After a summer backing A & M recording artists Dino & Sembello, Gary returned to Chicago in 1976 for studio work, and joined forces with keyboardist Terry Fryer, guitarist Bruce Gaitsch, and bassist Dennis Johnson to form Shy (a play on Chi-town) Rhythm. Together a little over two years, Shy Rhythm played on half a dozen albums, and several hundred commercial sessions. They also backed singer/songwriter Jim Peterik, and their demo caught Epic's interest. Peterik's solo album "Don't Fight The Feeling" debuted the same week as Boston's, on the same label. During the three year period from 1976 through 1978, Gary recorded the soul classic "Sweet Fools", with Essence, also on Epic (re-released on the CD "Cleveland Rocks, Greatest Hits 1977-1983," on Cleveland International), as well as the R&B album "Ain't Nothin' Freaky" with Geoffrey Stoner on Ovation, "Got To Share This Feeling" with singer John Gary, the Chase tribute album, "Watch Closely Now," both for Churchill Records, and two other albums with artists on the Churchill label.

The Jim Peterik Band toured with Boston and Heart, then guitarist Bruce Gaitsch and keyboardist Terry Fryer left the band. Today, Terry Fryer is a multimedia producer with Third Wave Productions, and both he and Bruce are multi-platinum songwriters as well as successful producers, artists and studio musicians. Gary and Dennis Johnson soldiered on with Peterik. They had worked with singer Dave Bickler on numerous commercial sessions, and asked him to join the new band. Bickler's great pop/rock voice now drives the very successful Bud Light "Real Men of Genius" ad campaign. Over the last ten years, Bickler has made more than 100 commercials for Bud. Peterik brought Frank Sullivan, the guitarist of Mariah onboard, and Survivor was complete, the name culled from the liner notes of Peterik's solo album. The new group's demo earned a record deal with Scotti Bros./Atlantic. The band hired famed producer Ron Nevison (Led Zeppelin, The Who, The Babys) and recorded at The Record Plant, Los Angeles. As the New Wave sound was emerging, the decision was made to have Peterik remix the record with Bruce Fairborn. On most of the songs, Ron Nevison's signature sound (along with guitar, bass and drum tracks) was altered so drastically that Nevison had his name removed from the record. One of the songs that Nevison decided Survivor would not release is a song Gary co-wrote, "Rockin' Into the Night." A&R man extraordinaire John Kalodner gave the song to 38 Special. It was the title of their 3rd album and the song that brought them to the world stage. "Rockin' Into the Night" has since appeared on over 26 albums, CD's and DVD's, including 38 Special's platinum album/CD "Flashback," and the "Ultimate Survivor Collection."

Survivor returned to Chicago from L.A. without a hit single and recorded another Peterik/Smith collaboration, "Rebel Girl," which became a huge 'turntable' hit. A non-album single, "Rebel Girl" was the most requested song on Chicago's WLS Radio for 3½ months, although the release of the single was delayed almost 3 months to the stores. Both "Rebel Girl," and Survivor's "live demo" of "Rockin' Into The Night" can be heard on the "Ultimate Survivor Collection" CD. "Rebel Girl" was also covered by The Outlaws and appears on two of their albums/CD's, and is on the Japanese pressing of Survivor's self-titled debut album.

Ironically, Peterik and Smith co-wrote Survivor's first two "hits" but neither song made the original Survivor album. Survivor toured with Starship, then Smith and Survivor parted ways. A couple of years later, Gary toured again with the great rock guitarist Leslie West, of Mountain. Despite their strong musical connection both live and in the studio, when bass player Sid Simms left the trio Gary opted to stay with his studio work over touring and also bowed out. Comfortable in the studio with rockers or crooners, Gary recorded the album "I Just Called To Say I Love You" with Vic Damone in 1985, on an old school, full orchestra session producing several songs that were re-released in 2008 on his "Vic Damone - Greatest Love Songs" CD. 1985 also saw Ron Nevison sign on again to produce Survivor's first album with their new lead singer Jimi Jameson. "Vital Signs" connected with three hits, "I Can't Hold Back," "High On You," and "The Search Is Over."