<PAGE>
PROSPECTUS SUPPLEMENT FILED PURSUANT TO RULE 424 (B)(5)
(TO PROSPECTUS DATED JANUARY 11, 2000) REGISTRATION NOS. 333-81299
AND 333-81299-01
13,000,000 SHARES
[LOGO]
Corning Incorporated
Common Stock
We are offering all of these shares of common stock and will receive all of the
net proceeds of this offering.
Our common stock is listed on the New York Stock Exchange under the symbol
"GLW". On January 25, 2000, the closing price for our common stock, as reported
on the NYSE, was $151 3/8 per share.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus supplement or the accompanying
prospectus. Any representation to the contrary is a criminal offense.
<TABLE>
<CAPTION>
Per Share Total
<S> <C> <C>
Initial public offering price............................... $151.375 $1,967,875,000
Underwriting discount....................................... $ 4.550 $ 59,150,000
Proceeds, before expenses, to Corning....................... $146.825 $1,908,725,000
</TABLE>
The underwriters may, under certain circumstances, purchase up to an additional
1,950,000 shares at the initial public offering price less the underwriting
discount.
The underwriters are severally underwriting the shares being offered. The
underwriters expect to deliver the shares against payment in New York, New York
on January 28, 2000.
The joint lead managers are Goldman, Sachs & Co. and J.P. Morgan & Co.
JOINT BOOK-RUNNING MANAGERS
Goldman, Sachs & Co. J.P. Morgan & Co.
------------------
Salomon Smith Barney
Banc of America Securities LLC
Donaldson, Lufkin & Jenrette
SoundView Technology Group
January 25, 2000
<PAGE>
No dealer, salesperson or other person is authorized to give any information
or to represent anything not contained in this prospectus. You must not rely on
any unauthorized information or representations.
This prospectus is an offer to sell only the shares offered hereby, but only
under circumstances and in jurisdictions where it is lawful to do so. The
information contained in this prospectus is current only as of its date.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
--------
<S> <C>
Prospectus Supplement
Forward-Looking Statements............. S-2
Corning Incorporated................... S-3
Recent Developments.................... S-5
Use of Proceeds........................ S-6
Price Range of Common Stock............ S-7
Dividend Policy........................ S-7
Capitalization......................... S-8
Selected Consolidated Financial Data... S-9
Management's Discussion and Analysis of
Financial Condition and Results of
Operations........................... S-11
Underwriting........................... S-16
Legal Matters.......................... S-17
</TABLE>
<TABLE>
Prospectus
<CAPTION>
Page
--------
<S> <C>
Corning Incorporated................... 2
Corning Finance B.V.................... 2
Use of Proceeds........................ 2
Securities We May Issue................ 3
Description of Debt Securities and
Guarantees........................... 4
Description of Warrants................ 19
Description of Preferred Stock......... 23
Description of Depositary Shares....... 27
Description of Common Stock............ 30
Plan of Distribution................... 32
Validity of Securities................. 33
Experts................................ 33
Where You Can Find More Information.... 34
</TABLE>
FORWARD-LOOKING STATEMENTS
The statements in this prospectus supplement and the accompanying prospectus
which are not historical facts are forward-looking statements. These forward-
looking statements involve risks and uncertainties that may cause the outcome to
be materially different. In addition to risks detailed in this prospectus
supplement, the accompanying prospectus and the documents that we incorporate by
reference, these risks and uncertainties include the following:
- global economic conditions,
- currency fluctuations,
- product demand and industry capacity,
- competitive products and pricing,
- manufacturing efficiencies,
- cost reductions,
- availability and costs of critical materials,
- new product development and commercialization,
- manufacturing capacity,
- facility expansions and new plant start-up costs,
- the effect of regulatory and legal developments,
- capital resource and cash flow activities,
- capital spending,
- equity company activities,
- interest costs,
- acquisition and divestiture activities,
- the rate of technology change and
- the ability to enforce patents.
S-2
<PAGE>
CORNING INCORPORATED
We trace our origins to a glass business established in 1851. Our present
corporation was incorporated in the State of New York in December 1936, and our
name was changed from Corning Glass Works to Corning Incorporated on April 28,
1989. Today, we are an international corporation competing in three broadly
defined operating segments: Telecommunications, Advanced Materials and
Information Display. Our business strategy is to focus on attractive global
markets where our leadership in materials and process technology will allow us
to achieve and sustain competitive advantage and superior growth over time.
TELECOMMUNICATIONS. Our Telecommunications segment produces optical fiber
and cable, optical hardware and equipment and photonics components used in the
worldwide telecommunications industry. We offer a wide selection of fibers for
use in long-haul, utility, submarine, local exchange, cable TV and premises
applications. We provide a substantial portion of the world's optical fiber,
including LEAF-Registered Trademark- optical fiber, a technologically advanced
high speed, high-data-rate fiber.
Siecor Corporation, our equity venture with Siemens, and Corning Cables, our
European optical fiber cabling division, manufacture fiber-optic cable and
network hardware that is deployed throughout the world. See "Recent
Developments--The Siemens Acquisition".
Our Photonics Technologies Division provides products that maximize the
capacity, flexibility, performance and reliability of communications networks
worldwide. Our photonics products boost, combine, separate and connect optical
signals transmitted over fiber-optic telecommunication networks. We are a
leading supplier of optical amplifiers and were among the first to offer an
innovative multiplexer module that allows optical signals to be added or dropped
as they travel through a communications network.
Our photonics products, primarily intended to enable the use of dense
wavelength division multiplexing technology, include cutting-edge PureGain-TM-
EDFA modules, PureGain DCM-Registered Trademark- modules and PurePass-TM-
optical routing modules.
We also offer MultiClad-Registered Trademark- couplers, variable optical
attenuators, micro-optic filters and PureMode-TM- engineered fibers. Our optical
networking products operate in terrestrial and submarine networks worldwide, and
are designed to withstand a wide array of mechanical and environmental
conditions. We are recognized as an industry leader, providing low-cost,
innovative fiber and photonic network solutions. Our test facilities assure the
performance and reliability of our photonics products at both the component and
system levels.
ADVANCED MATERIALS. Our Advanced Materials segment, which manufactures
environmental products, science products, semiconductor materials, optical and
lighting products and glass ceramic cooktops, has been a mainstay of our growth
for decades.
Our cellular ceramic products are component parts of catalytic converters on
cars, trucks and buses worldwide. Virtually every vehicle manufacturer around
the world demands new products that reduce emissions as mandated by global,
clean-air legislation. Recently introduced advanced cellular ceramic products
are expected to enable vehicle manufacturers to achieve substantially reduced
emissions over the next decade. Similar technologies are used to reduce
emissions from stationary power plants.
New products from our Science Products Division, which include polymer
microplates and which stem from our expertise in complex polymers, surface
chemistry and molecular biology, are useful in pharmaceutical and genomic
research. Our advanced microplates allow for more efficient drug testing.
Our fused silica products enable semiconductor manufacturers to use
microlithography techniques to achieve miniaturization required for the
manufacture and processing of chips for computer applications.
INFORMATION DISPLAY. Our Information Display segment manufactures glass
panels and funnels for televisions and cathode-ray tubes; projection video lense
assemblies; and liquid crystal display glass for flat panel displays. We are a
leading supplier of flat glass used in active matrix liquid crystal displays for
notebook computer screens, desktop monitors, digital cameras, personal digital
assistants and automotive displays. Ultra-thin, precision-surface glass enables
customers to create faster, larger and less expensive liquid crystal displays
that have higher resolution.
Our lenses, which are used widely in projection television systems, are
being adapted to meet emerging requirements in digital and high-definition
systems for
S-3
<PAGE>
entertainment as well as commercial applications. Our traditional, more mature
television glass business concentrates on glass face plates, panels, and funnels
used to make color picture tubes.
The following tables set forth financial data for our three operating
segments for the years ended December 31, 1998, 1997 and 1996 and the nine
months ended September 30, 1999 and 1998. These amounts do not include revenues,
expenses and equity earnings not specifically identifiable to the segment.
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------------------------------------------
Net Sales Segment Net Income (Loss)
------------------------------ ------------------------------
Operating Segment Financial Data 1998 1997 1996 1998 1997 1996
- -------------------------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Telecommunications....................... $1,791.7 $1,795.3 $1,397.7 $205.3 $297.5 $254.4
Advanced Materials....................... 1,020.1 1,030.4 1,031.4 93.8 103.6 75.3
Information Display...................... 644.7 664.2 565.5 56.5 7.1 (4.8)
-------- -------- -------- ------ ------ ------
Total Segments......................... $3,456.5 $3,489.9 $2,994.6 $355.6 $408.2 $324.9
======== ======== ======== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-----------------------------------------
Segment Net
Net Sales Income
------------------- -------------------
Operating Segment Financial Data 1999 1998 1999 1998
- -------------------------------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
Telecommunications........................................ $1,766.0 $1,312.4 $182.2 $150.6
Advanced Materials........................................ 774.5 767.7 85.3 67.2
Information Display....................................... 490.4 459.3 76.8 43.6
-------- -------- ------ ------
Total Segments.......................................... $3,030.9 $2,539.4 $344.3 $261.4
======== ======== ====== ======
</TABLE>
S-4
<PAGE>
RECENT DEVELOPMENTS
FOURTH QUARTER EARNINGS RELEASE. On January 24, 2000, we reported 1999
fourth-quarter diluted earnings per share from continuing operations before
special items of $0.51 per share, an increase of 28%, compared with $0.40 per
share before special items in 1998. Income from continuing operations before
special items for the fourth quarter of 1999 totaled $126.7 million, an increase
of 34%, compared with $94.6 million before special items in 1998.
Fourth-quarter sales were $1.2 billion, an increase of 35% compared with
1998 fourth-quarter sales of $927 million. Excluding the impact of acquisitions,
sales increased 25%. Sales of optical fiber remained strong, with demand for the
company's LEAF-Registered Trademark- optical fiber more than doubling over the
same quarter last year. Sales in the Photonic Technologies Division also
doubled, once again led by demand for the company's optical amplifiers. And
sales of flat-panel display glass used in computer monitors continued to grow at
a rate of 50%.
Equity earnings were up nearly 50% in the quarter, due primarily to
excellent performance at Samsung Corning Precision Glass Company, Ltd, a Korean
manufacturer of flat-panel display glass.
We also recorded fourth-quarter pre-tax income of $14.1 million
($8.6 million after tax, or $0.03 per share) from a release of restructuring
reserves. Including this non-recurring item, our income from continuing
operations for the fourth quarter of 1999 totaled $135.3 million, or $0.54 per
share. In addition, we recorded net income from discontinued operations of
$4.8 million, or $0.02 per share, reporting total net income of $140.1 million,
or $0.56 per share in the quarter.
Sales for the year were $4.3 billion, an increase of 23% compared with
$3.5 billion in 1998. Excluding the impact of acquisitions, 1999 sales increased
17% over 1998. We reported full year 1999 income from continuing operations of
$476.9 million, or $1.93 per share, compared to $327.5 million, or $1.39 per
share, from the same operations in 1998. Net income and diluted earnings per
share in 1999 were $481.7 million, or $1.95 per share, and included
$4.8 million or $0.02 per share of income from discontinued operations in the
fourth quarter. This compares with 1998 net income of $394 million, or $1.67 per
share, which included $66.5 million, or $0.28 per share, from discontinued
operations, related primarily to the sale of the consumer products business.
See our current report on Form 8-K dated January 24, 2000 for more detailed
information regarding our fourth-quarter and year-end financial data. This
report is incorporated by reference in this prospectus supplement.
THE SIEMENS ACQUISITION. On December 8, 1999, we announced the agreement to
acquire the worldwide optical cable and hardware businesses of Siemens AG. The
acquisition will include the remaining 50% of our two existing co-investments
with Siemens: Siecor Corporation and Siecor GmbH. The purchase price will be
$1.13 billion in cash, plus our assumption of approximately $41.4 million of
unconsolidated debt and $145 million of contingent performance payments payable,
if earned, over a four-year period.
Siecor Corporation has historically been accounted for as a consolidated
subsidiary and its results have been recorded within our Telecommunications
Segment. Siecor Corporation, which is headquartered in Hickory, North Carolina,
manufactures and distributes fiber-optic cable and network hardware. Siecor GmbH
has historically been accounted for as an equity affiliate shown as an
investment on our balance sheet and its results have also been accounted for
within our Telecommunications Segment. Siecor GmbH, which is headquartered in
Neustadt, Germany, manufactures and distributes optical fiber.
We expect that the acquisition will close in early 2000. Consummation of the
acquisition is subject to a number of customary conditions, including the
receipt of appropriate antitrust clearance in Europe.
THE OAK INDUSTRIES MERGER. On November 13, 1999, we agreed to acquire Oak
Industries Inc. through the merger of one of our wholly-owned subsidiaries into
Oak Industries. Each issued and outstanding share of common stock of Oak
Industries will be converted into the right to receive .83 shares of our common
stock. As a result of this merger, Oak Industries will become our wholly-owned
subsidiary.
Oak Industries is a leading manufacturer of highly engineered components
that it designs and sells to manufacturers in the communications and selected
other industries. The addition of Oak Industries will extend our
S-5
<PAGE>
opto-electronic product portfolio into important new market segments.
Specifically, Oak Industries' Lasertron, Inc. subsidiary, a pioneer in the
development of active fiber-optic devices for telecommunications, will enhance
our photonic technology product offering and development activities. The
products of Oak Industries' Gilbert Engineering Co. subsidiary, a leading
manufacturer of coaxial connectors for broadband communications networks, will
complement our existing capabilities in optical connectors, optical cable,
hardware and related equipment. The Oak Industries' Frequency Control Group
designs and manufactures devices that are used as a timing reference in
wireless, wireline and fiber-optic applications. In addition, Oak Industries'
Controls Group consists of Harper-Wyman and OakGrigsby, Inc., which manufacture
control systems for the gas range and gas grill industries and switches and
encoders used in a wide variety of applications.
We intend that the merger will be accounted for as a pooling of interests
and will be tax-free to Oak Industries stockholders. We expect that the
acquisition will close in early 2000. However, consummation of the acquisition
is subject to a number of customary conditions, including receipt of shareholder
approval.
Pro forma financial statements showing the effect of this merger on our
historical financial statements are included in our current report on Form 8-K
dated December 28, 1999, which is incorporated by reference in the prospectus.
USE OF PROCEEDS
We estimate that the net proceeds from the sale of the shares of common
stock offered by this prospectus supplement will be $1,908.2 million, or
$2,194.5 million if the underwriters exercise in full their option to purchase
additional shares, after deducting the underwriting discounts and commissions
and estimated offering expenses we will pay.
We intend to use the net proceeds of this offering:
- to pay initially the $1.13 billion cash portion of the purchase price for
the Siemens acquisition, which is expected to close in early 2000,
- to repay all of the bank debt to be assumed in the Oak Industries merger,
which approximates $100 million,
- to repay all of our outstanding commercial paper, which approximates
$250 million and
- for general corporate purposes, which include
- the funding of other acquisitions,
- working capital requirements and
- the funding of a portion of our normal, ongoing capital spending
program.
At December 31, 1999, the Oak Industries bank debt bore interest at the rate
of approximately 7.00% per annum and was due in 2000 and 2001. This debt had
been incurred for general corporate purposes. At that date, our commercial paper
bore interest at rates ranging from 5.95% to 6.65% per annum and was due in less
than 90 days. We issued our commercial paper for general corporate purposes.
If the Siemens acquisition is not completed, we will add those net proceeds
to working capital and use them for general corporate purposes.
We will invest the net proceeds in short-term, interest-bearing, investment
grade obligations until they are applied as described above.
S-6
<PAGE>
PRICE RANGE OF COMMON STOCK
Our common stock is listed on the New York Stock Exchange under the symbol
"GLW". The table below sets forth for the periods indicated the high and low
sales prices for our common stock as reported on the NYSE Composite Tape.
<TABLE>
<CAPTION>
Cash
Price Range Dividends
---------------------- Declared Per
High Low Share
-------- -------- ------------
<S> <C> <C> <C>
1997
First Quarter............................................. $46 3/8 $ 33 3/4 $.18
Second Quarter............................................ 56 1/2 43 .18
Third Quarter............................................. 65 1/8 39 3/4 .18
Fourth Quarter............................................ 49 9/16 35 3/8 .18
1998
First Quarter............................................. 43 15/16 32 .18
Second Quarter............................................ 44 3/8 33 15/16 .18
Third Quarter............................................. 36 22 7/8 .18
Fourth Quarter............................................ 45 11/16 26 15/16 .18
1999
First Quarter............................................. 61 3/4 44 3/4 .18
Second Quarter............................................ 70 3/4 47 11/16 .18
Third Quarter............................................. 75 60 5/16 .18
Fourth Quarter............................................ 129 1/16 64 1/16 .18
2000
First Quarter (through January 25, 2000).................. 175 1/2 103
</TABLE>
The last reported sale price of our common stock on the New York Stock
Exchange for January 25, 2000 was $151 3/8. At December 31, 1999, there were
245,465,548 shares of our common stock outstanding, held by approximately 16,000
shareholders of record and 110,000 beneficial owners.
DIVIDEND POLICY
We have regularly paid cash dividends since 1881 and expect to continue to
pay cash dividends. Our current quarterly cash dividend is $.18 per share of
common stock. Holders of common stock are entitled to share equally in the
dividends that may be declared by our board of directors, but only after payment
of dividends required to be paid on outstanding shares of preferred stock. The
continued declaration of dividends by our board of directors is subject to our
current and prospective earnings, financial condition, capital requirements and
any other factors that our board of directors deems relevant. See "Description
of Common Stock" and "Description of Preferred Stock" in the accompanying
prospectus.
S-7
<PAGE>
CAPITALIZATION
The following table sets forth both our actual consolidated capitalization
at September 30, 1999 and the combined pro forma capitalization reflecting the
merger with Oak Industries as disclosed in our Form 8-K dated December 28, 1999.
The Pro Forma as Adjusted numbers reflect (1) the Siemens acquisition and
(2) the issuance of the shares of common stock we are selling in this offering
and the application of the estimated net proceeds as described under "Use of
Proceeds".
<TABLE>
<CAPTION>
September 30, 1999
---------------------------------------
Pro Forma
for
Oak Industries Pro Forma
Actual Merger as Adjusted
-------- -------------- -----------
(Dollars in millions)
<S> <C> <C> <C>
Cash and short-term investments............................. $ 101.5 $ 109.7 $ 537.9
======== ======== ========
Current maturities of long-term debt and short-term notes
payable................................................... $ 297.8 $ 344.7 $ 94.7
======== ======== ========
Loans payable beyond one year............................... $1,287.6 $1,395.8 $1,295.8
Convertible subordinated notes.............................. -- 100.0 100.0
Unconsolidated debt assumed in Siemens acquisition.......... -- -- 41.4
Minority interest in subsidiary companies................... 361.4 361.4 120.4
Convertible preferred stock................................. 15.2 15.2 15.2
Common shareholders' equity
Common stock, including excess over par value and other
capital--par value $.50 per share; shares authorized:
500 million;
shares issued: 269.7 million Actual, 284.1 Pro Forma and
297.1 million
Pro Forma as Adjusted................................... 1,032.5 1,295.5 3,203.7
Retained earnings......................................... 1,730.8 1,639.0 1,639.0
Less cost of 25 million shares of common stock in
treasury................................................ (642.9) (642.9) (642.9)
Accumulated other comprehensive loss...................... (19.6) (31.3) (31.3)
-------- -------- --------
Total common shareholders' equity..................... 2,100.8 2,260.3 4,168.5
-------- -------- --------
Total capitalization........................................ $3,765.0 $4,132.7 $5,741.3
======== ======== ========
</TABLE>
In addition to the common stock offering, which is reflected in the Pro Forma as
Adjusted column, we expect to issue approximately $500 million equivalent of
euro-denominated debt in the first quarter of 2000.
S-8
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The following tables contain our consolidated financial data for the periods
presented. The financial data at and for each of the five years ended
December 31, 1998 have been derived from our audited financial statements. The
financial data at and for the nine months ended September 30, 1999 and 1998 have
been derived from our unaudited financial statements. You should read the
following financial data in conjunction with the financial statements, including
the related notes, which are incorporated by reference in the accompanying
prospectus.
<TABLE>
<CAPTION>
September 30, December 31,
-------------------------- ---------------------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
----------- -------- -------- -------- -------- -------- --------
(in millions, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net sales............ $3,048.8 $2,557.2 $3,484.0 $3,516.8 $3,024.0 $2,644.7 $2,367.5
Non-operating
gains.............. 30.0(a) 20.5(c) 39.7(c)(f)
Gross margin......... 1,187.2 973.8 1,345.9 1,490.5 1,206.6 1,036.0 903.3
Research, development
and engineering
expenses........... 260.9 213.8 293.9 250.3 189.2 172.2 169.7
Amortization of
purchased
intangibles........ 15.9 11.8 15.8 16.0 12.7 (h) (h)
Provision for
impairment and
restructuring...... 15.5(b) 84.6(d) 84.6(d) 26.5(i)
Income from
continuing
operations before
taxes on income.... 437.5 280.7 439.6 629.2 455.8 389.4 286.3
Minority interest in
earnings of
subsidiaries....... (46.1) (38.6) (60.9) (76.3) (52.5) (64.3) (48.7)
Equity in earnings
(losses) of
associated
companies:
Other than Dow
Corning
Corporation...... 84.9 75.5 95.3 79.2 85.1 66.6 48.5
Dow Corning
Corporation...... (348.0)(i) (2.8)(j)
Income (loss) from
continuing
operations......... $ 341.6(a)(b) $ 223.2(c)(d) $ 327.5(c)(d)(f) $ 408.9 $ 323.3 $ (77.3)(i) $ 190.6(j)
Income (loss) from
discontinued
operations, net of
income taxes....... 66.5(e) 66.5(e) 30.9 (147.7)(g) 26.5 90.7
-------- -------- -------- -------- -------- -------- --------
Net Income (loss).... $ 341.6 $ 289.7 $ 394.0 $ 439.8 $ 175.6 $ (50.8) $ 281.3
======== ======== ======== ======== ======== ======== ========
Basic Earnings (Loss)
Per Share
Continuing
operations....... $ 1.42 $ 0.97 $ 1.42 $ 1.79 $ 1.42 $ (0.35) $ 0.89
Discontinued
operations....... 0.29 0.29 0.13 (0.66) 0.12 0.43
-------- -------- -------- -------- -------- -------- --------
Net Income
(loss)....... $ 1.42 $ 1.26 $ 1.71 $ 1.92 $ 0.76 $ (0.23) $ 1.32
======== ======== ======== ======== ======== ======== ========
Diluted Earnings
(Loss) Per Share
Continuing
operations....... $ 1.39 $ 0.95 $ 1.39 $ 1.72 $ 1.40 $ (0.35) $ 0.88
Discontinued
operations....... 0.28 0.28 0.13 (0.62) 0.12 0.42
-------- -------- -------- -------- -------- -------- --------
Net income
(loss)....... $ 1.39 $ 1.23 $ 1.67 $ 1.85 $ 0.78 $ (0.23) $ 1.30
======== ======== ======== ======== ======== ======== ========
Dividends declared... $ 0.54 $ 0.54 $ 0.72 $ 0.72 $ 0.72 $ 0.72 $ 0.69
FINANCIAL POSITION:
Cash and cash
equivalents........ $ 101.5 $ 93.0 $ 45.4 $ 97.0 $ 215.1 $ 176.7 $ 131.2
Working capital...... 413.3 423.7 235.6 241.4 445.2 276.5 281.3
Total assets......... 5,673.8 4,760.3 4,981.9 4,691.9 4,183.4 5,334.5 5,365.5
Loans payable beyond
one year........... 1,287.6 1,093.3 998.3 1,125.8 1,195.1 1,326.0 1,330.5
Minority interest in
subsidiary
companies.......... 361.4 362.1 346.1 349.3 309.9 269.2 244.5
Convertible preferred
securities of
subsidiary(k)...... 365.5 365.2 365.3 365.1 364.7 364.4
Convertible preferred
stock.............. 15.2 18.4 17.9 19.8 22.2 23.9 24.9
Common shareholders'
equity............. 2,100.8 1,405.2 1,505.6 1,246.5 961.1 2,103.0 2,263.0
</TABLE>
(FOOTNOTES ON FOLLOWING PAGE)
S-9
<PAGE>
(a) In the third quarter of 1999, we sold Republic Wire and Cable, a
manufacturer of elevator cables and a subsidiary of Siecor Corporation for
approximately $52 million in cash and short-term notes. We recorded a
non-operating gain of $30 million ($9.5 million after tax and minority
interest), or $0.04 per share, as a result of this transaction.
(b) In the third quarter of 1999, we recognized an impairment loss of
$15.5 million ($10.0 million after tax), or $0.04 per share, in connection
with our decision to sell or dispose of certain assets within the Advanced
Materials Segment.
(c) In the second quarter of 1998, Molecular Simulations, Inc. merged with
Pharmacopeia, Inc., a publicly traded company (NASDAQ:PCOP). We previously
owned 35% of Molecular Simulations and own approximately 15% of the combined
entity. We realized a gain of $20.5 million ($13.2 million after tax), or
$0.06 per share, from this transaction.
(d) In the second quarter of 1998, we recorded a restructuring charge of
$84.6 million ($49.2 million after tax and minority interest), or $0.21 per
share. The charge is comprised of early retirement incentives and severance
costs.
(e) On April 1, 1998, we completed the recapitalization and sale of a
controlling interest in our consumer housewares business to an affiliate of
Borden, Inc. We received cash proceeds of $593 million and will continue to
retain an eight percent interest in the Corning Consumer Products Company.
We recorded an after-tax gain of $67.1 million, or $0.29 per share, in the
second quarter of 1998. We used approximately $350 million of the proceeds
to repay current borrowings and used the remaining proceeds to fund our
restructuring activities and invest in our future operations. The
$66.5 million net income from discontinued operations includes a
$0.6 million loss from operations of the discontinued business through
March 31, 1998.
(f) In the fourth quarter of 1998, we recorded a non-operating gain of
$19.2 million ($9.7 million after tax), or $0.04 per share, related to the
divestiture of several small businesses within our science products
division.
(g) On December 31, 1996, we distributed all of the shares of Quest Diagnostics
Incorporated and Covance Inc., which collectively comprised our Health Care
Services segment, to our shareholders on a pro rata basis. We recorded a
provision for loss on these distributions of $176.5 million, or $0.74 per
share.
(h) Prior to the presentation of these costs as a separate caption, they were
reflected within costs of goods sold.
(i) In 1995, we recognized a restructuring charge from continuing operations
totaling $26.5 million ($16.1 million after tax), as a result of severance
for workforce reductions in corporate staff groups and the write-off of
production equipment caused by the decision to exit the manufacturing
facility for glass-ceramic memory-disks.
In 1995, we also recorded an after-tax charge of $365.5 million to fully
reserve our investment in Dow Corning Corporation (a 50%-owned equity
company) as a result of Dow Corning Corporation filing for protection under
Chapter 11 of the United States Bankruptcy Code in May 1995. We recognized
equity earnings totaling $17.5 million from Dow Corning Corporation in the
first quarter of 1995. We discontinued recognition of equity earnings from
Dow Corning Corporation beginning in the second quarter of 1995.
(j) In 1994, we recognized a loss in equity earnings from Dow Corning
Corporation totaling $2.8 million, which included a $75.9 million reduction
in equity earnings recorded by us as a result of a charge taken by Dow
Corning Corporation related to breast-implant litigation.
(k) During the first quarter of 1999, Corning Delaware L.P., a special purpose
limited partnership in which we were the sole general partner, redeemed all
of its Convertible Monthly Income Preferred Securities (MIPS) for
11.5 million shares of our common stock.
S-10
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Our net income from continuing operations increased 53% in the first nine
months of 1999 compared with the same period in 1998. Diluted earnings per share
from continuing operations increased 46% in the first nine months of 1999
compared with the same period in 1998.
The following significant non-recurring items impacted our 1998 and 1999
results:
- an impairment charge of $15.5 million ($10.0 million after tax), or $0.04
per share, in the third quarter of 1999,
- a non-operating gain of $30.0 million ($9.5 million after tax and minority
interest), or $0.04 per share, in the third quarter of 1999,
- a restructuring charge of $84.6 million ($49.2 million after tax), or
$0.21 per share, in the second quarter of 1998 and
- a non-operating gain of $20.5 million ($13.2 million after tax), or $0.06
per share, in the second quarter of 1998.
We believe comparing our operating results excluding non-recurring items, a
measure that is not in accordance with generally accepted accounting principles
and may not be consistent with measures used at other companies, provides a
better understanding of the changes in our operating results. Excluding these
non-recurring items, net income from continuing operations was up 32% in the
first nine months of 1999 compared with the same period in the prior year.
Diluted earnings per share from continuing operations, excluding these
non-recurring items, increased 26% for the first nine months of 1999, over the
same period in 1998. These results reflect the impact of stronger demand for
premium fiber, environmental products and liquid crystal display glass.
Net sales for the first nine months of 1999 increased 19% to $3.0 billion.
Excluding the impact of acquisitions, our sales increased 14% in the first nine
months of 1999. Each of our operating segments contributed to the increase in
sales.
SEGMENT OVERVIEW
We group our products into three operating segments: Telecommunications,
Advanced Materials and Information Display. We also include the earnings of
equity affiliates that are closely associated with our operating segments in
segment net income.
We have prepared the financial results for our three operating segments on a
basis that is consistent with the manner in which our management internally
disaggregates financial information to assist in making internal operating
decisions. We have allocated some common expenses among segments differently
than we would for stand alone financial information prepared in accordance with
generally accepted accounting principles. The non-recurring items noted above
are excluded from segment net income.
S-11
<PAGE>
TELECOMMUNICATIONS SEGMENT
The following table sets forth financial data for our Telecommunications
Segment for the nine months ended September 30, 1999 and 1998:
<TABLE>
<CAPTION>
Nine months ended
September 30,
-------------------
1999 1998
-------- --------
<S> <C> <C>
Net sales................................................... $1,766.0 $1,312.4
Research, development and engineering expenses.............. $ 175.8 $ 136.5
Income from continuing operations before minority interest
and equity earnings....................................... $ 190.3 $ 166.6
Minority interest in earnings of subsidiaries............. (20.4) (30.4)
Equity in earnings of associated companies................ 12.3 14.4
-------- --------
Segment net income.......................................... $ 182.2 $ 150.6
======== ========
Segment net income as a percentage of segment sales......... 10.3% 11.5%
</TABLE>
Sales in the Telecommunications Segment increased 35% over the first three
quarters of 1998 to $1.77 billion. The sales growth in the segment was led
primarily by volume gains in our optical fiber and cable and photonic
technologies businesses. Segment net income increased approximately 20% in the
first three quarters of 1999, compared to the same period in 1998. The
percentage increase in net income is lower than that of sales because of higher
research and development spending and an increased volume of lower margin
products. Cost reductions experienced within this segment, particularly within
the photonic technologies business, mitigated the impact of price declines on
segment net income.
Sales in the optical fiber and cable business increased 40% over the first
three quarters of 1998 to $1.2 billion. This increase resulted primarily from
acquisitions and volume gains, which were led by the continued strong demand for
our premium fiber products. Approximately $132 million of the increase in
optical fiber and cable sales resulted from the following acquisitions:
- the acquisition of the optical cable business from BICC, plc and the
remaining 50% interest in Optical Waveguides Australia, Pty. Ltd. in the
second quarter of 1999 and
- the acquisition of Optical Fibres in the fourth quarter of 1998.
Excluding the impact of these acquisitions, sales in the optical fiber and
cable business increased approximately 25% for the first three quarters of 1999
in comparison to the same period last year due to volume gains of approximately
40%, reflecting continued strong demand for our premium fiber products.
Volume of premium fiber and cable products, including our new
LEAF-Registered Trademark-optical fiber, tripled over the first nine months of
1998. Price declines ranged between 10% and 25% for our optical fiber and cable
products in comparison with the same period last year. However, the weighted
average optical fiber and cable price declined approximately 5% compared to the
same period last year, due to the higher mix of premium product sales. The rate
of price declines slowed during the third quarter commensurate with the
worldwide tightening of supply of optical fiber.
Net income from the optical fiber and cable business increased more than 25%
over the first three quarters of 1998.
Sales in the photonics technologies business increased approximately 60% to
$275 million led by higher volume of new products. Results of this business
continued to be impacted by higher research and development spending, which
offset significant improvement in operating performance as a result of cost
reductions.
Sales in the hardware and equipment business increased approximately 5% to
$285 million, primarily due to a higher volume of existing products, partially
offset by price declines. Net income decreased in this business, reflecting the
impact of lower margins due to price declines.
S-12
<PAGE>
ADVANCED MATERIALS SEGMENT
The following table sets forth financial data for our Advanced Materials
Segment for the nine months ended September 30, 1999 and 1998:
<TABLE>
<CAPTION>
Nine months
ended
September 30,
-------------------
1999 1998
-------- --------
<S> <C> <C>
Net sales................................................... $774.5 $767.7
Research, development and engineering expenses.............. $ 68.8 $ 60.3
Income from continuing operations before minority interest
and equity earnings....................................... $ 71.6 $ 55.7
Minority interest in earnings of subsidiaries............. -- 0.3
Equity in earnings of associated companies................ 13.7 11.2
------ ------
Segment net income.......................................... $ 85.3 $ 67.2
====== ======
Segment net income as a percentage of segment sales......... 11.0% 8.8%
</TABLE>
Sales in the Advanced Materials Segment were up slightly for the first three
quarters of 1999 in comparison to the same period last year. Softness in the
semiconductor materials and optical products businesses offset volume gains in
the environmental products business.
Sales in the environmental products business, the largest business in the
segment, increased approximately 12% over the first three quarters of 1998 to
$295 million. The increase resulted primarily from gains in our new thinwall
ceramic substrate product and strong sales in North America. Sales in the
science products business were flat at $200 million despite divestitures in 1998
and 1999. Sales in the other Advanced Materials businesses declined 7% as the
result of the slowdown in the semiconductor manufacturing equipment industry,
which impacted demand for our high-purity fused silica products. Sales in these
businesses were also impacted by the erosion in the worldwide demand for glass
optical products due to the consumers' increasing preference for plastic lenses.
Segment net income increased 27% for the first three quarters of 1999 in
comparison to the same period in 1998. The significant increase was the result
of manufacturing efficiencies and the introduction of new thinwall products in
the environmental products business. This improvement helped to offset earnings
declines in the science products business caused by higher research and
development spending.
INFORMATION DISPLAY SEGMENT
The following table sets forth financial data for our Information Display
Segment for the nine months ended September 30, 1999 and 1998:
<TABLE>
<CAPTION>
Nine months
ended
September 30,
-------------------
1999 1998
-------- --------
<S> <C> <C>
Net sales................................................... $490.4 $459.3
Research, development and engineering expenses.............. $ 16.4 $ 16.9
Income from continuing operations before minority interest
and equity earnings....................................... $ 40.1 $ 15.3
Minority interest in earnings of subsidiaries............. (16.2) (12.2)
Equity in earnings of associated companies................ 52.9 40.5
------ ------
Segment net income.......................................... $ 76.8 $ 43.6
====== ======
Segment net income as a percentage of segment sales......... 15.7% 9.5%
</TABLE>
S-13
<PAGE>
Sales in the Information Display Segment increased 7% over the first three
quarters of 1998 to $490 million primarily due to growth in the advanced display
products business.
Sales in the advanced display products business increased 60% over the first
three quarters of 1998 to approximately $130 million, primarily due to continued
volume growth in liquid crystal display glass products. Net income in this
business also increased significantly due to manufacturing efficiencies and
strong equity earnings from Samsung Corning Precision Glass Co., Ltd., a Korean
manufacturer of liquid crystal display glass.
Sales in the conventional video components business totaled approximately
$250 million for the first three quarters of 1999, a decline of 8% in comparison
to the same period last year. Sales in this business were impacted by continued
weak volume and price declines. Net income in this business increased
significantly compared to the first three quarters of 1998, which were impacted
by losses incurred from tank repairs.
Sales in the projection video business increased 4% over the first three
quarters of 1998 to approximately $110 million, while earnings increased
significantly due to strong growth in the entertainment market segment.
Segment net income increased almost 80% over the first three quarters of
1998, primarily due to gains in the advanced display products business.
Taxes on Income
Our effective tax rate for continuing operations, excluding non-recurring
items, was 30% for the first nine months of 1999, compared to 31.5% for the same
period in 1998. The lower 1999 rate is due to a higher percentage of our
earnings resulting from consolidated entities with lower effective tax rates.
Liquidity and Capital Resources
Our working capital increased from $235.6 million at the end of 1998 to
$413.3 million at September 30, 1999. Our ratio of current assets to current
liabilities was 1.3 at the end of the third quarter compared to 1.2 at year-end
1998. The increase in working capital and ratio of current assets to current
liabilities is due primarily to higher accounts receivable and inventory
balances. Our long-term debt as a percentage of total capital increased from 31%
at year-end 1998 to 34% at September 30, 1999. The increase is primarily due to
the issuance of $300 million in long-term debt securities in the first quarter
of 1999.
We believe we have sufficient financial flexibility and ready access to
funds to meet seasonal working capital requirements and to fund capital
expenditures, acquisitions and other long-term growth opportunities. We filed
with the Securities and Exchange Commission a $2 billion shelf registration
statement in the second quarter of 1999 which became effective in October. With
this registration, we can offer and sell up to approximately $2.1 billion in
various types of debt and equity securities. We also increased our bank credit
line commitments by $400 million in the third quarter of 1999. This raised our
available lines of credit to $1.2 billion.
Cash and short-term investments increased from year-end 1998 by
$56.1 million. Operating activities for the nine months ended September 30, 1999
provided cash of $476.0 million. Financing activities for the nine months ended
September 30, 1999 provided cash of $259.6 million. Total cash provided by
operating and financing activities exceeded cash used by investing activities of
$667.1 million. Net cash provided by operating activities increased for the
first nine months of 1999 compared to the same period in 1998 because increases
in net income from continuing operations more than offset the increase in cash
used for working capital. Net cash used in investing activities for the first
nine months of 1999 totaled $667.1 million, versus cash provided by investing
activities of $77.1 million for the same period in 1998. The 1998 amount
includes the receipt of proceeds from the divestiture of our consumer housewares
business. Net cash provided by financing activities totaled $259.6 million for
the first nine months of 1999, due primarily to the issuance of long-term debt
securities in the first quarter. During the same period in 1998, we used cash in
financing activities of $347.5 million, reflecting repayments of long-term debt
with a portion of the proceeds from the divestiture of the consumer housewares
business.
Year 2000 Readiness Disclosure
As of the date of this prospectus supplement, all of our mission-critical
systems have been successfully tested for Year 2000 compliance and all of our
manufacturing locations are fully operational. Although we have not experienced
any significant Year 2000 problems to date, we plan to continue to monitor the
situation closely. In addition, to date, we have not experienced any
S-14
<PAGE>
significant Year 2000 problems with any customer, supplier or other third-party
provider. However, these external parties may have encountered or may yet
encounter Year 2000 problems.
We began our Year 2000 compliance process in 1996. The process included an
inventory of software, hardware and interfaces, an assessment of potential
Year 2000-related failures and their impact, the development of specific
modification and replacement plans, and the implementation and testing of
planned solutions. In addition, our Year 2000 compliance process included a
review of our key business processes, internal systems and external dependencies
to determine the need for contingency plans. Where there was sufficient risk,
contingency plans were developed accordingly. We also reviewed our significant
customers, suppliers and other third-party providers and made an assessment of
their Year 2000 readiness. This Year 2000 compliance effort was completed prior
to December 31, 1999.
In 1995, we initiated a significant project to upgrade and improve access to
business information using integrated enterprise-wide corporate applications
that were Year 2000 compliant. This initiative mitigated to some extent the
amount of Year 2000 costs incurred. Our total cost for Year 2000 compliance was
approximately $25 million. This amount included incremental costs of
approximately $13 million comprised primarily of contractor costs to modify
existing systems. Year 2000 related costs in 2000, if any, are not expected to
be material.
Additional information regarding our Year 2000 compliance process is
included in the "Management's Discussion and Analysis of Financial Condition and
Results of Operations" in our quarterly report on Form 10-Q filed for the period
ended September 30, 1999, which is incorporated by reference in this prospectus
supplement.
S-15
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement,
the underwriters named below have severally agreed to purchase, and we have
agreed to sell each underwriter, the number of shares of common stock set forth
opposite their name below. Goldman, Sachs & Co. and J.P. Morgan Securities Inc.
are the representatives of the underwriters.
<TABLE>
<CAPTION>
Number
of Shares
----------
<S> <C>
Goldman, Sachs & Co............... 4,032,000
J.P. Morgan Securities Inc........ 4,032,000
Salomon Smith Barney Inc.......... 1,152,000
Banc of America Securities LLC.... 768,000
Donaldson, Lufkin & Jenrette
Securities Corporation.......... 768,000
SoundView Technology Group,
Inc............................. 768,000
Bear, Stearns & Co. Inc........... 172,000
Chase Securities Inc.............. 172,000
Credit Suisse First Boston
Corporation..................... 172,000
Lehman Brothers Inc............... 172,000
Merrill Lynch, Pierce, Fenner &
Smith
Incorporated............. 172,000
Warburg Dillon Read LLC........... 172,000
Wasserstein Perella Securities,
Inc............................. 172,000
Dain Rauscher Incorporated........ 92,000
Raymond James & Associates,
Inc............................. 92,000
Wachovia Securities, Inc.......... 92,000
----------
Total........................... 13,000,000
==========
</TABLE>
The underwriting agreement provides that the obligations of the underwriters
to purchase our common stock included in this offering are subject to the
approval of the validity of the shares of common stock by counsel and other
conditions. The underwriters are obligated to take and pay for all of the shares
of common stock (other than those covered by the overallotment option described
below) if any are taken.
The underwriters have advised us that they propose initially to offer such
shares of common stock to the public at the initial public offering price set
forth on the cover page of this prospectus supplement. After the initial public
offering, the public offering price may be changed.
We have granted to the underwriters an option, exercisable for 30 days from
the date hereof, to purchase up to an additional 1,950,000 shares of common
stock at the initial public offering price less the underwriting discounts and
commissions set forth on the cover page of this prospectus supplement. The
underwriters may exercise that option solely for the purpose of covering
overallotments, if any, made in connection with the offering.
The following table shows the per share and total underwriting discounts and
commissions to be paid to the underwriters by us. These amounts are shown
assuming both no exercise and full exercise of the underwriters' option to
purchase additional shares.
<TABLE>
<CAPTION>
No Exercise Full Exercise
----------- -------------
<S> <C> <C>
Per Share............. $ 4.550 $ 4.550
Total................. $59,150,000 $68,022,500
</TABLE>
Shares sold by the underwriters to the public will initially be offered at
the initial public offering price set forth on the cover of this prospectus
supplement. Any shares sold by the underwriters to securities dealers may be
sold at a discount of up to $2.73 per share from the initial public offering
price. Any such securities dealers may resell any shares purchased from the
underwriters to certain other brokers or dealers at a discount of up to $0.10
per share from the initial public offering price. If all the shares are not sold
at the initial public offering price, the representatives may change the
offering price and the other selling terms.
We have agreed with the underwriters not to dispose of or hedge any of our
common stock or securities convertible into or exchangeable for shares of common
stock during the period from the date of this prospectus continuing through the
date 90 days after the date of this prospectus, except with the prior written
consent of the representatives. This agreement does not apply to any securities
issued:
- under employee benefit plans or dividend reinvestment plans,
- upon exercise of currently outstanding stock options,
S-16
<PAGE>
- upon conversion or exchange of currently outstanding convertible or
exchangeable securities or
- in connection with mergers, acquisitions or similar transactions.
We have agreed to indemnify the underwriters against, or contribute to
payments that the underwriters may be required to make in respect of, certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
The underwriters may engage in stabilizing transactions, syndicate covering
transactions and penalty bids in accordance with Rule 104 under the Securities
Exchange Act of 1934, as amended, in connection with the offering. Stabilizing
transactions permit bids to purchase the common stock so long as the stabilizing
bids do not exceed a specified maximum. Syndicate covering transactions involve
purchases of the common stock in the open market following completion of the
offering to cover all or a portion of a syndicate short position created by the
underwriters selling more shares of common stock in connection with the offering
than they are committed to purchase from us. In addition, the underwriters may
impose "penalty bids" under contractual arrangements between the underwriters
and dealers participating in the offering whereby they may reclaim from a dealer
participating in the offering the selling concession with respect to shares of
common stock that are distributed in the offering but subsequently purchased for
the account of the underwriters in the open market. Such stabilizing
transactions, syndicate covering transactions and penalty bids may result in the
maintenance of the price of the common stock at a level above that which might
otherwise prevail in the open market. None of the transactions described in this
paragraph is required and, if any are undertaken, they may be discontinued at
any time.
We estimate that our share of the total expenses of the offering, excluding
underwriting discounts and commissions, will be approximately $525,000.
In the ordinary course of the underwriters' respective businesses, the
underwriters and their affiliates have engaged and may engage in commercial and
investment banking transactions with us and our affiliates for which they have
received customary fees and expenses.
LEGAL MATTERS
Certain legal matters are being passed upon for us by William D. Eggers,
Esq., our Senior Vice President and General Counsel, and Shearman & Sterling,
New York, New York. The validity of the shares of common stock we are offering
is being passed upon for the underwriters by Sullivan & Cromwell, New York, New
York. Mr. Eggers owns substantially less than 1% of the outstanding shares of
our common stock.
S-17
<PAGE>
PROSPECTUS
[LOGO]
Corning Incorporated
and
Corning Finance B.V.
By this prospectus, we may offer from time to time up to $2,075,000,000 of:
- Debt Securities of Corning Incorporated;
- Guaranteed Debt Securities of Corning Finance B.V.;
- Debt Warrants and Equity Warrants of Corning Incorporated;
- Preferred Stock of Corning Incorporated;
- Depositary Shares of Corning Incorporated; and
- Common Stock of Corning Incorporated.
------------------------
When we offer securities, we will provide you with a prospectus supplement
describing the terms of the specific issue of securities including the offering
price of the securities. You should read this prospectus and the accompanying
prospectus supplement carefully before you invest.
The common stock of Corning Incorporated is listed on the New York Stock
Exchange under the symbol "GLW". On January 10, 2000, the closing price for the
common stock, as reported on the NYSE, was $118 per share.
------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
This prospectus is dated January 11, 2000
<PAGE>
CORNING INCORPORATED
We trace our origins to a glass business established in 1851. The present
corporation was incorporated in the State of New York in December 1936, and our
name was changed from Corning Glass Works to Corning Incorporated on April 28,
1989.
We are a global, technology-based corporation that operates in three broadly
based operating business segments:
- Telecommunications
- Advanced Materials
- Information Display
The Telecommunications Segment produces optical fiber and cable, optical
hardware and equipment and photonic components for the worldwide
telecommunications industry. The Advanced Materials Segment manufactures
specialized products with unique properties for customer applications utilizing
glass, glass ceramic and polymer technologies. Businesses within this segment
include environmental products, science products, semiconductor materials and
optical and lighting products. The Information Display Segment manufactures
glass panels and funnels for televisions and computer displays, projection video
lens assemblies and liquid-crystal display glass for flat panel displays.
Our principal office is located at One Riverfront Plaza, Corning, New York
14831. Our telephone number is (607) 974-9000.
CORNING FINANCE B.V.
Corning Finance B.V. is an indirect wholly owned subsidiary of Corning
Incorporated, incorporated under the laws of The Netherlands solely for the
purpose of raising capital to meet the financing needs of Corning Incorporated
and its subsidiaries. Corning Finance B.V. has no independent operations. Its
principal executive offices are located at Lange Voorhout 7, 2514EA The Hague;
telephone: 31.70.310.83.08.
USE OF PROCEEDS
Except as may be set forth in the prospectus supplement, we will use the net
proceeds from the sale of the securities offered under this prospectus and the
prospectus supplement for general corporate purposes. Our general corporate
purposes may include:
- the repayment or reduction of indebtedness;
- working capital requirements; and
- the funding of a portion of our normal, ongoing capital spending program.
Corning Finance B.V. will lend the net proceeds from the sale of any debt
securities offered by it to Corning Incorporated or its subsidiaries to be used
for similar purposes. We will determine any specific allocation of the net
proceeds of an offering of securities to a specific purpose at the time of the
offering and will describe the allocation in the related prospectus supplement.
2
<PAGE>
SECURITIES WE MAY ISSUE
We may use this prospectus to offer up to $2,075,000,000 of:
- debt securities issued by Corning Incorporated;
- debt securities issued by Corning Finance B.V. and fully and
unconditionally guaranteed by Corning Incorporated;
- debt warrants and equity warrants issued by Corning Incorporated;
- preferred stock issued by Corning Incorporated;
- depositary shares relating to preferred stock; and
- common stock issued by Corning Incorporated.
A prospectus supplement will describe the specific types, amounts, prices,
and detailed terms of any of these securities.
3
<PAGE>
DESCRIPTION OF DEBT SECURITIES AND GUARANTEES
General
THE DEBT SECURITIES WILL BE ISSUED UNDER AN INDENTURE
As required by U.S. federal law for all bonds and notes of companies that
are publicly offered, the debt securities are governed by a document called the
indenture. In the case of debt securities issued by Corning Incorporated, the
applicable indenture is a contract between Corning Incorporated and The Chase
Manhattan Bank, which acts as trustee. In the case of debt securities issued by
Corning Finance B.V., the applicable indenture is a contract among Corning
Finance B.V., Corning Incorporated, which acts as guarantor, and The Chase
Manhattan Bank, which acts as trustee. The trustee has two main roles:
- First, the trustee can enforce your rights against us if we default. There
are limitations on the extent to which the trustee acts on your behalf,
which we describe later under "--Default, Remedies and Waiver of Default";
and
- Second, the trustee performs administrative duties for us, which include
sending you interest payments and notices.
We may issue as many distinct series of debt securities under each indenture
as we wish. This section summarizes terms of the debt securities that are common
to all series. Most of the financial terms and other specific terms of your
series are described in the prospectus supplement attached to the front of this
prospectus. Those terms may vary from the terms described here. The prospectus
supplement may also describe special Federal income tax consequences of the debt
securities.
THIS SECTION IS ONLY A SUMMARY
This section and your prospectus supplement summarize all the material terms
of each indenture and your debt security. They do not, however, describe every
aspect of each indenture and your debt security.
Each indenture and its associated documents, including your debt security,
contain the full text of the matters described in this section and your
prospectus supplement. Each indenture and the debt securities are governed by
New York law. A copy of each indenture has been filed with the SEC as part of
our registration statement. See "Where You Can Find More Information" below for
information on how to obtain a copy.
Legal Ownership of Debt Securities
We refer to those who have debt securities registered in their own names, on
the books that we or the trustee maintain for this purpose, as the "holders" of
those debt securities. These persons are the legal holders of the debt
securities. We refer to those who, indirectly through others, own beneficial
interests in debt securities that are not registered in their own names as
indirect holders of those debt securities. As we discuss below, indirect holders
are not legal holders, and investors in debt securities issued in book-entry
form or in street name will be indirect holders.
BOOK-ENTRY HOLDERS
We will issue debt securities in book-entry form only, unless we specify
otherwise in the applicable prospectus supplement. This means debt securities
will be represented by one or more global securities registered in the name of a
financial institution that holds them as depositary on behalf of other financial
institutions that participate in the depositary's book-entry system. These
participating institutions, in turn, hold beneficial interests in the debt
securities on behalf of themselves or their customers.
Under each indenture, only the person in whose name a debt security is
registered is recognized as the holder of that debt security. Consequently, for
debt securities issued in global form, we will recognize only the depositary as
the holder of the debt securities and we will make all payments on the debt
securities to the depositary. The depositary passes along the payments it
receives to its participants, which in turn pass the payments along to their
customers who are the beneficial owners. The depositary and its participants do
so under agreements they have made with one another or with their customers;
they are not obligated to do so under the terms of the debt securities.
4
<PAGE>
As a result, investors will not own debt securities directly. Instead, they
will own beneficial interests in a global security, through a bank, broker or
other financial institution that participates in the depositary's book-entry
system or holds an interest through a participant. As long as the debt
securities are issued in global form, investors will be indirect holders, and
not holders, of the debt securities.
STREET NAME HOLDERS
In the future we may terminate a global security or issue debt securities
initially in non-global form. In these cases, investors may choose to hold their
debt securities in their own names or in "street name". Debt securities held by
an investor in street name would be registered in the name of a bank, broker or
other financial institution that the investor chooses, and the investor would
hold only a beneficial interest in those debt securities through an account he
or she maintains at that institution.
For debt securities held in street name, we will recognize only the
intermediary banks, brokers and other financial institutions in whose names the
debt securities are registered as the holders of those debt securities and we
will make all payments on those debt securities to them. These institutions pass
along the payments they receive to their customers who are the beneficial
owners, but only because they agree to do so in their customer agreements or
because they are legally required to do so. Investors who hold debt securities
in street name will be indirect holders, not holders, of those debt securities.
LEGAL HOLDERS
Our obligations, as well as the obligations of the trustee and those of any
third parties employed by us or the trustee, run only to the legal holders of
the debt securities. We do not have obligations to investors who hold beneficial
interests in global securities, in street name or by any other indirect means.
This will be the case whether an investor chooses to be an indirect holder of a
debt security or has no choice because we are issuing the debt securities only
in global form.
For example, once we make a payment or give a notice to the holder, we have
no further responsibility for the payment or notice even if that holder is
required, under agreements with depositary participants or customers or by law,
to pass it along to the indirect holders but does not do so. Similarly, if we
want to obtain the approval of the holders for any purpose--E.G., to amend the
applicable indenture or to relieve us of the consequences of a default or of our
obligation to comply with a particular provision of the applicable indenture--
we would seek the approval only from the holders, and not the indirect holders,
of the debt securities. Whether and how the holders contact the indirect holders
is up to the holders.
When we refer to you, we mean those who invest in the debt securities being
offered by this prospectus, whether they are the holders or only indirect
holders of those debt securities. When we refer to your debt securities, we mean
the debt securities in which you hold a direct or indirect interest.
SPECIAL CONSIDERATIONS FOR INDIRECT HOLDERS
If you hold debt securities through a bank, broker or other financial
institution, either in book-entry form or in street name, you should check with
your own institution to find out:
- how it handles securities payments and notices;
- whether it imposes fees or charges;
- how it would handle a request for the holders' consent, if ever required;
- whether and how you can instruct it to send you debt securities registered
in your own name so you can be a holder, if that is permitted in the
future;
- how it would exercise rights under the debt securities if there were a
default or other event triggering the need for holders to act to protect
their interests; and
- if the debt securities are in book-entry form, how the depositary's rules
and procedures will affect these matters.
What Is a Global Security?
We will issue each debt security in book-entry form only, unless we specify
otherwise in the applicable prospectus supplement. A global security represents
one or any other number of individual debt securities. Generally, all debt
securities represented by the same
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global securities will have the same terms. We may, however, issue a global
security that represents multiple debt securities that have different terms and
are issued at different times. We call this kind of global security a master
global security.
Each debt security issued in book-entry form will be represented by a global
security that we deposit with and register in the name of a financial
institution or its nominee that we select. The financial institution that we
select for this purpose is called the depositary. Unless we specify otherwise in
the applicable prospectus supplement, The Depository Trust Company, New York,
New York, known as DTC, will be the depositary for all debt securities issued in
book-entry form.
A global security may not be transferred to or registered in the name of
anyone other than the depositary or its nominee, unless special termination
situations arise. We describe those situations below under "--Special Situations
When a Global Security Will Be Terminated". As a result of these arrangements,
the depositary, or its nominee, will be the sole registered owner and holder of
all debt securities represented by a global security, and investors will be
permitted to own only beneficial interests in a global security. Beneficial
interests must be held by means of an account with a broker, bank or other
financial institution that in turn has an account with the depositary or with
another institution that does. Thus, an investor whose security is represented
by a global security will not be a holder of the debt security, but only an
indirect holder of a beneficial interest in the global security.
If the prospectus supplement for a particular debt security indicates that
the debt security will be issued in global form only, then the debt security
will be represented by a global security at all times unless and until the
global security is terminated. We describe the situations in which this can
occur below under "--Special Situations When a Global Security Will Be
Terminated". The global security may be a master global security, although your
prospectus supplement will not indicate whether it is a master global security.
If termination occurs, we may issue the debt securities through another
book-entry clearing system or decide that the debt securities may no longer be
held through any book-entry clearing system.
SPECIAL CONSIDERATIONS FOR GLOBAL SECURITIES
As an indirect holder, an investor's rights relating to a global security
will be governed by the account rules of the investor's financial institution
and of the depositary, as well as general laws relating to securities transfers.
We do not recognize this type of investor as a holder of debt securities and
instead deal only with the depositary that holds the global security.
If debt securities are issued only in the form of a global security, an
investor should be aware of the following:
- An investor cannot cause the debt securities to be registered in his or
her name, and cannot obtain non-global certificates for his or her
interest in the debt securities, except in the special situations we
describe below;
- An investor will be an indirect holder and must look to his or her own
bank or broker for payments on the debt securities and protection of his
or her legal rights relating to the debt securities, as we describe under
"--Legal Ownership of Debt Securities" above;
- An investor may not be able to sell interests in the debt securities to
some insurance companies and to other institutions that are required by
law to own their securities in non-book-entry form;
- An investor may not be able to pledge his or her interest in a global
security in circumstances where certificates representing the debt
securities must be delivered to the lender or other beneficiary of the
pledge in order for the pledge to be effective;
- The depositary's policies, which may change from time to time, will govern
payments, transfers, exchanges and other matters relating to an investor's
interest in a global security. We and the trustee have no responsibility
for any aspect of the depositary's actions or for its records of ownership
interests in a global security. We and the trustee also do not supervise
the depositary in any way;
- The depositary may (and we understand that DTC will) require that those
who purchase and sell interests in a global security within its
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book-entry system use immediately available funds and your broker or bank
may require you to do so as well; and
- Financial institutions that participate in the depositary's book-entry
system, and through which an investor holds its interest in a global
security, may also have their own policies affecting payments, notices and
other matters relating to the debt securities. There may be more than one
financial intermediary in the chain of ownership for an investor. We do
not monitor and are not responsible for the actions of any of those
intermediaries.
SPECIAL SITUATIONS WHEN A GLOBAL SECURITY WILL BE TERMINATED
In a few special situations described below, a global security will be
terminated and interests in it will be exchanged for certificates in non-global
form representing the debt securities it represented. After that exchange, the
choice of whether to hold the debt securities directly or in street name will be
up to the investor. Investors must consult their own banks or brokers to find
out how to have their interests in a global security transferred on termination
to their own names, so that they will be holders. We have described the rights
of holders and street name investors above under "--Legal Owner of Debt
Securities".
The special situations for termination of a global security are as follows:
- if the depositary notifies us that it is unwilling, unable or no longer
qualified to continue as depositary for that global security and we do not
appoint another institution to act as depositary within 60 days;
- if we notify the trustee that we wish to terminate that global security;
or
- if an event of default has occurred with regard to debt securities
represented by that global security and has not been cured or waived; we
discuss defaults later under "--Default, Remedies and Waiver of Default".
If a global security is terminated, only the depositary, and not we or the
trustee, is responsible for deciding the names of the institutions in whose
names the debt securities represented by the global security will be registered
and, therefore, who will be the holders of those debt securities.
Ranking
Each series of debt securities will not be secured by any property or assets
of Corning Incorporated or Corning Finance B.V., and will not be subordinated to
any other obligations of either Corning Incorporated or Corning Finance B.V., as
applicable.
Full and Unconditional Guarantee of Debt Securities of Corning Finance B.V.
All debt securities issued by Corning Finance B.V. will be fully and
unconditionally guaranteed under a guarantee of Corning Incorporated of the
payment of principal of, and any premium, interest and "additional amounts" on,
these debt securities when due, whether at maturity or otherwise. For a
discussion of the payment of "additional amounts", please see "--Payment of
Additional Amounts with Respect to the Guaranteed Debt Securities". Under the
terms of the full and unconditional guarantee, holders of the guaranteed debt
securities will not be required to exercise their remedies against Corning
Finance B.V. before they proceed directly against Corning Incorporated.
Payment of Additional Amounts With Respect to the Guaranteed Debt Securities
Unless otherwise indicated in your prospectus supplement, all amounts of
principal of, and any premium and interest on, any guaranteed debt securities
will be paid by Corning Finance B.V. without deduction or withholding for any
taxes, assessments or other charges imposed by the government of The
Netherlands, or the government of a jurisdiction in which a successor to Corning
Finance B.V. is organized. If deduction or withholding of any of these charges
is required by The Netherlands, or by a jurisdiction in which a successor to
Corning Finance B.V. is organized, Corning Finance B.V. will pay as additional
interest any additional amounts necessary to make the net amount paid to the
affected holders equal the amount the holders would have
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received in the absence of the deduction or withholding. However, these
"additional amounts" do not include:
- the amount of any tax, assessment or other governmental charge imposed by
any unit of the United States;
- the amount of any tax, assessment or other governmental charge which is
only payable because either:
-- a type of connection exists between the holder and The Netherlands;
or
-- the holder presented the debt security for payment more than 30 days
after the date on which the relevant payment became due or was
provided for, whichever is later;
- the amount of any tax, assessment or other governmental charge which is
payable other than by deduction or withholding from a payment on the debt
securities;
- the amount of any tax, assessment or other governmental charge that is
imposed or withheld due to the beneficial owner of the debt security
failing to comply with a request from us to either provide information
concerning the beneficial owner's nationality, residence or identity or
make any claim to satisfy any information or reporting requirement, if the
completion of either would have provided an exemption from the applicable
governmental charge; or
- any combination of the taxes, assessments or other governmental charges
described above.
The prospectus supplement will describe any additional circumstances under
which additional amounts will not be paid with respect to debt securities.
Redemption and Repayment
Unless otherwise indicated in your prospectus supplement, your debt security
will not be entitled to the benefit of any sinking fund--that is, we will not
deposit money on a regular basis into any separate custodial account to repay
your debt securities. In addition, we will not be entitled to redeem your debt
security before its stated maturity unless your prospectus supplement specifies
a redemption commencement date. You will not be entitled to require us to buy
your debt security from you, before its stated maturity, unless your prospectus
supplement specifies one or more repayment dates.
If your prospectus supplement specifies a redemption commencement date or a
repayment date, it will also specify one or more redemption prices or repayment
prices, which will be expressed as a percentage of the principal amount of your
debt security. It may also specify one or more redemption periods during which
the redemption prices relating to a redemption of debt securities during those
periods will apply.
If your prospectus supplement specifies a redemption commencement date, your
debt security will be redeemable at our option at any time on or after that
date. If we redeem your debt security, we will do so at the specified redemption
price, together with interest accrued to the redemption date. If different
prices are specified for different redemption periods, the price we pay will be
the price that applies to the redemption period during which your debt security
is redeemed.
If your prospectus supplement specifies a repayment date, your debt security
will be repayable at your option on the specified repayment date at the
specified repayment price, together with interest accrued to the repayment date.
In the event that we exercise an option to redeem any debt security, we will
give to the trustee and the holder written notice of the principal amount of the
debt security to be redeemed, not less than 30 days nor more than 60 days before
the applicable redemption date. We will give the notice in the manner described
below in "--Notices".
If a debt security represented by a global security is subject to repayment
at the holder's option, the depositary or its nominee, as the holder, will be
the only person that can exercise the right to repayment. Any indirect holders
who own beneficial interests in the global security and wish to exercise a
repayment right must give proper and timely instructions to their banks or
brokers through which they hold their interests, requesting that they notify the
depositary to exercise the repayment right on their behalf. Different firms have
different deadlines for accepting instructions from their customers, and you
should take care to act promptly enough to ensure that your request is given
effect by the depositary before the applicable deadline for exercise.
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STREET NAME AND OTHER INDIRECT HOLDERS SHOULD CONTACT THEIR BANKS OR BROKERS FOR
INFORMATION ABOUT HOW TO EXERCISE A REPAYMENT RIGHT IN A TIMELY MANNER.
In the event that the option of the holder to elect repayment as described
above is deemed to be a "tender offer" within the meaning of Rule 14e-1 under
the Securities Exchange Act of 1934, we will comply with Rule 14e-1 as then in
effect to the extent it is applicable to us and the transaction.
We or our affiliates may purchase debt securities from investors who are
willing to sell from time to time, either in the open market at prevailing
prices or in private transactions at negotiated prices. Debt securities that we
or they purchase may, at our discretion, be held, resold or canceled.
Optional Tax Redemption
Unless otherwise indicated in your prospectus supplement, except in the case
of debt securities that have a variable rate of interest, which may be redeemed
on any interest payment date, Corning Finance B.V. may redeem each series of
debt securities at its option in whole but not in part at any time. Except in
the case of outstanding original issue discount debt securities which may be
redeemed at the redemption price specified by the terms of that series of debt
securities, the redemption price will be equal to the principal amount plus
accrued interest to the date of redemption, if:
- Corning Finance B.V. would be required to pay additional amounts, as a
result of any change in the tax laws of The Netherlands which becomes
effective on or after the date of issuance of that series, as explained
above under "--Payment of Additional Amounts With Respect to the
Guaranteed Debt Securities", or
- as a result of any change in any treaty affecting taxation to which The
Netherlands, or a jurisdiction in which a successor to Corning Finance
B.V. is organized, is a party which becomes effective on or after a date
on which Corning Incorporated borrows money from Corning Finance B.V.,
Corning Incorporated would be required to deduct or withhold tax on any
payment to Corning Finance B.V. to enable it to make any payment of
principal, premium, if any, or interest.
In both of these cases, however, we will not be permitted to redeem a series
of debt securities if we can avoid either the payment of additional amounts, or
deductions or withholding, as the case may be, by using reasonable measures
available to us.
Conversion
Your debt securities may be convertible into or exchangeable for common
stock or other securities of Corning Incorporated if your prospectus supplement
so provides. If your debt securities are convertible or exchangeable, your
prospectus supplement will include provisions as to whether conversion or
exchange is mandatory, at your option or at our option. Your prospectus
supplement would also include provisions regarding the adjustment of the number
of shares of common stock or other securities of Corning Incorporated to be
received by you upon conversion or exchange.
Mergers and Similar Transactions
We are generally permitted to merge or consolidate with another firm. We are
also permitted to sell substantially all our assets to another firm. We may not
take any of these actions, however, unless all the following conditions are met:
- Where we merge out of existence or sell our assets, the successor firm
must agree to be legally responsible for the debt securities and must be
organized as a corporation, partnership, trust, limited liability company
or similar entity. In the case of a merger or consolidation of Corning
Incorporated, the successor firm may not be organized under a foreign
country's laws, that is, it must be organized under the laws of a State or
the District of Columbia or under federal law. In the case of a merger or
consolidation of Corning Finance B.V., the successor firm may be organized
under the laws of any jurisdiction.
- The merger, sale of assets or other transaction must not cause a default
on the debt securities, and we must not already be in default, unless the
merger or other transaction would cure the default. For purposes of this
no-default test, a default would include an event of default that has
occurred and not been cured, as described below under "Event of Default".
A default for
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this purpose would also include any event that would be an event of
default if the requirements for giving us default notice or our default
having to exist for a specific period of time were disregarded.
- It is possible that the merger, sale of assets or other transaction would
cause some of our property to become subject to a mortgage or other legal
mechanism giving lenders preferential rights in that property over other
lenders or over our general creditors if we fail to pay them back. We have
promised to limit these preferential rights on our property, called
"liens." This limitation is discussed below under "Restrictive Covenant
and Defeasance--Restrictions on Liens". If a merger or other transaction
would create any liens on our property, we must comply with that
restrictive covenant. We would do this either by deciding that the liens
were permitted, or by following the requirements of the restrictive
covenant to grant an equivalent or higher-ranking lien on the same
property to you and the other direct holders of the debt securities.
- In the case of the guaranteed debt securities, the successor to Corning
Finance B.V., if not organized in the United States, must agree to pay the
holder of each guaranteed debt security any "additional amounts" or other
expenses imposed on the holder as a result of the merger, consolidation or
sale, as explained above under "--Payment of Additional Amounts with
Respect to the Guaranteed Debt Securities".
Restrictive Covenants and Defeasance
RESTRICTIONS ON LIENS
In each indenture, Corning Incorporated promises that it will not become
obligated on any new debt that is secured by a lien on any of its principal
domestic manufacturing properties, or on any shares of stock or debt of any of
its domestic subsidiaries, unless it grants an equivalent or higher-ranking lien
on the same property to you and the other direct holders of the debt securities
and, if applicable, the guarantees.
Corning Incorporated does not need to comply with this restriction if the
amount of all debt that is secured by liens on its principal domestic
manufacturing properties is less than 10% of its consolidated net tangible
assets. In performing this calculation, debt secured would include the new debt
and the securities which it would secure as described in the previous paragraph.
This restriction on liens does not apply to debt secured by the following
types of liens, and Corning Incorporated can disregard this debt when we
calculate the limits imposed by this restriction:
- liens on the property of any domestic subsidiaries of Corning
Incorporated, or on their shares of stock or debt, if those liens existed
at the time the corporation became a domestic subsidiary of Corning
Incorporated or as of the date that debt securities are first issued under
the applicable indenture;
- liens in favor of Corning Incorporated or its domestic subsidiaries;
- some mechanics' liens, tax liens, liens in favor of, and to secure
payments or the acquisition of property from any governmental body by law
or because of a contract Corning Incorporated has entered into, and other
liens incidental to construction, conduct of business or ownership of its
property or of any domestic subsidiary;
- liens on property that existed at the time Corning Incorporated acquired
the property, including property it may acquire through a merger or
similar transaction, or that it granted in order to purchase, alter or
construct the property, sometimes called "purchase money mortgages"; and
- liens arising from any judgment, decree or order of a court so long as
proceedings to review these judgments have not been terminated or the
period in which to initiate proceedings has not expired.
Corning Incorporated can also disregard debt secured by liens that extend,
renew or replace any of these types of liens.
Corning Incorporated and its subsidiaries are permitted to have as much
unsecured debt as they may choose, and neither indenture restricts liens on any
of the shares of stock of Corning Incorporated or of less than 80%-owned
subsidiaries.
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RESTRICTIONS ON SALES AND LEASEBACKS
In each indenture, Corning Incorporated promises that neither it nor any of
its domestic subsidiaries will enter into any sale and leaseback transaction
involving a principal domestic manufacturing property, unless it complies with
this restrictive covenant. A "sale and leaseback transaction" generally is an
arrangement between Corning Incorporated or a domestic subsidiary and a bank,
insurance company or other lender or investor where Corning Incorporated or the
domestic subsidiary lease a principal domestic manufacturing property which was
or will be sold by Corning Incorporated or the domestic subsidiary to that
lender or investor more than 180 days after the completion of construction of
the property and the beginning of its full operation.
Corning Incorporated does not need to comply with this restriction if the
amount of attributable debt is less than 10% of its consolidated net tangible
assets. Corning Incorporated can comply with this restrictive covenant if it
retires an amount of funded debt, within 180 days of the transaction, equal to
at least the net proceeds of the sale of the principal domestic manufacturing
property that it leases in the transaction or the fair value of that property,
subject to credits for voluntary retirements of debt securities and funded debt
we may make, whichever is greater.
This restriction on sales and leasebacks does not apply to any sale and
leaseback transaction that is between Corning Incorporated and one of its
domestic subsidiaries or between domestic subsidiaries, or that involves a lease
for a period of three years or less.
DEFINITIONS RELATING TO OUR RESTRICTIVE COVENANTS
Following are the meanings of the terms that are important in understanding
the restrictive covenants previously described.
- "attributable debt" means the total net amount of rent, discounted at a
rate of 15% per annum compounded semi-annually, that is required to be
paid during the remaining term of any lease.
- "consolidated net tangible assets" is the total amount of assets, less
reserves and other permitted deductible items, after subtracting all
current liabilities and all goodwill, trade names, trademarks, patents,
unamortized debt discounts and expenses and similar intangible assets, as
these amounts appear on the most recent consolidated balance sheet of
Corning Incorporated and computed in accordance with generally accepted
accounting principles.
- A "domestic subsidiary" means any subsidiary of Corning Incorporated
except one which does not transact a substantial portion of its business
in the United States or does not regularly keep a substantial portion of
its assets, other than intangible assets, in the United States, or one
that is used primarily to finance the operations of Corning Incorporated
outside of the United States. A "subsidiary" is a corporation in which
Corning Incorporated and/or one or more of its other subsidiaries owns at
least 80% of the voting stock, which is a kind of stock that ordinarily
permits its owners to vote for the election of directors.
- "funded debt" means all debt for borrowed money that either has a maturity
of 12 months or more from the date on which the calculation of funded debt
is made or has a maturity of less than 12 months from that date but is by
its terms renewable or extendible beyond 12 months from that date at the
option of the borrower.
- A "principal domestic manufacturing property" is any building or other
structure or facility, and the land on which it sits and its associated
fixtures, that Corning Incorporated uses primarily for manufacturing or
processing, that has a gross book value in excess of 3% of consolidated
net tangible assets and that is located in the United States, other than a
building, structure or other facility that is financed by industrial
revenue bonds or that the board of directors of Corning Incorporated has
determined is not of material importance to the total business that
Corning Incorporated and its subsidiaries conduct.
DEFEASANCE AND COVENANT DEFEASANCE
Unless we say otherwise in the applicable prospectus supplement, the
provisions for full defeasance and covenant defeasance described below apply to
each series of debt securities. In general, we expect these provisions to apply
to each U.S. dollar-denominated debt
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security that is not a floating rate or indexed debt security.
FULL DEFEASANCE. If there is a change in U.S. federal tax law, as described
below, we can legally release ourselves from all payment and other obligations
on your debt securities. This is called full defeasance. To do so, each of the
following must occur:
- We must deposit in trust for the benefit of all holders a combination of
money and U.S. government or U.S. government agency notes or bonds that
will generate enough cash to make interest, principal and any other
payments on your debt securities on their various due dates;
- There must be a change in current U.S. federal tax law or an Internal
Revenue Service ruling that lets us make the above deposit without causing
you to be taxed on your debt security any differently than if we did not
make the deposit and just repaid the debt security ourselves. Under
current federal tax law, the deposit and our legal release from the debt
security would be treated as though we took back your debt security and
gave you your share of the cash and debt security or bonds deposited in
trust. In that event, you could recognize gain or loss on your debt
security; and
- We must deliver to the trustee a legal opinion of our counsel confirming
the tax law change described above.
If we ever fully defease your debt security, you will have to rely solely on
the trust deposit for payments on your debt security. You could not look to us
for payment in the event of any shortfall.
COVENANT DEFEASANCE. Under current U.S. federal tax law, we can make the
same type of deposit described above and be released from some of the
restrictive covenants relating to your debt security. This is called covenant
defeasance. In that event, you would lose the protection of those restrictive
covenants. In order to achieve covenant defeasance, we must do both of the
following:
- We must deposit in trust for the benefit of the holders a combination of
money and government or U.S. government notes or bonds that will generate
enough cash to make interest, principal and other payments on your debt
security on their various due dates.
- We must deliver to the trustee a legal opinion of our counsel confirming
that under current U.S. federal income tax law we may make the above
deposit without causing you to be taxed on your debt security any
differently than if we did not make the deposit and just repaid the debt
security ourselves.
If we accomplish covenant defeasance with regard to your debt security, the
following provisions of the indenture and the debt securities would no longer
apply:
- The condition regarding the treatment of liens when we merge or engage in
similar transactions, as described above under "--Restriction on Liens"
and any other covenants that your prospectus supplement may state are
applicable to your debt security.
- The events of default resulting from a breach of covenants, described
below in the fourth item under "--Default, Remedies and Waiver of
Default--Events of Default".
If we accomplish covenant defeasance, you can still look to us for repayment
of your debt security in the event of any shortfall in the trust deposit. You
should note, however, that if one of the remaining events of default occurred,
like our bankruptcy, and your debt security became immediately due and payable,
there may be a shortfall. Depending on the event causing the default, you may
not be able to obtain payment of the shortfall.
Default, Remedies and Waiver of Default
You will have special rights if an event of default with respect to your
debt security occurs and is not cured, as described in this subsection.
EVENTS OF DEFAULT
With respect to your debt security, when we refer to an event of default, we
mean any of the following:
- We do not pay interest on a debt security within 30 days of its due date.
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- We do not pay the principal or any premium on a debt security on its due
date.
- We do not deposit any sinking fund payment on its due date.
- We remain in breach of our covenant described under "--Restrictive
Covenants and Defeasance--Restrictions on Liens" above, or any other
covenant we make in the indenture for 60 days after we receive a notice of
default stating we are in breach. The notice must be sent by either the
trustee or holders of 25% of the principal amount of debt security of the
affected series.
- We file for bankruptcy or other events in bankruptcy, insolvency or
reorganization occur.
- Any other event of default described in the prospectus supplement occurs.
REMEDIES IF AN EVENT OF DEFAULT OCCURS
If an event of default has occurred and has not been cured or waived, the
trustee or the holders of 25% or more in principal amount of all debt securities
of the affected series may declare the entire principal amount of all the debt
securities to be due immediately. If an event of default occurs because of
events in bankruptcy, insolvency or reorganization relating to Corning
Incorporated, the entire principal amount of all the debt securities will be
automatically accelerated, without any action by the trustee or any holder.
Each of the situations described above is called an acceleration of the
maturity of the affected debt securities. If the maturity of any debt securities
is accelerated and a judgment for payment has not yet been obtained, the holders
of a majority in principal amount of the debt securities affected by the
acceleration may cancel the acceleration for all the affected debt securities.
If an event of default occurs, the trustee will have special duties. In that
situation, the trustee will be obligated to use those of its rights and powers
under the applicable indenture, and to use the same degree of care and skill in
doing so, that a prudent person would use in that situation in conducting his or
her own affairs.
Except as described in the prior paragraph, the trustee is not required to
take any action under the applicable indenture at the request of any holders
unless the holders offer the trustee reasonable protection from expenses and
liability. This is called an indemnity. If the trustee is provided with an
indemnity reasonably satisfactory to it, the holders of a majority in principal
amount of the relevant series of debt securities may direct the time, method and
place of conducting any lawsuit or other formal legal action seeking any remedy
available to the trustee. These majority holders may also direct the trustee in
performing any other action under the applicable indenture with respect to the
relevant series of debt securities.
Before you bypass the trustee and bring your own lawsuit or other formal
legal action or take other steps to enforce your rights or protect your
interests relating to the debt securities, the following must occur:
- The holder of your debt security must give the trustee written notice that
an event of default has occurred, and the event of default must not have
been cured or waived.
- The holders of 25% or more in principal amount of all of the relevant debt
securities must make a written request that the trustee take action
because of the default, and they or other holders must offer to the
trustee indemnity reasonably satisfactory to the trustee against the cost
and other liabilities of taking that action.
- The trustee must not have taken action for 60 days after the above steps
have been taken. During those 60 days, the holders of a majority in
principal amount of the related series of debt securities must not have
given the trustee directions that are inconsistent with the written
request of the holders of not less than 25% in principal amount of all the
relevant series of debt securities.
You are, however, entitled at any time to bring a lawsuit for the payment of
money due on your debt securities on or after their due date.
WAIVER OF DEFAULT
The holders of a majority in principal amount of the relevant series of debt
securities may waive a default for all of the relevant series of debt
securities. If this happens, the default will be treated as if it has not
occurred. No one can waive a payment default on a particular debt security,
however, without the approval of the holder of that debt security.
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WE WILL GIVE THE TRUSTEE INFORMATION ABOUT DEFAULTS ANNUALLY
We will furnish to the trustee every year a written statement of two of our
officers certifying that to their knowledge we are in compliance with the
indenture and the debt securities, or else specifying any default.
BOOK-ENTRY AND OTHER INDIRECT HOLDERS SHOULD CONSULT THEIR BANKS OR BROKERS
FOR INFORMATION ON HOW TO GIVE NOTICE OR DIRECTION TO OR MAKE A REQUEST OF THE
TRUSTEE AND HOW TO DECLARE OR CANCEL AN ACCELERATION.
Modification and Waiver of Covenants
There are three types of changes we can make to the indenture and the debt
securities.
CHANGES REQUIRING EACH HOLDER'S APPROVAL
First, there are changes that we or the trustee cannot make without the
approval of each holder of debt security affected by the change. We cannot:
- change the stated maturity for any principal or interest payment on a debt
security;
- reduce the principal amount, the amount payable on acceleration of the
maturity after a default, the interest rate or the redemption price for a
debt security;
- in the case of the guaranteed debt securities, change any obligation to
pay additional amounts, as explained above under "--Payment of Additional
Amounts With Respect to the Guaranteed Debt Securities";
- permit redemption of a debt security if not previously permitted;
- impair any right a holder may have to require repayment of its debt
security;
- change the currency of any payment on a debt security other than as
permitted by the debt security;
- change the place of payment on a debt security, if it is in non-global
form;
- impair a holder's right to sue for payment of any amount due on its debt
security;
- in the case of the guaranteed debt securities, change any obligation to
pay additional amounts, as explained above;
- reduce the percentage in principal amount of the debt securities and any
other affected series of debt securities, taken together, the approval of
whose holders is needed to change the indenture or the debt securities;
- reduce the percentage in principal amount of the debt securities and any
other affected series of debt securities, taken separately or together, as
the case may be, the consent of whose holders is needed to waive our
compliance with the applicable indenture or to waive defaults; and
- change the provisions of the applicable indenture dealing with
modification and waiver in any other respect, except to increase any
required percentage referred to above or to add to the provisions that
cannot be changed or waived without approval.
CHANGES NOT REQUIRING APPROVAL
The second type of change does not require any approval by holders of the
debt securities. This type is limited to clarifications and changes that would
not adversely affect the debt securities in any material respect. Nor do we need
any approval to make any change that affects only debt securities to be issued
under each indenture after the changes take effect.
We may also make changes or obtain waivers that do not adversely affect a
particular debt security, even if they affect other debt securities. In those
cases, we do not need to obtain the approval of the holder of that debt
security; we need only obtain any required approvals from the holders of the
affected debt securities or other debt securities.
CHANGES REQUIRING MAJORITY APPROVAL
Any other change to each indenture and the debt securities would require the
following approval:
- If the change affects only one series of debt securities, it must be
approved by the holders of a majority in principal amount of the relevant
series of debt securities.
- If the change affects more than one series of debt securities issued under
each indenture, it must be
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approved by the holders of a majority in principal amount of the series
affected by the change, with all affected series voting together as one
class for this purpose.
In each case, the required approval must be given by written consent.
The same majority approval would be required for us to obtain a waiver of
any of our covenants in each indenture. Our covenants include the promises we
make about merging and putting liens on our interests, which we describe above
under "--Mergers and Similar Transactions" and "--Restrictive Covenants and
Defeasance". If the holders agree to waive a covenant, we will not have to
comply with it.
BOOK-ENTRY AND OTHER INDIRECT HOLDERS SHOULD CONSULT THEIR BANKS OR BROKERS
FOR INFORMATION ON HOW APPROVAL MAY BE GRANTED OR DENIED IF WE SEEK TO CHANGE
THE APPLICABLE INDENTURE OR THE DEBT SECURITIES OR REQUEST A WAIVER.
Form, Exchange and Transfer
If the debt securities cease to be issued in global form, they will be
issued:
- only in fully registered form;
- without interest coupons; and
- unless we indicate otherwise in your prospectus supplement, in
denominations of $1,000 and amounts that are multiples of $1,000;
Holders may exchange their debt securities that are not in global form for
debt securities of smaller denominations or combined into fewer debt securities
of larger denominations, as long as the total principal amount is not changed.
Holders may exchange or transfer their debt securities at the office of the
trustee. We have appointed the trustee to act as our agent for registering debt
securities in the names of holders transferring debt securities. We may appoint
another entity to perform these functions or perform them ourselves.
Holders will not be required to pay a service charge to transfer or exchange
their debt securities, but they may be required to pay for any tax or other
governmental charge associated with the transfer or exchange. The transfer or
exchange will be made only if our transfer agent is satisfied with the holder's
proof of legal ownership.
If we have designated additional transfer agents for your debt security,
they will be named in your prospectus supplement. We may appoint additional
transfer agents or cancel the appointment of any particular transfer agent. We
may also approve a change in the office through which any transfer agent acts.
If any debt securities are redeemable and we redeem less than all those debt
securities, we may block the transfer or exchange of those debt securities
during the period beginning 15 days before the day we mail the notice of
redemption and ending on the day of that mailing, in order to freeze the list of
holders to prepare the mailing. We may also refuse to register transfers or
exchanges of any debt securities selected for redemption, except that we will
continue to permit transfers and exchanges of the unredeemed portion of any debt
security being partially redeemed.
If a debt security is issued as a global security, only the depositary will
be entitled to transfer and exchange the debt security as described in this
subsection, since it will be the sole holder of the debt security.
Payment Mechanics
WHO RECEIVES PAYMENT?
If interest is due on a debt security on an interest payment date, we will
pay the interest to the person or entity in whose name the debt security is
registered at the close of business on the regular record date (see below)
relating to the interest payment date. If interest is due at maturity but on a
day that is not an interest payment date, we will pay the interest to the person
or entity entitled to receive the principal of the debt security. If principal
or another amount besides interest is due on a debt security at maturity, we
will pay the amount to the holder of the debt security against surrender of the
debt security at a proper place of payment, or, in the case of a global
security, in accordance with the applicable policies of the depositary.
HOW WE WILL MAKE PAYMENTS DUE IN U.S. DOLLARS
We will follow the practice described in this subsection when paying amounts
due in U.S. dollars. Payments of amounts due in other currencies will be made as
described in the next subsection.
PAYMENTS ON GLOBAL SECURITIES. We will make payments on a global security
in accordance with the
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applicable policies of the depositary as in effect from time to time. Under
those policies, we will pay directly to the depositary, or its nominee, and not
to any indirect holders who own beneficial interests in the global security. An
indirect holder's right to those payments will be governed by the rules and
practices of the depositary and its participants, as described under "--What Is
a Global Security?".
PAYMENTS ON NON-GLOBAL SECURITIES. We will make payments on a debt security
in non-global form as follows. We will pay interest that is due on an interest
payment date by check mailed on the interest payment date to the holder at his
or her address shown on the trustee's records as of the close of business on the
record date. We will make all other payments by check at the paying agent
described below, against surrender of the debt security. All payments by check
will be made in next-day funds--I.E.,funds that become available on the day
after the check is cashed.
Alternatively, if a non-global security has a face amount of at least
$1,000,000 and the holder asks us to do so, we will pay any amount that becomes
due on the debt security by wire transfer of immediately available funds to an
account at a bank in New York City, on the due date. To request wire payment,
the holder must give the paying agent appropriate transfer instructions at least
five business days before the requested wire payment is due. In the case of any
interest payment due on an interest payment date, the instructions must be given
by the person who is the holder on the relevant regular record date. In the case
of any other payment, payment will be made only after the debt security is
surrendered to the paying agent. Any wire instructions, once properly given,
will remain in effect unless and until new instructions are given in the manner
described above.
BOOK-ENTRY AND OTHER INDIRECT HOLDERS SHOULD CONSULT THEIR BANKS OR BROKERS
FOR INFORMATION ON HOW THEY WILL RECEIVE PAYMENTS ON THEIR DEBT SECURITIES.
How We Will Make Payments Due in Other Currencies
We will follow the practice described in this subsection when paying amounts
that are due in a specified currency other than U.S. dollars.
PAYMENTS ON GLOBAL SECURITIES. We will make payments on a global security
in accordance with the applicable policies of the depositary as in effect from
time to time. We understand that these policies, as currently in effect at DTC,
are as follows.
Unless otherwise indicated in your prospectus supplement, if you are an
indirect holder of global notes denominated in a specified currency other than
U.S. dollars and if you elect to receive payments in that other currency, you
must notify the participant through which your interest in the global security
is held of your election:
- on or before the applicable regular record date, in the case of a payment
of interest, or
- on or before the 16th day prior to stated maturity, or any redemption or
repayment date, in the case of payment of principal or any premium.
You may elect to receive all or only a portion of any interest, principal or
premium payment in a specified currency other than U.S. dollars.
Your participant must, in turn, notify DTC of your election on or before the
third DTC business day after that regular record date, in the case of a payment
of interest, and on or before the 12th DTC business day prior to stated
maturity, or on the redemption or repayment date if your debt security is
redeemed or repaid earlier, in the case of a payment of principal or any
premium.
DTC, in turn, will notify the paying agent of your election in accordance
with DTC's procedures.
If complete instructions are received by the participant and forwarded by
the participant to DTC, and by DTC to the paying agent, on or before the dates
noted above, the paying agent, in accordance with DTC's instructions, will make
the payments to you or your participant by wire transfer of immediately
available funds to an account maintained by the payee with a bank located in the
country issuing the specified currency or in another jurisdiction acceptable to
us and the paying agent.
If the foregoing steps are not properly completed, we expect DTC to inform
the paying agent that payment is to be made in U.S. dollars. In that case, we or
our agent will convert the payment to U.S. dollars in the manner described below
under "--Conversion to U.S. Dollars". We expect that we or our agent will then
make the payment in U.S. dollars to DTC, and that DTC in turn will pass it along
to its participants.
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INDIRECT HOLDERS OF A GLOBAL SECURITY DENOMINATED IN A CURRENCY OTHER THAN
U.S. DOLLARS SHOULD CONSULT THEIR BANKS OR BROKERS FOR INFORMATION ON HOW TO
REQUEST PAYMENT IN THE SPECIFIED CURRENCY.
PAYMENTS ON NON-GLOBAL SECURITIES. Except as described in the last
paragraph under this heading, we will make payments on debt securities in
non-global form in the applicable specified currency. We will make these
payments by wire transfer of immediately available funds to any account that is
maintained in the applicable specified currency at a bank designated by the
holder and acceptable to us and the trustee. To designate an account for wire
payment, the holder must give the paying agent appropriate wire instructions at
least five business days before the requested wire payment is due. In the case
of any interest payment due on an interest payment date, the instructions must
be given by the person or entity who is the holder on the regular record date.
In the case of any other payment, the payment will be made only after the debt
security is surrendered to the paying agent. Any instructions, once properly
given, will remain in effect unless and until new instructions are properly
given in the manner described above.
If a holder fails to give instructions as described above, we will notify
the holder at the address in the trustee's records and will make the payment
within five business days after the holder provides appropriate instructions.
Any late payment made in these circumstances will be treated under the indenture
as if made on the due date, and no interest will accrue on the late payment from
the due date to the date paid.
Although a payment on a debt security in non-global form may be due in a
specified currency other than U.S. dollars, we will make the payment in U.S.
dollars if the holder asks us to do so. To request U.S. dollar payment, the
holder must provide appropriate written notice to the trustee at least five
business days before the next due date for which payment in U.S. dollars is
requested. In the case of any interest payment due on an interest payment date,
the request must be made by the person or entity who is the holder on the
regular record date. Any request, once properly made, will remain in effect
unless and until revoked by notice properly given in the manner described above.
BOOK-ENTRY AND OTHER INDIRECT HOLDERS OF A DEBT SECURITY WITH A SPECIFIED
CURRENCY OTHER THAN U.S. DOLLARS SHOULD CONTACT THEIR BANKS OR BROKERS FOR
INFORMATION ABOUT HOW TO RECEIVE PAYMENTS IN THE SPECIFIED CURRENCY OR IN U.S.
DOLLARS.
CONVERSION TO U.S. DOLLARS. When we are asked by a holder to make payments
in U.S. dollars of an amount due in another currency, either on a global
security or a non-global security as described above, we will determine the U.S.
dollar amount the holder receives as follows. The exchange rate agent described
below will request currency bid quotations expressed in U.S. dollars from three
or, if three are not available, then two, recognized foreign exchange dealers in
New York City, any of which may be the exchange rate agent, as of 11:00 A.M.,
New York City time, on the second business day before the payment date. Currency
bid quotations will be requested on an aggregate basis, for all holders of debt
securities, if any, requesting U.S. dollar payments of amounts due on the same
date in the same specified currency. The U.S. dollar amount the holder receives
will be based on the highest acceptable currency bid quotation received by the
exchange rate agent. If the exchange rate agent determines that at least two
acceptable currency bid quotations are not available on that second business
day, the payment will be made in the specified currency.
To be acceptable, a quotation must be given as of 11:00 A.M., New York City
time, on the second business day before the due date and the quoting dealer must
commit to execute a contract at the quotation.
A holder that requests payment in U.S. dollars will bear all associated
currency exchange costs, which will be deducted from the payment.
WHEN THE SPECIFIED CURRENCY IS NOT AVAILABLE. If we are obligated to make
any payment in a specified currency other than U.S. dollars, and the specified
currency is not available to us due to circumstances beyond our control--which
may include the imposition of exchange controls or a disruption in the currency
markets--we will be entitled to satisfy our obligation to make the payment in
that specified currency by making the payment in U.S. dollars, on the basis of
the most recently available exchange rate.
For a specified currency other than U.S. dollars, the exchange rate will be
the noon buying rate for cable transfers of the specified currency in New York
City as quoted by the Federal Reserve Bank of New York on the then-most recent
day to which that Bank has quoted that rate.
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The foregoing will apply to any debt security, whether in global or
non-global form, and to any payment, including a payment at maturity. Any
payment made under the circumstances and in a manner described above will not
result in a default under any of the indenture.
THE EURO. The euro may be a specified currency for some debt securities. On
January 1, 1999, the euro became the legal currency for the 11 member states
participating in the European Economic and Monetary Union. During a transition
period from January 1, 1999 to December 31, 2001 and for a maximum of six months
thereafter, the former national currencies of these 11 member states will
continue to be legal tender in their country of issue, at rates irrevocably
fixed on December 31, 1998.
EXCHANGE RATE AGENT. If we issue a debt security in a specified currency
other than U.S. dollars, we will appoint a financial institution to act as the
exchange rate agent and will name the institution initially appointed when the
debt security is originally issued in the applicable prospectus supplement. We
may change the exchange rate agent from time to time after the original issue
date of the debt security without your consent and without notifying you of the
change.
All determinations made by the exchange rate agent will be at its sole
discretion unless we state in the applicable prospectus supplement that any
determination is subject to our approval. In the absence of manifest error,
those determinations will be conclusive for all purposes and binding on you and
us, without any liability on the part of the exchange rate agent.
PAYMENT WHEN OFFICES ARE CLOSED
If any payment is due on a debt security on a day that is not a business
day, we will make the payment on the next day that is a business day. Payments
postponed to the next business day in this situation will be treated under the
indenture as if they were made on the original due date. A postponement of this
kind will not result in a default under any debt security or the indenture, and
no interest will accrue on the postponed amount from the original due date to
the next day that is a business day.
PAYING AGENT
We may appoint one or more financial institutions to act as our paying
agents, at whose designated offices debt securities in non-global form may be
surrendered for payment at their maturity. We call each of those offices a
paying agent. We may add, replace or terminate paying agents from time to time.
We may also choose to act as our own paying agent. Initially, we have appointed
the trustee, at its corporate trust office in New York City, as the paying
agent. We must notify you of changes in the paying agents.
UNCLAIMED PAYMENTS
Regardless of who acts as paying agent, all money paid by us to a paying
agent that remains unclaimed at the end of two years after the amount is due to
a holder will be repaid to us. After that two-year period, the holder may look
only to us for payment and not to the trustee, any other paying agent or anyone
else.
Notices
Notices to be given to holders of a global debt security will be given only
to the depositary, in accordance with its applicable policies as in effect from
time to time. Notices to be given to holders of debt securities not in global
form will be sent by mail to the respective addresses of the holders as they
appear in the trustee's records, and will be deemed given when mailed. Neither
the failure to give any notice to a particular holder, nor any defect in a
notice given to a particular holder, will affect the sufficiency of any notice
given to another holder.
BOOK-ENTRY AND OTHER INDIRECT HOLDERS SHOULD CONSULT THEIR BANKS OR BROKERS
FOR INFORMATION ON HOW THEY WILL RECEIVE NOTICES.
Our Relationship with the Trustee
The Chase Manhattan Bank is initially serving as the trustee for the debt
securities and all other series of debt securities to be issued under the
indenture. The Chase Manhattan Bank acts as the trustee of our investment plans
and has provided commercial banking and other services for us and our related
companies in the past and may do so in the future.
Service of Process
Corning Finance B.V. has appointed CT Corporation System acting through its
office at 1633 Broadway, New York, New York as its authorized agent for service
of process in any legal action or proceeding to which it is a party relating to
the indenture, the guaranteed debt securities or the full and unconditional
guarantee brought in any federal or state court in New York City and has
submitted to the non-exclusive jurisdiction of those courts.
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DESCRIPTION OF WARRANTS
Corning Incorporated may issue warrants to purchase its debt securities, as
well as warrants to purchase its preferred or common stock. Warrants may be
issued independently or together with any securities and may be attached to or
separate from those securities. The warrants will be issued under warrant
agreements to be entered into between Corning Incorporated and a bank or trust
company, as warrant agent, all as will be set forth in the related prospectus
supplement.
Debt Warrants
The following briefly summarizes the material terms of the debt warrant
agreement, other than pricing and related terms disclosed in the accompanying
prospectus supplement. You should read the particular terms of any debt warrants
that are offered by us and the applicable debt warrant agreement which will be
described in more detail in a prospectus supplement. The prospectus supplement
will also state whether any of the generalized provisions summarized below do
not apply to the debt warrants being offered.
GENERAL
Corning Incorporated may issue warrants for the purchase of its debt
securities. As explained below, each debt warrant will entitle its holder to
purchase debt securities at an exercise price set forth in, or to be
determinable as set forth in, the related prospectus supplement. Debt warrants
may be issued separately or together with debt securities.
The debt warrants are to be issued under debt warrant agreements to be
entered into between Corning Incorporated and one or more banks or trust
companies, as debt warrant agent, all as will be set forth in the prospectus
supplement relating to the debt warrants being offered by the prospectus
supplement. A form of debt warrant agreement, including a form of debt warrant
certificate representing the debt warrants, reflecting the alternative
provisions that may be included in the debt warrant agreements to be entered
into with respect to particular offerings of debt warrants, is included as an
exhibit to the registration statement of which this prospectus forms a part. See
"Where You Can Find More Information" below for information on how to obtain a
copy of the form of debt warrant agreement.
TERMS OF THE DEBT WARRANTS TO BE DESCRIBED IN THE PROSPECTUS SUPPLEMENT
The particular terms of each issue of debt warrants, the debt warrant
agreement relating to the debt warrants and the debt warrant certificates
representing debt warrants will be described in the applicable prospectus
supplement. This description will include:
- the initial offering price;
- the currency or currency unit in which the price for the debt warrants is
payable;
- the title, aggregate principal amount and terms of the debt securities
purchasable upon exercise of the debt warrants;
- the title and terms of any related debt securities with which the debt
warrants are issued and the number of the debt warrants issued with each
debt security;
- the date, if any, on and after which the debt warrants and the related
debt securities will be separately transferable;
- the principal amount of debt securities purchasable upon exercise of each
debt warrant and the price at which that principal amount of debt
securities may be purchased upon exercise of each debt warrant;
- the date on which the right to exercise the debt warrants will commence
and the date on which this right will expire;
- if applicable, a discussion of United States federal income tax,
accounting or other considerations applicable to the debt warrants;
- whether the debt warrants represented by the debt warrant certificates
will be issued in registered or bearer form, and, if registered, where
they may be transferred and registered; and
- any other terms of the debt warrants.
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Debt warrant certificates will be exchangeable for new debt warrant
certificates of different denominations and, if in registered form, may be
presented for registration of transfer and debt warrants may be exercised at the
corporate trust office of the debt warrant agent or any other office indicated
in the related prospectus supplement. Before the exercise of debt warrants,
holders of debt warrants will not be entitled to payments of principal, premium,
if any, or interest, if any, on the debt securities purchasable upon exercise of
the debt warrants, or to enforce any of the covenants in the indenture.
EXERCISE OF DEBT WARRANTS
Unless otherwise provided in the related prospectus supplement, each debt
warrant will entitle the holder of debt warrants to purchase for cash the
principal amount of debt securities at the exercise price that will in each case
be set forth in, or be determinable as set forth in, the related prospectus
supplement. Debt warrants may be exercised at any time up to the close of
business on the expiration date specified in the prospectus supplement relating
to the debt warrants. After the close of business on the expiration date or any
later date to which the expiration date may be extended by us, unexercised debt
warrants will become void.
Debt warrants may be exercised as set forth in the prospectus supplement
relating to the debt warrants. Upon receipt of payment and the debt warrant
certificate properly completed and duly executed at the corporate trust office
of the debt warrant agent or any other office indicated in the prospectus
supplement, we will, as soon as practicable, forward the debt securities
purchasable upon exercise of the debt warrants to the person entitled to them.
If fewer than all of the debt warrants represented by the debt warrant
certificate are exercised, a new debt warrant certificate will be issued for the
remaining amount of debt warrants.
If you hold your interest in a debt warrant indirectly, you should check
with the institution through which you hold your interest in the debt warrant to
determine how these provisions will apply to you.
MODIFICATIONS
The debt warrant agreement may be amended by Corning Incorporated and the
debt warrant agent, without the consent of the holder of any debt warrant
certificate, for the purpose of curing any ambiguity, or of curing, correcting
or supplementing any defective provision contained in the debt warrant
agreement, or making any provisions in regard to matters or questions arising
under the debt warrant agreement that Corning Incorporated may deem necessary or
desirable; PROVIDED that the amendment may not adversely affect the interest of
the holders of debt warrant certificates in any material respect. Corning
Incorporated and the debt warrant agent also may modify or amend the debt
warrant agreement and the terms of the debt warrants, with the consent of the
owners of not less than a majority in number of the then outstanding unexercised
debt warrants affected. However, modifications or amendments that result in any
of the following changes may be made only with the consent of the owners
affected by the modification or amendment:
- An increase in the exercise price of the debt warrants;
- A shortening of the period of time during which the debt warrants may be
exercised;
- Any material and adverse change that affects the exercise rights of the
owners of the debt warrants; or
- A reduction in the number of debt warrants whose owners must consent to
the modification or amendment of the debt warrant agreement or the terms
of the equity warrants.
MERGER, CONSOLIDATION, SALE OR OTHER DISPOSITIONS
Under the debt warrant agreement, Corning Incorporated may, to the extent
permitted in the indenture, consolidate with, or sell or convey all or
substantially all of its assets to, or merge with or into, any other
corporation. If at any time there is a merger, consolidation, sale, transfer,
conveyance or other disposition of substantially all of the assets of Corning
Incorporated, the successor or assuming corporation will succeed to and be
substituted for Corning Incorporated, with the same effect as if it had been
named in the debt warrant agreement and in the debt warrants as Corning
Incorporated. Corning Incorporated will then be relieved of any further
obligation under the debt warrant agreement or under the debt warrants.
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ENFORCEABILITY OF RIGHTS, GOVERNING LAW
The debt warrant agent will act solely as the agent of Corning Incorporated
in connection with the issuance and exercise of debt warrants and will not
assume any obligation or relationship of agency or trust for or with any holder
of a debt warrant certificate or any owner of a beneficial interest in debt
warrants. The holders of debt warrant certificates, without the consent of the
debt warrant agent, the trustee, the holder of any debt securities issued upon
exercise of debt warrants or the holder of any other debt warrant certificates,
may, on their own behalf and for their own benefit, enforce, and may institute
and maintain any suit, action or proceeding against Corning Incorporated
suitable to enforce, or otherwise in respect of, their rights to exercise debt
warrants evidenced by their debt warrant certificates. Except as may otherwise
be provided in the related prospectus supplement, each issue of debt warrants
and the applicable debt warrant agreement will be governed by the laws of the
State of New York.
Equity Warrants
The following briefly summarizes the material terms and provisions of the
equity warrants, other than pricing and related terms disclosed in the
accompanying prospectus supplement. You should read the particular terms of the
equity warrants that are offered by Corning Incorporated, which will be
described in more detail in a prospectus supplement. The prospectus supplement
will also state whether any of the general provisions summarized below do not
apply to the equity warrants being offered.
GENERAL
Corning Incorporated may issue warrants for the purchase of its equity
securities such as its preferred stock or common stock. As explained below, each
equity warrant will entitle its holder to purchase equity securities at an
exercise price set forth in, or to be determinable as set forth in, the related
prospectus supplement. Equity warrants may be issued separately or together with
equity securities.
The equity warrants are to be issued under equity warrant agreements to be
entered into between Corning Incorporated and one or more banks or trust
companies, as equity warrant agent, all as will be set forth in the prospectus
supplement relating to the equity warrants being offered by the prospectus
supplement. A form of equity warrant agreement, including a form of equity
warrant certificate representing the equity warrants, reflecting the alternative
provisions that may be included in the equity warrant agreements to be entered
into with respect to particular offerings of equity warrants, is included as an
exhibit to the registration statement of which this prospectus forms a part. See
"Where You Can Find More Information" below for information on how to obtain a
copy of the form of equity warrant agreement.
TERMS OF THE EQUITY WARRANTS TO BE DESCRIBED IN THE PROSPECTUS SUPPLEMENT
The particular terms of each issue of equity warrants, the equity warrant
agreement relating to the equity warrants and the equity warrant certificates
representing equity warrants will be described in the applicable prospectus
supplement. This description will include:
- the title of the equity warrants;
- the securities for which the equity warrants are exercisable;
- the price or prices at which the equity warrants will be issued;
- if applicable, the designation and terms of the preferred stock or common
stock with which the equity warrants are issued, and the number of equity
warrants issued with each share of preferred stock or common stock;
- if applicable, the date on and after which the equity warrants and the
related preferred stock or common stock will be separately transferable;
- if applicable, a discussion of any material federal income tax
considerations; and
- any other terms of the equity warrants, including terms, procedures and
limitations relating to the exchange and exercise of the equity warrants.
Holders of equity warrants will not be entitled, solely by virtue of being
holders, to vote, to consent, to receive dividends, to receive notice as
shareholders with
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respect to any meeting of shareholders for the election of our directors or any
other matter, or to exercise any rights whatsoever as shareholders of Corning
Incorporated.
The exercise price payable and the number of shares of common stock or
preferred stock purchasable upon the exercise of each equity warrant will be
subject to adjustment if Corning Incorporated issues a stock dividend to holders
of common stock or preferred stock, or if Corning Incorporated declares a stock
split, reverse stock split, combination, subdivision or reclassification of
common stock or preferred stock. Instead of adjusting the number of shares of
common stock or preferred stock purchasable upon exercise of each equity
warrant, Corning Incorporated may elect to adjust the number of equity warrants.
No adjustments in the number of shares purchasable upon exercise of the equity
warrants will be required until cumulative adjustments require an adjustment of
at least 1% of those shares. Corning Incorporated may, at its option, reduce the
exercise price at any time. Corning Incorporated will not issue fractional
shares upon exercise of equity warrants, but Corning Incorporated will pay the
cash value of any fractional shares otherwise issuable.
Notwithstanding the previous paragraph, if there is a consolidation, merger,
or sale or conveyance of substantially all of the property of Corning
Incorporated, the holder of each outstanding equity warrant will have the right
to the kind and amount of shares of stock and other securities and property,
including cash, receivable by a holder of the number of shares of common stock
or preferred stock into which that equity warrant was exercisable immediately
prior to the consolidation, merger, sale or conveyance.
EXERCISE OF EQUITY WARRANTS
Unless otherwise provided in the related prospectus supplement, each equity
warrant will entitle the holder of equity warrants to purchase for cash the
principal amount of equity securities at the exercise price that will in each
case be set forth in, or be determinable as set forth in, the related prospectus
supplement. Equity warrants may be exercised at any time up to the close of
business on the expiration date specified in the prospectus supplement relating
to the equity warrants. After the close of business on the expiration date or
any later date to which the expiration date may be extended by Corning
Incorporated, unexercised equity warrants will become void.
Equity warrants may be exercised as set forth in the prospectus supplement
relating to the equity warrants. Upon receipt of payment and the equity warrant
certificate properly completed and duly executed at the corporate trust office
of the equity warrant agent or any other office indicated in the prospectus
supplement, Corning Incorporated will, as soon as practicable, forward the
equity securities purchasable upon exercise of the equity warrants to the person
entitled to them. If fewer than all of the equity warrants represented by the
equity warrant certificate are exercised, a new equity warrant certificate will
be issued for the remaining amount of equity warrants.
If you hold your interest in an equity warrant indirectly, you should check
with the institution through which you hold your interest in the equity warrant
to determine how these provisions will apply to you.
MODIFICATIONS
The equity warrant agreement may be amended by Corning Incorporated and the
equity warrant agent, without the consent of the holder of any equity warrant
certificate, for the purpose of curing any ambiguity, or of curing, correcting
or supplementing any defective provision contained in the equity warrant
agreement, or making any provisions in regard to matters or questions arising
under the equity warrant agreement that Corning Incorporated may deem necessary
or desirable; PROVIDED that the amendment may not adversely affect the interest
of the holders of equity warrant certificates in any material respect. Corning
Incorporated and the equity warrant agent also may modify or amend the equity
warrant agreement and the terms of the equity warrants, with the consent of the
owners of not less than a majority in number of the then outstanding unexercised
equity warrants affected. However, modifications or amendments that result in
any of the following changes may be made only with the consent of the owners
affected by the modification or amendment:
- An increase in the exercise price of the equity warrants;
- A shortening of the period of time during which the equity warrants may be
exercised;
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- Any material and adverse change that affects the exercise rights of the
owners of the equity warrants; or
- A reduction in the number of equity warrants whose owners must consent to
the modification or amendment of the equity warrant agreement or the terms
of the equity warrants.
MERGER, CONSOLIDATION, SALE OR OTHER DISPOSITIONS
Under the equity warrant agreement, Corning Incorporated may, to the extent
permitted in the indenture, consolidate with, or sell or convey all or
substantially all of its assets to, or merge with or into, any other
corporation. If at any time there is a merger, consolidation, sale, transfer,
conveyance or other disposition of substantially all of the assets of Corning
Incorporated, the successor or assuming corporation will succeed to and be
substituted for Corning Incorporated, with the same effect as if it had been
named in the equity warrant agreement and in the equity warrants as Corning
Incorporated. Corning Incorporated will then be relieved of any further
obligation under the equity warrant agreement or under the equity warrants.
ENFORCEABILITY OF RIGHTS, GOVERNING LAW
The equity warrant agent will act solely as the agent of Corning
Incorporated in connection with the issuance and exercise of equity warrants and
will not assume any obligation or relationship of agency or trust for or with
any holder of an equity warrant certificate or any owner of a beneficial
interest in equity warrants. The holders of equity warrant certificates, without
the consent of the equity warrant agent, the holder of any equity securities
issued upon exercise of equity warrants or the holder of any other equity
warrant certificates, may, on their own behalf and for their own benefit,
enforce, and may institute and maintain any suit, action or proceeding against
Corning Incorporated suitable to enforce, or otherwise in respect of, their
rights to exercise equity warrants evidenced by their equity warrant
certificates. Except as may otherwise be provided in the related prospectus
supplement, each issue of equity warrants and the applicable equity warrant
agreement will be governed by the laws of the State of New York.
DESCRIPTION OF PREFERRED STOCK
The following briefly summarizes the material terms of the preferred stock
of Corning Incorporated, other than pricing and related terms disclosed in the
accompanying prospectus supplement. You should read the particular terms of any
series of preferred stock offered by Corning Incorporated which will be
described in more detail in any prospectus supplement relating to such series.
The prospectus supplement will also state whether any of the terms summarized
below do not apply to the series of preferred stock being offered.
General
Corning Incorporated is authorized to issue up to 10,000,000 shares of
preferred stock, par value $100 per share. Under the certificate of
incorporation of Corning Incorporated, the board of directors is authorized to
issue shares of preferred stock in one or more series, and to establish from
time to time a series of preferred stock with the following terms specified:
- the number of shares to be included in the series;
- the designation, powers, preferences and rights of the shares of the
series; and
- the qualifications, limitations or restrictions of the series, except as
otherwise stated in the certificate of incorporation.
Prior to the issuance of any series of preferred stock, the board of
directors will adopt resolutions creating and designating the series as a series
of preferred stock and will file an amendment to the certificate of
incorporation setting forth the terms of the series. Shareholders will not need
to approve this amendment.
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At December 31, 1999, Corning Incorporated had authorized the issuance of:
- 2,400,000 shares of Series A junior participating preferred stock, par
value $100 per share, upon exercise of preferred share purchase rights
associated with each share of common stock outstanding. See "Description
of Common Stock--Rights Agreement";
- 316,822 shares of Series B cumulative convertible preferred stock, par
value $100 per share; and
- 4,683,710 shares of Series C cumulative convertible preferred stock, par
value $100 per share, issuable only upon exchange of our 6% convertible
subordinated debentures due July 21, 2024, all of which were redeemed as
of March 23, 1999 and none of which are currently outstanding.
In addition, as described under "Description of Depositary Shares", Corning
Incorporated, at its option, instead of offering full shares of any series of
preferred stock, may offer depositary shares evidenced by depositary receipts,
each representing a fraction of a share of the particular series of preferred
stock issued and deposited with a depositary. The fraction of a share of
preferred stock which each depositary share represents will be set forth in the
prospectus supplement relating to the depositary shares.
The rights of holders of the preferred stock offered may be adversely
affected by the rights of holders of any shares of preferred stock that may be
issued in the future. The board of directors may cause shares of preferred stock
to be issued in public or private transactions for any proper corporate purpose.
Examples of proper corporate purposes include issuances to obtain additional
financing in connection with acquisitions, and issuances to officers, directors
and employees pursuant to benefit plans. Shares of preferred stock issued by
Corning Incorporated may have the effect of rendering more difficult or
discouraging an acquisition of Corning Incorporated deemed undesirable by the
board of directors.
The preferred stock will be, when issued, fully paid and nonassessable.
Holders of preferred stock will not have any preemptive or subscription rights
to acquire more stock of Corning Incorporated.
The transfer agent, registrar, dividend disbursing agent and redemption
agent for shares of each series of preferred stock will be named in the
prospectus supplement relating to these series.
Rank
Unless otherwise specified in the prospectus supplement relating to the
shares of any series of preferred stock, shares of one series will rank on an
equal basis with each other series of preferred stock and prior to the common
stock as to dividends and distributions of assets.
Dividends
Holders of each series of preferred stock will be entitled to receive cash
dividends when, as and if declared by the board of directors out of funds
legally available for dividends. The rates and dates of payment of dividends
will be set forth in the prospectus supplement relating to each series of
preferred stock. Dividends will be payable to holders of record of preferred
stock as they appear on the books of Corning Incorporated on the record dates
fixed by the board of directors. Dividends on any series of preferred stock may
be cumulative or noncumulative.
Corning Incorporated may not declare, pay or set apart for payment dividends
on the preferred stock unless full dividends on any other series of preferred
stock that ranks on an equal or senior basis have been paid or sufficient funds
have been set apart for payment for either of the following:
- all prior dividend periods of the other series of preferred stock that pay
dividends on a cumulative basis; or
- the immediately preceding dividend period of the other series of preferred
stock that pay dividends on a noncumulative basis.
Partial dividends declared on shares of preferred stock and any other series
of preferred stock ranking on an equal basis as to dividends will be declared
pro rata. A pro rata declaration means that the ratio of dividends declared per
share to accrued dividends per share will be the same for both series of
preferred stock.
Similarly, Corning Incorporated may not declare, pay or set apart for
payment non-stock dividends or make other payments on the common stock or any of
its other stock ranking junior to the preferred stock
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until full dividends on the preferred stock have been paid or set apart for
payments for:
- all prior dividend periods if the other series of preferred stock pays
dividends on a cumulative basis; or
- the immediately preceding dividend period if the preferred stock pays
dividends on a noncumulative basis.
Conversion and Exchange
The prospectus supplement for any series of preferred stock will state the
terms, if any, on which shares of that series are convertible into or
exchangeable for shares of common stock of Corning Incorporated.
Redemption
If so specified in the applicable prospectus supplement, a series of
preferred stock may be redeemable at any time, in whole or in part, at our
option or the holder's, and may be mandatorily redeemed.
Any restriction on the repurchase or redemption by Corning Incorporated of
its preferred stock while there is any arrearage in the payment of dividends
will be described in the relevant prospectus supplement.
Any partial redemptions of preferred stock will be made in a way that the
board of directors of Corning Incorporated decides is equitable.
Unless Corning Incorporated defaults in the payment of the redemption price,
dividends will cease to accrue after the redemption date on shares of preferred
stock called for redemption and all rights of holders of these shares will
terminate except for the right to receive the redemption price.
Anti-takeover Provisions
See "Description of Common Stock--Fair Price Amendment" and "Description of
Common Stock--Other Anti-takeover Provisions of the Certificate of Incorporation
and By-Laws" for a discussion of provisions of the certificate of incorporation
and by-laws of Corning Incorporated that would have an effect of delaying,
deferring or preventing a change in control of Corning Incorporated.
Liquidation Preference
Upon any voluntary or involuntary liquidation, dissolution or winding up of
Corning, holders of each series of preferred stock will be entitled to receive
distributions upon liquidation in the amount described in the prospectus
supplement relating to each series of preferred stock, plus an amount equal to
any accrued and unpaid dividends. These distributions will be made before any
distribution is made on any securities ranking junior relating to liquidation,
including common stock.
If the liquidation amounts payable relating to the preferred stock of any
series and any other securities ranking on a parity regarding liquidation rights
are not paid in full, the holders of the preferred stock of these series and the
other securities will share in any distribution of available assets of Corning
Incorporated on a ratable basis in proportion to the full liquidation
preferences. Holders of these series of preferred stock will not be entitled to
any other amounts from us after they have received their full liquidation
preference.
Voting Rights
The holders of shares of preferred stock will have no voting rights, except:
- as otherwise stated in the prospectus supplement;
- as otherwise stated in the certificate of designation establishing the
series; or
- as required by applicable law.
Outstanding Preferred Stock
At December 31, 1999, there were 122,938 shares of Series B preferred stock
outstanding.
Series B Preferred Stock
Cumulative cash dividends at the rate of 8% per annum are payable on shares
of the Series B preferred stock that have been issued. Corning Incorporated has
regularly paid dividends on the Series B preferred stock. No dividends may be
paid or declared on the Series A preferred stock or the common stock unless all
dividends for all prior dividend periods have been paid or declared on the
Series B preferred stock.
Holders of Series B preferred stock are entitled to vote, voting together
with the common stock and not
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as a separate class, on all matters submitted to holders of the common stock,
each share of Series B preferred stock having four votes, subject to adjustment.
Holders of Series B preferred stock have no preemptive rights. In the event
of a liquidation, dissolution or winding-up of Corning Incorporated, holders of
Series B preferred stock would be entitled to receive a distribution in the
amount of $100 per share, plus accrued and unpaid dividends, before any
distribution on the common stock or Series A preferred stock.
The Series B preferred stock is redeemable, in whole or in part, at the
election of Corning Incorporated, at any time, at $100 per share.
The Series B preferred stock is subject to redemption, at the option of the
holder, at any time upon five business day's notice, at a redemption price equal
to $100 plus accrued and unpaid dividends, if the proceeds are necessary:
- to make a distribution pursuant to an investment election made under one
of the investment plans of Corning Incorporated; or
- to satisfy any indebtedness to which the investment plans of Corning
Incorporated are subject, provided that this payment is necessary to
remedy or prevent a default under the applicable indebtedness.
Corning Incorporated, at its option, may make payment of the redemption
price required upon redemption of shares of Series B preferred stock in cash or
in shares of common stock, or in any combination of shares of common stock and
cash.
The Series B preferred stock is convertible at the option of the holder, at
any time, into common stock at a conversion price of $20.89 per share of common
stock, each share of Series B preferred stock being valued at $100 for the
purpose of this conversion, producing a conversion ratio equal to 4.79 shares of
common stock for each share of Series B preferred stock so converted, subject to
adjustments to prevent dilution.
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DESCRIPTION OF DEPOSITARY SHARES
The following briefly summarizes the material provisions of the deposit
agreement and of the depositary shares and depositary receipts, other than
pricing and related terms disclosed in the accompanying prospectus supplement.
You should read the particular terms of any depositary shares and any depositary
receipts that are offered by us and any deposit agreement relating to a
particular series of preferred stock which will be described in more detail in a
prospectus supplement. The prospectus supplement will also state whether any of
the generalized provisions summarized below do not apply to the depositary
shares or depositary receipts being offered. A form of deposit agreement,
including the form of depositary receipt, is included as an exhibit to the
registration statement of which this prospectus forms a part. See "Where You Can
Find More Information" below for information on how to obtain a copy of the form
of deposit agreement.
General
Corning Incorporated may, at its option, elect to offer fractional shares of
preferred stock, rather than full shares of preferred stock. If it decides to do
so, Corning Incorporated will issue receipts for depositary shares, each of
which will represent a fraction of a share of a particular series of preferred
stock.
The shares of any series of preferred stock represented by depositary shares
will be deposited under a deposit agreement between Corning Incorporated and a
bank or trust company selected by Corning Incorporated having its principal
office in the United States and having a combined capital and surplus of at
least $50,000,000, as preferred stock depositary. Each owner of a depositary
share will be entitled to all the rights and preferences of the underlying
preferred stock, including dividend, voting, redemption, conversion and
liquidation rights, in proportion to the applicable fraction of a share of
preferred stock represented by the depositary share.
The depositary shares will be evidenced by depositary receipts issued
pursuant to the deposit agreement. Depositary receipts will be distributed to
those persons purchasing the fractional shares of preferred stock in accordance
with the terms of the applicable prospectus supplement.
Dividends and Other Distributions
The preferred stock depositary will distribute all cash dividends or other
cash distributions received in respect of the deposited preferred stock to the
record holders of depositary shares relating to the underlying preferred stock
in proportion to the number of the depositary shares owned by the holders.
The preferred stock depositary will distribute any property received by it
other than cash to the record holders of depositary shares entitled to these
distributions. If the preferred stock depositary determines that it is not
feasible to make a distribution, it may, with the approval of Corning
Incorporated, sell the property and distribute the net proceeds from the sale to
the holders of the depositary shares.
Redemption of Preferred Stock
If Corning Incorporated is to redeem a series of preferred stock represented
by depositary shares, the depositary shares will be redeemed from the proceeds
received by the preferred stock depositary resulting from the redemption, in
whole or in part, of the applicable series of preferred stock. The depositary
shares will be redeemed by the preferred stock depositary at a price per
depositary share equal to the applicable fraction of the redemption price per
share payable in respect of the shares of preferred stock so redeemed.
Whenever Corning Incorporated redeems shares of preferred stock held by the
preferred stock depositary, the preferred stock depositary will redeem as of the
same date the number of depositary shares representing shares of preferred stock
so redeemed. If fewer than all the depositary shares are to be redeemed, the
depositary shares to be redeemed will be selected by the preferred stock
depositary by lot or ratably or by any other equitable method as the preferred
stock depositary decides.
Withdrawal of Preferred Stock
Unless the related depositary shares have previously been called for
redemption, any holder of depositary shares may receive the number of whole
shares of the related series of preferred stock and any money or other property
represented by those depositary receipts after surrendering the depositary
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receipts at the corporate trust office of the preferred stock depositary.
Holders of depositary shares making these withdrawals will be entitled to
receive whole shares of preferred stock on the basis set forth in the related
prospectus supplement for that series of preferred stock.
However, holders of whole shares of preferred stock will not be entitled to
deposit that preferred stock under the deposit agreement or to receive
depositary receipts for that preferred stock after withdrawal. If the depositary
shares surrendered by the holder in connection with withdrawal exceed the number
of depositary shares that represent the number of whole shares of preferred
stock to be withdrawn, the preferred stock depositary will deliver to that
holder at the same time a new depositary receipt evidencing the excess number of
depositary shares.
Voting Deposited Preferred Stock
When the preferred stock depository receives notice of any meeting at which
the holders of any series of deposited preferred stock are entitled to vote, the
preferred stock depositary will mail the information contained in the notice to
the record holders of the depositary shares relating to the applicable series of
preferred stock. Each record holder of the depositary shares on the record date
will be entitled to instruct the preferred stock depositary to vote the amount
of the preferred stock represented by the holder's depositary shares. To the
extent possible, the preferred stock depositary will vote the amount of the
series of preferred stock represented by depositary shares in accordance with
the instructions it receives.
Corning Incorporated will agree to take all reasonable actions that the
preferred stock depositary determines are necessary to enable the preferred
stock depositary to vote as instructed. The preferred stock depositary will vote
all shares of any series of preferred stock held by it proportionately with
instructions received if it does not receive specific instructions from the
holders of depositary shares representing that series of preferred stock.
Amendment and Termination of the Deposit Agreement
The form of depositary receipt evidencing the depositary shares and any
provision of the deposit agreement may at any time be amended by agreement
between Corning Incorporated and the preferred stock depositary. However, any
amendment that imposes additional charges or materially and adversely alters any
substantial existing right of the holders of depositary shares will not be
effective unless the amendment has been approved by the holders of at least a
majority of the affected depositary shares then outstanding. Holders who retain
their depositary receipts after the amendment becomes effective will be deemed
to agree to the amendment and will be bound by the amended deposit agreement.
The deposit agreement automatically terminates if:
- all outstanding depositary shares have been redeemed;
- each share of preferred stock has been converted into or exchanged for
common stock; or
- a final distribution in respect of the preferred stock has been made to
the holders of depositary shares in connection with any liquidation,
dissolution or winding up of Corning Incorporated.
Corning Incorporated may terminate the deposit agreement at any time and the
preferred stock depositary will give notice of that termination to the record
holders of all outstanding depositary receipts not less than 30 days prior to
the termination date. In that event, the preferred stock depositary will deliver
or make available for delivery to holders of depositary shares, upon surrender
of the depositary shares, the number of whole or fractional shares of the
related series of preferred stock as are represented by those depositary shares.
Charges of Preferred Stock Depositary; Taxes and other Governmental Charges
No fees, charges and expenses of the preferred stock depositary or any agent
of the preferred stock depositary or of any registrar will be payable by any
person other than Corning Incorporated, except for any taxes and other
governmental charges and except as provided in the deposit agreement. If the
preferred stock depositary incurs fees, charges or expenses for which it is not
otherwise liable at the election of a holder of a depositary receipt or other
person, that holder or other person will be liable for those fees, charges and
expenses.
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Resignation and Removal of Depositary
The preferred stock depositary may resign at any time by delivering to
Corning Incorporated notice of its intent to do so, and Corning Incorporated may
at any time remove the preferred stock depositary. Any resignation or removal
will take effect upon the appointment of a successor preferred stock depositary
and its acceptance of the appointment. A successor preferred stock depositary
must be appointed within 60 days after delivery of the notice of resignation or
removal and must be a bank or trust company having its principal office in the
United States and having a combined capital and surplus of at least $50,000,000.
Miscellaneous
The preferred stock depositary will forward all reports and communications
from Corning Incorporated which are delivered to the preferred stock depositary
and which Corning Incorporated is required to furnish to the holders of the
deposited preferred stock.
Neither the preferred stock depositary nor Corning Incorporated will be
liable if it is prevented or delayed by law or any circumstances beyond its
control in performing its obligations under the deposit agreement. The
obligations of Corning Incorporated and the preferred stock depositary under the
deposit agreement will be limited to performance with honest intentions of their
duties under the agreement and they will not be obligated to prosecute or defend
any legal proceeding in respect of any depositary shares, depositary receipts or
shares of preferred stock unless satisfactory indemnity is furnished. Corning
Incorporated and the preferred stock depositary may rely upon written advice of
counsel or accountants, or upon information provided by holders of depositary
receipts or other persons believed to be competent and on documents believed to
be genuine.
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DESCRIPTION OF COMMON STOCK
Corning Incorporated has authorized the issuance of 500,000,000 shares of
common stock, par value $.50 per share. As of December 31, 1999, Corning
Incorporated had 245,465,548 shares outstanding. Each holder of common stock is
entitled to one vote per share for all matters to be voted on by shareholders of
Corning Incorporated. Holders of common stock may not cumulate their votes in
the election of directors, and are entitled to share equally in the dividends
that may be declared by the board of directors, but only after payment of
dividends required to be paid on outstanding shares of preferred stock. The
current quarterly cash dividend of Corning Incorporated is $.18 per share of
common stock. The continued declaration of dividends by the board of directors
is subject to the current and prospective earnings, financial condition and
capital requirements of Corning Incorporated and any other factors that the
board of directors deems relevant.
Upon voluntary or involuntary liquidation, dissolution or winding up of
Corning Incorporated, the holders of the common stock share ratably in the
assets remaining after payments to creditors and provision for the preference of
any preferred stock. There are no preemptive or other subscription rights,
conversion rights or redemption or scheduled installment payment provisions
relating to shares of common stock. All of the outstanding shares of common
stock are fully paid and nonassessable. The transfer agent and registrar for the
common stock is Harris Trust and Savings Bank. The common stock is listed on The
New York Stock Exchange, Inc.
Rights Agreement
Attached to each share of common stock is one preferred share purchase
right. Each right entitles the registered holder to purchase from Corning
Incorporated one one-hundredth of a share of Series A preferred stock at a price
of $125.00 per one one-hundredth of a share of Series A preferred stock, subject
to adjustment. The rights expire on July 15, 2006, unless the final expiration
date is extended or unless the rights are earlier redeemed by Corning
Incorporated.
The rights represented by the certificates for common stock are not
exercisable, and are not transferable apart from the common stock, until the
earlier of:
- ten days after a person or group, called an "acquiring person", acquires
beneficial ownership of 20% or more of the common stock of Corning
Incorporated; or
- ten business days, or a later date determined by the board of directors,
after the commencement or first public announcement of a tender or
exchange offer that would result in a person or group beneficially owning
20% or more of the outstanding common stock of Corning Incorporated.
The earlier of these two dates is called the "distribution date". Separate
certificates for the rights will be mailed to holders of record of the common
stock as of the distribution date. The rights could then begin trading
separately from the common stock.
Generally, in the event that a person or group becomes an acquiring person,
each right, other than the rights owned by the acquiring person, will entitle
the holder to receive, upon exercise of the right, common stock having a value
equal to two times the exercise price of the right. In the event that Corning
Incorporated is acquired in a merger, consolidation, or other business
combination transaction or more than 50% of its assets, cash flow or earning
power is sold or transferred, each right, other than the rights owned by an
acquiring person, will entitle the holder to receive, upon the exercise of the
right, common stock of the surviving corporation having a value equal to two
times the exercise price of the right.
At any time after the acquisition by the acquiring person of beneficial
ownership of 20% or more of the outstanding shares of the common stock of
Corning Incorporated and before the acquisition by the acquiring person of 50%
or more of the voting power of the outstanding shares of the common stock of
Corning Incorporated, the board of directors may exchange the rights, other than
rights owned by the acquiring person, which would have become void, in whole or
in part, at an exchange ratio of one share of our common stock per right,
subject to adjustment.
The rights are redeemable in whole, but not in part, at $.01 per right until
any person or group becomes an acquiring person. The ability to exercise the
rights terminates at the time that the board of
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directors elects to redeem the rights. Notice of redemption will be given by
mail to the registered holders of the rights. At no time will the rights have
any voting rights. The rights agent is Harris Trust and Savings Bank.
The exercise price payable, and the number of shares of Series A preferred
stock or other securities or property issuable, upon exercise of the rights are
subject to adjustment from time to time to prevent dilution:
- in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the shares of Series A preferred stock;
- upon the grant to holders of the shares of Series A preferred stock of
rights or warrants to subscribe for or purchase shares of Series A
preferred stock at a price, or securities convertible into shares of
Series A preferred stock with a conversion price, less than the then
current market price of the shares of Series A preferred stock; or
- upon the distribution to holders of the shares of Series A preferred stock
of evidences of indebtedness or assets, excluding regular periodic cash
dividends paid out of earnings or retained earnings or dividends payable
in shares of Series A preferred stock, or of subscription rights or
warrants, other than those referred to above.
The number of outstanding rights and the number of one one-hundredths of a
share of Series A preferred stock issuable upon exercise of each right are also
subject to adjustment in the event of a stock split of, or stock dividend on, or
subdivision, consolidation or combination of, the common stock prior to the
distribution date. With some exceptions, no adjustment in the exercise price
will be required until cumulative adjustments require an adjustment of at least
1% in the exercise price.
Upon the exercise of the rights, no fractional shares of Series A preferred
stock will be issued and instead an adjustment in cash will be made. However,
fractional shares of Series A preferred stock may be issued where these
fractions are integral multiples of one-hundredth of a share which may, at the
election of Corning Incorporated, be evidenced by depositary receipts.
The rights have certain anti-takeover effects. The rights may cause
substantial dilution to a person or group that attempts to acquire us on terms
not approved by the board of directors of Corning Incorporated, except in the
case of an offer conditioned on a substantial number of rights being acquired.
The rights should not interfere with any merger or other business combination
approved by the board of directors since, subject to exceptions, the rights may
be redeemed by us at $.01 per right at any time prior to the acquisition by a
person or group of beneficial ownership of 20% or more of the common stock. The
redemption of the rights may be made effective at any time, on any basis, and
with any conditions that the board of directors in its sole discretion may
establish.
The shares of Series A preferred stock purchasable upon exercise of the
right will rank junior to all other series of preferred stock of Corning
Incorporated, including the Series B preferred stock, or any similar stock that
specifically provides that it ranks prior to the shares of Series A preferred
stock. The shares of Series A preferred stock will be nonredeemable. Each share
of Series A preferred stock will be entitled to a minimum preferential quarterly
dividend of $1.00 per share, but will be entitled to an aggregate dividend of
100 times the dividend declared per share of common stock. In the event of
liquidation, the holders of the shares of Series A preferred stock will be
entitled to a minimum preferential liquidation payment of $100 per share, but
will be entitled to an aggregate payment of 100 times the payment made per share
of common stock. Each share of Series A preferred stock will have 100 votes,
voting together with the common stock. In the event of any merger, consolidation
or other transaction in which common stock is exchanged, each share of Series A
preferred stock will be entitled to receive 100 times the amount and type of
consideration received per share of common stock. These rights are protected by
customary antidilution provisions. Because of the nature of the Series A
preferred stock's dividend, liquidation and voting rights, the value of the
interest in a share of Series A preferred stock purchasable upon the exercise of
each right should approximate the value of one share of common stock.
The description of the rights contained in this section does not describe
every aspect of the rights. The rights agreement dated as of June 5, 1996,
between Corning Incorporated and the rights agent, contains the full legal text
of the matters described in this section. A copy of the rights agreement has
been
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incorporated by reference in the Registration Statement of which this prospectus
forms a part. See "Where You Can Find More Information" below for information on
how to obtain a copy.
Fair Price Amendment
In 1985, shareholders of Corning Incorporated adopted a "fair price
amendment" to the certificate of incorporation of Corning Incorporated that, in
general, requires the approval by the holders of at least 80% of the voting
power of the outstanding capital stock of Corning Incorporated entitled to vote
generally in the election of directors as a condition for mergers and other
forms of business combinations with any beneficial owner of more than 10% of
this voting power unless:
- the transaction is approved by at least a majority of the "continuing
directors", as defined in the certificate of incorporation; or
- minimum price, form of consideration and procedural requirements are met.
Amendment or repeal of this provision or the adoption of any inconsistent
provision requires the affirmative vote of at least 80% of the voting stock
unless the proposed amendment or repeal or the adoption of the inconsistent
provisions were approved by two-thirds of the entire board of directors and a
majority of the continuing directors.
Other Anti-takeover Provisions of the Certificate of Incorporation and By-Laws
In addition to the preferred share purchase rights and the fair price
amendment, the certificate of incorporation and by-laws of Corning Incorporated
contain other provisions that may discourage a third party from seeking to
acquire Corning Incorporated or to commence a proxy contest or other
takeover-related action. Corning Incorporated has classified its board of
directors so that one-third of the board is elected each year to three-year
terms of office. In addition, holders of common stock may remove a director from
office at any time prior to the expiration of his or her term only with cause
and by vote of a majority of holders of common stock outstanding. These
provisions, together with provisions concerning the size of the board and
requiring that premature vacancies on the board be filled only by a majority of
the entire board, may not be amended, altered or repealed, nor may we adopt any
inconsistent provisions without the affirmative vote of at least 80% of the
voting stock of Corning Incorporated or the approval of two-thirds of the entire
board of directors.
The by-laws of Corning Incorporated contain procedural requirements with
respect to the nomination of directors by shareholders that require, among other
things, delivery of notice by nominating shareholders to its Secretary not later
than 90 days nor more than 120 days prior to the date of the shareholders
meeting at which the nomination is to be considered. The by-laws do not provide
that a meeting of the board of directors may be called by shareholders.
The certificate of incorporation of Corning Incorporated provides that no
director will be liable to Corning Incorporated or its shareholders for a breach
of duty as a director except as provided by the New York Business Corporation
Law.
The effect of these provisions may be to deter attempts either to obtain
control of Corning Incorporated or to acquire a substantial amount of its stock,
even if a proposed acquisition transaction were at a significant premium over
the then-prevailing market value of the common stock, or to deter attempts to
remove the board of directors and management of Corning Incorporated, even
though some or a majority of the holders of common stock may believe these
actions to be beneficial.
PLAN OF DISTRIBUTION
We may sell securities to or through underwriters, and also may sell
securities directly to other purchasers or through agents. Unless otherwise set
forth in the prospectus supplement, the obligations of any underwriters to
purchase the securities will be subject to conditions precedent and these
underwriters will be obligated to purchase all the securities if any are
purchased.
The distribution of the securities may be effected from time to time in one
or more transactions at a fixed price or prices which may be changed, at market
prices prevailing at the time of sale, at prices related to these prevailing
market prices or at negotiated prices.
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The applicable prospectus supplement will describe the method of distribution of
the securities.
In connection with the sale of securities, underwriters may receive
compensation from us or from purchasers of securities for whom they may act as
agents, in the form of discounts, concessions or commissions. Underwriters,
dealers and agents that participate in the distribution of securities may be
deemed to be underwriters, and any discounts or commissions received by them and
any profit on the resale of securities by them may be deemed to be underwriting
discounts and commissions, under the Securities Act of 1933. Any underwriter,
dealer or agent that will participate in the distribution of the securities will
be identified, and any compensation it will receive will be described, in the
prospectus supplement.
Under agreements which may be entered into by us, underwriters, dealers and
agents who participate in the distribution of securities may be entitled to
indemnification by us against some liabilities, including liabilities under the
Act, or to contribution with respect to payments which the underwriters, dealers
or agents may be required to make relating to these liabilities. Any agreement
in which we agree to idemnify underwriters, dealers and agents against civil
liabilities will be described in the relevant prospectus supplement.
If so indicated in the prospectus supplement, we will authorize dealers or
other persons acting as our agent to solicit offers by some institutions to
purchase securities from us pursuant to contracts providing for payment and
delivery on a future date. Institutions with which these contracts may be made
include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions and others.
VALIDITY OF SECURITIES
The validity of the securities is being passed on for us by William D.
Eggers, Esq., Senior Vice President and General Counsel of Corning Incorporated,
and for any underwriters, dealers or agents by Sullivan & Cromwell, 125 Broad
Street, New York, New York. Mr. Eggers owns substantially less than 1% of the
outstanding shares of Corning Incorporated common stock.
EXPERTS
The consolidated financial statements of Corning Incorporated incorporated
in this prospectus by reference to Corning Incorporated's 1998 Annual Report on
Form 10-K for the year ended December 31, 1998, have been so incorporated in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of that firm as experts in auditing and accounting.
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WHERE YOU CAN FIND MORE INFORMATION
As required by the Securities Act of 1933, we filed a registration statement
(Nos. 333-81299 and 333-81299-01) relating to the securities offered by this
prospectus with the Securities and Exchange Commission. This prospectus is a
part of that registration statement, which includes additional information.
Corning Incorporated files annual, quarterly and current reports, proxy
statements and other information with the SEC. You may read and copy this
information at the SEC's public reference rooms in Washington, D.C., New York,
New York and Chicago, Illinois. You can also request copies of the documents,
upon payment of a duplicating fee, by writing the Public Reference Section of
the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. These SEC filings are also available to the public from
the SEC's web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file with
the SEC. This means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The information
incorporated by reference is considered to be part of this prospectus.
Information that we file later with the SEC will automatically update
information in this prospectus. In all cases, you should rely on the later
information over different information included in this prospectus or the
prospectus supplement.
This prospectus includes by reference the documents listed below that
Corning Incorporated has previously filed with the SEC and that are not included
in or delivered with the documents. They contain important information about our
company and its financial condition.
- Annual Report on Form 10-K for the year ended December 31, 1998.
- Quarterly reports on Form 10-Q for the quarters ended March 31, 1999,
June 30, 1999 and September 30, 1999.
- Current reports on Form 8-K dated January 19, 1999; January 25, 1999;
February 4, 1999; March 1, 1999; March 11, 1999, April 14, 1999, July 8,
1999, July 19, 1999, October 13, 1999, November 18, 1999, December 28,
1999, December 29, 1999 and January 11, 2000.
- Current report on Form 8-K/A dated January 26, 1999.
- Registration Statement on Form 8-A containing a description of our
preferred share rights plan filed on July 11, 1996.
We incorporate by reference additional documents that we may file with the
SEC after the date of this prospectus and before the completion of this
offering. The documents include periodic reports, like Annual Reports on
Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as
well as proxy statements.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Corning Incorporated
One Riverfront Plaza
Corning, New York 14831
Attention: Secretary
(607) 974-9000
Information in this prospectus may add to, update or change information in a
previously filed document incorporated by reference in this prospectus. In that
case, you should rely on the information in this prospectus. Information in a
document filed after the date of this prospectus may add to, update or change
information in this prospectus or in a previously filed document incorporated by
reference in this prospectus. In that case, you should rely on the information
in the later filed document.
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