp.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Principal Occupations and
Director Term Other Directorships
Name and Age Since Expires Held in Public Companies
Other Directors:
<S> <C> <C> <C>
Julian W. 1976 1999 Julian W. Atwater, P.C. is a
Atwater (66) partner in Nixon, Hargrave, Devans
& Doyle LLP, attorneys
Donald D. 1987 1999 Former Chairman of International
Lennox (79) Imaging Materials, Inc., a manu-
facturer of thermal transfer ribbons
for office equipment (1990-1997);
prior thereto Chairman and Chief
Executive Officer of Schlegel
Corporation; prior thereto
Chairman, President and Chief
Executive Officer of Navistar
International Corporation
David J. 1997 2000 Executive Vice President of the
Burns (43) Company since August 1995; prior
thereto Vice President - Machine
Products Group of the Company
(1992-1995)
J. David 1993 2000 President of Cooper Hand Tools,
Cartwright (59) a division of Cooper Industries, Inc.,
a diversified, worldwide manufacturer
of electrical products, tools and
hardware, and automotive products,
since 1994; prior thereto President,
Champion Spark Plug Company, a
division of Cooper Industries, Inc.,
(1992-1994)
James S. 1965 2000 Chairman, President and Chief
Gleason (63) Executive Officer of the Company
</TABLE>
<PAGE>
<PAGE>
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 1998. 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.
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 864,746<F1> 8.2%
1000 University Avenue
Rochester, New York 14692
Dimensional Fund Advisors, Inc. 720,400<F2> 6.9%
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 387,000 shares, sole voting
power. Officers of Dimensional Fund Advisors Inc. vote an additional
99,800 shares as officers of the DFA Investment Trust Company and an
additional 233,600 shares as officers of DFA Investment Dimensions
Group Inc.
</FN>
</TABLE>
<PAGE>
<PAGE>
The following table sets forth information, as of March 1, 1998, 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, 1997, 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 14,580<F2><F3> *
Julian W. Atwater 31,399<F2><F3> *
Robert W. Bjork 30,355<F2><F3> *
J. David Cartwright 20,433<F2><F3> *
John W. Guffey, Jr. 18,499<F2><F3> *
Donald D. Lennox 41,476<F2><F3> *
William P. Montague 4,863<F3> *
Robert A. Sherman 44,304<F2><F3> *
Robert L. Smialek 2,824<F3> *
James S. Gleason 438,889<F2><F4><F5> 4.1%
David J. Burns 73,209<F2><F5> *
Ralph E. Harper 46,963<F2><F5> *
John B. Kodweis 58,762<F2><F5> *
John J. Perrotti 51,557<F2><F5> *
All directors and 1,754,063<F2><F3><F4><F5><F6> 15.8%
executive officers as
a group (15 persons)
______________________
<FN>
* Less than 1% of the outstanding shares of Common Stock.
<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,
1998: Messrs. Anderson, Atwater, Bjork, Cartwright, Guffey,
Lennox, Gleason, Burns, Harper, Kodweis and Perrotti - 10,000,
24,000, 24,000, 12,000, 10,000, 14,000, 266,800, 56,780, 32,500,
38,000 and 39,000 shares respectively; and all directors and
executive officers as a group - 535,080 shares.
<F3> Includes 4,580, 2,399, 2,355, 8,433, 4,499, 15,438, 863,
21,894 and 824 hypothetical shares (without voting power)
credited to the accounts of Messrs. Anderson, Atwater,
Bjork, Cartwright, Guffey, Lennox, Montague, Sherman and
Smialek, respectively, pursuant to the Directors Fees
Deferral Plan.
<F4> Includes 65,710 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,
1998 were subject to restrictions on disposition:
Messrs. Gleason, Burns, Harper, Kodweis and Perrotti -
16,534, 9,004, 1,549, 5,298 and 9,687 shares
respectively; and all directors and executive officers as
a group - 45,126 shares.
<F6> Includes 864,746 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 this entity are not included above in
those individuals' stockholdings.
</FN>
<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 stockholder 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 execu-
tive 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 Company's 1992 Stock Plan.
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. 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 stock-
holders by providing executive officers an opportunity to have a financial
stake in the Company that should increase as stock prices reflect improved
Company performance.
<PAGE>
<PAGE>
Chief Executive Officer Compensation
The Committee met in December 1996 to determine Mr. Gleason's compen-
sation for 1997. It took note of the continued improvement in the Company's
sales and financial performance in 1996, reflecting accelerated development of
new products and continuing improved productivity in manufacturing and over-
head operations, as well as greater strength in markets the Company serves.
In view of these and other factors, the Committee increased Mr. Gleason's base
salary by $40,000 for 1997 to $370,000. The Committee also approved a sec-
ond increase to $400,000 if and when the Pfauter acquisition was consummated.
That increase was effective August 1, 1997.
In December 1997, the Committee granted Mr. Gleason stock options to
purchase 25,000 shares.
In February 1998, the Committee met to consider bonus awards for 1997
under the AMICP. Awards of $246,009 and 1,710 shares of restricted stock
were made to Mr. Gleason as a result of the amount by which the Company
exceeded the threshold targeted financial returns under the Plan in 1997.
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 Ownership Guidelines
The Company's Board of Directors has adopted guidelines for the minimum
value of Company Common Stock that key employees, including executive offi-
cers, are expected to hold. The minimum value established for each individual
is a multiple of the mid-point of his or her salary grade. The multiple
varies depending upon the individual's position with the Company, being higher
the more senior the position. It is highest for the Chief Executive Officer
at four times base salary. The Company expects the guidelines to be met no
later than December 2003 by all current covered executives and within five
years after hire or promotion for all new executives covered by them. The
Company also expects executives to make continued progress each year towards
reaching their stock ownership guidelines.
The guidelines are not intended to prevent executives from selling stock
that they currently own or receive pursuant to a stock option or other
compensation program, provided that such sales are not inconsistent with the
ownership levels called for by the guidelines, and it is expected that they
will periodically sell shares based on tax, estate planning and other personal
considerations.
<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 $100 was invested on January 1, 1993 in
the Company's Common Stock and in each of the foregoing indices and assumes
reinvestment of dividends.
</TABLE>
<TABLE>
<CAPTION>
GLEASON CORPORATION
Comparison of Five Year Cumulative Total Return
vs. S&P Small Cap 600 and 7-Company Peer Group Index <F1>
Value of Investment ($)
Company/Index Name 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
<S> <C> <C> <C> <C> <C> <C>
Gleason Corporation 100 102.06 102.49 230.38 237.11 391.58
S&P Small Cap 600 Index 100 118.79 113.12 147.01 178.35 223.98
Peer Group Index<F1> 100 121.76 129.07 157.39 138.91 162.21
<FN>
<F1> Includes Bridgeport Machines, Inc., Brown & Sharpe Manufacturing Company,
Cincinnati Milacron Inc., DeVlieg-Bullard, Inc., Hardinge Brothers Inc.,
Hurco Companies, Inc., and Monarch Machine Tool Company. Giddings &
Lewis, Inc. has been removed from the peer group index since it was
acquired in 1997 and is no longer publicly traded.
</FN>
</TABLE>
<PAGE>
<PAGE>
SUMMARY COMPENSATION TABLE
Set forth below is certain compensation information for executive officers
of the Company.
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
Securities
Restricted Underlying All Other
Name and Stock Options/ Compensa-
Principal Salary Bonus Awards<F1> SARS<F2> tion<F8>
Position Year ($) ($) ($) (#) ($)
<S> <C> <C> <C> <C> <C> <C>
James S. 1997 389,273 246,009 51,621<F3> 25,000 15,806
Gleason 1996 334,274 188,120 - 32,000 14,450
President and 1995 308,733 63,168 - 24,000 13,930
Chief
Executive
Officer
David J. 1997 220,002 129,209 27,169<F4> 12,000 8,643
Burns 1996 175,008 99,723 - 20,000 8,037
Executive 1995 138,338 33,466 48,750 14,000 7,234
Vice President
John J. 1997 182,508 111,360 23,395<F5> 10,000 8,347
Perrotti 1996 141,250 86,318 16,500 14,000 7,768
Vice President 1995 111,250 25,350 - 10,000 5,771
- - Finance and
Treasurer
Ralph E. 1997 160,203 85,075 17,811<F6> 8,000 11,271
Harper 1996 135,716 66,531 - 7,000 10,364
Vice President 1995 127,836 22,350 - 5,000 9,086
and Secretary
John B. 1997 150,400 85,075 17,811<F7> 8,000 9,962
Kodweis 1996 135,907 66,531 - 7,000 9,336
Vice President - 1995 126,417 22,350 13,000 5,000 7,406
Administration
and Human
Resources
<FN>
<F1> Holders of restricted stock are entitled to vote and receive dividends
thereon.
<F2> 1996 and 1995 have been adjusted to reflect the 1997 two-for-one (2-for-
1) stock split.
<F3> Mr. Gleason held an aggregate of 16,534 shares of restricted stock
valued, using the December 31, 1997 closing price, at $445,385. The
1997 award was 1,710 shares, 855 of which become unrestricted on each
anniversary of the award.
<F4> Mr. Burns held an aggregate of 9,004 shares of restricted stock valued,
using the December 31, 1997 closing price, at $242,545. The 1997 award
was 900 shares, 450 of which become unrestricted on each anniversary of
the award. The 1995 award was 3,000 shares, 120 of which become
unrestricted on each anniversary of the award.
<F5> Mr. Perrotti held an aggregate of 9,687 shares of restricted stock
valued, using the December 31, 1997 closing price, at $260,944. The
1997 award was 775 shares, 387 of which become unrestricted on the first
anniversary of the award and 388 of which become unrestricted on the
second anniversary of the award. The 1996 award was 1,000 shares, 34 of
which become unrestricted on each anniversary of the award.
<F6> Mr. Harper held an aggregate of 1,549 shares of restricted stock valued,
using the December 31, 1997 closing price, at $41,726. The 1997 award
was 590 shares, 295 of which become unrestricted on each anniversary of
the award.
<F7> Mr. Kodweis held an aggregate of 5,298 shares of restricted stock valued,
using the December 31, 1997 closing price, at $142,715. The 1997 award
was 590 shares, 295 of which become unrestricted on each anniversary of
the award. The 1995 award was 800 shares which became unrestricted on
the second anniversary of the award.
<F8> Includes for 1997: $6,400 in defined contribution retirement plan awards
and $1,600 in contributions to the Company's 401(k) plan for each of the
executives named in the Summary Compensation Table and $7,806, $643,
$347, $3,271 and $1,962 in group term life insurance premiums for
Messrs. Gleason, Burns, Perrotti, Harper and Kodweis, respectively.
</FN>
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
STOCK OPTION GRANTS IN LAST FISCAL YEAR
Potential Realizable
Securities Exercise Value at Assumed
Underlying % of Total or Base Annual Rate of Stock
Options Options Price Price Appreciation for
Granted<F1> Granted to ($ per Expiration Option Term<F2>
Name (#) Employees Share) Date 5%($) 10%($)
<S> <C> <C> <C> <C> <C> <C>
James S. Gleason 25,000 25.5 26.03 12/8/07 409,273 1,037,178
David J. Burns 12,000 12.2 26.03 12/8/07 196,451 497,845
John J. Perrotti 10,000 10.2 26.03 12/8/07 163,709 414,871
John B. Kodweis 8,000 8.2 26.03 12/8/07 130,967 331,897
Ralph E. Harper 8,000 8.2 26.03 12/8/07 130,967 331,897
All Employees 98,000 100.0 1,604,349 4,065,737
All Stockholders 170,663,938 432,495,928
All Employee Gains
as % of all
Stockholder Gains .94% .94%
<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>
<CAPTION>
OPTION EXERCISES IN LAST FISCAL YEAR AND
YEAR END OPTION VALUES
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 5,200 98,150 296,600 25,000 5,293,252 22,656
David J. Burns 9,242 154,247 56,780 12,000 818,860 10,875
John J. Perrotti 0 0 39,000 10,000 557,250 9,063
John B. Kodweis 8,000 126,906 50,000 8,000 858,684 7,250
Ralph E. Harper 4,000 57,937 41,000 8,000 696,310 7,250
<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 $26.9375
per share, the closing price in New York Stock Exchange composite
transactions of the Company's Common Stock on December 31, 1997.
</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 retire-
ment 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 the participant's average annual compensation (including annual incentive
but not long-term incentive pay) for the three years such compensation was
greatest 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, calcu-
lated 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>
$200,000 $ 60,000 $ 80,000 $100,000 $110,000
$250,000 $ 75,000 $100,000 $125,000 $137,500
$300,000 $ 90,000 $120,000 $150,000 $165,000
$350,000 $105,000 $140,000 $175,000 $192,500
$400,000 $120,000 $160,000 $200,000 $220,000
$500,000 $150,000 $200,000 $250,000 $275,000
$600,000 $180,000 $240,000 $300,000 $330,000
$700,000 $210,000 $280,000 $350,000 $385,000
</TABLE>
NOTE: As of December 31, 1997, the number of credited full
years of service for those persons named in the
preceding compensation table are as follows: Mr.
Gleason: 38; Mr. Burns: 19; Mr. Perrotti: 11; Mr.
Harper: 25; and Mr. Kodweis: 18.
<PAGE>
<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 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 principal outside counsel.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
In 1997 Robert L. Smialek 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 November 30, 1998.
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 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 30, 1998
<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 5, 1998, 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>
The Board of Directors recommends a vote FOR the
Election of Directors and FOR Proposal (2).
1. ELECTION OF DIRECTORS.
( ) FOR
( ) WITHHELD
Nominees:
For three-year terms:
Martin L. Anderson
John W. Guffey, Jr.
William P. Montague
For a one-year term:
Robert L. Smialek
FOR, except vote withheld from the following nominee(s):
____________________________________________________
2. PROPOSAL TO APPOINT ERNST & YOUNG LLP AS INDEPENDENT
AUDITORS FOR 1998.
( ) FOR ( ) AGAINST ( ) ABSTAIN
3. 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 FOR THE ELECTION OF DIRECTORS AND FOR PROPOSAL (2).
_______________________________________________________________
PLEASE COMPLETE, DATE, SIGN AND RETURN IN THE ENCLOSED ENVELOPE
Signature(s) __________________________ Date _____________,1998
NOTE: Name of stockholder should be signed exactly as it appears
on this proxy. When shares are held jointly, both should
sign.
