GLEASON CORPORATION
                        1992 STOCK PLAN
                  (as amended through 5/6/97)

1.   DEFINITIONS

     The  terms defined in this Section 1 shall, for all purposes
     of this Plan, have the meanings herein specified:

     "Affiliate" shall mean any corporation which directly or
     indirectly controls, is controlled by, or is under common
     control with the Company.

     "Award" shall mean a designation of an individual as
     recipient of either Options (with or without Stock
     Appreciation Rights) or Restricted Stock pursuant to the
     Plan.

     "Board of Directors" shall mean not less than a quorum of
     the whole Board of Directors of the Company.

     "Cause" shall mean an act of dishonesty, moral turpitude or
     an intentional or grossly negligent act detrimental to the
     best interests of the Company or a Subsidiary.

     "Change of Control" shall mean any purchase of the Company's
     Common Stock pursuant to a tender or exchange offer by any
     person, entity or group (other than the Company) owning less
     than 30% of the outstanding Common Stock if upon termination
     of such offer such person, entity or group owns 30% or more
     of the outstanding Common Stock.

     "Code" shall mean the Internal Revenue Code of 1986, as
     amended from time to time.

     "Common Stock" shall mean the Company's presently authorized
     Common Stock, par value $1.00 per share, except as this
     definition may be modified as provided in Section 12.

     "Company" shall mean Gleason Corporation, a Delaware corporation.

     "Compensation Committee"  shall mean the Executive Compensation  
     Committee of the Board of Directors, which shall consist of at 
     least three directors who are Non-Employee Directors, as defined  
     in Rule 16b-3(b)(3)(i) pursuant to the Securities Exchange Act of 
     1934; provided that, if such committee has any additional members 
     who are not Non-Employee Directors, as defined in such Rule, any
     such members who are not Non-Employee Directors shall abstain  
     or recuse themselves from any action involving a grant or award 
     to any person who is subject to Section 16 of the Securities 
     Exchange Act, as provided in the SEC No-Action Letter to the 
     American Society of Corporate Secretaries (December 11, 1996).

<PAGE>
<PAGE>
 
 
     "Derivative Security"  shall mean any Option, Stock Appreciation 
     Right or Special Right.

     "Employee" shall mean a person (who may also be a director
     or officer) who is employed by the Company or a Subsidiary
     thereof on a full-time basis and compensated for such
     employment by a regular salary.

     "ERISA"  shall mean the Employee Retirement Income Security
     Act of 1974, as amended from time to time.

     "Fair Market Value" as of a specified date shall be
     determined by the Compensation Committee, but whenever
     possible shall mean the mean between the highest and the
     lowest sale price of the Common Stock on the New York Stock
     Exchange Consolidated Tape on such date or, if there are no
     sales on such date, the mean of the bid and asked prices for
     the Common Stock on the New York Stock Exchange on such
     date.

     "Grant" shall mean a grant of Restricted Stock.

     "Grantee" shall mean an Employee who is granted Restricted
     Stock.

     "Incentive  Option" shall mean only an Option which is
     specifically designated as an incentive stock option by the
     Compensation Committee at the time of grant and which
     qualifies as an "incentive stock option" as defined in
     Section 422 of the Code.

     "Non-Statutory Option" shall mean any Option other than an
     Incentive Option.

     "Option" shall mean either an Incentive or Non-Statutory
     Option granted by the Company pursuant to the Plan to
     purchase shares of Common Stock.

     "Option Price" shall mean the price to be paid for a share
     of Common Stock pursuant to a Stock Option Agreement.

     "Optionee" shall mean an Employee or director who is granted
     an Option.

     "Plan" shall mean the Gleason Corporation 1992 Stock Plan.

     "Restricted Period" shall mean the period established by the
     Compensation Committee during which shares of Common Stock
     granted to an Employee as described in Section 11 shall be
     Restricted Stock.

<PAGE>
<PAGE>
    
 
     "Restricted Stock" shall mean Common Stock subject to the
     restrictions described in Section 11.

     "Retirement" shall mean retirement from active service with
     the Company or a Subsidiary after attaining age 55 and
     completion of at least five years of continuous employment
     with the Company and its Subsidiaries.

     "Special Right" shall mean the right to receive cash or
     Common Stock upon exercise of an Option or upon exercise of
     Stock Appreciation Rights in connection with a Change of
     Control as described in Section 8(B).

     "Stock Appreciation Right" shall mean the right to receive
     cash or Common Stock with respect to shares of Common Stock
     subject to an Option in lieu of exercising such Option, as
     described in Section 8.

     "Stock Option Agreement" shall mean the written agreement
     between the Company and Optionee confirming the Option and
     setting forth the terms and conditions upon which it may be
     exercised.

     "Stock Option Committee" shall mean the Stock Option
     Committee appointed pursuant to Section 4.

     "Subsidiary" shall mean any corporation in which the Company
     owns, directly or indirectly through one or more
     Subsidiaries, at least 50% of the total combined voting
     power of all classes of stock.

     "Successor"  shall mean the person or persons entitled to
     exercise an Option or receive formerly Restricted Stock,
     including a guardian or other duly appointed legal
     representative of an Optionee or Grantee who has been
     declared incompetent, and in the case of a deceased Optionee
     or Grantee a person named as beneficiary under a designation
     filed with the Stock Option Committee by the Optionee or
     Grantee or, if no designation has been filed, the person or
     persons so entitled under the will of the Optionee or
     Grantee or, if the Optionee or Grantee shall have failed to
     make testamentary disposition of such Award or shall have
     died intestate, the legal representative or representatives
     of the Optionee or Grantee.

     References herein to the masculine gender shall be deemed to
     include references to the feminine gender and the singular
     form shall include the plural.

<PAGE>
<PAGE>
2.   PURPOSES

     The purposes of the Plan are to promote the growth and
     profitability of the Company by enabling it to attract and
     retain the best available personnel for positions of
     substantial responsibility, and to provide directors and key
     Employees with an opportunity for investment in the
     Company's Common Stock and give them an additional incentive
     to increase their efforts on behalf of the Company and its
     Subsidiaries.

3.   EFFECTIVE DATE AND TERMINATION

     The effective date of the Plan is May 5, 1992, the date on
     which the Plan was approved by the shareholders of the
     Company.  No Award may be granted under the Plan after
     May 4, 2002, the date 10 years after the effective date.

4.   ADMINISTRATION

     (A)  The Plan shall be administered by the Compensation
          Committee, which, in its discretion, may delegate such
          of its administrative functions as it deems appropriate
          to a Stock Option Committee, consisting of at least
          three Employees of the Company appointed by the
          Compensation Committee, provided, however, that, except
          for Options granted pursuant to Section 16, the
          selection of Employees to receive a Grant or Award and
          the timing, pricing and amount of any Grant or Award to
          an Employee shall be determined only by decision of the
          Compensation Committee.  References herein to the
          Compensation Committee shall include the Stock Option
          Committee to the extent of delegation to it of
          administrative functions by the Compensation Committee.
          The Stock Option Committee shall make recommendations
          to the Compensation Committee concerning the grant of
          Options and Restricted Stock.

     (B)  Membership on the Compensation Committee shall not
          affect or impair such member's rights under any Award
          granted to him more than one year prior to his becoming
          a member of the Committee or granted to him under
          Section 16.

     (C)  In any matters respecting action under this Plan,
          the Compensation and Stock Option Committees shall keep
          minutes of their meetings; a majority of each Committee
          shall constitute a quorum thereof and the acts of a
          majority of the members present at any meeting at which
          quorum is present, or acts approved in writing by the
          entire Committee, shall be the acts of the Committee.


5.   ELIGIBILITY

     Subject to the provisions of the Plan, the Compensation
     Committee shall from time to time determine and designate

<PAGE>
<PAGE>
     those key Employees of the Company or its Subsidiaries to
     whom Awards are to be made and the number of shares of
     Common Stock to be optioned and/or the size of a Restricted
     Stock Grant to each such individual.  In determining the
     eligibility of an Employee to receive an Award and the
     number and type of Options to be awarded or shares to be
     granted to such Employee, the Compensation Committee shall
     consider the position and responsibilities of the Employee,
     the nature and value to the Company or a Subsidiary of his
     services and accomplishments, his present and potential
     contribution to the success of the Company or its
     Subsidiaries and such other factors as the Committee may
     deem relevant.  More than one Award (whether of the same or
     different types) may be granted to an individual, but:

     (A)   An Incentive Option granted to an individual who,
           at the time of such grant "owns" (as defined in
           Sections 422 and 424 of the Code) stock possessing more
           than 10% of the total combined voting power of all
           classes of stock of the Company or a Subsidiary shall
           have an Option Price of at least 110% of Fair Market
           Value and a term of not more than 5 years, or such
           lesser price (but not less than Fair Market Value) or
           longer term (but not more than 10 years) as may at the
           time of such grant be permitted by the Code, or the
           regulations thereunder, for an Incentive Option granted
           to such an individual.

     (B)   The aggregate Fair Market Value (determined as of
           the date of grant) of the stock with respect to which
           Incentive Options are exercisable for the first time by
           an Employee during any calendar year under the Plan and
           all other stock option plans of the Company and any
           Subsidiaries shall not exceed $100,000, or such other
           sum as may from time to time be permitted under
           Section 422 of the Code.

6.   NUMBER OF SHARES SUBJECT TO AWARDS

     Subject to possible adjustment under Section 12 of the Plan,
     500,000 shares of Common Stock may be issued pursuant to
     Awards under the Plan, but no more than 150,000 shares of
     Common Stock may be granted as Restricted  Stock.  Shares
     issued pursuant to Awards under the Plan may be authorized
     and unissued shares or may be treasury shares.  If an Option
     granted under the Plan upon expiration or cancellation
     thereof remains unexercised as to any shares, they may be
     the subject of further Award; however, to the extent that
     Stock Appreciation Rights granted in conjunction with an
     Option are exercised, such Option shall be deemed to have
     been exercised and the shares of Common Stock which
     otherwise would have been issued upon the exercise of such
     Option shall not be subject to further Award.  The number of
     shares available for Award under the Plan shall be reduced
     to the extent of any shares issued in fulfillment of Special
     Rights upon exercise of an Option, and to the extent, if
<PAGE>
<PAGE>
     any, that shares issued in fulfillment of Special rights
     upon exercise of Stock Appreciation Rights, when added to
     the number of shares covered by the Option with respect to
     which the Stock Appreciation Rights were exercised.  Shares
     which are forfeited to the Company by reason of termination
     of employment as provided in Section 11, shares received by
     the Company in payment for exercise of an Option as
     permitted by Section 9(C)(4)(a) and shares withheld by the
     Company to satisfy tax withholding requirements as provided
     in Section 15 may not be the subject of further Award.

     The Committee cannot approve cancellation of an Option
     granted under the Plan prior to its expiration and the
     substitution therefor of a new Option at a lower Option
     price.

7.   TYPES OF OPTIONS AND RELATED RIGHTS

     (A)   The Compensation Committee shall have full and
           complete authority in its discretion, subject to
           Section 16 and the other provisions of the Plan, to
           grant Options containing such terms and conditions as
           shall be requisite, in its judgment, to constitute
           either Incentive Options or Non-Statutory Options.

     (B)   The Compensation Committee may grant Stock
           Appreciation Rights (as provided by Section 8 hereof)
           in connection with an Option, except for Options
           granted pursuant to Section 16, at the time of grant of
           the Option or, in the case of a Non-Statutory Option,
           at a later date.

     (C)   If Stock Appreciation Rights are not specifically
           granted by the Compensation Committee, the grant of an
           Option shall carry with it conditional Stock
           Appreciation Rights which shall be exercisable by the
           Optionee only during the 30 days after termination of a
           tender or exchange offer which results in a Change of
           Control.

     (D)   All Option grants shall also be deemed to include
           associated Special Rights.
  
8.   STOCK APPRECIATION RIGHTS AND SPECIAL RIGHTS

     (A)   Stock Appreciation Rights shall entitle the holder
           of an Option in connection with which such Stock
           Appreciation Rights are granted, upon exercise of the
           Stock Appreciation Rights, to surrender the Option, or
           any applicable portion thereof, to the extent
           unexercised, and to receive a number of shares of
           Common Stock, cash, or cash and shares of Common Stock,
           determined pursuant to subparagraph (C)(2) and
           paragraph (D) of this Section 8.

<PAGE>
<PAGE>
     (B)  Special Rights shall entitle the holder of an
          Option to the additional compensation described below.
          If there has been outstanding, within 30 days prior to
          the date on which an Option or related Stock
          Appreciation Right is exercised, a tender or exchange
          offer which resulted in a Change of Control, then upon
          exercise of such Option, without any payment by the
          holder thereof other than the Option Price, or upon
          exercise of such Stock Appreciation Rights, the
          Optionee's Special Rights shall also be deemed to have
          been exercised and shall entitle him, in addition to
          the shares to which he is entitled upon such exercise,
          to receive as additional compensation such additional
          number of shares (subject to the limitations of
          Section 6) as shall be equal in aggregate Fair Market
          Value to the product of multiplying the number of
          shares in respect of which the Option or Stock
          Appreciation Rights shall have been exercised times the
          amount, if any, by which the highest price paid per
          share pursuant to such tender or exchange offer
          exceeded the Fair Market Value per share on the date of
          exercise.

     (C)  Stock Appreciation Rights shall be subject to the
          following terms and conditions and to such other terms
          and conditions not inconsistent with the Plan as shall
          from time to time be approved by the Compensation
          Committee:

          (1)  Stock Appreciation Rights shall be exercisable
               only by such person or persons, at such time or times,
               and to the extent, that the Option to which they relate
               shall be exercisable, and only when the Fair Market Value
               per share exceeds the Option Price per share.

          (2)  Upon exercise of Stock Appreciation Rights, the
               holder thereof shall be entitled to receive such number
               of shares, and cash for any fractional share, as shall be
               equal in aggregate Fair Market Value to the amount by
               which the Fair Market Value per share on the date
               of such exercise shall exceed the Option Price per
               share of the related Option, multiplied by the
               number of shares in respect of which the Stock
               Appreciation Rights shall have been exercised.

          (3)  To the extent that Stock Appreciation Rights are
               exercised, the Option in connection with which such
               Stock Appreciation Rights were granted shall be deemed
               to have been exercised.

     (D)  The Company may settle all or any part of its
          obligation arising out of an exercise of Stock
          Appreciation Rights and Special Rights by the payment
          of cash in an amount equal to the aggregate Fair Market
          Value of shares (including a fraction of a share)
          
<PAGE>
<PAGE>
          determined on the date of exercise that it would
          otherwise be obligated to deliver under paragraph (B)
          or subparagraph (C)(2), or both, but for the cash
          payment.  Such cash settlement may be made either
          (i) in the sole discretion of the Committee or
          (ii) pursuant to an election by the Optionee approved
          by the Committee.

9.   TERMS OF OPTIONS

     The grant of each Option shall be confirmed by a Stock
     Option Agreement (in the form prescribed by the Compensation
     Committee) which shall be executed by the Company and the
     Optionee as promptly as practicable after such grant.  The
     Stock Option Agreement shall expressly state whether the
     Option is an Incentive Option or a Non-Statutory Option and
     shall incorporate by reference the provisions of this Plan.

     (A)  The Option Price in all cases shall be 100% of the
          Fair Market Value of the Company's Common Stock on the
          date the Option is granted, subject to adjustment as
          provided in Section 12, and except as specified in
          Section 5(A).

     (B)  The term of each Option granted under this Plan,
          except for Options granted pursuant to Section 16,
          shall be for such period as the Compensation Committee
          shall determine, but not more than 10 years from the
          date of grant thereof (or such lesser period is
          specified in Section 5(A)), subject to earlier
          termination of the Option as provided in Subsection D
          of this Section 9.

     (C)  Each Option granted under this Plan may be
          exercised during its term for such number of shares as
          shall be prescribed by the provisions of the Stock
          Option Agreement evidencing such Option, provided that:

          (1)  An Option granted under this Plan may not be exercised
               to any extent until at least six months after the date
               of the grant of the Option, provided that an Option
               may be exercised in full within 30 days following
               termination of a tender or exchange which results
               in a Change of Control, subject to the provisions
               of Sections 5(B) and 10(A).

          (2)  An Option granted pursuant to Section 16 may during
               its term be exercised by the Optionee during the
               continuance of the Optionee's service as a director
               of the Company and for three months after termination of
               service as a director.  If an Optionee holding an
               Option granted pursuant to Section 16 dies while a
  
<PAGE>
<PAGE>
               Director or within three months after cessation of
               service as a Director, any outstanding Options may
               be exercised by the Successor of the Optionee at
               any time prior to the expiration date of such
               Options or within one year of the date of the
               Optionee's death, whichever is the shorter period.
               Any other Option may during its term be exercised
               by the Optionee (a) during the continuance of the
               Optionee's employment by the Company or a
               Subsidiary or (b) after cessation of the
               Optionee's employment by the Company or a
               Subsidiary to the extent provided in Subsection D
               of this Article 9.

          (3)  An Option may be exercised by the Optionee or
               a Successor only by written notice to the
               Company (in the form prescribed by the
               Compensation Committee) specifying the number of
               shares to be purchased, together with payment or
               payment arrangements in accordance with paragraph
               (4) below.

          (4)  The aggregate Option Price of the shares as to
               which an Option is exercised shall be, in the
               discretion of the Compensation Committee (a) paid
               in full by any one or any combination of the
               following: cash, personal check, or delivery of
               Common Stock certificates endorsed in blank or accompanied
               by executed stock powers with signatures guaranteed
               by a national bank or trust company or a member of
               a national securities exchange evidencing shares
               of Common Stock having an aggregate Fair Market
               Value on the date of exercise equal to or greater
               than the Option Price, (b) paid on a deferred
               basis upon such terms and conditions, including
               provisions for securing payment as the
               Compensation Committee, in its discretion, shall
               specify, or (c) deemed to be paid in full provided
               the notice of exercise of the Option is
               accompanied by a copy of irrevocable instructions
               to a broker (in a form satisfactory to the Stock
               Option Committee) to promptly deliver to the
               Company the amount of sale or loan proceeds
               sufficient to cover the Option Price.  Payment of
               the Option Price with certificates evidencing
               shares of Common Stock as provided above shall not
               increase the number of shares available for Award
               under the Plan.

    (D)   If an Optionee ceases to be employed by the
          Company or any Subsidiary the following rules shall
          apply to any outstanding Options then held by the
          Optionee or his or her Successor:

<PAGE>
<PAGE>
          (1)  If the employment of an Optionee is terminated for
               Cause, his rights under any then outstanding Options
               shall terminate at the time of such termination of
               employment.

          (2)  If the employment of an Optionee is terminated
               by the Company or a Subsidiary because, in
               the opinion of the Compensation Committee, the
               Optionee has become physically incapacitated, any
               outstanding Options may be exercised at any time
               prior to the expiration date of such Options or
               within three months after the date of such
               disability termination, whichever is the shorter
               period, whether or not such Options were exercisable on
               the date of such termination under the provisions
               of the applicable Stock Option Agreements relating
               thereto.  The question whether the termination of
               employment shall be considered a disability
               termination caused by physical incapacity shall be
               determined in each case by the Compensation
               Committee and such determination shall be final.

          (3)  If an Optionee dies while an Employee or within
               three months after termination of employment for
               disability, any outstanding Options may be exercised
               by the Successor of the Optionee at any time prior to the
               expiration date of such Options or within one year
               of the date of the Optionee's death, whichever is
               the shorter period, whether or not such Options
               were exercisable on the date of the Optionee's
               death under the provisions of the applicable Stock
               Option Agreements relating thereto.  If an
               Optionee dies within three months after his
               Retirement or other termination of his employment
               without Cause, any outstanding Options may be
               exercised by the Successor of the Optionee at any
               time prior to the expiration date of such options
               or within one year of the Date of the Optionee's
               death, whichever is the shorter period, provided
               that such Options were exercisable on the date of
               the Optionee's termination of employment under the
               provisions of the applicable Stock Option
               Agreement relating thereto or the Compensation
               Committee specifically waives any restrictions
               relating to exercisability contained therein.

          (4)  If the employment of an Optionee is terminated without
               Cause for reasons other than those described in
               paragraphs (2) and (3), whether by reason of
               Retirement of the Optionee or by reason of any other
               termination without Cause, any outstanding Options 
               may be exercised by the Optionee at any time prior to the
               expiration date of such Options or within three
               months after the date of such termination,
               whichever is the shorter period, provided such
              
<PAGE>
<PAGE>
               Options were exercisable on the date of such
               termination under the provisions of the applicable
               Stock Option Agreement relating thereto or the
               Compensation Committee specifically waives any
               restrictions relating to exercisability contained
               therein.

         (5)   Anything herein to the contrary notwithstanding,
               unless written notification to the contrary is given
               to the Optionee or Successor by the Compensation
               Committee within 30 days after the Optionee's
               death, Retirement, or other termination of
               employment without Cause, paragraphs (2) through
               (4) above shall be applied as if all references in
               such paragraphs to three months were references to
               three years.

     (E)  Options granted pursuant to the Plan shall contain
          such other terms, provisions and conditions not
          inconsistent herewith as shall be determined by the
          Compensation Committee.

10.  ISSUANCE AND DELIVERY OF SHARES

     (A)  As soon as practicable after receipt by the
          Company of notice of exercise and of payment in full of
          the Option Price of shares with respect to which an
          Option has been exercised, or upon exercise of Stock
          Appreciation Rights or Special Rights, a certificate or
          certificates representing the appropriate number of
          shares registered in the name or names of the Optionee
          or his Successor shall be delivered to the Optionee or
          his Successor.

     (B)  An Optionee shall have no rights as a stockholder
          with respect to any shares for which he is granted an
          option until the date of issuance to him of a stock
          certificate for such shares and no adjustment shall be
          made for any dividends or, except as provided in
          Section 12, other rights the record date for which is
          prior to the date such stock certificate is issued.

     (C)  If at any time the Board of Directors shall
          determine, in its discretion, that the listing,
          registration or qualification of any of the shares
          subject to Options under the Plan upon any securities
          exchange or under any state or federal law, or the
          consent or approval of any governmental regulatory
          body, is necessary or desirable as a condition of or in
          connection with the purchase or issue of shares
          thereunder, no outstanding Options may be exercised in
          whole or in part unless such listing, registration,
          qualification, consent or approval shall have been
          effected or obtained free of any conditions not
          acceptable to the Board of Directors.  The Board of
          Directors may require any person exercising an Option
          to make such representations and furnish such
          information as it may consider appropriate in
<PAGE>
<PAGE>
          connection with the issuance or delivery of the shares
          in compliance with applicable law and shall have the
          authority to cause the Company at its expense to take
          any action related to the Plan which may be required in
          connection with such listing, registration,
          qualification, consent or approval.

11.  RESTRICTED STOCK GRANTS

     The Compensation Committee shall have the authority to make
     Grants to Employees upon such terms and conditions as it
     shall establish, subject to the following provisions:

     (A)  Except as expressly provided below, Restricted
          Stock shall not be sold, transferred, assigned, pledged
          or otherwise disposed of by the Grantee during the
          Restricted Period established by the Compensation
          Committee.  The Compensation Committee may establish
          different Restricted Periods applicable to different
          shares of Restricted Stock evidenced by a single Grant
          as it deems appropriate.  No Restricted Period shall be
          less than one year or more than ten years from the date
          of Grant.

     (B)  Restricted Stock shall be issued as of the date of
          the Grant and the certificate evidencing shares shall
          be delivered by the Company to the Grantee within a
          reasonable period of time after it ceases to be
          Restricted Stock upon expiration of the applicable
          Restricted Period.  The Grantee shall be entitled to
          vote and to receive cash dividends on his shares of
          Restricted Stock.

     (C)  In the event of termination of employment of a
          Grantee, except termination by reason of death or
          disability, and except as the Compensation Committee
          may otherwise determine in the case of termination
          subsequent to his 55th birthday pursuant to an early
          separation plan of the Company, his shares of
          Restricted Stock and all rights therein shall be
          forfeited to the Company.

     (D)  In the event of termination of employment of a
          Grantee by reason of death or disability, the Grantee
          or his Successor shall be entitled to receive a
          certificate for a number of shares of Common Stock
          equal to that portion of his Restricted Stock remaining
          from any Grant determined by multiplying the total
          number of shares of Restricted Stock remaining from
          such Grant by a fraction, the numerator of which shall
          be the number of days of employment from the date of
          the Grant to the date of termination, and the
          denominator of which shall be the number of days from
          the date of the Grant to the date of expiration of the
          last to expire of the Restricted Periods applicable to
          
<PAGE>
<PAGE>
          that Grant.  All rights of the Grantee in the balance
          of the shares of Restricted Stock remaining from such
          grant shall be forfeited to the Company.

    (E)   The effect of approved leaves of absence on the
          running of applicable Restricted Periods shall be
          determined by the Compensation Committee, provided,
          however, that no Restricted Period shall expire during
          an approved leave of absence unless expressly so
          provided by the Committee.

    (F)   If a tender or exchange offer results in a Change
          of Control, any Restricted Period shall immediately
          expire for all Restricted Stock.

12.  ADJUSTMENTS

     In the event that a dividend shall be declared upon the
     Common Stock payable in shares (other than treasury shares)
     of Common Stock, the number of shares of Common Stock then
     subject to any Award outstanding under the Plan and the
     number of shares available for Award pursuant to the Plan
     but not yet subject to Award shall be adjusted by adding to
     each such share the number of shares which would be
     distributable in respect thereof if such shares had been
     outstanding on the date fixed for determining the
     stockholders of the Company entitled to receive such stock
     dividend.  In the event that the outstanding shares of
     Common Stock shall be changed into or exchanged for a
     different number or kind of shares of stock or other
     securities of the Company or of another corporation, whether
     through reorganization, recapitalization, stock split-up,
     combination of shares, merger or consolidation, then there
     shall be substituted for each share of Common Stock subject
     to any such Award and for each share of Common Stock
     available for Award pursuant to the Plan but not yet subject
     to Award the number and kind of shares of stock or other
     securities into which each outstanding share of Common Stock
     shall have been so changed or for which each such share
     shall have been exchanged.  In the event there shall be any
     change, other than as specified above in this Section 12, in
     the number or kind of outstanding shares of Common Stock or
     of any stock or other securities into which such Common
     Stock shall have been changed or for which it shall have
     been exchanged, then if the Board of Directors shall in its
     sole discretion determine that such change equitably
     requires an adjustment in the number or kinds of shares
     theretofore available for Award pursuant to the Plan but not
     yet subject to Award and of the shares then subject to any
     Award then outstanding under the Plan, such adjustment shall
     be made by the Board of Directors and shall be effective and
     binding for all purposes of the Plan and of each Award
     outstanding thereunder.  In the case of any such
     substitution or adjustment as provided for in this
     Section 12, the Option Price set forth in each outstanding
     Option for each share covered thereby prior to such

<PAGE>
<PAGE>
     substitution or adjustment will be the Option Price for all
     shares of stock or other securities which shall have  been
     substituted for such share or to which such share shall have
     been adjusted pursuant to this Section 12.  Upon any
     adjustment made pursuant to this Section 12 the Company
     will, upon request, deliver to the Optionee or his Successor
     a certificate of its Secretary setting forth the Option
     Price thereafter in effect and the number and kind of shares
     or other securities thereafter purchasable on the exercise
     of such Option.

13.  INTERPRETATION, AMENDMENTS AND TERMINATION

     (A)  The Compensation Committee may make such rules and
          regulations and establish such procedures for the
          administration of the Plan as it deems appropriate.  In
          the event of any dispute or disagreement as to the
          interpretation of this Plan or of any rule, regulation
          or procedure, or as to any question, right or
          obligation arising from or related to the Plan, the
          decision of the Compensation Committee shall be final
          and binding upon all persons.

     (B)  The Board of Directors may amend this Plan as it
          shall deem advisable, except that the Board of
          Directors may not, without further approval of the
          stockholders of the Company (a) materially increase the
          benefits accruing to Insiders under the Plan,
          (b) materially increase the total number of shares for
          which Awards may be made to Insiders under the Plan,
          either in the aggregate or to any individual Insider,
          (c) materially change the class of eligible Insiders,
          except to comport with changes in the Code, ERISA or
          rules or regulations thereunder, or (d) materially
          change the provisions of Section 16 regarding automatic
          director Options.  The provisions of Section 16 may not
          be amended more than once in any six month period even
          with approval of the stockholders except to comport
          with changes in the Code, ERISA or rules or regulations
          thereunder.

     (C)  The Board of Directors may, in its discretion,
          terminate this Plan at any time.

     (D)  Amendment or termination of the Plan shall not
          without their consent adversely affect the rights of
          Optionees, Grantees or their Successors under any
          outstanding Award.

14.  NO EMPLOYMENT RIGHTS

     The Plan and any Award granted under the Plan shall not
     confer upon any Optionee or Grantee any right with respect
   
<PAGE>
<PAGE>
     to continuance of employment by the Company or a Subsidiary,
     nor shall interfere in any way with the right of the Company
     or a Subsidiary by which an Optionee or Grantee is employed
     to terminate his employment at any time.

15.  WITHHOLDING TAXES

     The Company unilaterally or by arrangement with the Optionee
     or Grantee shall make appropriate provision for the
     satisfaction of withholding taxes in the case of any Award,
     Grant, exercise or other event which gives rise to a
     withholding requirement.  An Optionee, Grantee or other
     person receiving shares upon exercise of a Non-Statutory
     Option or expiration of the Restricted Period on shares of
     Restricted Stock shall be required to pay the Company or any
     Subsidiary in cash the amount of any taxes which the Company
     or Subsidiary is required to withhold by reason of such
     exercise or expiration.  Notwithstanding the preceding
     sentence, in the case of Options or Restricted Stock, other
     than Options granted pursuant to Section 16, the
     Compensation Committee in its discretion, and subject to
     such rules and limitations as it shall adopt, may permit an
     Optionee or Grantee to elect to have shares of Common Stock
     which are issuable, transferable or deliverable to him upon
     such exercise or expiration withheld to satisfy in whole or
     part the minimum federal, state and local withholding tax
     requirements with respect to such exercise or expiration.
     The portion of any withholding tax represented by a
     fractional share must be paid in cash.

16.  DIRECTOR OPTIONS

    (A)   Each director of the Company who is not an
          employee of the Company or any subsidiary shall, on the
          first business day of June which first occurs following
          the director's election at the annual meeting of
          stockholders, commencing with June 1, 1997, and on the
          first business day of each June thereafter during such
          director's term, automatically be granted a
          Non-Statutory Option to purchase 3,000 shares of Common
          Stock.  A director's Option granted hereunder shall not
          be exercisable until six months after the date of
          grant.  Thereafter such an Option shall be exercisable
          at any time within 10 years after the date of grant
          provided it remains exercisable pursuant to the rules
          of Section 9(C)(2).

    (B)   Automatic director Option grants shall only be
          made if, as of each date of grant, the director (i) is
          not otherwise an employee of the Company or any
          subsidiary, (ii) has not been an employee of the
          Company or any subsidiary for any part of the preceding
          fiscal year, and (iii) has served on the Board of
          Directors continuously since the commencement of his
          term.
<PAGE>
<PAGE>
    (C)   Options granted automatically to directors
          pursuant to this Section 16 shall automatically include
          conditional Stock Appreciation Rights and Special
          Rights, as described in Section 7(C) and in
          Section 7(D).

    (D)   In the event that the number of shares of Common
          Stock available for grant under the Plan is
          insufficient to make all automatic grants required to
          be made on any date pursuant to this Section 16, an
          Option shall be granted to each non-employee director
          entitled to a grant on such date for that number of
          shares equal to the number of shares of Common Stock
          then available for grant under the Plan divided by the
          number of directors eligible on such date to receive
          such grants.

    (E)   Except as provided in this Section 16,
          non-employee director Options shall be subject to the
          terms and conditions of Section 9 for Non-Statutory
          Options.

17.  NONTRANSFERABILITY OF DERIVATIVE SECURITIES

     Each Derivative Security awarded under the Plan shall be
     nontransferable by the Optionee except by will or the laws
     of descent and distribution, or pursuant to a valid
     beneficiary designation, and except that the Compensation
     Committee may at the time of grant, or any time thereafter,
     authorize the transfer in whole or part of Non-Statutory
     Options held by an officer of the Company to one or more of
     his spouse and/or children and/or grandchildren.  Each
     Option granted under the Plan shall be exercisable during
     the Optionee's lifetime only:

     (A)  by the Optionee or his or her guardian or other
          legal representative;

     (B)  by such other means as the Compensation Committee
          may approve from time to time that is not inconsistent
          with or contrary to Section 16(b) of the Securities
          Exchange Act of 1934 or Rule 16b-3 thereunder.

     Any Stock Appreciation Right granted in conjunction with an
     Incentive Option is transferable only when such Option is
     transferable and under the same conditions.

18.  NOTICES

     All notices under the Plan shall be in writing, and if to
     the Company, shall be delivered to the Secretary of the
     Company or mailed to its principal office, 1000 University
     Avenue, Rochester, New York 14692-2970, addressed to the
     attention of the Secretary; and if to the Optionee or
     Grantee at the address appearing in the payroll records of
     the Company or a Subsidiary.  Such addresses may be changed
     at any time by written notice to the other party.