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)
Edward J. Pelta
(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(1) (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 30, 1999
Dear Stockholder:
You are cordially invited to attend the Annual Meeting
of Stockholders of Gleason Corporation to be held on Tuesday, May
4, 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 two
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 1999 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 4, 1999 at 10:00 A.M. for the following purposes:
(1) To elect two directors for three-year terms;
(2) To appoint Ernst & Young LLP as independent auditors for 1999; and
(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 11, 1999
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
EDWARD J. PELTA, Secretary
Rochester, New York
March 30, 1999
_______________________________________________________________
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 4, 1999.
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 is being sent to stockholders
is March 30, 1999.
The close of business on March 11, 1999 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
9,608,135 shares of CommonStock, 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 1999.
A stockholder giving a proxy has the right to revoke it at any time before it
has been voted by (i) delivering 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.
Silas L. Nichols was elected by the Board in 1998. His term expires this
year. In addition, the term of Robert L. Smialek expires this year.
Julian W. Atwater and Donald D. Lennox are retiring as directors.
Accordingly, the Board of Directors will consist of eight directors. In order
to establish three classes of directors of approximately equal number, the
Board of Directors has nominated Silas L. Nichols and Robert L. Smialek to
serve as directors for three-year terms. The Board of Directors believes
that the nominees will be available and able to serve as directors, but if
either 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 Corporate
Governance Committee and an Executive Compensation Committee.
The members of the Audit Committee are John W. Guffey, Jr., Chairman,
Martin L. Anderson, J. David Cartwright, Donald D. Lennox, William P. Montague,
Silas L. Nichols and Robert L. Smialek. The Audit Committee is responsible
for recommending the annual appointment of the independent auditors for the
Corporation, subject to approval by the Board and the Stockholders, and for
evaluating the independence of the auditors. The Committee reviews with the
independent auditors the scope of the audit, their fees and related matters,
receives copies of the annual comments from the independent auditors on
accounting procedures and systems of control and reviews with them any
questions, comments or suggestions they may have relating to the internal
controls, accounting practices or procedures of the Company or its
subsidiaries. It also reviews with management and the independent auditors
the annual financial statements of the Company and any material changes in
accounting principles or practices used in preparing the statements.
Additional responsibilities include reviewing procedures for ensuring
implementation of accepted recommendations made by the independent auditors.
The Committee also reviews the status of compliance with laws, regulations and
internal procedures, and contingent liabilities and risks that may be material
to the Company. In 1998 this Committee held two meetings.
The members of the Corporate Governance Committee are Donald D. Lennox,
Chairman, Martin L. Anderson, Julian W. Atwater, J. David Cartwright, John W.
Guffey, Jr., William P. Montague, Silas L. Nichols and Robert L. Smialek. The
Corporate Governance Committee is responsible for considering and making
recommendations to the Board concerning the appropriate size and composition
of the Board. This responsibility includes: considering and recommending
candidates to fill new positions on the Board as a result of either expansion
or vacancies that occur by resignation, retirement or for any other reason;
reviewing candidates recommended by stockholders; selecting advisors to the
Board to assist in searches for candidates for Board membership; conducting
inquiries into the background and qualifications of possible candidates; and
recommending the director nominees for approval by the Board and the
Stockholders.
<PAGE>
<PAGE>
In addition, the Committee considers and reviews the Company's Corporate
Governance Principles; reviews and evaluates the job 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 one meeting
in 1998.
The members of the Executive Compensation Committee are Martin L. Anderson,
Chairman, Julian W. Atwater, J. David Cartwright, John W. Guffey, Jr., Donald
D. Lennox, William P. Montague, Silas L. Nichols and Robert L. Smialek. The
Executive Compensation Committee is responsible for approving the compensation
for the Chairman and Chief Executive Officer of the Company and approving
the compensation of other elected officers of the Company. The Committee's
additional functions are to adopt compensation plans, other than those
providing for the issuance of stock, authorize executive employment arrange-
ments, and oversee administration of the Company's incentive compensation
plans. The Committee is also responsible for preparation of the Executive
Compensation Committee Report for the annual proxy statement. This Committee
held three meetings in 1998.
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 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 1998 the Board of Directors held seven meetings. In 1998 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:
Silas L. 1998 1999 President, ABB Flexible
Nichols (55) Automation Inc. (Manufacturing
Industry & Robotics Group of ABB
Asea Brown Boveri Ltd.), a provider
of robot-based automation solu-
tions, since 1996; prior thereto
Executive Vice President & General
Manager, ABB Customer Service
Division (1992-1996)
Robert L. 1997 1999 Chairman, President and Chief
Smialek (55) Executive Officer of Insilco
Corporation, a diversified manufac-
turer of industrial and specialty
consumer products, since 1993;
Director: Thermalex, Inc. and
General Cable Corp.
Other Directors:
David J. 1997 2000 Executive Vice President of the
Burns (44) Company since August 1995; prior
thereto Vice President - Machine
Products Group of the Company
(1992-1995)
J. David 1993 2000 President of Cooper Tools, a
Cartwright(60) division of Cooper Industries, Inc.,
a worldwide manufacturer of elec-
trical products, tools and hardware,
since 1994; prior thereto President,
Champion Spark Plug Company, a
former division of Cooper
Industries, Inc. (1992-1994)
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Principal Occupations and
Director Term Other Directorships
Name and Age Since Expires Held in Public Companies
<S> <C> <C> <C>
James S. 1965 2000 Chairman, President and Chief
Gleason (64) Executive Officer of the Company
Martin L. 1995 2001 Director of Supply Chain
Anderson (50) Programs, 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 2001 Chairman and Chief
Guffey, Jr. (61) Executive Officer 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. (1991-1994)
William P. 1997 2001 President of Mark IV Industries,
Montague (52) 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 of
Mark IV Industries, Inc. and
Gibraltar Steel Corporation
</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 1999. 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 1,197,346<F1> 12.4%
1000 University Avenue
Rochester, New York 14692
Dimensional Fund Advisors, Inc. 714,200<F2> 7.4%
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 voting powers.
</FN>
</TABLE>
<PAGE>
<PAGE>
The following table sets forth information, as of March 1, 1999, 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, 1998, 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 21,807<F2><F3> *
Julian W. Atwater 35,930<F2><F3> *
J. David Cartwright 27,660<F2><F3> *
John W. Guffey, Jr. 25,716<F2><F3> *
Donald D. Lennox 45,860<F2><F3> *
William P. Montague 11,886<F2><F3> *
Silas L. Nichols 1,104<F3> *
Robert L. Smialek 11,831<F2><F3> *
James S. Gleason 434,652<F2><F4><F5> 4.4%
David J. Burns 87,164<F2><F5> *
Ralph E. Harper 50,865<F2><F5> *
John B. Kodweis 64,800<F2><F5> *
John J. Perrotti 63,526<F2><F5> *
All directors and 2,094,371<F2><F3><F4><F5><F6> 20.4%
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, 1999: Messrs. Anderson, Atwater, Cartwright, Guffey,
Lennox, Montague, Smialek, Gleason, Burns, Harper,
Kodweis and Perrotti - 16,000, 28,000, 18,000, 16,000,
20,000, 6,000, 6,000, 251,800, 68,780, 40,500, 46,000 and
49,000 shares respectively; and all directors and
executive officers as a group - 574,080 shares.
<F3> Includes 5,807, 2,930, 9,660, 5,716, 16,758, 1,886,
1,104, and 1,831 hypothetical shares (without voting
power) credited to the accounts of Messrs. Anderson,
Atwater, Cartwright, Guffey, Lennox, Montague, Nichols
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,
1999 were subject to restrictions on disposition:
Messrs. Gleason, Burns, Harper, Kodweis and Perrotti -
17,546, 9,943, 1,153, 5,607 and 10,768 shares
respectively; and all directors and executive officers as
a group - 49,783 shares.
<F6> Includes 1,197,346 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>
</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
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) Economic Value
Added(EVA(registered trademark))(net operating profit after tax minus
(average net operating capital multiplied by the Company's weighted average
cost of capital)), and by the executive's personal performance. The Company's
weighted average cost of capital is 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
that should increase as stock prices reflect improved Company performance.
<PAGE>
<PAGE>
Chief Executive Officer Compensation
The Committee met in December 1997 to determine Mr. Gleason's
compensation for 1998. It took note of the successful acquisition of the
Pfauter Group which was effective July 31, 1997, the continued improvement
in the Company's sales and financial performance in 1997, a successful second-
ary stock offering completed in December 1997, and the continued strength
in the markets the Company serves. In view of these and other factors, the
Committee increased Mr. Gleason's base salary by $50,000 for 1998 to $450,000.
In December 1998, the Committee granted Mr. Gleason stock options to
purchase 35,000 shares.
In February 1999, the Committee met to consider bonus awards for 1998
under the AMICP. Awards of $317,929 and 1,867 shares of restricted stock
were made to Mr. Gleason as a result of the Company's EVA under the Plan in
1998.
EXECUTIVE COMPENSATION COMMITTEE
Martin L. Anderson, Chairman
Julian W. Atwater
J. David Cartwright
John W. Guffey, Jr.
Donald D. Lennox
William P. Montague
Silas L. Nichols
Robert L. Smialek
<PAGE>
<PAGE>
Stock Ownership Guidelines
The Company has adopted guidelines to assist key employees, including
executive officers, in determining appropriate levels of Common Stock owner-
ship. The guidelines set forth a minimum value of Common Stock which the
Company requires each key employee hold. The minimum value established for
any particular individual relates to varying multiples of his or her salary
depending upon the individual's position with the Company. The multiple is
the highest for the Chief Executive Officer, at four times base salary. The
Company expects the guidelines will be met no later than December 2003 by
all covered executives employed at the time the guidelines were established
and within five years after hire or promotion for all new executives covered
by the guidelines. The Company further expects that executives will make
significant progress each year towards reaching the final stock ownership
guidelines.
The existence of these guidelines is not intended to prevent executives
from selling stock that they currently own or receive pursuant to a stock
option or other compensation program. Executives, including the named execu-
tive officers, may 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 $100 was invested on January 1, 1994 in
the Company's Common Stock and in each of the foregoing indices and assumes
reinvestment of dividends.
<TABLE>
GLEASON CORPORATION
Comparison of Five Year Cumulative Total Return
vs. S&P Small Cap 600 and 7-Company Peer Group Index <F1>
Value of Investment ($)
<CAPTION>
Company/Index Name 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
<S> <C> <C> <C> <C> <C> <C>
Gleason Corporation 100 100.43 225.75 232.35 383.72 260.81
S&P Small Cap 600 Index 100 95.23 123.76 150.14 188.56 186.10
Peer Group Index<F1> 100 106.01 129.26 114.09 133.22 97.83
<FN>
<F1> Includes Bridgeport Machines, Inc., Brown & Sharpe Manufacturing Company,
DeVlieg-Bullard, Inc., Hardinge Inc., Hurco Companies, Inc., Milacron
Inc. and Monarch Machine Tool Company.
</FN>
</TABLE>
<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
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. 1998 454,184 317,929 32,603<F3> 35,000 12,528
Gleason 1997 389,273 246,009 51,621 25,000 15,806
President and 1996 334,274 188,120 - 32,000 14,450
Chief Executive
Officer
David J. 1998 245,004 152,402 30,640<F4> 13,000 10,569
Burns 1997 220,002 129,209 27,169 12,000 8,643
Executive 1996 175,008 99,723 - 20,000 8,037
Vice President
John J. 1998 210,000 126,000 31,679<F5> 11,000 10,113
Perrotti 1997 182,508 111,360 23,395 10,000 8,347
Vice President 1996 141,250 86,318 16,500 14,000 7,768
- - Finance and
Treasurer
Ralph E. 1998 175,624 105,374 14,979<F6> - 9,764
Harper 1997 160,203 85,075 17,811 8,000 11,271
Vice President 1996 135,716 66,531 - 7,000 10,364
and Secretary
John B. 1998 167,833 100,700 19,653<F7> 8,500 9,690
Kodweis 1997 150,400 85,075 17,811 8,000 9,962
Vice President- 1996 135,907 66,531 - 7,000 9,336
Administration
and Human
Resources
<FN>
<F1> Holders of restricted stock are entitled to vote and receive dividends
thereon.
<F2> 1996 has been adjusted to reflect the 1997 two-for-one (2-for-1) stock
split.
<F3> Mr. Gleason held an aggregate of 17,546 shares of restricted stock
valued, using the December 31, 1998 closing price, at $318,021. The 1998
award was 1,867 shares, 933 of which become unrestricted on the first
anniversary of the award and 934 become unrestricted on the second
anniversary of the award. 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 9,943 shares of restricted stock valued,
using the December 31, 1998 closing price, at $180,217. The 1998 award
was 1,755 shares, 877 of which become unrestricted on the first
anniversary of the award and 878 become unrestricted on the second
anniversary of the award. The 1997 award was 900 shares, 450 of which
become unrestricted on each anniversary of the award.
<F5> Mr. Perrotti held an aggregate of 10,768 shares of restricted stock
valued, using the December 31, 1998 closing price, at $195,170. The 1998
award was 1,814 shares, 907 of which become unrestricted on each
anniversary of the award. 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, who retired from the Company on December 31, 1998, held an
aggregate of 1,153 shares of restricted stock valued, using the December
31, 1998 closing price, at $20,898. The 1998 award was 858 shares, 429
of which become unrestricted on each anniversary of the award. The 1997
award was 590 shares, 295 of which become unrestricted on each
anniversary of the award.
<F7> Mr. Kodweis held an aggregate of 5,607 shares of restricted stock valued,
using the December 31, 1998 closing price, at $101,627. The 1998 award
was 1,126 shares, 563 of which become unrestricted on each anniversary of
the award. The 1997 award was 590 shares, 295 of which become
unrestricted on each anniversary of the award.
<F8> Includes for 1998: $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 $4,528, $2,569,
$2,113, $1,764 and $1,690 in group term life insurance premiums for
Messrs. Gleason, Burns, Perrotti, Harper and Kodweis, respectively.
</FN>
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
STOCK OPTION GRANTS IN LAST FISCAL YEAR
PotentialRealizable
Securities Exercise Value at Assumed
Underlying % of Total or Base Annual Rate of Stock
Options Options Price Price Appreciation for
Granted<F1> Granted to ($ per Expiration Option Term<F2>
Name (#) Employees Share) Date 5%($) 10%($)
<S> <C> <C> <C> <C> <C> <C>
James S. Gleason 35,000 35.9 19.03 12/7/08 418,897 1,061,568
David J. Burns 13,000 13.3 19.03 12/7/08 155,590 394,297
John J. Perrotti 11,000 11.3 19.03 12/7/08 131,653 333,636
John B. Kodweis 8,500 8.7 19.03 12/7/08 101,732 257,809
Ralph E. Harper - - - -
All Employees 97,500 100.0 1,166,928 2,957,225
All Stockholders 119,005,617 301,583,598
All Employee Gains
as % of all
Stockholder Gains .98% .98%
<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
Number of Securities
Aggregate Underlying Unexercised Valueof 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 29,800 684,588 291,800 35,000 2,325,589 --
David J. Burns -- -- 68,780 13,000 318,526 --
John J. Perrotti -- -- 49,000 11,000 213,563 --
John B. Kodweis 12,000 220,967 46,000 8,500 304,342 --
Ralph E. Harper 8,500 165,482 40,500 -- 245,734 --
<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 $18.125
per share, the closing price in New York Stock Exchange composite
transactions of the Company's Common Stock on December 31, 1998.
</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 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
Average of Credited of Credited of Credited
Earnings Service Service Service
<S> <C> <C> <C>
$ 200,000 $ 60,000 $ 90,000 $110,000
$ 300,000 $ 90,000 $135,000 $165,000
$ 400,000 $120,000 $180,000 $220,000
$ 500,000 $150,000 $225,000 $275,000
$ 600,000 $180,000 $270,000 $330,000
$ 700,000 $210,000 $315,000 $385,000
$ 800,000 $240,000 $360,000 $440,000
$ 900,000 $270,000 $405,000 $495,000
$1,000,000 $300,000 $450,000 $550,000
</TABLE>
NOTE: As of December 31, 1998, the number of credited full
years of service for those persons named in the
preceding compensation table are as follows: Mr.
Gleason: 39; Mr. Burns: 20; Mr. Perrotti: 12; Mr.
Harper: 26; and Mr. Kodweis: 19.
<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 Martin L. Anderson, Chairman, Julian W. Atwater, J. David
Cartwright, John W. Guffey, Jr., Donald D. Lennox, William P. Montague,
Silas L. Nichols and Robert L. Smialek. Julian W. Atwater, P.C., who is
now retired, was 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
Based solely upon a review of Forms 3 and 4 and amendments thereto
furnished to the Company during the last fiscal year and Forms 5 and
amendments thereto furnished to the Company with respect to the last fiscal
year, the Company is not aware that any director, officer or beneficial
owner of more than 10% of the Company's Common Stock failed to file on a
timely basis reports required by Section 16(a) of the Securities
Exchange Act of 1934 during the past fiscal year.
<PAGE>
<PAGE>
PROPOSALS OF STOCKHOLDERS
In order to be considered 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, 1999. If notice of a proposal by a stock-
holder intended to be presented at next year's Annual Meeting is received by
the Company after February 12, 2000, the persons named under the Company's
management proxies will be authorized to exercise discretionary voting
authority on such proposal if it is raised at the meeting. In addition, the
Company's By-laws require that stockholder proposals must be received at the
principal executive offices of the Company not less than 60 days prior nor
more than 90 days prior to the scheduled date of the Annual Meeting in
order to be submitted at the meeting.
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, 1999
EVA is a registered trademark of Stern Stewart & Co.
<PAGE>
<PAGE>
GLEASON CORPORATION
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints James S. Gleason and
Edward J. Pelta, 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 4, 1999, 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:
Silas L. Nichols
Robert L. Smialek
FOR, except vote withheld from the following nominee(s):
____________________________________________________
2. PROPOSAL TO APPOINT ERNST & YOUNG LLP AS INDEPENDENT
AUDITORS FOR 1999
( ) 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 _____________,1999
NOTE: Name of stockholder should be signed exactly as it appears
on this proxy. When shares are held jointly, both should
sign.
