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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
CORNING INCORPORATED
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
NOTICE OF 2000
ANNUAL MEETING OF SHAREHOLDERS
AND PROXY STATEMENT
[LOGO]
<PAGE>
PLEASE NOTE THE ACCOMPANYING
PROXY STATEMENT AND PROXY CARD
It is important that your shares be represented and voted at the meeting
regardless of the number you may hold. If you cannot attend the meeting in
person, we ask that you sign, date and return the enclosed proxy card in favor
of the proxy committee designated by the Board of Directors.
Instead of submitting your proxy card by mail, you may vote electronically via
the Internet or by telephone. Shareholders of record may vote telephonically by
calling 877-587-0755 or over the Internet at HTTP:/ WWW.HARRISBANK.COM/WPROXY.
The telephone number is available only for calls originating in the United
States or Canada. The Internet and telephone arrangements are described in
greater detail at the bottom of Corning's proxy card.
Please note that there are separate Internet and telephone voting arrangements
for shareholders who hold their shares through a bank, broker or another. If you
hold your shares through another, you should check the proxy card or other
information provided by the bank, broker or other holder to determine the voting
options available.
NOTICE OF ANNUAL MEETING
TO SHAREHOLDERS OF CORNING INCORPORATED:
You are cordially invited to attend the Annual Meeting of Corning Incorporated
which will be held in the Corning Glass Center, Corning, New York, on Thursday,
April 27, 2000 at 11:00 o'clock A.M. The principal business of the meeting will
be:
(a) To elect three Directors for three-year terms;
(b) To adopt an amendment to Corning's Restated Certificate of Incorporation to
increase the number of authorized shares of Common Stock, $.50 par value, from
500,000,000 shares to 1,200,000,000 shares;
(c) To adopt an equity plan for Corning's non-employee Directors; and
(d) To transact such other business as may properly come before the meeting.
A. John Peck, Jr.
Vice President and Secretary
Corning Incorporated
One Riverfront Plaza
Corning, New York 14831
March 6, 2000
<PAGE>
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS, APRIL 27, 2000. The enclosed proxy is
solicited by the Board of Directors of Corning Incorporated, Corning, New York
14831. Corning started mailing this Notice of Annual Meeting and Proxy Statement
and the enclosed proxy to holders of its Common Stock and Series B 8%
Convertible Preferred Stock on or about March 17, 2000. This Notice of Annual
Meeting and Proxy Statement, the proxy and the 1999 Annual Report are also
available on the Corning's Internet site at HTTP://WWW.CORNING.COM/INVESTOR/
INDEX.HTML.
If you give a proxy, you may revoke it by written notice to Corning prior to
the meeting, by written notice to the Secretary at the meeting or by delivery of
a properly executed, later-dated proxy (including an Internet or telephone vote)
at any time prior to being voted at the meeting. Each valid and timely proxy not
revoked will be voted at the meeting in accordance with your written or
electronic instructions.
If you own beneficially Preferred Stock through Corning's Investment Plans or
were listed as a holder of Common Stock on Corning's books at the close of
business on March 6, 2000, you are entitled to notice of and to vote at the
meeting. On February 2, 2000, Corning had outstanding 275,814,906 shares of
Common Stock, each entitled to one vote, and 118,003 shares of Preferred Stock,
each entitled to four votes.
VOTING BY PROXY
If you properly fill in and sign your proxy card and mail it in the enclosed,
prepaid and addressed envelope, or if you submit your proxy instructions by
telephone or over the Internet, your "proxy" (the individuals serving on the
proxy committee named on your proxy card) will vote your shares as you have
directed. If you do not make specific choices, your proxy will vote your shares
as recommended by the Board as follows:
- FOR the election of the director nominees.
- FOR the increase in the number of authorized shares of Common Stock.
- FOR the adoption of an equity plan for non-employee directors.
- If any other matter is properly presented at the Annual Meeting, your proxy
will vote on that matter in his discretion. If anyone nominated to serve as
a director is not able to accept nomination or election, your proxy may vote
for the election of other persons recommended by the Board of Directors to
serve as directors.
VOTING PROCEDURES
The presence, in person or by proxy, of the holders of a majority of the
shares entitled to vote generally for the election of directors is necessary to
constitute a quorum at the annual meeting. Abstentions and broker "non-votes"
are counted as present and entitled to vote for purposes of determining a
quorum. A broker "non-vote" occurs when one holding shares for a beneficial
owner does not vote on a particular proposal because the holder does not have
discretionary voting power to vote with respect to
1
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that item and has not received instructions from the beneficial owner.
A plurality of the votes cast at the meeting is required for the election of a
director. Abstentions and broker "non-votes" are not counted for purposes of the
election of a director.
The affirmative vote of the holders of a majority of the outstanding shares of
Common Stock and Preferred Stock entitled to vote is required to approve the
proposal to amend the Certificate of Incorporation to increase the number of
authorized shares of Common Stock. The affirmative vote of the holders of a
majority of the shares present in person or represented by proxy and entitled to
vote at the meeting is required to approve the equity plan for non-employee
directors.
An abstention or a broker "non-vote" is counted as a vote against the proposal
to amend the Certificate of Incorporation and to adopt the equity plan for the
non-employee directors.
NOMINEES FOR ELECTION AS DIRECTORS
Corning's Board of Directors is divided into three classes. Each of the
nominees for the office of director is a member of the present Board of
Directors. Messrs. Houghton and O'Connor were elected by Corning's security
holders and Dr. Rieman was elected a director by the full Board on July 23,
1999. The terms of James R. Houghton, James J. O'Connor and Deborah D. Rieman
expire this year. Under the terms of the Board's retirement policy, Dr. Robert
Barker and Mr. James W. Kinnear are not standing for re-election. No nominee now
owns beneficially any of the securities (other than directors' qualifying
shares) of any of Corning's subsidiary companies. We have included below certain
information about the nominees for election as directors and the directors who
will continue in office after the Annual Meeting.
NOMINEES FOR ELECTION FOR TERMS EXPIRING IN 2003
<TABLE>
<S> <C>
JAMES R. HOUGHTON++
[PHOTO] CHAIRMAN EMERITUS
CORNING INCORPORATED
Mr. Houghton joined Corning in 1962. He was elected
a vice president of Corning and general manager of
the Consumer Products Division in 1968, vice
chairman in 1971, chairman of the executive
committee and chief strategic officer in 1980 and
chairman and chief executive officer in April 1983,
retiring in April 1996. Mr. Houghton is a director
of Metropolitan Life Insurance Company, J. P. Mor-
gan & Co. Incorporated and Exxon Corporation. He is
a trustee of The Metropolitan Museum of Art, The
Pierpont Morgan Library and The Corning Museum of
Glass and a member of The Harvard Corporation.
Director since 1969. Age 63.
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
JAMES J. O'CONNOR++
[PHOTO] RETIRED CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE
OFFICER
UNICOM CORPORATION
Mr. O'Connor joined Commonwealth Edison Company in
1963. He became president in 1977, a director in
1978 and chairman and chief executive officer in
1980. In 1994 he was also named chairman and chief
executive officer of Unicom Corporation, which then
became the parent company of Commonwealth Edison,
retiring in 1998. Mr. O'Connor is a director of
Tribune Company, American National Can Group, Inc.,
Smurfit-Stone Container Corporation and United
Airlines. Director since 1984. Age 62.
DEBORAH D. RIEMAN
[PHOTO] ENTREPRENEUR IN RESIDENCE
U.S. VENTURE PARTNERS
Dr. Rieman has more than eighteen years of
experience in the software industry. She is
currently entrepreneur in residence at U.S. Venture
Partners and most recently served as executive
director of Check Point Software Technologies,
having served as president and chief executive
officer of Check Point Software's U.S. subsidiary
from 1995 to March 1999. Dr. Rieman is a director of
Altera Corporation, Alchemedia Corporation and
Enonymous Corporation. Director since 1999. Age 50.
DIRECTORS WHOSE TERMS WILL EXPIRE IN 2002
JOHN SEELY BROWN++
[PHOTO] VICE PRESIDENT AND CHIEF SCIENTIST
XEROX CORPORATION
Dr. Brown has served Xerox Corporation since 1978 in
various scientific research positions, in 1986 being
elected vice president in charge of advanced
research, in 1990 being appointed director of the
Palo Alto Research Center, and in 1992 being named
chief scientist of Xerox. Dr. Brown is a director of
Polycom, Inc. and Varian Associates Inc. Director
since 1996. Age 59.
</TABLE>
3
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<TABLE>
<S> <C>
GORDON GUND++
[PHOTO] PRESIDENT AND CHIEF EXECUTIVE OFFICER
GUND INVESTMENT CORPORATION
Mr. Gund is, and since his election as a director of
the Corporation has been, the principal owner of the
Cleveland Cavaliers National Basketball Association
team and a member of the Board of Governors of the
National Basketball Association. He is also
principal owner and chairman of Nationwide
Advertising Service, Inc. He is a director of the
Kellogg Company. Director since 1990. Age 60.
JOHN M. HENNESSY++
[PHOTO] CHAIRMAN PRIVATE EQUITY
CREDIT SUISSE FIRST BOSTON CORPORATION
Mr. Hennessy became managing director of First
Boston Corporation in 1974 after serving the public
in various financial positions. In 1989 he was
elected chairman of the executive board and group
chief executive officer of CS First Boston Inc. He
retired from the latter position on December 31,
1996. Mr. Hennessy is a director of M.I.T.
Corporation and Credit Suisse Group, Zurich.
Director since 1989. Age 63.
JOHN W. LOOSE*
[PHOTO] PRESIDENT AND CHIEF OPERATING OFFICER
CORNING INCORPORATED
Mr. Loose has served Corning in various commercial
and management positions since 1964, being elected
executive vice president, Information Display Group,
in 1990, president of Corning Vitro Corporation
(later named Corning Consumer Products Company) in
1993, President of Corning Communications in 1996
and to his present position effective January 1,
2000. Mr. Loose is a director of Polaroid
Corporation and chairman of the board of Siecor Cor-
poration. Director since 1996. Age 58.
</TABLE>
4
<PAGE>
<TABLE>
<S> <C>
H. ONNO RUDING++
[PHOTO] VICE CHAIRMAN
CITIBANK, N.A.
Dr. Ruding has served private firms and the public
(serving as Minister of Finance of The Netherlands
from 1982-1989) in various financial positions,
serving as a director of Citicorp and Citibank, N.A.
from 1990 and 1998, respectively, to the present and
vice chairman of Citibank, N.A. from 1992 to the
present. Dr. Ruding is a director of Citicorp and
Citibank, N.A., Compass Ltd. and Pechiney, an
advisory director of Unilever N.V. and Unilever PLC,
an advisor to Robeco, a trustee of Mount Sinai
School of Medicine and Mount Sinai NYU Health and a
member of the Committee for European Monetary Union
and the Trilateral Commission. Director since 1995.
Age 60.
DIRECTORS WHOSE TERMS WILL EXPIRE 2001
ROGER G. ACKERMAN*
[PHOTO] CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
CORNING INCORPORATED
Mr. Ackerman joined Corning in 1962 and was elected
group president of Corning in 1985, president and
chief operating officer in 1990 and to his present
position in 1996. Mr. Ackerman is a director of The
Pittston Company and The Massachusetts Mutual Life
Insurance Company, chairman of The Business Council
of New York State and president of the Foundation
for the Malcolm Baldridge National Quality Award.
Director since 1985. Age 61.
JOHN H. FOSTER++
[PHOTO] MANAGING PARTNER
FOSTER MANAGEMENT COMPANY
Mr. Foster is founder and managing partner of Foster
Management Company. He is also chairman of the board
of XYAN.com; and founder and former chairman of the
board of NovaCare, Inc., a trustee of the Hospital
for Special Surgery, the Children's Hospital of
Philadelphia and a member of the Dean's Council of
the Harvard School of Public Health, the Council of
The Woodrow Wilson Center and the Amos Tuck School
Board of Overseers. Director since 1994. Age 57.
</TABLE>
5
<PAGE>
<TABLE>
<S> <C>
NORMAN E. GARRITY*
[PHOTO] VICE CHAIRMAN
CORNING INCORPORATED
Mr. Garrity joined Corning in 1966 and was named a
vice president in 1984, senior vice president of
manufacturing and engineering for the Specialty
Materials Group in 1987, executive vice president in
1990, President, Corning Technologies in 1996 and to
his present position effective January 1, 2000.
Mr. Garrity is a director of Work & Technology
Institute, the National Association of
Manufacturers, a trustee of Bucknell University and
co-chair of the Coalition for Open Trade. Director
since 1996. Age 58.
CATHERINE A. REIN++
[PHOTO] PRESIDENT AND CHIEF EXECUTIVE OFFICER
METROPOLITAN PROPERTY AND CASUALTY INSURANCE COMPANY
Ms. Rein joined Metropolitan Life Insurance Company
in 1985, being named executive vice president in
charge of corporate services in 1989 and senior
executive vice president in charge of the business
services group in 1998. She was elected to her
present position in 1999. Ms. Rein is a director of
the Bank of New York, Inc., New England Financial
Services, Inc., Inroads/NYC, Inc. and GPU, Inc. and
trustee of the New York University Law Center Foun-
dation. Director since 1990. Age 57.
WILLIAM D. SMITHBURG++
[PHOTO] RETIRED CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE
OFFICER
THE QUAKER OATS COMPANY
Mr. Smithburg joined Quaker Oats in 1966, being
elected president in 1979 and chairman and chief
executive officer in 1983. He also served as
president from November 1990 to January 1993 and
from November 1995 to November 1997 when he
retired. Mr. Smithburg is a director of Abbott
Laboratories, Northern Trust Corporation and Prime
Capital Corp. Director since 1987. Age 61.
</TABLE>
- --------------------------
* Member of the Executive Committee
++ Alternate member of the Executive Committee
6
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Paragraphs (a) and (b) below set forth information about the beneficial
ownership of Corning's Common Stock as of December 31, 1999. Unless otherwise
indicated, the persons named have sole voting and investment power with respect
to the shares listed.
(a) To the knowledge of the management, the following owned more than 5% of
Corning's outstanding shares of Common Stock:
<TABLE>
<CAPTION>
SHARES OWNED
NAME AND ADDRESS AND NATURE OF PERCENT
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- ------------------------------------------- -------------------- --------
<S> <C> <C>
Capital Research and Management Company 13,228,500 Common(1) 5.38%
333 South Hope Street
Los Angeles, CA 90071
</TABLE>
- --------------------------
(1) Capital Research and Management Company has sole investment power and no
voting power with respect to such shares.
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<PAGE>
(b) The number of shares of Corning's Common Stock (and the voting equivalent
represented by shares of Preferred Stock) owned by the directors and nominees
for directors, by the chief executive officer and the four other most highly
compensated executive officers (the "named executive officers") and by all
directors and executive officers as a group is as follows:
<TABLE>
<CAPTION>
SHARES OWNED
AND NATURE OF PERCENT
BENEFICIAL OF
NAME OWNERSHIP(1)(2)(3) CLASS(7)
- ---- ------------------ --------
<S> <C> <C>
DIRECTORS
Robert Barker 7,447(4) --
- ----------------------------------------------------
John S. Brown 7,429(4) --
- ----------------------------------------------------
John H. Foster 7,829(4) --
- ----------------------------------------------------
Gordon Gund 303,357(4) --
- ----------------------------------------------------
John M. Hennessy 10,945(4) --
- ----------------------------------------------------
James R. Houghton 736,983(5) --
- ----------------------------------------------------
James W. Kinnear 11,514(4) --
- ----------------------------------------------------
James J. O'Connor 10,968(4) --
- ----------------------------------------------------
Catherine A. Rein 10,410(4) --
- ----------------------------------------------------
Deborah D. Rieman 4,400(4) --
- ----------------------------------------------------
H. Onno Ruding 8,302(4) --
- ----------------------------------------------------
William D. Smithburg 11,429(4) --
- ----------------------------------------------------
NAMED EXECUTIVE OFFICERS
(*also serve as directors)
Roger G. Ackerman* 724,885 --
- ----------------------------------------------------
Charles W. Deneka 182,749 --
- ----------------------------------------------------
Norman E. Garrity* 497,034 --
- ----------------------------------------------------
John W. Loose* 543,030 --
- ----------------------------------------------------
Wendell P. Weeks 188,303 --
- ----------------------------------------------------
All Directors and
Executive Officers as
a Group 4,509,204(6) 1.83%
- ----------------------------------------------------
</TABLE>
(1) Includes shares of Common Stock, subject to forfeiture and restrictions on
transfer, granted under Corning's Incentive Stock Plans as well as options to
purchase shares of Common Stock exercisable within 60 days under Corning's Stock
Option Plans. Messrs. Ackerman, Deneka, Garrity, Houghton, Loose and Weeks have
the right to purchase 373,536; 97,601; 282,950; 241,701; 268,304 and 80,900
shares, respectively, pursuant to such options. All directors and executive
officers as a group hold options to purchase 1,884,414 such shares.
(2) Includes shares of Common Stock, subject to forfeiture and restrictions on
transfer, issued under Corning's Restricted Stock Plans for Non-Employee
Directors.
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(3) Includes shares of Common Stock and the voting equivalent in Preferred
Stock, on the basis of four shares of Common Stock for each share of Preferred
Stock, held by The Chase Manhattan Bank, N.A. as the trustee of Corning's
Investment Plans for the benefit of the members of the group, who may instruct
the trustee as to the voting of such shares. If no instructions are received,
the trustee votes the shares in the same proportion as it votes the shares for
which instructions were received. Shares of Preferred Stock may be held only by
the trustee. The power to dispose of shares of Common and Preferred Stock is
also restricted by the provisions of the Plans. The trustee holds for the
benefit of Messrs. Ackerman, Deneka, Garrity, Loose and Weeks, and all directors
and executive officers as a group the equivalent of 26,651; 184; 1,996; 14,471
and 2,452 shares of Common Stock, respectively. It also holds for the benefit of
all employees who participate in the Plans the equivalent of 8,673,874 shares of
Common Stock (being 3.5% of the Class), each entitled to one vote, being
8,181,506 shares of Common Stock and the voting equivalent of 123,092 shares of
Preferred Stock (being 100% of the Class), each entitled to four votes.
(4) In addition, Messrs. Barker, Brown, Foster, Gund, Hennessy, Kinnear,
O'Connor, Ruding and Smithburg and Ms. Rein have credited to their accounts the
equivalent of 14,453; 3,542; 5,406; 10,931; 13,141; 22,298; 9,556; 2,184; 18,338
and 2,515 shares, respectively, of Common Stock in phantom form under Corning's
Deferred Compensation Plan for Directors. Deferred fees will be paid solely in
cash at or following termination of service as a director.
(5) Includes 277,465 shares held in trusts by Market Street Trust Company as a
co-trustee for the benefit of Mr. Houghton as income beneficiary. Does not
include 7,230,157 shares held in trusts by Market Street Trust Company, as to
which Mr. Houghton disclaims beneficial ownership. Market Street Trust Company
is a limited purpose trust company controlled by the Houghton family, the
directors of which include James R. Houghton and other Houghton family members.
(6) Does not include 48,800 shares owned by the spouses and minor children of
certain executive officers and directors as to which such officers and directors
disclaim beneficial ownership.
(7) Unless otherwise indicated, does not exceed 1% of the Class of Common Stock.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION
The Compensation Committee of the Board of Directors, composed entirely of
non-employee directors, administers executive compensation at Corning. The
following is the Committee's report.
The Compensation Committee reviews and recommends executive compensation
levels, cash and equity incentives for executive officers and reports such
recommendations to the Board for its consideration and action.
The philosophy underlying, and the strategies guiding, the Committee's
recommendations regarding the compensation program, the impact of performance
within that program and a description of actions affecting 1999 compensation for
Mr. Ackerman,
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Chairman of the Board and Chief Executive Officer, are discussed below.
COMPENSATION PHILOSOPHY
The Committee believes that executive compensation should be based on
objective measures of performance at the individual, corporate and applicable
business unit level, should be driven by the long-term interests of the
shareholders and should be directly linked to corporate performance.
COMPENSATION STRATEGY
The basic strategic compensation principles are as follows:
- Executive compensation will reward performance and contribution to
shareholder value and be competitive with positions of similar
responsibility at other companies of comparable complexity and size.
- As employees assume greater responsibilities, an increasing share of their
total compensation package will be derived from variable incentive
compensation (both of a long- and short-term nature) generated by
achievement of objectives producing long-term growth in corporate
performance and shareholder value.
- Performance-based equity incentives, including stock option grants, are
effective ways to align the long-term interests of employees with those of
shareholders.
- Stock ownership fosters commitment to long-term shareholder value.
Executives are encouraged to own and hold Common Stock through the design of
Corning's long-term equity plans and in communications which stress the
commitment to long-term value.
- The benefits package for executives will be substantially identical to that
offered to all salaried employees and will be designed to encourage
long-term commitment to Corning.
The executive compensation program consists of three elements: base salary;
annual cash incentives; and long-term incentives, including cash, equity and
stock options. The Committee tests annually each element of the compensation
program against market surveys provided by several independent compensation
consultants. These surveys currently include companies engaged in a variety of
manufacturing and service industries, many of which are "Fortune 500" companies,
and companies included in the S&P 500 Index and some of which are included in
the S&P Diversified Manufacturing Index.
COMPENSATION DEDUCTIBILITY
As a matter of practice, the Committee intends to set performance-based goals
annually under the Variable Compensation Plan and the long-term incentive plan
(known as the Corporate Performance Plan) and to deduct compensation paid under
these Plans to the extent consistent with the provisions of Section 162(m) of
the Internal Revenue Code of 1986, as amended.
COMPENSATION PROGRAM
The annual compensation of the named executives shown in the "Salary" and
"Bonus" columns of the Summary Compensation Table, and the Committee's
recommendations to adjust salary levels and bonus targets,
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are based on an individual's responsibilities, overall corporate performance,
external comparative compensation information and performance against
established financial goals, such as return on equity, net income and earnings
per share.
Annual variable incentives are paid in cash through the Variable Compensation
Plan pursuant to which the Committee sets minimum, target and maximum awards
based on position level. Awards are earned based on achievement of annual
predetermined net earnings goals set by the Committee. In 1999, actual
performance was very strong and exceeded the financial goals established by the
Committee.
Under the 1998 Employee Equity Participation Program and predecessor programs,
Corning developed a series of performance-based plans which provide the
mechanism to reward improvement in corporate performance as measured by earnings
per share.
In 1999, the Committee approved a new performance-based executive compensation
plan in order to realign executive compensation with the external marketplace
and the interests of shareholders. Under this plan, the Committee has placed
greater emphasis on the value of stock options and has established multi-year
perfor-mance cash targets for each named executive officer.
In December 1999, the Committee granted to the named executive officers stock
options for 2000 and performance-based cash awards for the three-year
performance period 2000-2002. These stock option grants are indicated in the
Option Grant Table.
The pension and welfare benefits provided to executives are substantially
equal to those provided to all salaried employees. Employees whose pensionable
earnings exceed federal limits, and who participate in the underlying qualified
plans, are eligible to participate in non-qualified supplemental pension and
supplemental investment plans.
CEO COMPENSATION ACTIONS--1999
1999 was a year of significant accomplishment with outstanding financial
performance, after a disappointing 1998. All of the executive compensation
programs reflect the improved results in 1999 as compared to 1998.
BASE SALARY: Effective January 1, 1999, the Committee increased
Mr. Ackerman's base salary for 1999 by 4.5%, from $780,000 per annum to $815,000
per annum, while maintaining his incentive target for 1999 at 85% of base
salary.
ANNUAL INCENTIVES: Mr. Ackerman's bonus for 1999 was composed of two parts:
First, Mr. Ackerman received 170% of his 1999 base salary under the Variable
Compensation Plan. This award was based on Corning's achieving net profit after
tax equivalent to 200% of the target opportunity the Committee set in
February 1999. Second, Mr. Ackerman received 8.54% (1999 minimum = 0%;
maximum = 10%) of his base salary under the Corporation's GoalSharing Plan, a
variable compensation plan available to almost all employees.
LONG-TERM INCENTIVES: In December 1999, Mr. Ackerman was awarded options
covering 107,000 shares of Corning Common Stock for 2000 and a performance cash
target incentive of
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$1,125,000 for the 3-year cycle, 2000-2002, under the Corporate Performance
Plan.
CONCLUSION
The Committee believes that the quality of executive leadership significantly
affects long-term performance and that it is in the best interest of the
shareholders to compensate fairly executive leadership for achievement meeting
or exceeding the high standards set by the Committee, so long as there is
corresponding risk when performance falls short of such standards. One of the
Committee's primary goals is to relate compensation to corporate performance.
Based on Corning's performance in 1999, the Committee believes that Corning's
current executive compensation program meets such standards and has contributed,
and will continue to contribute, to Corning's success and the long-term success
of its shareholders.
The Compensation Committee:
James W. Kinnear, Chairman
James J. O'Connor
William D. Smithburg
12
<PAGE>
PERFORMANCE GRAPH
The following graph illustrates the cumulative total shareholder return over
the last five years of Corning's Common Stock, the S&P 500 and the S&P
Diversified Manufacturing Companies (in which Corning is included). The graph
includes the capital weighted performance results of those
companies in the diversified manufacturing companies classification that are
also included in the S&P 500. Prior to 1997 Corning compared its shareholder
return to the S&P Miscellaneous Industrial Companies classification. This
classification is no longer published.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG CORNING INCORPORATED,
S&P 500 AND S&P MANUFACTURING (DIVERSIFIED) COMPANIES
(FISCAL YEARS ENDING DECEMBER 31)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
Corning Incorporated 100 109.5 160.8 156.2 193.1 559.5
S&P 500 100 137.6 169.1 225.5 290 351
S&P Manufacturing (Diversified) 100 140.8 194.1 231.1 267.8 328.3
</TABLE>
13
<PAGE>
EXECUTIVE COMPENSATION
The following tables and charts show for the last three years the compensation
paid by Corning to its chief executive officer and the four other most highly
compensated executive officers whose aggregate salary and bonus exceeded
$100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-----------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
- -------------------------------------------------------------------- ----------------------- ---------
OTHER ALL
ANNUAL RESTRICTED SECURITIES INCENTIVE OTHER
NAME AND COMPEN- STOCK UNDERLYING PLAN COMPEN-
PRINCIPAL POSITION YEAR SALARY BONUS SATION(1) AWARDS(2) OPTIONS(3) PAYOUTS SATION(4)
- ------------------ -------- -------- ---------- --------- ---------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Roger G. Ackerman, 1999 $815,000 $1,455,101 $81,839 $ -- 113,226 $0 $72,995
Chairman of the 1998 780,000 367,107 72,234 582,188 207,000 0 120,551
Board 1997 750,000 1,172,250 82,213 2,918,156 14,000 0 95,285
Norman E. Garrity, 1999 555,000 824,397 98,859 1,910,000 56,000 0 41,295
President, 1998 530,000 209,297 68,674 329,913 127,000 0 67,848
Corning Technologies 1997 500,000 606,500 61,310 1,778,081 32,000 0 56,834
John W. Loose,
President, 1999 555,000 824,397 36,086 2,865,000 66,666 0 47,195
Corning 1998 530,000 209,297 63,783 465,750 127,000 0 70,179
Communications 1997 500,000 606,500 62,139 1,924,486 32,000 0 55,813
Charles W. Deneka,
Senior Vice 1999 325,000 417,755 38,732 -- 25,974 0 25,963
President, 1998 280,000 95,462 15,941 621,673 59,000 0 31,963
Science & Technology 1997 250,000 237,625 25,070 1,017,423 30,000 0 22,832
Wendell P. Weeks,
Executive Vice 1999 325,000 417,755 31,752 58,176 42,050 0 15,257
President, 1998 300,000 90,162 23,212 -- 64,000 0 17,748
Opto-Electronics 1997 220,000 182,940 14,124 3,018,954 16,000 0 8,085
</TABLE>
(1) Includes tax gross-up payments.
(2) At year end 1999, Messrs. Ackerman, Deneka, Garrity, Loose and Weeks held an
aggregate of 251,664; 80,537; 165,310; 175,311 and 93,637 shares of
restricted stock, respectively, having an aggregate value on December 31,
1999 of $32,449,053; $10,384,280; $21,314,741; $22,604,250 and $12,073,367,
respectively. Certain of such shares are subject to restrictions on transfer
until the executive officer retires at or after age 60 and are subject to
forfeiture prior to age 60 in whole if such officer voluntarily terminates
employment with Corning and in part if such officer's employment is
terminated by Corning. Dividends are paid to such individuals on all shares
of restricted Common Stock held by them.
(3) Includes Additional Options which are described in the table captioned
"Option/ SAR Grants in Last Fiscal Year" on page .
(4) Represents amounts contributed by Corning to the Investment Plan and a
non-qualified investment plan maintained by Corning to provide employees the
benefits which would have been available pursuant to the terms of Corning's
Investment Plan but for limitations on contributions to tax-qualified plans
imposed pursuant to the Employee Retirement Income Security Act.
Under an existing severance policy Corning will provide to all salaried
employees in certain events compensation in amounts ranging between eight weeks
(for employees
14
<PAGE>
with at least one year of service) and fifty-two weeks (for employees with
twenty or more years of service). In addition, Corning will provide to certain
of its officers and senior employees, including the named executive officers, in
certain events up to three years of cash compensation in light of the length of
time anticipated in securing comparable employment. These events include a
constructive termination of employment as a result of a substantial change in
the employee's responsibilities, compensation levels, relocation and similar
matters following a change in Corning's ownership and management.
OPTION/SAR GRANTS IN LAST FISCAL YEAR(1)
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES OF STOCK
INDIVIDUAL GRANTS PRICE APPRECIATION FOR OPTION TERM(3)
----------------------------------------------- --------------------------------------------
% OF TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED
UNDERLYING TO
OPTIONS EMPLOYEES
GRANTED IN FISCAL EXERCISE EXPIRATION GAIN AT GAIN AT GAIN AT
NAME (2) YEAR PRICE DATE 0% 5% 10%
- ---------------------- ---------- ---------- -------- ---------- -------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Roger G. Ackerman 107,000(4) 6.76% $95.50 11/30/2009 $0 $ 6,426,360 $ 16,285,657
Additional Options: 1,659 .10% 60.31 12/6/2004 0 27,643 61,084
4,567 .28% 58.50 12/6/2004 0 73,814 163,110
Norman E. Garrity 56,000(4) 3.53% 95.50 11/30/2009 0 3,363,328 8,523,335
John W. Loose 65,000(4) 4.10% 95.50 11/30/2009 0 3,903,863 9,893,156
Additional Option: 1,666 .10% 60.30 12/6/2004 0 27,631 61,057
Charles W. Deneka 24,000(4) 1.51% 95.50 11/30/2009 0 1,441,426 3,652,858
Additional Option: 1,974 .12% 73.38 2/4/2007 0 69,160 165,651
Wendell P. Weeks 39,000(4) 2.46% 95.50 11/30/2009 0 2,342,318 5,935,894
Additional Options: 503 .03% 61.75 4/27/2004 0 8,581 18,963
972 .06% 61.75 12/6/2004 0 16,583 36,643
1,575 .09% 63.53 12/5/2005 0 34,030 77,202
All Shareholders as a N/A N/A N/A N/A 0 12,096,198,553 30,528,501,110
group
All Optionees as a 1,582,029(5) 100% 78.22(6) 2009 0 7,960,174 196,756,629
group
Optionee Gain As % Of All Shareholders Gain .64% .64%
</TABLE>
(1) No SARs were granted.
(2) The stock option agreements also provide that an additional option
("Additional Option") may be granted if the optionee uses shares of
Corning's Common Stock to pay the purchase price of an option. The
Additional Option will cover the number of shares tendered in payment of the
option price, will be granted at the then fair market value of Corning's
Common Stock, will become exercisable only after the lapse of twelve months
and will expire on the expiration date of the original option.
(3) The dollar amounts set forth under these columns are the result of
calculations at 0% and at the 5% and 10% rates established by the Securities
and Exchange Commission and therefore are not intended to forecast future
appreciation of Corning's stock price.
(4) The stock option agreements provide that one half of the options will become
exercisable on December 1, 2001 and all options will become exercisable on
December 1, 2002. Includes Additional Options covering 12,634 shares.
(5) Includes Additional Options covering 215,429 shares.
(6) The exercise price is a weighted average of option prices relating to grants
of options, including Additional Options, made on various occasions in 1999.
15
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL
YEAR AND FISCAL YEAR-END OPTION/SAR VALUES(1)
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS
SHARES FISCAL YEAR END AT FISCAL YEAR END
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Roger G. Ackerman 143,424 $3,979,534 144,456 445,806 $14,365,055 $36,352,295
Norman E. Garrity 62,886 2,577,682 144,160 258,290 14,207,807 21,471,689
John W. Loose 49,981 1,228,572 131,311 267,159 12,726,906 21,675,171
Charles W. Deneka 39,394 880,303 26,151 126,924 2,508,870 10,643,150
Wendell P. Weeks 29,189 1,080,459 17,543 137,407 1,644,678 10,683,913
</TABLE>
(1) There are no SARs outstanding.
PENSION PLAN
Corning has a defined benefit Pension Plan under which it pays benefits based
upon career earnings (regular salary and cash awards such as those paid under
its Variable Compensation Plans) and years of credited service. Employees are
required to contribute 2% of compensation in excess of the social security wage
base up to the compensation limits imposed by the Internal Revenue Code.
Salaried employees may contribute 2% of earnings up to the social security wage
base to improve pension benefits. Corning reviews and adjusts the benefit
formula periodically for inflationary and other factors. Corning's contributions
to the Plan are determined by the Plan's actuaries and are not determined on an
individual basis. The amount of benefits payable under the Plan and attributable
to Corning's contributions is subject to the provisions of the Employee
Retirement Income Security Act and the Internal Revenue Code.
Corning maintains non-qualified supplemental pension plans pursuant to which
it will pay amounts approximately equal to the difference between the benefits
provided under the Pension Plan and benefits which would have been paid
thereunder but for the limitations of the Employee Retirement Income Security
Act and the Internal Revenue Code. Certain employees, including the named
executive officers, participate in the Executive Supplemental Pension Plan which
pays benefits based upon final average compensation (the highest five
consecutive calendar years in the ten calendar years immediately preceding
retirement) and years of credited service. Certain of the benefits payable under
the Executive Supplemental Pension Plan are presently funded and vested on an
individual basis.
The table below sets forth the estimated annual amounts payable under the
Pension Plan and the Executive Supplemental Pension Plan. These amounts are
based upon the straight life annuity option and are not subject to reduction for
Social Security benefits or other payments or offsets. Additional benefits may
be payable to persons who contribute voluntarily to the Pension Plan. The Plans'
normal retirement age is 65 with 5 years of credited service.
16
<PAGE>
YEARS OF SERVICE
<TABLE>
<CAPTION>
FINAL AVERAGE PAY 15 20 25 30 35 40
- ----------------- -------- -------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
$ 500,000 $109,800 $146,400 $183,000 $ 219,600 $ 256,200 $ 293,700
600,000 132,300 176,400 220,500 264,600 308,700 353,700
700,000 154,800 206,400 258,000 309,600 361,200 413,700
800,000 177,300 236,400 295,500 354,600 413,700 473,700
900,000 199,800 266,400 333,000 399,600 466,200 533,700
1,000,000 222,300 296,400 370,500 444,600 518,700 593,700
1,100,000 244,800 326,400 408,000 489,600 571,200 653,700
1,200,000 267,300 356,400 445,500 534,600 623,700 713,700
1,300,000 289,800 386,400 483,000 579,600 676,200 773,700
1,400,000 312,300 416,400 520,500 624,600 728,700 833,700
1,500,000 334,800 446,400 558,000 669,600 781,200 893,700
1,600,000 357,300 476,400 595,500 714,600 833,700 953,700
1,700,000 379,800 506,400 633,000 759,600 886,200 1,013,700
1,800,000 402,300 536,400 670,500 804,600 938,700 1,073,700
1,900,000 424,800 566,400 708,000 849,600 991,200 1,133,700
2,000,000 447,300 596,400 745,500 894,600 1,043,700 1,193,700
2,100,000 469,800 626,400 783,000 939,600 1,096,200 1,253,700
2,200,000 492,300 656,400 820,500 984,600 1,148,700 1,313,700
2,300,000 514,800 686,400 858,000 1,029,600 1,201,200 1,373,700
2,400,000 537,300 716,400 895,500 1,074,600 1,253,700 1,433,700
2,500,000 559,800 746,400 933,000 1,119,600 1,306,200 1,493,700
</TABLE>
The compensation covered by the Pension Plan and the Executive Supplemental
Pension Plan for the named executive officers is the salary and bonus set forth
in the Summary Compensation Table. The bonus is included as compensation in the
calendar year paid. Messrs. Ackerman, Deneka, Garrity, Loose and Weeks have 37,
27, 33, 35 and 16 years of credited service, respectively.
AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF
AUTHORIZED COMMON SHARES
The Board of Directors has approved an amendment to Corning's Restated
Certificate of Incorporation to increase the number of shares of authorized
Common Stock from 500,000,000 to 1,200,000,000 shares. The Board has directed
that the amendment be submitted for consideration and action at the Annual
Meeting.
VOTE REQUIRED
The proposed amendment requires the affirmative vote of a majority of the
total number of outstanding shares of the Common and Preferred Stock entitled to
vote at the meeting.
REASONS FOR THE AMENDMENT
The Board believes it is in Corning's best interest to provide additional
flexibility to issue securities from time to time for a number of business
purposes.
As of February 2, 2000, Corning had 275,814,906 outstanding shares of Common
Stock and had an aggregate of 4,683,602 shares reserved for issuance under
various stock-based incentive plans--its Stock Option Plans, its Incentive Stock
Plans and upon exercise of substitute stock options granted in connection with
several acquisitions. There are also 2,619,222 shares reserved for issue upon
conversion of outstanding Convertible Subordinated Debentures of Oak Industries,
a recently acquired subsidiary, and Corning's Preferred Stock. In addition,
17
<PAGE>
25,145,419 shares are held as treasury stock.
The Board believes it advisable to increase the authorized number of shares of
Common Stock because there may be insufficient shares available for issuance
from time to time for purposes which the Board may determine to be in Corning's
interest. These purposes would include financing growth, stock splits, stock
dividends, providing shares for employee benefit plans, dividend reinvestment
plans, possible future acquisitions and other general corporate purposes related
to the development and expansion of the corporate enterprise. The Board believes
it will be advantageous to be able to act promptly with respect to investment or
acquisition opportunities without the expense and delay involved in convening
special shareholder meetings to authorize additional shares which may be issued
in connection with such opportunities. Corning is not currently planning any
material acquisition or recapitalization, although such matters may be
considered from time to time.
While the Board believes it advisable to increase the number of authorized
shares of Common Stock for the reasons set forth above, the Board realizes that
the increase in the number of authorized shares of Common Stock could be used
for anti-takeover purposes as Corning could issue additional shares to make more
difficult or discourage an attempt to acquire control of Corning. Corning is not
aware of any effort to accumulate its securities or obtain control by means of a
tender offer, proxy contest or otherwise. The amendment is being proposed to
provide additional flexibility to finance growth.
The consolidated financial statements, audited by PricewaterhouseCoopers LLP,
which are contained in the Corporation's 1999 Annual Report which has been
mailed to the Corporation's security holders pursuant to Rule 14a-3(b) of
Regulation 14A of the General Rules and Regulations under the Securities and
Exchange Act of 1934, are incorporated in this document by reference.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ADOPTION OF THE AMENDMENT
INCREASING THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK.
ADOPTION OF AN EQUITY PLAN FOR NON-EMPLOYEE DIRECTORS
On February 2, 2000, subject to the approval of the holders of Corning's
Common Stock and Preferred Stock, the Board of Directors adopted a new equity
plan for non-employee directors under which the Board from time to time may make
discretionary awards of shares and/or grants of options to purchase shares of
Corning's Common Stock to non-employee directors. A summary of the principal
features of the equity plan for non-employee directors is set forth below. The
full text of the Plan is available without charge upon request.
SUMMARY OF PLAN FEATURES
PURPOSES. The Plan will assist Corning in attracting and retaining
individuals of exceptional ability to serve as its directors and to more closely
align their interests with those of shareholders.
ADMINISTRATION. The Plan is to be administered by the Compensation Committee
of the Board of Directors.
18
<PAGE>
The Committee will have broad discretionary authority (within the parameters
specified in the Plan) to determine when and to which eligible persons shares
may be awarded and/or options may be granted; to determine the terms of each
award made and/or option granted; to construe, interpret, and settle any dispute
concerning the Plan, any shares awarded and/or options granted; and to make any
other decision or take any other action that it deems necessary or desirable for
the administration or operation of the Plan.
ELIGIBILITY. The only persons eligible to participate in the Plan are persons
who, at the time of an award of shares or the grant of an option, are directors
who are not, and have not been in the last three years, employees of Corning or
any affiliated entity. Currently, eleven of Corning's fourteen directors are
eligible to participate in the Plan.
AVAILABLE SHARES; ADJUSTMENTS. Subject to adjustment as contemplated by the
Plan, the maximum number of shares of Common Stock that may be used for awards
and the settlement of options is 200,000. If an option granted under the plan
terminates or expires without having been exercised in full, or if shares
awarded subject to restrictions are forfeited, the shares that were subject to
the option or the restrictions will become available for new awards or option
grants under the Plan. Shares used for Plan purposes may be either shares held
in Corning's treasury or new issuances, as the Board determines.
TERMS. The Plan affords the Committee or the Board the discretion to
determine, at the time of an award or the grant of an option, the number of
shares that will be awarded or covered by the option; the restrictions on
transfer or the possibility of forfeiture which may be imposed on an award; and
the time at which the option (or any portion of it) first will become
exercisable, and the latest date on which it may be exercised. Subject to
adjustment as contemplated by the Plan, the per share exercise price of each
option will be not less than the fair market value of a share of Common Stock on
the date the option is granted. No option granted under the Plan may have an
expiration later than ten years after its grant. Each option will terminate in
its entirety on the earliest of (1) the third anniversary of the date on which
the grantee ceased to be a Corning director, (2) the date on which written
notice of termination of the option is given to the former director (or such
later date as is specified in that notice), and (3) the option's expiration
date.
Without the Committee's express consent, each option will be non-transferable
except by will or the laws of descent and distribution and during the director's
lifetime may be exercised only by the director. To the extent then exercisable,
an option may be exercised in whole or in part by giving written notice of
exercise in the manner contemplated in the Plan and paying in full in cash or
with shares of Corning's Common Stock the aggregate exercise price for the
number of shares for which the option is being exercised.
DURATION OF PLAN; AMENDMENTS. If approved by the shareholders at the Annual
Meeting, the Plan will continue until April 30, 2010 unless the Board terminates
it earlier. The Board may at any time and from time to time amend, modify,
suspend or terminate the Plan, with or without shareholder
19
<PAGE>
approval, except that no amendment or modification will be made without
shareholder approval if such approval is then required by Rule 16b-3 promulgated
under the Securities Exchange Act of 1934 or by the applicable rules of any
national securities exchange on which Corning's Common Stock is then listed, or
if the amendment increases the number of shares of Common Stock available under
the Plan or reduces any exercise price of any option to less than fair market
value at the date of grant. No amendment shall adversely affect any outstanding
award or option without the holder's consent.
CERTAIN TAX CONSIDERATIONS
All options granted under the Plan will be nonqualified stock options (that
is, options that do not qualify as incentive stock options under Section 422 of
the Internal Revenue Code).
In general, under current federal income tax law applicable to nonqualified
stock options, the grant of an option under the Plan is not a taxable event for
the grantee or a deductible event for Corning. However, upon exercise of the
option, the grantee would realize ordinary compensation income measured by the
excess of the fair market value of the acquired shares at the time of exercise
over the exercise price paid, and Corning would be entitled to a deduction equal
to the income realized by the grantee. Upon a subsequent sale of the shares
acquired, the grantee generally would realize a capital gain or loss (long-term
or short-term depending on the length of the holding period preceding
disposition) equal to the positive or negative difference between the grantee's
basis in the shares (usually the market price of the shares at the time of
exercise) and the value received in the sale.
A non-employee director who receives an award of shares of Common Stock under
the Plan will recognize ordinary compensation income in an amount equal to the
fair market value of Corning's Common Stock on the date the shares are no longer
subject to forfeiture. If an award is made subject to the possibility of
forfeiture, the director may elect to be taxed on the fair market value thereof
on the date of receipt under Section 83(b) of the Internal Revenue Code of 1986.
Corning will be entitled to a deduction equal to the amount of income recognized
by the director in the same year in which the director recognizes the income.
VOTE REQUIRED
The holders of a majority of the voting rights of Corning's Common Stock and
Series B Preferred Stock voting at the Annual Meeting must vote in favor of or
FOR the Plan in order for the Plan to become effective. Each share of Common
Stock is entitled to one vote and each share of Preferred Stock is entitled to
four votes.
If the plan is approved, all existing equity plans for non-employee directors
will terminate and no more shares will be granted thereunder.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THIS PLAN.
SHAREHOLDER PROPOSALS
Any shareholder who wishes to present a proposal at the 2001 Annual Meeting
and to have the proposal included in the Proxy Statement and proxy relating to
that meeting must
20
<PAGE>
submit the proposal to Corning's Secretary at One Riverfront Plaza, Corning, New
York 14831, for receipt not later than November 23, 2000.
The proxy committee designated by Corning's Board of Directors may vote on a
discretionary basis on any other shareholder proposal presented at the 2001
Annual Meeting if that proposal is not brought to the Corporation's notice
between December 28, 2000 and January 27, 2001.
MATTERS RELATING TO DIRECTORS
COMPENSATION
During 1999 Corning paid to non-employee directors an annual retainer of
$27,500 and $1,000 for each meeting attended. In lieu of meeting fees, chairmen
of committees received an additional retainer ranging from $4,000 to $7,500,
depending upon the committee chaired.
Directors may defer any portion of their compensation. Amounts deferred shall
be paid only in cash and while deferred may be allocated to (i) an account
earning interest, compounded quarterly, at the rate equal to the greater of the
prime rate of Citibank, N.A. in effect on specified dates or the rate paid on
the stable value fund under Corning's Investment Plans, (ii) an account based
upon the market value of Corning's Common Stock from time to time, or (iii) a
combination of such accounts. At December 31, 1999 eleven directors had elected
to defer compensation.
Under the Restricted Stock Plans for Non-Employee Directors, Corning issued to
each non-employee director elected in 1999 400 shares of Common Stock for each
year specified in the term of service for which such director was elected,
subject to forfeiture and restrictions on transfer, and issued 4,000 shares to
one non-employee director newly elected since the 1999 Annual Meeting, subject
to forfeiture and restrictions on transfer.
Corning has a Directors' Charitable Giving Program funded by insurance
policies on the lives of the directors. In 1999, Corning paid a total of
$396,790 in premiums on such policies. Upon the death of a director, Corning
will donate $1,250,000 (on behalf of a non-employee director) and $1,000,000 (on
behalf of an employee director) to one or more qualified charitable
organizations recommended by such director and approved by Corning. The
directors derive no financial benefit from the Program as all charitable
deductions and cash surrender value of life insurance policies accrue solely to
the Corporation. One must be a director for five years to participate in the
Program. Messrs. Brown, Garrity, Loose and Ruding and Ms. Rieman have less than
five years of service as directors and are not yet eligible to participate.
BOARD MEETINGS
The Board of Directors met six times during 1999. Each director attended at
least 75% of all meetings of the Board of Directors and the meetings of the
committees of which each was a member.
BOARD COMMITTEES
Corning has audit, compensation and nominating committees of the Board of
Directors.
The Audit Committee (Messrs. O'Connor, Barker, Brown and Smithburg and
Ms. Rein) met five times during 1999. It recommends the firm of independent
accountants to
21
<PAGE>
conduct the annual examination of the consolidated financial statements, confers
with such accountants and reviews the scope of the examination and brings to the
entire Board of Directors for review those items relating to such examination or
to accounting practices which the Audit Committee believes merit such review.
The Compensation Committee (Messrs. Kinnear, O'Connor and Smithburg) met five
times during 1999. It makes recommendations to the Board of Directors with
respect to the compensation of officers and executive employees and administers
the Variable Compensation Plan, Cash Incentive Plan, Employee Equity
Participation Program and the Executive Supplemental Pension Plan.
The Nominating and Corporate Governance Committee (Messrs. Houghton, Kinnear
and Ruding) met two times during 1999. It proposed the nominees for election as
directors at the Annual Meeting of Shareholders to be held on April 27, 2000. It
reviews, considers and proposes nominees for election as directors of the
Corporation and makes such other proposals with respect to the organization,
size, composition and operation of the Board of Directors as it deems advisable.
While the Committee may consider persons nominated by shareholders, it has no
explicit procedures in this regard.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires Corning's
directors and certain of its officers to file reports of their ownership of
Corning stock and of changes in such ownership with the Securities and Exchange
Commission and the New York Stock Exchange. Regulations also require Corning to
identify in this proxy statement any person subject to this requirement who
failed to file any such report on a timely basis. William D. Smithburg, a
director of the Corporation, was five days late in filing a report covering his
purchase of shares of Common Stock in May 1999. Dr. Robert Barker failed to
report on a timely basis a gift of 1,054 shares of Corning Common Stock made in
July, 1999.
OTHER MATTERS
During 1999 Corning leased office space in Corning, New York owned by
Mr. Robert L. Ecklin, an executive officer. Corning paid an average base monthly
rental of $15,000 for such space. The lease expired on July 31, 1999.
Corning has purchased insurance from National Union Fire Insurance Company of
Pittsburgh, Pennsylvania, Zurich Insurance Company, Royal Insurance Company of
America, Gulf Insurance Company and Columbia Casualty Company providing for
reimbursement of its directors and officers for costs and expenses incurred by
them in actions brought against them in connection with their actions as
directors or officers, including actions as fiduciaries under the Employee
Retirement Income Security Act of 1974. The insurance coverage, which expires in
August 2001, costs $772,000 on an annual basis, which will be paid by the
Corporation.
At the meeting of the Board of Directors held on February 2, 2000, the Board
upon the recommendation of the Audit Committee appointed PricewaterhouseCoopers
LLP as the independent accountants for the 2000 fiscal year. Audit services of
22
<PAGE>
PricewaterhouseCoopers LLP for 1999 included examination of Corning's
consolidated financial statements, limited reviews of the unaudited quarterly
consolidated financial statements, limited assistance and consultation in
connection with filings with the Securities and Exchange Commission and audits
of certain of Corning's businesses of the Corporation.
Corning expects representatives of PricewaterhouseCoopers LLP to be present at
the Annual Meeting and available to respond to questions which may be raised
there. These representatives may comment on the financial statements if they so
desire.
Corning will pay the cost and expenses of soliciting proxies. In addition to
soliciting proxies by mail, some of Corning's directors, officers and regular
employees, without extra remuneration, may solicit proxies personally or by
telephone, telegraph or other electronic means. Corning has retained Georgeson
Shareholder Communications Inc., at a cost of $12,000, to help solicit proxies
and may also request brokerage houses, nominees, custodians and fiduciaries to
forward soliciting material to beneficial owners of shares held of record.
By order of the Board of Directors
A. John Peck, Jr.
Vice President and Secretary
March 6, 2000
23
<PAGE>
[LOGO]
Printed on recycled paper using soybean ink
<PAGE>
Proxy Solicited on Behalf of The Board of Directors For The Annual Meeting of
Shareholders--April 27, 2000
The undersigned appoints Roger G. Ackerman, Norman E. Garrity and John W. Loose,
and each of them, as proxies, with full power of substitution and revocation, to
vote, as designated on the reverse side hereof, all the Common Stock of Corning
Incorporated which the undersigned has power to vote, with all powers which the
undersigned would possess if personally present, at the annual meeting of
shareholders thereof to be held on April 27, 2000, or at any adjournment
thereof.
Unless otherwise marked, this proxy will be voted FOR the election of the
nominees named, FOR the Amendment of the Restated Certificate of Incorporation
and FOR the equity plan for non-employee directors.
____ Check here for address change.
New Address: ______________________________
______________________________
______________________________
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
(Continued and to be signed on reverse side.) CORNING
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IF YOU WISH TO VOTE BY TELEPHONE OR THE INTERNET, PLEASE READ THE
INSTRUCTIONS BELOW.
This year Corning Incorporated is offering you the choice of several ways to
vote your shares. If not voting in person, you may vote by mail, or choose one
of the two methods described below. Your vote by telephone or the Internet
authorizes the named proxies to vote your shares in the same manner as if you
marked, signed and returned your proxy card. To vote by telephone or the
Internet, follow these steps:
TO VOTE BY PHONE:
1. Call toll-free 877-587-0755 any time using a touch tone telephone. There is
no charge for this call.
2. Enter the 6-digit Control Number located on the upper left-hand corner of
your proxy card.
3. Follow the recorded instructions.
TO VOTE BY INTERNET:
1. Go to the following website: WWW.HARRISBANK.COM/WPROXY
2. Enter the information requested on your computer screen, including the
6-digit Control Number located on the upper left-hand corner of your proxy
card.
3. Follow the instructions on the screen.
IF YOU VOTE BY TELEPHONE OR THE INTERNET, THERE IS NO NEED TO AND
YOU SHOULD NOT RETURN YOUR PROXY CARD.
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The Board of Directors recommends a vote FOR all nominees for directors and FOR
proposal nos. 2 and 3.
1. Nominees: James R. Houghton, FOR WITHHOLD
James J. O'Connor and
Deborah D. Rieman ____ ____
____ FOR ALL (except
Nominee(s) written below:)
FOR AGAINST ABSTAIN
2. Amendment to the Restated ____ ____ ____
Certificate of Incorporation
3. Equity Plan for ____ ____ ____
Non-Employee Directors
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For Information Only:
____ Check here if you plan to attend the meeting.
____ Check here to discontinue mailing duplicate Annual Report.
Signature(s)________________________ Dated:__________, 2000
Please sign exactly as name appears hereon. Joint owners should each sign. Where
applicable, indicate official position or representative capacity.
