[Corning Logo]
Notice of 1996 Annual
Meeting of Stockholders
and Proxy Statement
[recycled logo] Printed on recycled paper
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Please Note the Accompanying
Proxy Statement and Proxy Card
It is important to you and to the Corporation that your shares be represented at
the meeting regardless of the number you may hold. If you are unable to be
present in person, we ask that you sign, date and return the enclosed Proxy in
favor of the Proxy Committee designated by the Board of Directors.
Notice of Annual Meeting
To Stockholders of Corning Incorporated:
Notice is hereby given that the Annual Meeting of the holders of Common Stock
and Series B 8% Convertible Preferred Stock of Corning Incorporated will be held
in the office of the Corporation [in the Corning Glass Center] in the City of
Corning, State of New York, on Thursday, April 25, 1996 at 11:00 o'clock
A.M. The principal business of the meeting will be:
[a] To elect five Directors for three-year terms and one Director for a
two-year term; and
[b] To transact such other business as may properly come before the
meeting.
A. John Peck, Jr.
Secretary
Corning Incorporated
One Riverfront Plaza
Corning, New York 14831
March 6, 1996
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Proxy Statement
Relating to the Annual Meeting of Stockholders, April 25, 1996. The enclosed
Proxy is solicited by the Board of Directors of Corning Incorporated
[hereinafter referred to as the "Corporation" or "Corning"], Corning, New York
14831. The Corporation anticipates that this Proxy Statement and the enclosed
Proxy will be mailed to holders of the Corporation's Common Stock and Series B
8% Convertible Preferred Stock [hereinafter referred to as the "Preferred
Stock"] commencing on or about March 14, 1996. The Proxy may be revoked by
written notice to the Corporation prior to the meeting or by written notice to
the Secretary at the meeting at any time prior to being voted. Each valid and
timely Proxy not revoked will be voted at the meeting in accordance with the
instructions thereon.
Holders of Common and Preferred Stock on the books of the Corporation at the
close of business on March 6, 1996 are entitled to notice of and to vote at the
meeting. On February 7, 1996, the Corporation had outstanding 229,899,405 shares
of Common Stock, each entitled to one vote, and 237,323 shares of Preferred
Stock, each entitled to four votes.
Action to be Taken Under the Proxy
The persons acting under the Proxy will vote the shares represented thereby
for the election of John Seely Brown, Lawrence S. Eagleburger, Gordon Gund, John
M. Hennessy, Henry Rosovsky and H. Onno Ruding as directors. The Board of
Directors does not know of any other business to be brought before the meeting,
but it is intended that, as to any such other business, a vote may be cast
pursuant to the Proxy in accordance with the judgment of the person or persons
acting thereunder. Should any above-named nominee for the office of director
become unable to accept nomination or election, which is not anticipated, it is
intended that the persons acting under the Proxy will vote for the election of
such other person as the Board of Directors may recommend.
Voting Procedures
New York's Business Corporation Law provides that, a quorum being present,
nominees for the office of director are to be elected by a plurality of votes
cast at the meeting. Only shares affirmatively voted in favor of a nominee will
be counted toward the achievement of a plurality. Votes withheld [including
broker non-votes] are counted as present for the purpose of determining a quorum
but are not counted as votes cast in determining the plurality.
Nominees for Election as Directors
The Corporation's Board of Directors is divided into three classes. Each of
the above-named nominees for the office of director is a member of the present
Board of Directors. Gordon Gund, John M. Hennessy and Henry Rosovsky were
elected by the Corporation's security holders. John Seely Brown, Lawrence S.
Eagleburger and H. Onno Ruding were elected by the Corporation's Board of
Directors since the 1995 Annual Meeting of Stockholders. The terms of John Seely
Brown, Lawrence S. Eagleburger, Gordon Gund, John M. Hennessy, Vernon E. Jordan,
Jr., Henry Rosovsky and H. Onno Ruding expire this year. Mr. Jordan will not
stand for re-election. Dr. David A. Duke, who is retiring in June 1996, expects
to resign as a director in April 1996. Mr. James R. Houghton expects to retire
and resign as Chairman of the Board in April 1996 but will continue in office as
a director. No nominee is now the beneficial owner of any of the securities
[other than directors' qualifying shares] of any of the Corporation's
subsidiaries. Certain information with respect to nominees for election as
directors and directors whose term of office will continue after the Annual
Meeting is set forth below.
1
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Nominee for Election - Term Expiring 1998
The Honorable Lawrence S. Eagleburger
Senior Foreign Policy Advisor
Baker, Donelson, Bearman & Caldwell, Washington, D.C.
A veteran of the U.S. Army, Mr. Eagleburger received B.S.
and M.S. degrees from the University of Wisconsin and
retired from the U.S. Department of State in 1984 after 27
years of government service. He returned to U.S. government
service in 1989, becoming Deputy Secretary of State in
1989, Acting Secretary of State in 1992 and Secretary of
State from December 8, 1992 to January 19, 1993, following
which he joined the law firm of Baker, Donelson, Bearman &
Caldwell as senior foreign policy advisor. Mr. Eagleburger,
65, is a director of Dresser Industries, Inc., Phillips
Petroleum Company, Universal Corporation, Stimsonite Corp.,
COMSAT Corp. and Virginia Fiber Corp. He was elected a
director of the Corporation in October 1995.
Nominees for Election - Terms Expiring 1999
John Seely Brown
Vice President and Chief Scientist
Xerox Corporation
A graduate of Brown University with advanced degrees from
the University of Michigan, Dr. Brown has served Xerox
Corporation since 1978 in various scientific research
positions. In 1986 he was elected vice president in charge
of advanced research and in 1990 director of the Palo Alto
Research Center and in 1992 was appointed chief scientist
of Xerox. Dr. Brown, 55, is a director of General
Instrument Corporation, an advisory director of numerous
scientific and information technology organizations and a
member of numerous professional societies. He was elected a
director of the Corporation on February 7, 1996.
Gordon Gund++
President and Chief Executive Officer
Gund Investment Corporation
Mr. Gund, president and chief executive officer of Gund
Investment Corporation, which manages diversified
investment activities, is principal owner of the Cleveland
Cavaliers National Basketball Association team, a member of
the Board of Governors of the National Basketball
Association, co-owner of the San Jose Sharks National
Hockey League team and a member of the Board of Governors
of the National Hockey League. He is chairman and chief
executive officer of Gund Business Enterprises, which owns
Nationwide Advertising Services, Inc. and CAVS/Gund Arena
Company. He is also a general partner of GUS Enterprises.
He is a director of the Kellogg Company and Kepner-Tregoe,
Inc. and co-founder and chairman of the Foundation Fighting
Blindness. Mr. Gund, 56, elected a director of the
Corporation in 1990, is a graduate of Harvard University.
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John M. Hennessy++
Chairman of the Executive Board and Chief Executive Officer
CS First Boston
Mr. Hennessy, a graduate of Harvard College, was a National
Science Foundation Fellow at the Sloan School,
Massachusetts Institute of Technology, in economics and
finance and served as Deputy Assistant Secretary of
Treasury Affairs for Development Finance from 1970 to 1972
and as Assistant Secretary for International Affairs,
Department of Treasury, from 1972 to 1974. He became
managing director of First Boston Corporation, a subsidiary
of CS First Boston, Inc., in 1974, was named vice chairman
of First Boston Corporation in 1982 and vice chairman of CS
First Boston, Inc. in 1989, President and Group Chief
Executive Officer in October 1989 and in 1993 was elected
to his present position. Mr. Hennessy, 59, was elected a
director of the Corporation in 1989 and is a director of
Vitro, S.A. and M.I.T. Corporation and a member of numerous
civic committees.
Henry Rosovsky++
Geyser University Professor, Harvard University
Dr. Rosovsky, the Lewis P. and Linda L. Geyser University
Professor, has been associated with the Harvard University
economics department since 1965. From 1973 to 1984 he
served as dean of the faculty of arts and sciences. In 1971
he served as consultant to the President's Commission on
International Trade and Foreign Investment, and in 1977 and
1978 as a consultant to the Asian Development Bank. Dr.
Rosovsky, a graduate of the College of William and Mary
with advanced degrees from Harvard, is a director of Paine
Webber Group, Inc. and The Japan Fund, Inc. He is 68 and
was elected a director of the Corporation in 1980.
H. Onno Ruding
Vice Chairman, Citicorp and Citibank, N.A.
Dr. Ruding, with advanced degrees in economics from Erasmus
University, Rotterdam, has served private firms and the
public in various financial positions, including executive
director of the International Monetary Fund from 1977-1980,
Minister of Finance of The Netherlands from 1982-1989 and
chairman of the Netherlands Christian Federation of
Employers from 1990-1992. He became a director of Citicorp
in 1990 and was appointed vice chairman of Citicorp and
Citibank, N.A. in 1992. Dr. Ruding, 56, is a supervisory
director of Pechiney Nederland, N.V., an advisory director
of Unilever N.V. and Unilever PLC, an advisor to Robeco and
a member of the board of trustees of Mount Sinai Hospital
and a member of the Committee for European Monetary Union
and the Trilateral Commission. He was elected a director of
the Corporation in June 1995.
3
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Directors Continuing in Office
Roger G. Ackerman*
President, Corning Incorporated
Mr. Ackerman, a graduate of Rutgers University and the PMD
program at Harvard, has served Corning since 1962 in a
variety of engineering, sales and management positions. In
1972 he was elected the president of a Corning subsidiary,
Corhart Refractories Co., in 1975 the general manager and
vice president of the Ceramic Products Division and in 1980
a senior vice president. In 1981 Mr. Ackerman became the
director of the Manufacturing and Engineering Division, in
1983 the president of MetPath Inc. [now Corning Clinical
Laboratories Inc.] and in 1985 group president and a
director. In 1990, he was elected the president and chief
operating officer of Corning. Mr. Ackerman, 57, is a
director of The Pittston Company, The Massachusetts Mutual
Life Insurance Company and Dow Corning Corporation, and a
member of the executive committee of the National
Association of Manufacturers. His term expires at the 1998
Annual Meeting.
Robert Barker++
Professor and Provost Emeritus, Cornell University
Dr. Barker, a graduate of the University of British
Columbia and the University of California at Berkeley, has
served on the faculties of the University of Iowa and
Michigan State University and in 1995 retired after having
been associated with Cornell University since 1979 as
Professor of Biochemistry, Director of the Division of
Biological Sciences, as Vice President for Research and
Advanced Studies, as Provost, as Senior Provost and as
Director and Senior Fellow of the Center for the
Environment. He is now Professor and Provost Emeritus of
Cornell University. He has served as a consultant to the
National Institutes of Health, the National Academy of
Sciences, the Oak Ridge and Los Alamos National
Laboratories and the National Board of Medical Examiners.
Dr. Barker is 67 and was elected a director of the
Corporation in 1986. His term expires at the 1997 Annual
Meeting.
Mary L. Bundy++
Mrs. Bundy, a graduate of Radcliffe College and the Hunter
College School of Social Work, recently retired from the
private practice of clinical social work in New York City
where she previously was a case worker at the Jewish Board
of Family and Children's Services, Inc. She has served
Radcliffe College as a trustee and vice chairwoman of the
Board of Trustees and was acting vice president of the
College in 1978. Mrs. Bundy, 70, was elected a director of
the Corporation in 1973. She is a director of the
Foundation for Child Development and has served as
Chairwoman of the Edward W. Hazen Foundation, a director of
Levi Strauss & Co., Inc., a trustee of the Metropolitan
Museum of Art and an overseer of Harvard University. Her
term expires at the 1997 Annual Meeting.
4
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Van C. Campbell*
Vice Chairman, Corning Incorporated
A graduate of Cornell University with an MBA from Harvard,
Mr. Campbell joined Corning in 1964. Elected an assistant
treasurer in 1971, treasurer in 1972, a vice president in
1973, financial vice president in 1975 and senior vice
president for finance in 1980, he became general manager of
the Consumer Products Division in October 1981. He was
elected vice chairman responsible for finance and
administration and a director in 1983. Mr. Campbell, who is
57, is a director of Corning International Corporation,
Corning Life Sciences Inc., Dow Corning Corporation,
Armstrong World Industries, Inc. and General Signal
Corporation. His term expires at the 1997 Annual Meeting.
David A. Duke*
Vice Chairman, Corning Incorporated
Dr. Duke, a graduate of, and with advanced degrees from,
the University of Utah, has served Corning in a succession
of research and management positions since 1962. He was
elected a vice president Telecommunications Products in
1980, elected a senior vice president in 1984 and named
director of Research and Development in 1985. He became
responsible for Research, Development and Engineering in
March 1987 and was elected vice chairman of technology and
a director in 1988. Dr. Duke, 60, is a director of Corning
International Corporation, Siecor Corporation and Armco,
Inc. and a member of a number of scientific organizations.
His term expires at the 1998 Annual Meeting.
John H. Foster++
Chairman and Chief Executive Officer
NovaCare, Inc.
Mr. Foster, founder, chairman of the board and chief
executive officer of NovaCare, Inc., a national provider of
comprehensive rehabilitation services, is also founder,
chairman of the board and chief executive officer of
Apogee, Inc., a national provider of mental health
services, and of Foster Management Company, an investment
advisory firm. Mr. Foster, 53, a graduate of Williams
College and the Amos Tuck School of Business Administration
at Dartmouth College, is a trustee of the Hospital for
Special Surgery, the Children's Hospital of Philadelphia,
the Mystic Seaport Museum and the Independence Seaport
Museum and a member of the Dean's Council of the Harvard
School of Public Health and the Amos Tuck School Board of
Overseers. He was elected a director of the Corporation in
1994. His term expires at the 1998 Annual Meeting.
5
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James R. Houghton*
Chairman of the Board and Chief Executive Officer
Corning Incorporated
A graduate of Harvard College and Harvard Business School,
Mr. Houghton joined Corning in 1962. He became a vice
president of Corning and general manager of the Consumer
Products Division in 1968, a director in 1969, vice
chairman in 1971, chairman of the executive committee and
chief strategic officer in 1980 and chairman and chief
executive officer in April 1983. Mr. Houghton, 59, is a
director of Dow Corning Corporation, Metropolitan Life
Insurance Company, J. P. Morgan & Co. Incorporated and
Exxon Corporation. His term expires at the 1997 Annual
Meeting.
James W. Kinnear++
Retired President and Chief Executive Officer, Texaco Inc.
A 1950 graduate of the United States Naval Academy, Mr.
Kinnear joined Texaco in 1954. In 1977 he was elected a
director, and from 1987 until April, 1993 was President and
Chief Executive Officer of Texaco Inc. Mr. Kinnear, 67, was
elected a director of the Corporation in 1978 and is a
director of ASARCO Incorporated and Paine Webber Group
Inc., an advisory director of Unilever N.V. and Unilever
PLC and an alternate director of MIM Holdings Limited. He
is Chairman of the Metropolitan Opera Association, a member
of the Board of Overseers and Managers of Memorial
Sloan-Kettering Cancer Center, a member of the Board of
Managers of The New York Botanical Garden and a trustee of
the American Enterprise Institute. His term expires at the
1997 Annual Meeting.
James J. O'Connor++
Chairman of the Board and Chief Executive Officer
Unicom Corporation
A graduate of Holy Cross College, Harvard Business School
and Georgetown Law School and a veteran of the U.S. Air
Force, Mr. O'Connor joined Commonwealth Edison Company (the
principal subsidiary of Unicom Corporation) in 1963. He
became a vice president of Commonwealth Edison in 1970,
executive vice president in 1973, president in 1977, a
director in 1978 and chairman and chief executive officer
in 1980. In 1994 he was also named chairman and chief
executive officer of Unicom Corporation, which then became
the parent company of Commonwealth Edison. Mr. O'Connor,
58, is a director of Tribune Company, First Chicago
Corporation, The First National Bank of Chicago, Scotsman
Industries, Inc. and United Air Lines. He was elected a
director of the Corporation in 1984. His term expires at
the 1997 Annual Meeting.
6
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Catherine A. Rein++
Executive Vice President
Metropolitan Life Insurance Company
Ms. Rein, a graduate of Pennsylvania State University and
New York University, joined Metropolitan Life Insurance
Company in 1985 as a vice president in the human resources
department. In 1988 she was named senior vice president and
in 1989 was named executive vice president in charge of the
corporate development, planning and services departments.
Prior to 1985 she was vice president and general counsel
for The Continental Group, Inc. Ms. Rein, 52, elected a
director of the Corporation in 1990, is a director of the
Bank of New York, Inroads/NYC, Inc. and General Public
Utilities and a trustee of the Urban League and the New
York University Law Center Foundation. Her term expires at
the 1998 Annual Meeting.
William D. Smithburg++
Chairman, President and Chief Executive Officer
The Quaker Oats Company
A graduate of DePaul University with an MBA from
Northwestern University, Mr. Smithburg joined Quaker Oats
in 1966. He was elected a vice president in 1971, executive
vice president - U.S. grocery products in 1976, president
in 1979, chairman and chief executive officer in 1983 and
served as president from November 1990 to January 1993 and
from November 1995 to the present. Mr. Smithburg, who is
57, was elected a director of the Corporation in 1987 and
is a director of Abbott Laboratories, Northern Trust
Corporation, Prime Capital Corp. and the Grocery
Manufacturers Association. His term expires at the 1998
Annual Meeting.
* Member of the Executive Committee
++ Alternate member of the Executive Committee
7
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Security Ownership of
Certain Beneficial Owners
Unless otherwise indicated, each of the persons named in paragraph [a] and in
paragraph [b] below has sole voting and investment power with respect to the
shares listed.
[a] The only person who, to the knowledge of the management, owned
beneficially on December 31, 1995 more than 5% of the outstanding shares of
Common and Preferred Stock of the Corporation is set forth below:
Shares Owned
Name and Address and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class
- --------------------------------------------------------------------------------
Corning Incorporated 11,641,751 Common[1] 5.06%
Investment Plans
c/o The Chase Manhattan
Bank, N.A.
770 Broadway
New York, NY 10003
- --------------------------------------------------------------------------------
[1] Includes 10,690,963 shares of Common Stock and the equivalent thereof in
237,697 shares of Preferred Stock [being 100% of the Class] held by The Chase
Manhattan Bank, N.A. as the trustee of the Corporation's Investment Plans. Each
share of Common Stock is entitled to one vote and each share of Preferred Stock
is entitled to four votes. See also footnote [4] of paragraph [b] below.
[b] Set forth below is the number of shares of Common Stock and Common Stock
equivalents, assuming the conversion of outstanding shares of Preferred Stock
into shares of Common Stock, of the Corporation beneficially owned on December
31, 1995 [except for Dr. Brown whose ownership is as of February 7, 1996] by the
directors and nominees for directors; by the chief executive officer and the
other four most highly compensated executive officers [collectively, the "named
executive officers"] and by all directors and executive officers of the
Corporation as a group:
Shares Owned
and Nature of Percent
Beneficial of
Name Ownership[1][2][3][4] Class[8]
- ---- --------------------- --------
Directors
- ---------
Robert Barker 6,693 [5] ---
John S. Brown 4,000 ---
Mary L. Bundy 7,600 ---
Lawrence S. Eagleburger 4,524 ---
John H. Foster 5,600 ---
Gordon Gund 110,568 [5] ---
John M. Hennessy 7,032 [5] ---
Vernon E. Jordan, Jr. 8,553 ---
James W. Kinnear 8,800 [5] ---
James J. O'Connor 9,046 [5] ---
Catherine A. Rein 8,000 ---
Henry Rosovsky 6,720 [5] ---
H. Onno Ruding 4,452 [5] ---
William D. Smithburg 7,200 ---
Named Executive Officers
- ------------------------
[*also serve as directors]
Roger G. Ackerman* 381,252 ---
Van C. Campbell* 401,013 ---
David A. Duke* 236,471 ---
Norman E. Garrity 318,358 ---
James R. Houghton* 1,406,648 [6] ---
All Directors and Executive
Officers as a Group 5,077,197 [7] 2.2%
[1] Includes shares of Common Stock purchased pursuant to the terms of the
Corporation's Equity Purchase Plan and which may be resold only to the
Corporation. Messrs. Garrity and Houghton and all directors and executive
officers as a group own 24,548, 1,600 and 126,668 such shares, respectively.
8
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[2] Includes shares of Common Stock, subject to forfeiture and restrictions on
transfer, granted pursuant to the Corporation's Incentive Stock Plans as well as
options to purchase shares of Common Stock exercisable within 60 days under the
Corporation's Stock Option Plans. Messrs. Ackerman, Campbell, Duke, Garrity and
Houghton have the right to purchase 137,497, 174,424, 102,000, 125,000 and
318,000 shares, respectively, pursuant to such options. All directors and
executive officers as a group hold options to purchase 1,648,408 such shares.
[3] Includes shares of Common Stock, subject to forfeiture and restrictions on
transfer, issued pursuant to the Corporation's Restricted Stock Plans for
Non-Employee Directors.
[4] Includes all shares of capital stock, Common Stock and the equivalent
thereof in Preferred Stock on the basis of four shares of Common Stock for each
share of Preferred Stock, held by The Chase Manhattan Bank, N.A. as the trustee
of the Corporation's Investment Plans for the benefit of the members of the
group, who may instruct the trustee as to the voting of such shares. If no
instructions are received, the trustee votes the shares in the same proportion
as it votes all of the shares for which instructions were received. Shares of
Preferred Stock may be held only by the trustee. The power to dispose of shares
of Common and Preferred Stock is also restricted by the provisions of the Plans.
The trustee holds for the benefit of Messrs. Ackerman, Campbell, Duke, Garrity,
Houghton and all directors and executive officers as a group the equivalent of
21,491, 31,799, 7,407, 12,461, 44,847 and 207,612 shares of Common Stock,
respectively, and for the benefit of all employees who participate in the Plans
the equivalent of 11,641,751 shares of Common Stock, each entitled to one vote,
being 10,690,963 shares of Common Stock and 237,697 shares [being 100% of the
Class] of Preferred Stock, each entitled to four votes.
[5] In addition, Messrs. Barker, Gund, Hennessy, Kinnear, O'Connor, Rosovsky and
Smithburg have credited to their accounts the equivalent of 21,005, 4,825,
6,680, 13,636, 3,833, 7,772 and 11,015 shares, respectively, of Common Stock in
valuation entry form under the Corporation's Deferred Compensation Plan for
Directors. Deferred fees will be paid solely in cash at or following termination
of service as a director.
[6] Includes 686,450 shares held in trusts by Market Street Trust Company as a
co-trustee for the benefit of Mr. Houghton as income beneficiary. Does not
include 1,198 shares owned by Mr. Houghton's wife, as to which Mr. Houghton
disclaims beneficial ownership. Also does not include 10,108,936 shares held in
trusts by Market Street Trust Company, as to which Mr. Houghton disclaims
beneficial ownership. Market Street Trust Company is a limited purpose trust
company controlled by the Houghton family, the directors of which include James
R. Houghton and other Houghton family members.
[7] Does not include 49,740 shares owned by the spouses and minor children of
certain executive officers and directors as to which such officers and directors
disclaim beneficial ownership.
[8] Unless otherwise indicated, does not exceed 1% of the Class of Common Stock.
9
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Report of the Compensation Committee of the Board of Directors on Executive
Compensation
Executive compensation at Corning is administered by the Compensation
Committee of the Board of Directors, composed entirely of non-employee
directors. The following is the Committee's report.
"The Compensation Committee reviews and recommends executive compensation
levels, cash and equity incentives for executive officers and reports such
recommendations to the Board for its consideration and action.
The philosophy underlying, and the strategies guiding, the Committee's
recommendations regarding the Corporation's compensation program, the impact of
performance within that program and a description of actions affecting 1995
compensation for Mr. Houghton, Chairman of the Board of Directors and Chief
Executive Officer of the Corporation, are discussed below.
Compensation Philosophy
The Committee is responsible for ensuring that executive compensation is
based on objective measures of performance at the individual, corporate and
applicable business unit level. The Committee believes that compensation should
be driven by the long-term interests of the stockholders and should be directly
linked to corporate performance.
Compensation Strategy
The Committee's basic strategic compensation principles are as follows:
o Executive compensation will reward performance and contribution to
stockholder value and be competitive with positions of similar responsibility
at other companies of comparable complexity, size and historical performance.
The companies which meet such parameters are referred to as Corning's
comparable companies.
o As employees assume greater responsibilities, an increasing share of their
total compensation package will be derived from variable incentive
compensation [both of a long- and short-term nature] generated by achievement
of performance objectives designed to produce long-term growth in stockholder
value.
o Performance-based equity incentives and stock option grants are effective
ways to align the long-term interests of employees with those of
stockholders.
o Stock ownership fosters commitment to long-term stockholder value. Executives
are encouraged to own and hold Common Stock through the design of the
Corporation's long-term equity plans and in communications which stress the
commitment to long-term value.
o The benefits package for executives will be substantially identical to that
offered to all salaried employees and will be designed to encourage long-term
commitment to the Corporation.
The executive compensation program is composed of four elements: base salary;
annual incentives; long-term equity based incentives; and stock options. The
Committee tests annually each element of the compensation program against market
surveys provided by independent compensation consultants. Such surveys currently
include in the aggregate more than 200 companies engaged in a variety of
manufacturing and service industries, all of which are "Fortune 500" companies
and each of which is included in the S&P 500 Index and some of which are
included in the S&P 500 Miscellaneous Industrial Companies Index.
It is Corning's compensation strategy to target base salary at approximately
the median of the Corning comparable companies and to have the equity-based and
variable pay incentive compensation components drive total compensation to the
top quartile of such companies if performance meets or exceeds such top quartile
performance.
10
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Compensation Deductibility
In 1994, as a result of the adoption of Section 162[m] of the Internal
Revenue Code of 1986, as amended, the Corporation, at the direction of the
Committee, sought and obtained stockholder approval of the various criteria long
used under the 1988 Variable Compensation Plan and the Corporate Performance
Plan [described in the section below entitled Compensation Program] to measure
and reward performance under such plans. The Committee intends to continue to
set performance-based goals under the 1988 Variable Compensation Plan and the
Corporate Performance Plan and to deduct compensation paid upon attainment of
such goals to the extent consistent with the provisions of Section 162[m].
Compensation Program
Annual compensation of the named executives as shown in the "Salary" and
"Bonus" columns of the Summary Compensation Table, and recommendations by the
Committee to adjust salary levels and bonus targets, are based on an
individual's responsibilities and performance against established return on
equity and net income goals, overall corporate performance and external
comparative compensation information.
Annual variable incentives are paid in cash through the Variable
Compensation Plan under which minimum, target and maximum awards are set by the
Committee based on position level. Awards are earned based on achievement of
annual predetermined return on equity and net earnings goals set by the
Committee. In 1995 performance against such goals was mixed with some goals
being exceeded and other goals not being met.
Under the 1994 Employee Equity Participation Program, the Corporation
developed a series of performance-based plans [herein referred to as the
"Corporate Performance Plan"]. The Corporate Performance Plan provides the
mechanism to reward improvement in corporate performance as measured by return
on equity and earnings per share.
Each year the Committee sets minimum, target and maximum goals and awards
shares [at target levels] of Common Stock which are subject to forfeiture in
whole or in part if goals are not met. Shares earned under the Corporate
Performance Plan may range from 0% to 150% of the target award, depending on
actual performance results. Shares earned remain subject to forfeiture and
restrictions on transfer for two years following the end of the performance
period. Overall corporate performance for 1995 was 86.1% of the return on equity
and earnings per share targets, adjusted for certain one-time events and/or
other unusual or non-recurring items. Based on 1995 performance, 86.1% of the
shares granted in December 1994 were earned under the Plan by all the named
executive officers except Mr. Garrity who had both operational and corporate
targets and who earned 107.4% of the shares so granted [as indicated in the
Corporate Performance Plan Activity Table].
Awards of performance-based shares under the Corporate Performance Plan
[covering the years 1996-1998] are to be granted to executive officers for each
of the three performance years 1996 through 1998. Awards for the 1996
performance year were granted in December 1995 with subsequent grants
anticipated in December 1996 and December 1997. The Committee has established
minimum, target and maximum goals for each of 1996, 1997 and 1998. Shares earned
under the Plan may range from 0% to 150% of the target award, depending on
actual performance results. Shares earned each year remain subject to forfeiture
and restrictions on transfer for two years following the end of the performance
period.
Stock options for the entire three-year performance period of 1996-1998 were
granted to named executive officers in December 1995, in a defined ratio to the
"performance-based" shares described above. Options to purchase two shares of
Common Stock were granted for every one
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performance-based share to be issued over the three-year performance period.
In determining the number of stock options and shares to be made available
to executives under the Corporate Performance Plan, the Committee evaluated the
comparative external market data described above with respect to the stock
options granted and performance-based shares awarded by the Corning comparable
companies included in such data, the number of shares of Common Stock already
subject to restrictions and options and the number of additional shares to be
awarded necessary to align directly management and stockholder interests.
The pension and welfare benefits provided to executives are substantially
equal to those provided to all salaried employees. Employees whose pensionable
earnings exceed federal limits are eligible to participate in non-qualified
supplemental retirement and investment plans.
CEO Compensation Actions - 1995
Base Salary: In December 1994, after keeping Mr. Houghton's base salary
constant for 1994, the Committee increased Mr. Houghton's base salary for 1995
by 4%, from $700,000 per annum to $728,000 per annum. Despite such increase, Mr.
Houghton's salary continued to be below the 50th percentile of the market for
similarly sized, and for Corning comparable, companies. The Committee also
decided to transfer a larger percentage of Mr. Houghton's earnings potential to
the annual bonus incentive programs, thereby causing a greater portion of Mr.
Houghton's total cash compensation to be at risk and dependent on the
performance of the Corporation. As a result of this December 1994 decision, Mr.
Houghton's incentive target for 1995 was increased by 10% to 90% of base salary.
Annual Incentives: Mr. Houghton's bonus for 1995 was composed of two parts:
First, Mr. Houghton received 54% of his year-end 1995 base salary under the
Variable Compensation Plan. This award was based on the Corporation's achieving
86% of the net income after tax goal set by the Committee in 1995. Second, Mr.
Houghton received 6.55% [1995 minimum = 0%; maximum = 10%] of his year-end base
salary under the Corporation's GoalSharing Plan, which was the average
percentage of amounts awarded to approximately 15,000 Corning employees
participating in 1995 in the GoalSharing Plan.
Long-Term Incentives: Under the Corporate Performance Plan, Mr. Houghton
earned for 1995 performance 15,068 [or 86.1%] of the shares granted to him in
December 1994 in connection with the 1995 return on equity and earnings per
share targets. Each of the return on equity and earnings per share goals
achieved, adjusted for certain one-time events and/or other unusual or
non-recurring items, have equal weighting in determing the actual number of
shares earned.
In December 1995, Mr. Houghton was granted [i] 22,000 shares of Common Stock
under the Corporate Performance Plan for 1996 performance, which shares are
subject to forfeiture if the Corporation fails to achieve the 1996 earnings per
share and return on equity objectives and [ii] stock options covering 44,000
shares at fair market value on the date of grant. One-half of the options become
exercisable in February 1999 and all become exercisable in February 2000. The
options expire in December 2005. The 22,000 shares are shown in the Corporate
Performance Plan Activity Table for 1996.
Conclusion
The Committee believes that the quality of executive leadership
significantly affects the long-term performance of the Corporation and that it
is in the best interest of the stockholders to compensate fairly executive
leadership for achievement meeting or exceeding the high standards set by the
Committee, so long as there is corresponding risk when performance falls short
of such standards. A primary goal of the Committee is to relate compensation to
corporate performance. The
12
<PAGE>
Committee believes that Corning's current executive compensation program meets
such standards and has contributed, and will continue to contribute, to the
Corporation's success.
The Compensation Committee:
James W. Kinnear, James J. O'Connor
Chairman
Vernon E. Jordan, Jr. Catherine A. Rein"
Performance Graph
Set forth below is a graph illustrating the Corporation's cumulative total
stockholder return over the last five years compared to two performance
indicators of the stock market, the S&P 500 and the S&P Miscellaneous Industrial
Companies in which the Corporation is included. The latter includes the capital
weighted performance results of those companies in the miscellaneous industrial
companies classification that are also included in the S&P 500.
[LINE CHART]
Comparison of Five-Year Cumulative Total Return
Among Corning Incorporated, S&P 500 and S&P Miscellaneous Industrial Companies
(Fiscal Years Ending December 31)
1990 = 100 DOLLARS 1990 = 100 DOLLARS
1990 1991 1992 1993 1994 1995
- --------------------------------------------------------------------------------
Corning Incorporated 100.0 174.0 172.9 132.2 144.3 158.1
S&P 500 100.0 130.0 139.7 153.5 155.5 214.0
S&P Miscellaneous 100.0 125.7 140.3 161.3 166.5 200.4
13
<PAGE>
Executive Compensation
The following tables and charts set forth information with respect to
benefits made available, and compensation paid or accrued, by the Corporation
and its subsidiaries during the year ended December 31, 1995 for services by
each of the chief executive officer and the four most highly compensated
executive officers [other than the chief executive officer] whose total salary
and bonus exceeded $100,000. The Corporation regards total annual pay as the
combination of the cash amounts set forth under the salary and bonus columns.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term Compensation
--------------------------------------
Annual Compensation Awards Payouts
- ---------------------------------------------------------- ---------- -----------
Other All
Annual Restricted Securities Incentive Other
Name and Compen- Stock Underlying Plan Compen-
Principal Position Year Salary Bonus sation[1] Awards[2] Options Payouts sation[3]
- ------------------ ---- ------ ----- --------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
James R. Houghton, 1995 $728,000 $440,804 $26,263 $470,875 44,000 ---- $95,666
Chairman of 1994 700,000 821,240 34,020 765,960 35,000 $312,654 72,965
the Board 1993 672,500 481,618 34,605 348,845 35,000 132,900 53,953
Roger G. Ackerman, 1995 600,000 309,300 36,229 376,688 198,000 ---- 75,441
President 1994 525,000 621,720 29,651 547,114 28,000 244,261 54,271
1993 482,500 353,888 34,969 196,413 25,000 103,828 41,802
Van C. Campbell, 1995 515,000 257,315 16,037 336,344 162,000 ---- 68,209
Vice Chairman 1994 450,000 435,465 18,441 437,691 25,000 195,409 44,107
1993 400,000 264,285 25,744 160,794 20,000 83,063 33,035
David A. Duke, 1995 450,000 204,975 17,946 336,344 21,000 ---- 51,690
Vice Chairman 1994 400,000 387,080 17,102 437,691 25,000 195,409 38,036
1993 382,500 215,960 22,689 160,794 20,000 83,063 32,483
Norman E. Garrity, 1995 380,000 246,620 15,000 335,625 99,000 ---- 43,081
Executive Vice 1994 330,000 317,666 19,400 447,127 20,000 276,525 22,961
President 1993 300,000 148,110 25,928 124,388 20,000 95,245 18,331
</TABLE>
[1] Includes dividends on shares of restricted stock granted but not earned
within one year from date of grant and tax gross-up payments.
[2] At year end 1995, Messrs. Houghton, Ackerman, Campbell, Duke and Garrity
held an aggregate of 243,165, 191,100, 158,880, 108,380 and 113,295 shares
of restricted stock, respectively, having an aggregate value on December 31,
1995 of $7,598,906, $5,971,875, $4,965,000, $3,386,875 and $3,540,469,
respectively. Certain of such shares, net of forfeitures, were subject to
performance-based conditions on vesting and are subject to forfeiture upon
termination and restrictions on transfer prior to stated dates. [See also
the Corporate Performance Plan Activity Table.] Certain other shares are
subject to restrictions on transfer until the executive officer retires at
or after age 60 and are subject to forfeiture prior to age 60 in whole if
such officer voluntarily terminates employment with the Corporation and in
part if such officer's employment is terminated by the Corporation.
Dividends are paid to such individuals on all shares of restricted Common
Stock held by them.
14
<PAGE>
[3] Each salaried employee of the Corporation who reached a fifth anniversary of
employment during 1995 received an additional two weeks of vacation and 40%
of two weeks of salary. The $7,692 received by Mr. Campbell on such
anniversary in 1995 is included above. The benefit of 40% of an additional
two weeks of salary is being phased out and will be eliminated in its
entirety by year-end 1996. Also included are the following amounts
contributed by the Corporation to the Investment Plan and a non-qualified
investment plan maintained by the Corporation to provide salaried employees
the benefits which would have been available to them pursuant to the terms
of the Corporation's Investment Plan but for limitations on contributions to
tax-qualified plans imposed pursuant to the Employee Retirement Income
Security Act: for 1995 $95,666 for Mr. Houghton, $75,441 for Mr. Ackerman,
$60,517 for Mr. Campbell, $51,690 for Dr. Duke and $43,081 for Mr. Garrity.
The Corporation has in place a severance policy pursuant to which it will
provide to all salaried employees upon the happening of certain stated events
compensation in amounts ranging between eight weeks [for employees with at least
one year of service] and fifty-two weeks [for employees with twenty or more
years of service]. Additionally, certain of the Corporation's officers and other
senior employees, including the five named executive officers, are entitled to
receive up to two years of compensation in light of the length of time
anticipated in securing comparable employment. The Corporation has provided
written assurance to such officers and senior employees, including the executive
officers named in the Summary Compensation Table, that such events would include
a constructive termination of employment as a result of a substantial change in
such employee's responsibilities, compensation levels, relocation and similar
matters following a change in the ownership and management of the Corporation.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL
YEAR AND FISCAL YEAR-END OPTION/SAR VALUES [1]
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at In-the-Money Options
Fiscal Year End At Fiscal Year End
Shares ---------------------- --------------------
Acquired on Value
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James R. Houghton 0 $ 0 286,000 146,000 $3,101,455 $188,125
Roger G. Ackerman 35,003 521,443 112,497 276,000 724,715 137,562
Van C. Campbell 0 0 154,424 227,000 1,453,477 112,812
David A. Duke 27,000 499,632 82,000 86,000 451,020 112,812
Norman E. Garrity 0 0 105,000 159,000 765,857 107,500
</TABLE>
[1] There are no SARs outstanding.
15
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR [1]
<TABLE>
<CAPTION>
Potential Realizable Value at Assumed
Annual Rates of Stock Price
Individual Grants Appreciation for Option Term[3]
- ----------------------------------------------------------------------------- -------------------------------------
Number of % of Total
Securities Options
Underlying Granted
Options to Employees Exercise Expiration Gain at Gain at Gain at
Name Granted in Fiscal Year Price Date 0% 5% 10%
---- ------- -------------- ----- ---- -- -- ---
<S> <C> <C> <C> <C> <C> <C> <C>
James R. Houghton 44,000[2] 1.3% $31.25 12/5/2005 $0 $ 864,730 $ 2,191,396
Roger G. Ackerman 198,000[2] 5.8% 31.25 12/5/2005 0 3,891,286 9,861,281
Van C. Campbell 162,000[2] 4.8% 31.25 12/5/2005 0 3,183,779 8,068,321
David A. Duke 21,000[2] 0.6% 31.25 12/5/2005 0 412,712 1,045,893
Norman E. Garrity 99,000[2] 2.9% 31.25 12/5/2005 0 1,945,643 4,930,641
All Shareholders as N/A N/A N/A N/A 0 4,529,534,478 11,478,729,688
a group
All Optionees as 3,389,100 100% 31.34 2005 0 66,797,662 169,278,390
a group [4]
Optionee Gain As % Of All Stockholders Gain 1.47% 1.47%
</TABLE>
[1] No SARs were granted.
[2] The Stock Option Agreements provide that one half of the options are to
become exercisable on February 1, 1999 and all options are to become
exercisable on February 1, 2000.
[3] The dollar amounts set forth under these columns are the result of
calculations at 0% and at the 5% and 10% rates established by the
Securities and Exchange Commission and therefore are not intended to
forecast future appreciation of Corning's stock price. Corning did not use
any alternative formula for grant date valuation as it is unaware of any
formula which would determine with reasonable accuracy a present value
based upon future unknown factors.
[4] The exercise price shown to the right is a weighted average of option
prices relating to grants of options made on five occasions in 1995. No
gain to the optionees is possible without an appreciation in stock price,
an event which will also benefit all stockholders. If the stock price does
not appreciate, the optionees will realize no benefit.
16
<PAGE>
CORPORATE PERFORMANCE PLAN ACTIVITY TABLE
This Table illustrates the number of performance-based shares awarded
under the Corporate Performance Plan [as earlier described on page 11]. The
number of shares earned or which may be earned by the named executive is
determined by the achievement of specific return on equity and earnings per
share goals for the Corporation. The percentage of awards that may be earned
ranges from 0% to 150% of target. The dollar value of the shares earned for 1995
is reflected in the Restricted Stock Awards column of the Summary Compensation
Table appearing on page 14.
In February 1997 the Compensation Committee will assess performance
against goals and determine the number of shares earned of those granted in
December 1995. Once earned, such shares remain restricted as to transfer for two
years and subject to forfeiture upon termination of employment prior thereto.
<TABLE>
<CAPTION>
Number Number Number Vesting
Grant of Shares Performance of Shares of Shares Date of
Name Year Date Granted Period Forfeited Earned Earned Shares
---- ---- ---- ------- ------ --------- ------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
James R. Houghton 1996 12/95 22,000 1996 2/99
1995 12/94 17,500 1995 2,432 15,068 2/98
1994 12/93 17,500 1994 25,165 2/97
1993 12/92 16,000 1993 12,000 4,000 2/96
Roger G. Ackerman 1996 12/95 33,000 1996 2/99
1995 12/94 14,000 1995 1,946 12,054 2/98
1994 12/93 12,500 1994 17,975 2/97
1993 12/92 12,500 1993 9,375 3,125 2/96
Van C. Campbell 1996 12/95 27,000 1996 2/99
1995 12/94 12,500 1995 1,737 10,763 2/98
1994 12/93 10,000 1994 14,380 2/97
1993 12/92 10,000 1993 7,500 2,500 2/96
David A. Duke 1996 12/95 10,500 1996 2/99
1995 12/94 12,500 1995 1,737 10,763 2/98
1994 12/93 10,000 1994 14,380 2/97
1993 12/92 10,000 1993 7,500 2,500 2/96
Norman E. Garrity 1996 12/95 16,500 1996 2/99
1995 12/94 10,000 1995 10,740 2/98
1994 12/93 10,000 1994 14,690 2/97
1993 12/92 10,000 1993 7,095 2,905 2/96
</TABLE>
17
<PAGE>
PENSION PLAN
The table below sets forth estimated annual benefits payable upon retirement.
A description of the formula by which such benefits are determined and the
estimated annual benefits payable upon retirement age for each of the named
executive officers follows the table.
<PAGE>
Years of Service
15 20 25 30 35 40
- -------------------------------------------------------------------------------
Remuneration
- -------------------------------------------------------------------------------
$ 100,000 26,367 35,804 44,473 52,906 61,338 69,771
- -------------------------------------------------------------------------------
200,000 56,367 75,804 94,473 112,906 131,338 149,771
- -------------------------------------------------------------------------------
300,000 86,367 115,804 144,473 172,906 201,338 229,771
- -------------------------------------------------------------------------------
400,000 116,367 155,804 194,473 232,906 271,338 309,771
- -------------------------------------------------------------------------------
500,000 146,367 195,804 244,473 292,906 341,338 389,771
- -------------------------------------------------------------------------------
600,000 176,367 235,804 294,473 352,906 411,338 469,771
- -------------------------------------------------------------------------------
700,000 206,367 275,804 344,473 412,906 481,338 549,771
- -------------------------------------------------------------------------------
800,000 236,367 315,804 394,473 472,906 551,338 629,771
- -------------------------------------------------------------------------------
900,000 266,367 355,804 444,473 532,906 621,338 709,771
- -------------------------------------------------------------------------------
1,000,000 296,367 395,804 494,473 592,906 691,338 789,771
- -------------------------------------------------------------------------------
1,100,000 326,367 435,804 544,473 652,906 761,338 869,771
- -------------------------------------------------------------------------------
1,200,000 356,367 475,804 594,473 712,906 831,338 949,771
- -------------------------------------------------------------------------------
1,300,000 386,367 515,804 644,473 772,906 901,338 1,029,771
- -------------------------------------------------------------------------------
1,400,000 416,367 555,804 694,473 832,906 971,338 1,109,771
- -------------------------------------------------------------------------------
1,500,000 446,367 595,804 744,473 892,906 1,041,338 1,189,771
- -------------------------------------------------------------------------------
The Corporation maintains a Salaried Pension Plan, a defined benefit plan,
contributions to which are determined by the Corporation's actuaries and are not
made on an individual basis. Benefits paid under this Plan are based upon career
earnings [regular salary and cash awards paid under the Corporation's Variable
Compensation Plans] and years of credited service. The Salaried Pension Plan
provides that salaried employees of the Corporation who retire on or after
December 31, 1993 will receive pension benefits equal to the greater of [a]
benefits provided by a formula pursuant to which they shall receive for each
year of credited service an amount equal to 1.5% of annual earnings up to the
social security wage base and 2% of annual earnings in excess of such base or
[b] benefits calculated pursuant to a formula which provides that retirees shall
receive for each year of credited service prior to January 1, 1994 an amount
equal to 1% of the first $24,000 of average earnings for the highest five
consecutive years of annual earnings in the ten years of credited service
immediately prior to 1994 and 1.5% of such average earnings in excess of
$24,000. Effective upon commencement of employment, salaried employees may
contribute to the Salaried Pension Plan 2% of their annual earnings up to the
social security wage base. Such employees will receive for each year of credited
18
<PAGE>
service after December 31, 1990 in lieu of the amount described in [a] above an
amount equal to 2% of annual earnings. The benefit formula is reviewed and
adjusted periodically for inflationary and other factors.
While the amount of benefits payable pursuant to the Salaried Pension Plan
and attributable to the Corporation's contributions is limited by the provisions
of the Employee Retirement Income Security Act, maximum annual benefits
calculated under the straight life annuity option form of pension payable to
participants at age 65, the normal retirement age specified in the Plan, are
illustrated in the table set forth above.
The Corporation maintains a non-qualified Executive Supplemental Pension Plan
pursuant to which it will pay to certain executives amounts approximately equal
to the difference between the benefits provided for under the Corporation's
Salaried Pension Plan and benefits which would have been payable thereunder but
for the provisions of the Employee Retirement Income Security Act. The
Corporation has established a trust to fund amounts payable under the Executive
Supplemental Pension Plan, certain portions of which are presently funded and
vested in individual participants. It is estimated that Messrs. Ackerman,
Campbell, Duke, Garrity and Houghton who have 34, 32, 33, 29 and 33 years of
credited service, respectively, would receive each year if they worked to age
65, the normal retirement age specified in the Salaried Pension Plan, the
following amounts under the Salaried Pension Plan and the Executive Supplemental
Pension Plan: $554,571, $418,850, $375,423, $286,122 and $729,250, respectively.
Receipt of Stockholder Proposals
Any stockholder proposal intended to be presented at the 1997 Annual Meeting
and included in the Corporation's Proxy Statement and Proxy relating to that
meeting must be received by the Corporation at One Riverfront Plaza, Corning,
New York 14831; Attention: The Secretary not later than November 17, 1996.
Directors' Compensation and Other Matters Relating to Directors
Each director of the Corporation, other than a director who is an employee of
the Corporation, receives $22,500 for service as a director and is also paid
$750 for each meeting of the Board or any committee thereof which he attends. In
lieu of a meeting fee, chairmen of committees of the Board are paid a retainer
ranging from $3,000 to $6,500, depending upon the committee which the director
chairs. Pursuant to a Deferred Compensation Plan for Directors adopted by the
Corporation in 1983, each director may elect to defer until a date specified by
him receipt of all or a portion of his compensation. Such Plan provides that
amounts deferred shall be paid only in cash and while deferred may be allocated
to [i] a cash account upon which amounts deferred may earn interest, compounded
quarterly, at the prime rate of Citibank, N.A. in effect on certain specified
dates, [ii] a market value account, the value of which will be based upon the
market value of the Corporation's Common Stock from time to time, [iii] a book
value account, the value of which will be based upon the book value of the
Corporation's Common Stock established on an annual basis, or [iv] a combination
of such accounts. At December 31, 1995 eleven directors had elected to defer
compensation pursuant to such Plan. Pursuant to the Restricted Stock Plans for
Non-Employee Directors, the Corporation during 1995 issued to each non-employee
director elected in 1995 400 shares of the Corporation's Common Stock for each
year specified in the term of service for which such director was elected,
subject to forfeiture and restrictions on transfer, and issued 4,000 shares each
to three non-employee directors newly elected since the 1995 Annual Meeting,
subject to forfeiture and restrictions on transfer.
19
<PAGE>
The Corporation has established a Directors' Charitable Giving Program funded
by insurance policies on the lives of the directors. In 1995 the Corporation
paid a total of $396,792 in premiums on such policies. Upon the death of a
director, the Corporation will donate $1,250,000 [on behalf of a non-employee
director] and $1,000,000 [on behalf of an employee director] to one or more
qualified charitable organizations recommended by such director and approved by
the Corporation. The directors derive no financial benefit from the Program as
all charitable deductions and cash surrender value of life insurance policies
accrue solely to the Corporation. Five years of service as a director is
required to participate in the Program. All directors, other than Messrs. Brown,
Eagleburger, Foster and Ruding, currently participate in the Program.
The Board of Directors of the Corporation held during 1995 five regularly
scheduled meetings. Each director, other than Messrs. Eagleburger and Rosovsky,
attended at least 75% of all such regularly scheduled meetings and the meetings
of the committees of which each was a member.
The Corporation has audit, compensation and nominating committees composed of
members of the Board of Directors.
The Audit Committee, composed of Messrs. O'Connor, Barker and Smithburg and
Ms. Rein, met seven times during 1995. It recommends the firm of independent
accountants to conduct the annual examination of the Corporation's consolidated
financial statements, confers with such accountants and reviews the scope of the
examination and brings to the entire Board of Directors for review those items
relating to such examination or to accounting practices which the Audit
Committee believes merit such review. The Compensation Committee, composed of
Messrs. Kinnear, Jordan and O'Connor and Ms. Rein, met six times during 1995. It
makes recommendations to the Board of Directors with respect to the compensation
of officers and executive employees of the Corporation and administers the
Corporation's Variable Compensation Plan, Employee Equity Participation Program
and the Executive Supplemental Pension Plan. The Nominating Committee, composed
of Messrs. Jordan, Ackerman, Houghton, Kinnear, Rosovsky and, subsequent to
their election, Messrs. Eagleburger and Ruding, met three times during 1995. It
proposed the election of H. Onno Ruding in June 1995, Lawrence S. Eagleburger in
October 1995 and John Seely Brown in February 1996 [at a meeting held in
February 1996] as well as the nominees for election as directors at the Annual
Meeting of Stockholders to be held on April 25, 1996. It reviews, considers and
proposes nominees for election as directors of the Corporation and makes such
other proposals with respect to the organization, size and composition of the
Board of Directors as it deems advisable. While the Committee may consider
persons nominated by stockholders, it has no explicit procedures in this regard.
Compensation Committee Interlocks and Insider Participation
Ms. Rein, Executive Vice President of Metropolitan Life Insurance Company, of
which Mr. Houghton is a director, is a member of the Corporation's Compensation
Committee.
Other Matters
Corning Consumer Products Company, a wholly-owned subsidiary, leased office
space in Corning, New York from Mr. Robert L. Ecklin, an executive officer. The
monthly rental under such lease, which expired on June 30, 1995, was $2,075. The
Corporation also leases other office space in Corning, New York owned by Mr.
Ecklin. During 1995 the Corporation paid an average base monthly rental of
$11,315 for such space. The lease expires on June 30, 1996. Clinical Pathology
Inc. doing
20
<PAGE>
business as MetPath, a wholly-owned subsidiary of the Corporation,
leases office and laboratory space located in Corning, New York from Mr. Ecklin
at a base monthly rental of $892. The lease expires on December 31, 1997.
During 1995, ten executive officers of the Corporation owed the Corporation a
maximum aggregate amount of $730,384, which remained outstanding on December 31,
1995, and paid interest on such amounts at 6% per annum.
Section 16[a] of the Securities Exchange Act of 1934 requires Corning's
directors and certain of its officers to file reports of their ownership of
Corning stock and of changes in such ownership with the Securities and Exchange
Commission [the "SEC"] and the New York Stock Exchange. SEC regulations also
require Corning to identify in this proxy statement any person subject to this
requirement who failed to file any such report on a timely basis. Larry Aiello,
Jr. and Norman E. Garrity, officers of the Company, each filed late one such
report, Mr. Aiello disclosing the grant of shares under an employee benefit plan
and Mr. Garrity disclosing the sale of shares on three occasions in prior years.
Gordon Gund, a director of the Corporation, filed late one such report
disclosing the acquisition of shares by a trust of which his wife is a trustee.
The Corporation has purchased insurance from National Union Fire Insurance
Company, Pittsburgh, Pennsylvania, Federal Insurance Company, A.C.E. Insurance
Company [Bermuda] Ltd. and Zurich Insurance Company providing for reimbursement
of directors and officers of the Corporation and its subsidiary companies for
costs and expenses incurred by them in actions brought against them in
connection with their actions as directors or officers, including actions as
fiduciaries under the Employee Retirement Income Security Act of 1974. The
insurance coverage, which expires in May 1996, costs $1,400,000 on an annual
basis, which will be paid by the Corporation.
At the meeting of the Corporation's Board of Directors held on February 7,
1996, the Board appointed Price Waterhouse LLP as the independent accountants
for the Corporation for its 1996 fiscal year, pursuant to the recommendation of
the Audit Committee. Audit services performed by Price Waterhouse LLP for the
fiscal year ended December 31, 1995 consisted of examination of the consolidated
financial statements of the Corporation, limited review of the unaudited
quarterly consolidated financial statements and limited assistance and
consultation in connection with filings with the Securities and Exchange
Commission.
The Corporation expects representatives of Price Waterhouse LLP to be present
at and available to respond to appropriate questions which may be raised at the
Annual Meeting. Representatives of Price Waterhouse LLP will have the
opportunity to comment on the Corporation's financial statements if they so
desire.
The cost of the solicitation of Proxies will be borne by the Corporation. In
addition to solicitation of the Proxies by use of the mails, some of the
directors, officers and regular employees of the Corporation, without extra
remuneration, may solicit Proxies personally or by telephone or telegraph. The
Corporation has retained Georgeson & Co. Inc., at a cost of $12,000, to assist
in soliciting Proxies in connection with the Annual Meeting. The Corporation may
also request brokerage houses, nominees, custodians and fiduciaries to forward
soliciting material to beneficial owners of shares held of record. The
Corporation will reimburse such persons for their expenses in forwarding
soliciting material.
By order of the Board of Directors.
A. John Peck, Jr.
Secretary
March 6, 1996
21
<PAGE>
CORNING
Proxy Solicited on Behalf of The Board of Directors For The Annual Meeting of
Stockholders--April 25, 1996
The undersigned appoints James R. Houghton, Roger G. Ackerman and Van C.
Campbell, and each of them, as proxies, with full power of substitution and
revocation, to vote, as designated on the reverse side hereof, all the Common
Stock of Corning Incorporated which the undersigned has power to vote, with
all powers which the undersigned would possess if personally present, at the
annual meeting of stockholders thereof to be held on April 25, 1996, or at any
adjournment thereof.
Unless otherwise marked, this proxy will be voted FOR the election of the
nominees named.
_____ Check here for address change.
New Address: ______________________
____________________________________
____________________________________
_____ Check here if you plan to
attend the meeting.
_____ Check here to discontinue
mailing duplicate Annual Report.
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
<PAGE>
The Board of Directors recommends a vote FOR all nominees for directors.
Nominees: FOR WITHHOLD
John Seely Brown;
Lawrence S. Eagleburger; _____ ________
Gordon Gund; John M.
Hennessy; Henry Rosovsky
and H. Onno Ruding _____
FOR ALL (except Nominee(s)
written below):
_________________________________________________________________________
Signature(s) ________________________ Dated: _________, 1996
Please sign exactly as name appears hereon. Joint owners should each sign.
Where applicable, indicate official position or representative capacity.
