Shearman & Sterling
599 Lexington Avenue
New York, NY 10022
May 26, 1994
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, NW
Washington, D.C. 20549
Attention: Document Control -- EDGAR
SUBJECT: Corning Incorporated and Corning Delaware, L.P. Combined
Registration Statement on Form S-3
Gentlemen:
On behalf of Corning Incorporated ("Corning") and Corning
Delaware, L.P. ("Corning Delaware"), we are hereby filing under the
Securities Exchange Act of 1933, as amended, Corning's and Corning
Delaware's Combined Registration Statement on Form S-3 (the "Registration
Statement") related to (i) the issuance and sale of Corning Delaware's
Convertible Monthly Income Preferred Securities (the "Preferred Securities"),
(ii) the shares of Corning Series C Convertible Preferred Stock, $ 100
par value, issuable upon certain events in exchange for the Preferred
Securities, as set forth in the Registration Statement, (iii) the shares
of Corning Common Stock, $.50 par value, issuable upon conversion of the
Preferred Securities and (iv) the Guarantee of the Preferred Securities
by Corning. The filing fee of $ 109,053 has been sent by wire transfer
by Corning to the Commission's lockbox facility at the Mellon Bank in
Pittsburgh, Pennsylvania.
Please note that while not required to be incorporated by
reference pursuant to Form S-3 (Item 12(a)(2)), certain historical
financial statements of Damon Corporation, which was acquired by Corning
in 1993, are incorporated by reference in the Registration Statement
through Corning's Current Reports on Form 8-K dated August 4, 1993 and
August 13, 1993 in the interest of providing prospective investors with
full disclosure.
In addition, please note that we have elected to use Form S-3,
even though the Preferred Securities of Corning Delaware are convertible,
on the basis that such convertible securities are convertible into the
securities of Corning, the guarantor, and not into other securities of
Corning Delaware or securities of any other entity.
If you should have any questions or comments concerning this filing,
please call Cornelius J. Dwyer, Jr. at (212) 848-7019 or the undersigned at
(212) 848-8983 at Shearman & Sterling or Robert W. Reeder at (212) 558-3755
or Mitchell J. Wolfe at (212) 558-3059 at Sullivan & Cromwell, counsel for
the underwriters. For your information, Corning is a subscriber of
CompuServe at user ID 72741,206.
Very truly yours,
Virginia A. Melvin
Enclosure
cc
<PAGE>
As filed with the Securities and Exchange Commission on May 26, 1994
Registration No 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CORNING
DELAWARE, L.P.
(Exact name of registrant as specified in charter)
CORNING INCORPORATED
(Exact name of registrant as specified in charter)
DELAWARE NEW YORK
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
APPLIED FOR 16-0393470
(IRS Employer Identification No.) (IRS Employer Identification No.)
c/o William C. Ughetta William C. Ughetta
Corning Incorporated Corning Incorporated
One Riverfront Plaza One Riverfront Plaza
Corning, New York 14831 Corning, New York 14831
(607) 974-9000 (607) 974-9000
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
COPIES TO:
Cornelius J. Dwyer, Jr. Robert W. Reeder, III
Shearman & Sterling Sullivan & Cromwell
599 Lexington Avenue 250 Park Avenue
New York, NY 10022 New York, NY 10177
(212) 848-4000 (212) 558-4000
Approximate date of commencement of proposed sale to public: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box.[x]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Maximum Maximum
Amount to be Offering Aggregate Amount of
Title of Each Class of Registered Price Offering Registration
Securities to be Registered (1) (2) Per Share(3) Price(3) Fee
<S> <C> <C> <C> <C>
Corning Delaware, L.P. Preferred
Securities (2) $50
Corning Incorporated Series C
Convertible Preferred Stock
($100 par value) (1)(4)
Corning Incorporated Common Stock
($.50 par value) (1) (4)(5) $316,250,000 $316,250,000 $109,053
Corning Incorporated Guarantee
with respect to Corning
Delaware, L.P. Preferred
Securities(4)
</TABLE>
(footnotes on next page)
The Registrants hereby amend this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrants
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
[HERRING]
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such State.
<PAGE>
(1) There are being registered hereunder such presently indeterminate number
of shares of Common Stock of Corning Incorporated and Series C Convertible
Preferred Stock of Corning Incorporated into which the Preferred Securities
may be converted or exchanged and for which no separate consideration will be
received.
(2) Includes $41,250,000 of Preferred Securities which may be sold pursuant
to an over-allotment option granted to the Underwriters.
(3) Estimated solely for the purpose of calculating the registration fee.
(4) No separate consideration will be received for the Corning Incorporated
Guarantee, the Corning Incorporated Series C Convertible Preferred Stock, or
the Corning Incorporated Common Stock.
(5) Associated with the Common Stock are Preferred Share Purchase Rights that
will not be exercisable or evidenced separately from the Common Stock prior
to the occurrence of certain events.
<PAGE>
SUBJECT TO COMPLETION, DATED MAY 26, 1994
, ,000
CORNING DELAWARE
% CONVERTIBLE MONTHLY INCOME PREFERRED SECURITIES
("CONVERTIBLE MIPS"*)
(LIQUIDATION PREFERENCE $50 PER SECURITY)
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY, AND CONVERTIBLE
INTO COMMON STOCK OF,
CORNING INCORPORATED
The , ,000 % Convertible Monthly Income Preferred Securities (the
"Preferred Securities") are being issued by Corning Delaware, L.P. ("Corning
Delaware"), a Delaware limited partnership. All of the partnership interests
in Corning Delaware, other than the limited partnership interests represented
by the Preferred Securities, are owned by Corning Incorporated, a New York
corporation ("Corning" or the "Company"), which is the general partner in
Corning Delaware. The Preferred Securities will have a preference over all
other partnership interests of Corning Delaware with respect to cash
distributions and amounts payable on liquidation.
Holders of the Preferred Securities will be entitled to receive cumulative
cash distributions from Corning Delaware, at an annual rate of % of the
liquidation preference of $50 per Preferred Security, accruing from the date
of original issuance and payable monthly in arrears on the last day of each
calendar month of each year, commencing , 1994 ("dividends"). See
"Description of Securities Offered--Preferred Securities--Dividends."
(continued on next page)
See "Investment Considerations" for a discussion of certain factors to be
considered in connection with an investment in the Preferred Securities,
including circumstances under which interest payments on the Subordinated
Debentures (as defined) may be deferred for up to 60 months.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
Initial Public Underwriting Proceeds to
Offering Price Commission (1) Corning Delaware (2) (3)
<S> <C> <C> <C>
Per Corning Delaware Preferred Security $ (2) $
Total (4) $ (2) $
</TABLE>
(1) Corning Delaware and Corning have agreed to indemnify the Underwriters
against certain liabilities, including liabilities under the Securities Act
of 1933, as amended. See "Underwriting."
(2) In view of the fact that the proceeds of the sale of the Preferred
Securities will ultimately be used by Corning Delaware to purchase
convertible subordinated debentures of Corning, the Underwriting Agreement
provides that Corning will pay to the Underwriters, as compensation
("Underwriters' Compensation"), $ per Preferred Security (or $ in the
aggregate). See "Underwriting."
(3) Expenses of the offering which are payable by Corning are estimated to be
$ .
(4) Corning Delaware and Corning have granted the Underwriters an option for
30 days to purchase up to an additional Preferred Securities at the
initial public offering price per share, less the Underwriters' Compensation,
solely to cover over-allotments. If such option is exercised in full, the
total initial public offering price, underwriting commission and proceeds to
Corning Delaware will be $, $and $, respectively. See "Underwriting."
The Preferred Securities offered hereby are offered severally by the
Underwriters, as specified herein, subject to receipt and acceptance by them
and subject to their right to reject any order in whole or in part. It is
expected that delivery of the Preferred Securities will be made only in
book-entry form through the facilities of The Depository Trust Company on or
about , 1994.
Goldman, Sachs & Co. Lazard Freres & Co.
The date of this Prospectus is , 1994.
<PAGE>
(continued from previous page)
In the event of the liquidation of Corning Delaware, holders of Preferred
Securities will be entitled to receive for each Preferred Security a
liquidation preference of $50 plus accumulated and unpaid dividends to the
date of payment, subject to certain limitations. See "Description of
Securities Offered--Preferred Securities--Liquidation Rights."
Each Preferred Security is convertible through Corning Delaware at the option
of the holder, at any time, unless previously redeemed or exchanged, into
shares of Corning Common Stock, par value $.50 per share ("Corning Common
Stock"), at the rate of shares of Corning Common Stock for each Preferred
Security (equivalent to a conversion price of $ per share of Corning Common
Stock), subject to adjustment in certain circumstances. See "Description of
Securities Offered--Preferred Securities--Conversion Rights." The last
reported sale price of Corning Common Stock, which is listed under the symbol
"GLW" on the New York Stock Exchange, on May 25, 1994 was $33.750 per share.
The Preferred Securities are also subject to exchange, in whole but not in
part, into shares of Series C Convertible Preferred Stock, par value $100 per
share ("Corning Series C Preferred Stock"), upon a vote of the holders of a
majority of the aggregate liquidation preference of all outstanding Preferred
Securities upon the failure of holders of Preferred Securities to receive
dividends in full for 15 consecutive months and/or upon the occurrence of a
Tax Event (as defined herein). The Corning Series C Preferred Stock will have
dividend, conversion and optional redemption features substantially identical
to those of the Preferred Securities but will not be subject to mandatory
redemption. See "Description of Securities Offered--Preferred
Securities--Optional Exchange for Corning Series C Preferred Stock" and
"--Description of Corning Series C Preferred Stock."
The Preferred Securities are redeemable, at the option of Corning Delaware,
in whole or in part, on or after June , 1998, at the redemption prices set
forth herein, together with accumulated and unpaid dividends to the date
fixed for redemption. The Preferred Securities are subject to mandatory
redemption on the 30th anniversary of the date of original issuance. See
"Description of Securities Offered--Preferred Securities--Optional
Redemption" and "--Mandatory Redemption."
Corning will unconditionally guarantee, to the extent set forth herein, the
payment of dividends by Corning Delaware on the Preferred Securities (if and
to the extent declared from funds legally available therefor), the redemption
price (including all accumulated and unpaid dividends) payable with respect
to the Preferred Securities and payments on liquidation with respect to the
Preferred Securities (to the extent of the assets of Corning Delaware
available for distribution to holders of the Preferred Securities). The
guarantee will be unsecured and will be subordinate to all liabilities of
Corning and will rank pari passu with the most senior preferred or preference
stock now or hereafter issued by Corning. The proceeds from the offering of
the Preferred Securities will be invested by Corning Delaware in convertible
subordinated debentures of Corning (the "Subordinated Debentures") having the
terms described herein. Interest payment periods on the Subordinated
Debentures are monthly but may be extended by Corning for up to 60 months, in
which event Corning Delaware would be unable to make monthly dividend
payments on the Preferred Securities. The failure of holders to receive
dividends in full for 15 consecutive months would trigger the right of the
holders of the Preferred Securities to cause Corning Delaware to exchange the
Subordinated Debentures for shares of Corning Series C Preferred Stock and
distribute such shares to the holders of the Preferred Securities. See
"Description of Securities Offered--Description of the Guarantee" and
"--Description of the Subordinated Debentures" for a description of the
various contractual obligations of Corning relating to the Preferred
Securities.
Application will be made to list the Preferred Securities on the New York
Stock Exchange under the symbol "GLW pfM."
The Preferred Securities will be represented by a global certificate or
certificates registered in the name of The Depository Trust Company ("DTC")
or its nominee. Beneficial interests in the Preferred Securities will be
shown on, and transfers thereof will be effected only through, records
maintained by the participants of DTC. Except as described herein, Preferred
Securities in certificated form will not be issued in exchange for the global
certificates. See "Description of Securities Offered--Preferred
Securities--Book-Entry-Only Issuance--The Depository Trust Company."
*An application has been filed by Goldman, Sachs & Co. with the United States
Patent and Trademark Office for the registration of the MIPS servicemark.
<PAGE>
AVAILABLE INFORMATION
Corning is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy
statements and other information filed by Corning may be inspected and copied
at the public reference facilities maintained by the Commission at Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's
Regional Offices located at 7 World Trade Center, 7th Floor, New York, New
York 10048 and Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. Copies of such materials may be obtained upon
written request from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. In addition,
such material may also be inspected and copied at the offices of the New York
Stock Exchange, Inc. (the "NYSE"), 20 Broad Street, New York, New York 10005.
Corning and Corning Delaware have filed with the Commission a registration
statement on Form S-3 (herein, together with all amendments and exhibits,
referred to as the "Registration Statement") under the Securities Act of
1933, as amended. This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information, reference is hereby made to the Registration Statement.
No separate financial statements of Corning Delaware have been included
herein. Corning and Corning Delaware do not consider that such financial
statements would be material to holders of Preferred Securities because
Corning Delaware is a newly organized special purpose entity, has no
operating history and no independent operations and is not engaged in, and
does not propose to engage in, any activity other than as described under
"Corning Delaware." Corning beneficially owns directly or indirectly all of
Corning Delaware's partnership interests (other than the Preferred
Securities).
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission (File No. 1-3247) pursuant
to the Exchange Act are incorporated herein by reference:
1. Corning's Annual Report on Form 10-K for the fiscal year ended January
2, 1994, filed pursuant to Section 13(a) of the Exchange Act.
2. All other reports filed by Corning pursuant to Section 13(a) or 15(d) of
the Exchange Act since January 2, 1994, consisting of Corning's Quarterly
Report on Form 10-Q for the twelve weeks ended March 27, 1994; and Corning's
Current Reports on Form 8-K dated January 24, 1994 and April 6, 1994,
respectively. Certain historical financial statements of Damon Corporation
("Damon") which was acquired in 1993 are included in Corning's Current
Reports on Form 8-K dated August 4, 1993 and August 13, 1993.
3. The description of Corning's Preferred Share Purchase Rights Plan
contained in the registration statement on Form 8-A filed by Corning on July
8, 1986, including the amendment thereto on Form 8 filed by Corning on
October 9, 1989.
4. All other documents filed by Corning pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the Offering.
Corning will provide without charge to each person, including any beneficial
owner of Preferred Securities, to whom a copy of this Prospectus is
delivered, upon the written or oral request of any such person, a copy of any
or all of the documents incorporated herein by reference, other than exhibits
to such information (unless such exhibits are specifically incorporated by
reference in such documents). Requests should be directed to Corning
Incorporated, One Riverfront Plaza, Corning, New York 14831, Attention:
Secretary, telephone (607) 974-9000.
IN CONNECTION WITH THE OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE PREFERRED
SECURITIES OFFERED HEREBY AND CORNING COMMON STOCK AT LEVELS ABOVE THOSE
WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE
EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE OVER-THE-COUNTER MARKET OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and consolidated financial statements (including the notes
thereto) appearing elsewhere or incorporated by reference in this Prospectus.
Unless otherwise specified, references herein to the "Company" or "Corning"
refer to Corning Incorporated and its consolidated subsidiaries. Prospective
investors should carefully read the entire Prospectus.
CORNING DELAWARE
Corning Delaware is a special purpose limited partnership formed under the
laws of the State of Delaware. All of its partnership interests (other than
the Preferred Securities) are currently and will be beneficially owned
directly or indirectly by Corning. Corning is the sole general partner (the
"General Partner") in Corning Delaware.
THE COMPANY
Corning traces its origins to a glass business established by the Houghton
family in 1851. The present corporation was incorporated in the State of New
York in December 1936, and its name was changed from Corning Glass Works to
Corning Incorporated on April 28, 1989.
Corning is an international corporation competing in four broadly-based
business segments: Specialty Materials, Communications, Laboratory Services
and Consumer Products. Corning is engaged principally in the manufacture and
sale of products made from specialty glasses and related inorganic materials
having special properties of chemical stability, electrical resistance, heat
resistance, light transmission and mechanical strength. Corning and its
subsidiaries annually produce some 60,000 different products at 44 plants in
eight countries. In addition, Corning, through subsidiaries and affiliates,
engages in laboratory services businesses, including life and environmental
sciences and clinical-laboratory testing, at 62 facilities in ten countries.
Corning has followed and will continue to follow a consistent strategy for
its businesses:
--to provide quality products and services to the four broad market
segments in which it chooses to compete,
--to be a market leader in each of its businesses, and
--to fully utilize the talents and capabilities of all its employees.
Corning utilizes various strategies and tactics appropriate to each business
and its specific markets. However, all strategies incorporate certain key
elements.
In addition to the restructuring programs already under way, Corning is
currently engaged in a comprehensive review of its business and cost
structure. Corning expects this review to be substantially completed by the
end of 1994.
Technology has been at the core of Corning's historical success. Corning's
investment in research and development has been significant at $131 million
in 1991; $151 million in 1992; and $173 million in 1993. Research and
development spending has enabled Corning to remain at the forefront of
technological advances for decades with new and improved products. Included
among Corning's important technological discoveries over the years are
optical fiber for telecommunications, ceramic substrates for automotive and
stationary emission control devices, photosensitive glasses for various
markets and mass produced television bulbs and incandescent light bulbs.
Recent developments include an electrically heated automotive pollution
control substrate, an expanded line of optical communications amplifiers,
dispersion shifted optical fiber, a glass ceramic magnetic memory disk and
active matrix liquid-crystal display glasses.
Alliances and acquisitions are utilized to leverage Corning's technologies
and market position. Corning's extensive experience with alliances spans more
than fifty years and includes jointly owned companies with The Dow Chemical
Company in silicones, PPG Industries Inc. in glass block and foam glass, the
Samsung Group and Asahi Glass in television bulbs, Siemens AG in
opto-electronics, and Mitsubishi Heavy Industries Ltd. in stationary emission
control devices.
<PAGE>
Corning has recently completed several major strategic acquisitions, the most
significant of which was the acquisition of Damon Corporation ("Damon") in
August 1993. The acquisition of Damon has provided significant operating
synergies with MetPath Inc. ("MetPath") and is expected to provide additional
operating synergies upon full integration of Damon. Corning has also
completed acquisitions in the optical-fiber and optical-cable businesses and
the science products business. On May 4, 1994, Corning announced that it had
signed a definitive agreement to merge Maryland Medical Laboratory Inc., a
privately owned Baltimore, Maryland firm specializing in clinical laboratory
testing for hospitals and physicians, with its MetPath clinical laboratory
testing operations.
Quality is an important element of all of Corning's business strategies. This
embodies an unwavering focus on satisfying the customer, continuous
improvement of the processes which deliver products and services to the
customer and creating an empowered workforce dedicated to serving the
customer.
RECENT DEVELOPMENTS
First Quarter 1994 Results
Corning's first quarter net income totaled $58 million, or $0.28 per share,
compared with 1993's first quarter net income of $49.8 million, or $0.26 per
share. Excluding the impact of a non-operating gain in 1993, net income and
earnings per share for the first quarter 1994 were up 23 percent and 15
percent, respectively, when compared to the same period last year.
First quarter sales totaled $948.9 million, up 16 percent over 1993.
Approximately half of the sales increase was due to the acquisition of Damon
in August of 1993. The earnings improvement in the quarter was led by the
optical-fiber and optical-cable and environmental substrate businesses.
Equity company earnings of $16.5 million were more than double those of the
prior year's first quarter. The improvements were due to a strong performance
at Dow Corning Corporation ("Dow Corning") and the elimination of losses from
Vitro Corning, S.A. de C.V. ("Vitro Corning"), which was divested in late
1993.
Disposition of Clinical Laboratory Testing Operations
On April 4, 1994, MetPath sold the clinical laboratory testing operations of
Damon in California for approximately $51 million in cash. No gain or loss
will be recognized as a result of this transaction. The proceeds from the
transaction will be used to retire a portion of the debt incurred in
connection with the acquisition of Damon in August 1993.
Creation of Environmental Testing Services Company
On May 2, 1994, Corning and International Technology Corporation
("International Technology") signed a definitive agreement to create a
jointly owned company to provide environmental testing and related services.
Under the terms of the agreement, Corning will transfer the net assets of its
environmental testing laboratory business to the new company and
International Technology will transfer the assets of its IT Analytical
Services business to the new company. Corning and International Technology
each will own 50 percent of the company. The transaction, which is subject to
regulatory approval, is expected to close in the second or third quarter
1994. Corning will account for its investment in the newly created company
using the equity method of accounting for investments. The impact of the
transaction is not expected to be material to Corning's financial statements.
Acquisition of Maryland Medical Laboratory Inc.
On May 4, 1994, Corning signed a definitive agreement to acquire all of the
outstanding shares of Maryland Medical Laboratory Inc. and several affiliates
(collectively, "Maryland Medical") for approximately 4.5 million shares of
Corning Common Stock in a pooling-of-interests transaction. The transaction,
which is subject to regulatory approval, is expected to close in the second
or third quarter 1994. In connection with this transaction, Corning has
granted to certain stockholders of Maryland Medical certain registration
rights with respect to the shares of Corning Common Stock they receive.
However, such stockholders may not sell the registered shares until the
release of Corning's third quarter results. The impact of the transaction is
not expected to be material to Corning's financial statements.
Sale of Parkersburg Plant
On May 23, 1994, Corning sold its Parkersburg, West Virginia glass-tubing
products plant to Schott Scientific Glass, Inc., a subsidiary of Schott
Corporation, for $57 million. The transaction is expected to result in a
modest after-tax gain.
<PAGE>
See "Investment Considerations" for a discussion of certain factors to be
considered in connection with an investment in the Preferred Securities,
including circumstances under which interest payments on the Subordinated
Debentures may be deferred for up to 60 months.
THE OFFERING
<TABLE>
<S> <C>
Securities Offered ,000 of Corning Delaware's %
Convertible Monthly Income Preferred
Securities, liquidation preference of $50 per
share. Additionally, Corning and Corning
Delaware have granted the Underwriters an
option for 30 days to purchase up to an
additional Preferred Securities at
the initial public offering price, less the
Underwriters' Compensation, solely to cover
over-allotments, if any.
Dividends Dividends (as defined herein) on the
Preferred Securities will be cumulative from
the date of original issuance of the
Preferred Securities and will be payable at
the annual rate of % of the liquidation
preference of $50 per Preferred Security.
Dividends will be paid monthly in arrears on
the last day of each calendar month,
commencing , 1994. The proceeds from
the offering of the Preferred Securities will
be invested in the Subordinated Debentures.
Interest payment periods on the Subordinated
Debentures are monthly but may be extended
from time to time by Corning for up to 60
months, in which event Corning Delaware would
be unable to make monthly dividend payments
on the Preferred Securities during the period
of any such extension. During such period,
interest on the Subordinated Debentures and
dividends on the Preferred Securities will
compound monthly. The failure of holders of
the Preferred Securities to receive dividends
in full for 15 consecutive months would
trigger the right of such holders to cause
Corning Delaware to exchange all of the
Subordinated Debentures for shares of Corning
Series C Convertible Preferred Stock, par
value $100 per share ("Corning Series C
Preferred Stock"), and to distribute such
shares to the holders of Preferred
Securities. If the Preferred Securities
remain outstanding for three months after the
earlier of the date of notice of a Tax Event
and the date that a vote is taken at any
special partnership meeting called by the
holders of the Preferred Securities to cause
the exchange of all of the Subordinated
Debentures for shares of Corning Series C
Preferred Stock, then amounts available for
distribution to holders may be reduced by the
amount of Additional Taxes (as defined
herein). See "Description of Securities
Offered--Description of the Subordinated
Debentures--Option to Extend Payment Period"
and "Description of Securities
Offered--Preferred Securities--Optional
Exchange for Corning Series C Preferred
Stock."
Liquidation Preference $50 per Preferred Security, plus an amount
equal to any accumulated and unpaid dividends
(whether or not earned or declared).
<PAGE>
Conversion into Corning
Common Stock Each Preferred Security is convertible
through Corning Delaware at the option of the
holder, at any time, unless previously
redeemed or exchanged, into shares of Corning
Common Stock, par value $.50 per share (the
"Corning Common Stock"), at the rate of
shares of Corning Common Stock for each
Preferred Security (equivalent to a
conversion price of $ per share of
Corning Common Stock), subject to adjustment
in certain circumstances. Upon receiving an
irrevocable notice by a holder of a Preferred
Security to exercise its conversion right,
Corning Delaware, on behalf of such holder,
will exercise its option to convert such
holder's allocable portion of the
Subordinated Debentures into Corning Common
Stock and will distribute such shares of
Corning Common Stock to such holder in
exchange for a corresponding portion of such
holder's Preferred Securities. See
"Description of Securities Offered--Preferred
Securities--Conversion Rights."
Redemption From time to time on and after , 1998,
the Preferred Securities will be redeemable,
at the option of Corning Delaware, in whole
or in part, for cash at the redemption prices
set forth herein, together with accumulated
and unpaid dividends (whether or not earned
or declared) to the date fixed for
redemption. The Preferred Securities are
subject to mandatory redemption on the 30th
anniversary of the date of original issuance
at a redemption price of $50 per Preferred
Security together with accumulated and unpaid
dividends (whether or not earned or
declared). If Preferred Securities are called
for redemption, the conversion right will
terminate two calendar days prior to the
redemption date.
Optional Exchange for
Corning Series C Upon the occurrence of certain exchange
Preferred Stock events, the holders of a majority of the
aggregate liquidation preference of Preferred
Securities then outstanding may, at their
option, cause Corning Delaware to exchange
all (but not less than all) of the
Subordinated Debentures for shares of Corning
Series C Preferred Stock at the Exchange
Price (as defined under "Description of
Securities Offered--Preferred
Securities--Dividends") and distribute such
shares to the holders of Preferred
Securities. The exchange events are (a) the
failure of holders of the Preferred
Securities to receive, for 15 consecutive
months, the full amount of dividend payments
(other than as provided in clause (ii) under
Voting Rights below), or (b) the occurrence
of a Tax Event.
The Corning Series C Preferred Stock will
have dividend, conversion, optional
redemption, and other terms substantially
identical to the terms of the Preferred
Securities, except that, among other things,
the holders of Corning Series C Preferred
Stock will have the right to elect two
additional directors of Corning whenever
dividends on the Corning Series C Preferred
Stock are in arrears for 18 months (including
for this purpose any arrearage with respect
to the Preferred Securities) and the Corning
Series C Preferred Stock will be perpetual
and will not be subject to mandatory
redemption.
Guarantee Pursuant to a Guarantee Agreement (the
"Guarantee"), Corning will unconditionally
guarantee, to the extent set forth therein,
(a) the payment of dividends (including any
Additional Interest thereon, as defined
herein) by Corning Delaware on the Preferred
Securities, if, and to the extent declared
from funds legally available therefor, (b)
the redemption price of the Preferred
Securities, and (c) payments on
<PAGE>
liquidation with respect to the Preferred
Securities, to the extent of the assets of
Corning Delaware available for distribution
to holders of the Preferred Securities. The
Guarantee will be unsecured and will be
subordinated to all liabilities of Corning
and will rank pari passu with the Series B
Preferred Stock (as defined under
"Description of Corning Capital Stock--Series
Preferred Stock"). See "Description of
Securities Offered--Description of the
Guarantee."
Voting Rights Generally, holders of the Preferred
Securities will not have any voting rights.
However, upon the failure of holders to have
received, at the end of any period of 60
consecutive months, dividends in full on the
Preferred Securities for such 60-month
period, the holders of the Preferred
Securities will be entitled to appoint and
authorize a Special General Partner to
enforce Corning Delaware's rights under the
Subordinated Debentures, enforce Corning's
obligations under the Guarantee and declare
and pay dividends on the Preferred Securities
to the extent funds are legally available
therefor. In addition, upon the occurrence of
a Tax Event, holders of the Preferred
Securities will be entitled to call a special
partnership meeting for the purpose of
deciding whether (i) to cause Corning
Delaware to exchange all of the outstanding
Subordinated Debentures for shares of Corning
Series C Preferred Stock at the Exchange
Price and distribute such shares to the
holders of Preferred Securities in exchange
for the Preferred Securities or (ii) to
continue to hold the Preferred Securities, in
which case amounts available for distribution
to holders may be reduced. See "Description
of Securities Offered--Preferred
Securities--Dividends."
Use of Proceeds The proceeds to be received by Corning
Delaware from the sale of the Preferred
Securities will be invested in the
Subordinated Debentures of Corning, which,
after paying the expenses associated with
this Offering, will use such funds to retire
a significant portion of the Damon
acquisition debt. See "Use of Proceeds."
Subordinated Debentures The Subordinated Debentures will have a
maturity of 30 years and will bear interest
at the rate of % per annum, payable
monthly in arrears. Corning has the right to
select an interest payment period or periods
longer than one month (during which period or
periods interest will compound monthly),
provided that any extended interest payment
period does not exceed 60 months. If Corning
selects an interest payment period longer
than one month, it will be prohibited from
paying dividends on any of its capital stock
and making certain other restricted payments
until monthly interest payments are resumed
and all accumulated and unpaid interest
(including any Additional Interest) on the
Subordinated Debentures is brought current.
Corning will have the right to make partial
payments of such interest during the extended
interest payment period. The Subordinated
Debentures are convertible into shares of
Corning Common Stock at the option of Corning
Delaware and exchangeable for shares of
Corning Series C Preferred Stock upon the
exchange events referred to above. On and
after , 1998, Corning may prepay the
Subordinated Debentures, in whole or in part.
The payment of the principal and interest on
the Subordinated Debentures will be
subordinated in right of payment to all
Senior Indebtedness (as defined under
"Description of Securities
Offered--Description of the Subordinated
Debentures--Subordination") of Corning. As of
March 27, 1994, Corning had $1.9 billion of
Senior Indebtedness outstanding.
</TABLE>
<PAGE>
SUMMARY FINANCIAL INFORMATION
The following is a summary of certain consolidated financial information that
has been derived from the consolidated financial statements of Corning. The
summary financial data set forth below for Corning for the 1989 through 1993
fiscal years are derived from its audited financial statements. The summary
financial data set forth below for the first twelve weeks of 1994 and 1993
are derived from Corning's unaudited financial statements, which in the
opinion of management contain all adjustments (consisting only of normal
recurring items) necessary for the fair presentation of this information. The
financial data should be read in conjunction with the information set forth
in "Selected Consolidated Financial Data" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations," and the
historical financial information and related notes incorporated by reference
in this Prospectus.
The unaudited pro forma combined income statement data set forth below
reflect the estimated impact on Corning's 1993 income statement of the 1993
acquisitions of Damon and Costar Corporation ("Costar"), and several other
completed 1993 transactions (collectively, the "Transactions"). Such pro
forma data assume the Transactions had been completed on January 4, 1993. The
unaudited pro forma combined income statement data set forth below are
derived from, and should be read in conjunction with, the unaudited pro forma
combined 1993 statement of income included elsewhere in this Prospectus and
the historical financial statements of Corning and Damon incorporated by
reference into this Prospectus. The following pro forma income statement data
are presented for informational purposes only, and are not necessarily
indicative of the results that would have occurred had the transactions been
completed on the dates indicated or the results that may be attained in the
future.
See "Selected Consolidated Financial Data", "Corning Unaudited Pro Forma
Combined 1993 Statement of Income," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Incorporation of Certain
Documents by Reference."
<TABLE>
<CAPTION>
Twelve
Weeks Ended Fiscal Year Ended
Mar. Mar. Dec. Dec.
27, 28, Jan. 2, Jan. 3, 29, 30, Dec. 31,
1994 1993 1994 1993 1991 1990 1989
(dollars in millions, except per share amounts)
<S> <C> <C> <C> <C> <C> <C> <C>
HISTORICAL:
Income Statement Data:
Net sales $948.9 $817.0 $4,004.8 $3,708.7 $3,259.2 $2,940.5 $2,439.2
Income before
extraordinary credit and
cumulative effect of
changes in accounting
methods(a) 58.0 49.8 (15.2) 266.3 311.2 289.1 259.4
Net income (loss)(a) 58.0 49.8 (15.2) (12.6) 316.8 292.0 261.0
Balance Sheet Data:
Total assets $5,430.2 $4,282.6 $5,231.7 $4,286.3 $3,852.6 $3,512.0 $3,360.7
Working capital 452.5 596.6 451.4 465.2 521.0 458.4 487.3
Loans payable beyond one
year 1,573.6 916.7 1,585.6 815.7 700.0 611.2 624.5
Common stockholders'
equity 1,956.1 1,808.5 1,685.8 1,803.8 2,018.8 1,850.3 1,711.2
Per Common Share Data:
Income before
extraordinary credit and
cumulative effect of
changes in accounting
methods(a) $0.28 $0.26 $(0.09) $1.40 $1.66 $1.53 $1.39
Net income (loss)(a) 0.28 0.26 (0.09) (0.08) 1.69 1.55 1.40
Common dividends
declared(b) 0.17 0.17 0.68 0.62 0.68 0.46 0.53
PRO FORMA: (c)
Income Statement Data:
Net sales $4,350.8
Net income $12.6
Net income per share $0.05
</TABLE>
(a) Amounts for all periods other than the first quarter 1994 are
significantly impacted by certain non-recurring gains and losses and the
cumulative effect of changes in accounting methods. See the Notes to Selected
Consolidated Financial Data contained elsewhere in this Prospectus.
(b) Includes special dividends of $0.15 and $0.1125 per common share in 1991
and 1989, respectively.
(c) See the Notes to Unaudited Pro Forma Combined 1993 Statement of Income
contained elsewhere in this Prospectus.
<PAGE>
USE OF PROCEEDS
Corning Delaware will invest the proceeds from the Offering in the
Subordinated Debentures. Corning, after payment of the Underwriters'
Compensation (as defined under "Underwriting") and other expenses of the
Offering, will use the net proceeds from the sale of the Subordinated
Debentures to Corning Delaware of $ ($ if the Underwriters'
over-allotment option is exercised in full) to retire a significant portion
of the debt incurred in the 1993 acquisition of Damon. The Damon debt bears a
variable interest rate based on the London Interbank Offered Rate and matures
on December 31, 1995. For information concerning the Damon transaction, see
"Business of Corning--Laboratory Services."
INVESTMENT CONSIDERATIONS
Prospective purchasers of Preferred Securities should carefully review the
information contained elsewhere in this Prospectus and should particularly
consider the following matters:
Subordinate Obligations Under Guarantee and Subordinated
Debentures. Corning's obligations under the Guarantee are subordinate and
junior in right of payment to all liabilities of Corning and the obligations
of Corning under the Subordinated Debentures are subordinate and junior in
right of payment to all Senior Indebtedness of Corning. See "Description of
Securities Offered--Description of the Guarantee" and "Description of
Securities Offered--Description of the Subordinated
Debentures--Subordination."
Option to Extend Payment Periods. Corning has the right to extend interest
payment periods on the Subordinated Debentures for up to 60 months, and, as a
consequence, monthly dividends on the Preferred Securities would be deferred
(but will continue to compound monthly) during any such extended interest
payment period. In the event that Corning exercises this right, Corning may
not declare dividends on any shares of its capital stock. However, in the
event such a deferral continues for more than 15 months, the holders of a
majority of liquidation preference of the Preferred Securities then
outstanding may cause the exchange of all of the Preferred Securities for
Corning Series C Preferred Stock at the Exchange Price. See "Description of
Securities Offered--Description of the Subordinated Debentures--Option to
Extend Interest Payment Period."
For a discussion of the taxation of such an exchange to holders, including
the possibility of holders recognizing additional taxable income from the
accrued dividends received in connection with the exchange, see "Certain
Federal Income Tax Considerations--Exchange of Preferred Securities for
Corning Series C Preferred Stock."
Should an extended interest payment period occur, Corning Delaware, except in
very limited circumstances, will continue to accrue income for U.S. federal
income tax purposes which will be allocated, but not distributed, to holders
of record of Preferred Securities. As a result, such holders will include
such interest in gross income for United States federal income tax purposes
in advance of the receipt of cash, and will not receive the cash related to
such income if such a holder disposes of its Preferred Securities prior to
the record date for payment of dividends. See "Certain Federal Income Tax
Considerations--Original Issue Discount."
Exchange Event. In the case of a Tax Event, the holders of a majority of
liquidation preference of Preferred Securities then outstanding will have the
right to cause all of the Preferred Securities to be exchanged for Corning
Series C Preferred Stock at the Exchange Price. However, in the event that
the Preferred Securities are not exchanged, the amounts available for
distribution to holders may be reduced. Under certain circumstances giving
rise to a Tax Event, the exchange of Preferred Securities for Corning Series
C Preferred Stock would be a taxable transaction in which exchanging holders
recognize gain. See "Certain Federal Income Tax Considerations--Exchange of
Preferred Securities for Corning Series C Preferred Stock."
<PAGE>
CAPITALIZATION
The following table sets forth (i) the actual capitalization of Corning at
March 27, 1994, and (ii) the pro forma capitalization of Corning as of such
date after giving effect to the Offering, assuming no exercise of the
Underwriters' over-allotment option. The table should be read in conjunction
with the financial statements of Corning incorporated by reference in this
Prospectus. See "Use of Proceeds," "Selected Consolidated Financial Data,"
"Corning Unaudited Pro Forma Combined 1993 Statement of Income,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," and "Description of Securities Offered--Preferred Securities."
<TABLE>
<CAPTION>
March 27, 1994
Actual Pro Forma
(dollars in millions, except per share data)
<S> <C> <C>
Short-Term Debt:
Total short-term debt $232.5 $232.5
Long-Term Debt:
Total long-term debt 1,573.6 1,298.6
Convertible Preferred Securities of
Subsidiary: 275.0
Convertible Preferred Stock:
Par value $100 per share: 10,000,000 shares
authorized; 255,036 shares of 8% Series B
Preferred Stock outstanding 25.5 25.5
Common Stockholders' Equity:
Common Stock, including excess over par
value and other capital: par value $0.50
per share; authorized 500,000,000 shares;
235,988,668 issued 872.9 872.9
Retained earnings 1,603.9 1,603.9
Less cost of 27,368,018 shares of common
stock in treasury (515.8) (515.8)
Cumulative translation adjustment (4.9) (4.9)
Total common stockholders' equity 1,956.1 1,956.1
Total capitalization $3,787.7 $3,787.7
</TABLE>
<PAGE>
RATIOS OF EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
The following table sets forth the historical ratio of earnings to combined
fixed charges and preferred stock dividends of Corning for the periods
indicated:
<TABLE>
<CAPTION>
Fiscal Year Ended
Twelve Weeks
Ended Jan. Jan. Dec. Dec.
March 27, 2, 3, 29, 30, Dec. 31,
1994 1994 1993 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Combined Fixed
Charges and Preferred Stock
Dividends 3.2x 1.1x 3.8x 4.4x 4.6x 5.0x
</TABLE>
For the purposes of computing the ratio of earnings to combined fixed charges
and preferred stock dividends, earnings consist of (1) income before taxes on
income, before equity in earnings and minority interest and before fixed
charges (excluding interest capitalized during the period), (2) Corning's
share of pre-tax earnings of fifty-percent owned companies, (3) Corning's
share of pre-tax earnings of greater than fifty-percent owned unconsolidated
subsidiaries, (4) dividends received from less than fifty-percent owned
companies and Corning's share of losses of such companies, if any, if any
debt of such companies is guaranteed by Corning and (5) previously
capitalized interest amortized during the period; fixed charges consist of
(1) interest on indebtedness, (2) amortization of debt issuance costs, (3) a
portion of rental expenses which represent an appropriate interest factor,
(4) Corning's share of the fixed charges of fifty-percent owned companies and
(5) fixed charges of greater than fifty-percent owned unconsolidated
subsidiaries; and preferred dividends include the amount of pre-tax income
required to pay preferred dividends on an after-tax basis.
<PAGE>
MARKET PRICES OF CORNING COMMON STOCK AND DIVIDENDS
Corning Common Stock is traded on the NYSE under the symbol "GLW." At May ,
1994, there were holders of record of Corning Common Stock and
shares outstanding. The following table sets forth the high and low sale
prices for Corning Common Stock, as reported by the NYSE, and the cash
dividends declared per share on Corning Common Stock, for the periods
indicated.
<TABLE>
<CAPTION>
Price Range(a)
Cash Dividends
Declared Per
High Low Share(a)
<S> <C> <C> <C>
1991
First Quarter $31.000 $21.063 $.125
Second Quarter 31.750 28.375 .125
Third Quarter 35.750 31.250 .125
Fourth Quarter 43.125 33.563 .300(b)
1992
First Quarter 40.313 28.750 .15
Second Quarter 38.625 31.500 .15
Third Quarter 38.625 34.375 .15
Fourth Quarter 39.750 34.750 .17
1993
First Quarter 39.000 29.000 .17
Second Quarter 35.875 31.500 .17
Third Quarter 35.125 26.875 .17
Fourth Quarter 28.250 24.000 .17
1994
First Quarter 33.125 27.625 .17
Second Quarter (through May 25,
1994) 33.750 30.500 .17
</TABLE>
(a) Per share amounts have been adjusted for the 2-for-1 stock split
effective January 13, 1992.
(b) Includes a special dividend of $.15 per common share in the fourth
quarter of 1991.
Corning has regularly paid cash dividends since 1881 and expects to continue
to pay cash dividends. Corning's quarterly cash dividend is currently $.17
per share of Corning Common Stock. The payment of dividends is subject to the
preferential dividend rights of any outstanding Series Preferred Stock of
Corning (as defined under "Description of Corning Capital Stock--Series
Preferred Stock"). Corning and its majority-owned subsidiaries would also be
prohibited from paying dividends on Corning Common Stock at any time when
interest payments had not been made in full on the Subordinated Debentures or
when dividends had not been paid in full on the Preferred Securities. Since
the declaration and payment of future dividends on Corning's capital stock
will be based on a number of factors considered by Corning's Board of
Directors, including current and prospective earnings, financial condition
and capital requirements, and such other factors as the Board of Directors
may deem relevant, there can be no assurance that dividends on Corning Common
Stock will be paid in the future. See "Description of Corning Capital
Stock--General--Dividend Rights and Restrictions."
SELECTED CONSOLIDATED FINANCIAL DATA
The following is a summary of certain consolidated financial information that
has been derived from the consolidated financial statements of Corning. The
summary financial data set forth below for Corning for the fiscal years 1989
through 1993 are derived from its audited financial statements. The selected
consolidated financial data set forth below for the first twelve weeks of
1994 and 1993 are derived from Corning's unaudited financial statements,
which in the opinion of management contain all adjustments (consisting only
of normal recurring items) necessary for the fair presentation of this
information. The financial data should be read in conjunction with the
information set forth in "Management's Discussion and Analysis of Financial
Condition and Results of Operations," and the historical financial
information and related notes incorporated by reference in this Prospectus.
See "Incorporation of Certain Documents by Reference."
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
<TABLE>
<CAPTION>
Twelve
Weeks Ended Fiscal Year Ended
Mar. Mar. Dec. Dec.
27, 28, Jan. 2, Jan. 3, 29, 30, Dec. 31,
1994 1993 1994 1993 1991 1990 1989
(dollars in millions, except per share amounts)
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data:
Revenues
Net sales $948.9 $817.0 $4,004.8 $3,708.7 $3,259.2 $2,940.5 $2,439.2
Royalty, interest and
dividend income 7.7 6.4 29.9 35.3 27.6 39.9 29.6
Non-operating gains 4.2 4.2 7.0 8.1 69.2 107.1
956.6 827.6 4,038.9 3,751.0 3,294.9 3,049.6 2,575.9
Deductions
Cost of sales 622.1 532.1 2,597.0 2,411.3 2,121.6 1,925.7 1,600.9
Selling, general and
administrative expenses 185.7 168.6 774.0 692.2 622.5 581.8 491.8
Research and development
expenses 38.2 37.7 173.1 151.1 130.7 124.5 109.6
Provision for
restructuring costs and
other special charges 207.0 63.3 54.4
Interest expense 25.8 16.5 88.2 62.6 58.1 54.0 44.5
Other, net 5.8 3.1 42.9 33.9 34.6 35.5 20.9
Income before taxes on
income 79.0 69.6 156.7 336.6 327.4 328.1 253.8
Taxes on income 29.6 23.9 35.3 92.5 110.6 136.1 116.9
Income before minority
interest and equity
earnings 49.4 45.7 121.4 244.1 216.8 192.0 136.9
Minority interest in
earnings of subsidiaries (7.9) (3.1) (16.6) (21.6) (17.3) (10.4) (4.2)
Equity in earnings
(losses) of associated
companies before
cumulative effect of
changes in accounting
methods 16.5 7.2 (120.0) 43.8 111.7 107.5 126.7
Income (Loss) before
Extraordinary Credit and
Cumulative Effect of
Changes in Accounting
Methods 58.0 49.8(a) (15.2)(c) 266.3(d) 311.2(f) 289.1(g) 259.4(h)
Tax benefit of loss
carryforwards 7.7 5.6 2.9 1.6
Cumulative effect of
changes in accounting
methods (286.6)
Net Income (Loss) $58.0 $49.8(b) $(15.2)(b) $(12.6)(e) $316.8 $292.0 $261.0
Balance Sheet Data:
Total assets $5,430.2 $4,282.6 $5,231.7 $4,286.3 $3,852.6 $3,512.0 $3,360.7
Working capital 452.5 596.6 451.4 465.2 521.0 458.4 487.3
Loans payable beyond one
year 1,573.6 916.7 1,585.6 815.7 700.0 611.2 624.5
Common stockholders'
equity 1,956.1 1,808.5 1,685.8 1,803.8 2,018.8 1,850.3 1,711.2
Per Common Share Data:(i)
Income (loss) before
extraordinary credit
and cumulative effect of
changes in accounting
methods $0.28 $0.26 $(0.09) $1.40 $1.66 $1.53 $1.39
Net income (loss) 0.28 0.26 (0.09) (0.08) 1.69 1.55 1.40
Common dividends
declared(j) 0.17 0.17 0.68 0.62 0.68 0.46 0.53
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
(a) During the first quarter 1993, Corning recognized a non-operating gain
totaling $4.2 million ($2.6 million after-tax).
(b) Effective January 4, 1993, Corning and its subsidiaries adopted Financial
Accounting Standard No. 109, " Accounting for Income Taxes" ("FAS 109") and
Financial Accounting Standard No. 112, "Employers' Accounting for
Postemployment Benefits" ("FAS 112"). The impact of adopting FAS 109 and FAS
112 was not material to the financial statements.
(c) In 1993, Corning recognized net non-recurring losses from consolidated
operations totaling $202.8 million ($117.9 million after-tax and minority
interest), including a non-operating gain of $4.2 million ($2.6 million
after-tax); a charge of $36.5 million ($22.0 million after tax) to reflect
the settlement and related legal expenses incurred in the compromise
agreement between MetPath and the Civil Division of the Department of
Justice; and a restructuring charge totaling $170.5 million ($98.5 million
after tax and minority interest) as a result of costs to integrate the Damon
and Costar acquisitions and a planned company-wide restructuring program
announced October 6, 1993 to reduce overhead costs during 1994.
Corning also recorded a $203.1 million reduction in equity earnings as a
result of a charge taken by Dow Corning related to breast-implant litigation
and a $9.5 million reduction in equity earnings as a result of a
restructuring charge taken by Vitro Corning.
(d) In 1992, Corning recognized net non-operating gains from consolidated
operations totaling $7.0 million ($21.7 million after- tax), including a gain
of $10.1 million (before- and after-tax) from the sale of an additional
equity interest in Corning Japan K.K. and a pre-tax loss of $7.3 million
($9.0 million after-tax gain) from the formation of the consumer housewares
venture with Vitro S.A. ("Vitro"). Corning also recorded a provision of $63.3
million ($32.1 million after-tax of $22.9 million and minority interest of
$8.3 million) as a result of Corning Vitro Corporation's ("Corning Vitro")
decision to restructure its Brazilian operations.
Corning also recognized a $37.7 million reduction in equity earnings which
included $24.5 million of costs associated with Dow Corning's terminated
breast implant business and $13.2 million of restructuring charges associated
with Dow Corning's exit from its Brazilian operations and other
cost-reduction programs.
(e) Effective December 30, 1991, Corning and its subsidiaries adopted
Financial Accounting Standard No. 106, "Employers' Accounting for
Postretirement Benefits Other than Pensions" ("FAS 106"). The cumulative
effect of adopting FAS 106 resulted in a charge of $294.8 million (after-tax
and minority interest), or $1.56 per share, in 1992. In addition, an $8.2
million gain, or $0.04 per share, from an equity company's adoption of FAS
109 was recognized in 1992.
(f) In 1991, the Company recognized net non-operating gains from consolidated
operations totaling $8.1 million ($14.6 million after-tax) which included a
gain of $5.3 million (before- and after-tax) on the sale of a less than 10%
equity interest in Corning Japan. The Company also recognized an $8.2 million
reduction in equity earnings to reflect a charge recorded by Dow Corning for
costs associated with its breast implant business.
(g) In 1990, the Company recognized non-operating gains totaling $69.2
million ($29.2 million after-tax) on the sales of certain investments,
including a gain on the sale of substantially all the Company's investment in
Iwaki Glass Company Ltd. totaling $51.1 million ($19.4 million after-tax).
(h) In 1989, the Company recognized non-operating gains totaling $107.1
million ($61.9 million after-tax), including a gain on the sale of its 50%
interest in Ciba Corning Diagnostics Corp. of $75.7 million ($41.0 million
after-tax) and a gain of $21.7 million ($13.7 million after-tax) related to
patent infringement matters in the optical-fiber business.
Also in 1989, the Company provided $54.4 million ($45.0 million after-tax)
for the repositioning of certain businesses and facilities. The provision
related primarily to consumer product operations worldwide, and to certain
other operations in Europe.
(i) Per share amounts have been adjusted for the 2-for-1 stock split
effective January 13, 1992.
(j) Includes special dividends of $0.15 and $0.1125 per common share in 1991
and 1989, respectively.
<PAGE>
CORNING UNAUDITED PRO FORMA COMBINED 1993 STATEMENT OF INCOME
The Unaudited Pro Forma Combined 1993 Statement of Income (the "Pro Forma
Information") is presented to reflect the estimated impact on Corning's 1993
Statement of Income of the following Transactions completed in 1993:
* The acquisition of Damon in August 1993, at a total purchase price of
approximately $405 million, including acquisition expenses. The transaction
has been accounted for as a purchase.
* The merger with Costar in September 1993 in which Corning acquired all of
the outstanding shares of common stock and options to purchase common stock
of Costar for approximately 5.5 million shares of Corning Common Stock and
options to purchase approximately 300,000 shares of Corning Common Stock.
This acquisition has been accounted for as a pooling of interests. Corning's
consolidated financial statements for periods prior to the acquisition have
not been restated since the acquisition is not material to Corning's
financial position or results of operations.
* The transaction with Unilab Corporation ("Unilab"), which was completed in
November 1993, and other completed acquisitions (collectively, the "Other
Completed Transactions") which individually and in the aggregate are not
significant. The Unilab transaction is described in Note 4.
The 1993 Unaudited Pro Forma Combined Statement of Income assumes that the
Transactions had been completed on January 4, 1993. The impact of the
Offering is not material to the 1993 pro forma results.
The Pro Forma Information gives effect only to the adjustments set forth in
the accompanying notes and does not reflect any synergies anticipated by
Corning management as a result of these acquisitions. The Pro Forma
Information is not necessarily indicative of the results of operations which
would have been achieved had the Transactions been completed as of the
beginning of the period presented, nor is it necessarily indicative of
Corning's future results of operations.
Corning has completed or has pending several transactions in 1994 which
individually and in the aggregate are not significant to Corning's
consolidated financial statements. As such, pro forma data on these
transactions are not presented.
The Pro Forma Information should be read in conjunction with the historical
financial statements of Corning and Damon incorporated by reference into this
Prospectus.
<PAGE>
CORNING
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
YEAR ENDED JANUARY 2, 1994
(in millions, except per share amounts)
<TABLE>
<CAPTION>
Pro Forma
Other
Corning Damon Costar Completed
(1) (2) (3) Transactions(4) Adjustments(5) Combined(6)
<S> <C> <C> <C> <C> <C> <C>
Revenues
Net sales $4,004.8 $199.9 $52.9 $93.2 $4,350.8
Royalty, interest and
dividend income 29.9 29.9
Non-operating gains 4.2 4.2
4,038.9 199.9 52.9 93.2 4,384.9
Deductions
Cost of sales 2,597.0 129.4 29.2 76.2 $7.5(a) 2,839.3
Selling, general and
administrative expenses 774.0 58.1 14.9 8.2 855.2
Research and development
expenses 173.1 2.2 175.3
Provision for
restructuring costs and
other special charges 207.0 (55.0)(b) 152.0
Interest expense 88.2 5.6 0.4 3.2 14.2 (c) 111.6
Other, net 42.9 1.0 0.7 (0.1) (0.9)(d) 43.6
Income before taxes on
income 156.7 5.8 5.5 5.7 34.2 207.9
Taxes on income 35.3 2.1 1.7 2.1 15.5(e) 56.7
Income before minority
interest and equity
earnings 121.4 3.7 3.8 3.6 18.7 151.2
Minority interest in
earnings of subsidiaries (16.6) (2.2) 0.2(f) (18.6)
Equity in earnings of
associated companies
before cumulative effect
of changes in accounting
methods (120.0) (120.0)
Income Before
Extraordinary Credit and
Cumulative Effect of
Changes in Accounting
Methods $(15.2) $1.5 $3.8 $3.6 $18.9 $12.6
Weighted Average Shares
Outstanding 191.963 4.950(g) 196.913
Per Common Share
Income Before
Extraordinary Credit and
Cumulative Effect of
Changes in Accounting
Methods $(0.09) $0.05
</TABLE>
(1) Represents the historical results of operations of the Company for the
year ended January 2, 1994.
(2) Represents the historical results of operations of Damon for the seven
months ended July 31, 1993.
(3) Represents the historical results of operations of Costar for the eight
months ended August 31, 1993.
(4) Represents the historical results of operations of Other Completed
Transactions and the impact of the Unilab transaction through the acquisition
date.
(5) See Note 2 to the Pro Forma Information.
(6) Reflects the results of operations of the Company on a pro forma basis
assuming the Transactions had been completed on January 4, 1993.
<PAGE>
CORNING
NOTES TO UNAUDITED PRO FORMA COMBINED 1993 STATEMENT OF INCOME
Note 1--Basis of Presentation:
The Unaudited Pro Forma Combined Statement of Income reflects the Company's
results of operations for the year ended January 2, 1994, on a pro forma
basis assuming the Transactions had been completed as of January 4, 1993.
Corning management believes that the assumptions used in preparing the Pro
Forma Information provide a reasonable basis for presenting all of the
significant effects of the Transactions, that the pro forma adjustments give
appropriate effect to those assumptions and that the pro forma adjustments
are properly applied in the Pro Forma Information.
Note 2--Pro Forma Adjustments:
(a) The pro forma adjustment to cost of sales represents the increase in
amortization of the excess of cost over fair value of tangible net assets
acquired in the Damon transaction and the Other Completed Transactions of
$5.7 million and $1.8 million, respectively, for the year ended January 2,
1994.
The excess of cost over fair value of tangible net assets acquired in the
Damon transaction was $552 million. The excess of cost over fair value of
tangible net assets acquired has been allocated to goodwill with a life of
forty years. Management believes that fair value approximates book value for
all tangible assets.
(b) The pro forma adjustment represents the elimination of one-time
restructuring costs of $47.1 million related to closing MetPath facilities as
a result of the integration of Damon and MetPath and $7.9 million of Costar
transaction costs recorded in Corning's results for the year ended January 2,
1994.
(c) The pro forma adjustment to interest expense represents the interest on
the debt incurred in connection with the Damon transaction and the Other
Completed Transactions of $11.9 million and $2.3 million, respectively, for
the year ended January 2, 1994. The weighted average interest rate on the
debt incurred in connection with the Damon transaction is 4.9% and on the
Other Completed Transactions ranges from 3.5% to 6.7%.
Corning financed the Damon acquisition and the refinancing of approximately
$167 million of indebtedness of Damon under short-term financing agreements
entered into with certain banks to effect this transaction. During the third
quarter of 1993, Corning refinanced a portion of this short-term financing by
issuing approximately $200 million of long-term debt. The pro forma
adjustment for interest expense related to the Damon transaction is
calculated as the weighted average of short-term and long-term interest
rates. The impact of the Offering is not material to the 1993 pro forma
results.
(d) The pro forma adjustment represents the elimination of approximately $1
million of one-time costs incurred by Damon in connection with a terminated
merger agreement with National Health Laboratories Incorporated ("NHL") which
were charged to Damon's results of operations for the seven months ended July
31, 1993.
(e) The pro forma adjustment to tax expense represents the tax effect of the
adjustments detailed in notes (a), (b), (c), and (d) above. This adjustment
is calculated at Corning's historical effective tax rate.
(f) The pro forma adjustment to minority interest represents the applicable
minority interest on the historical earnings and pro forma adjustments of the
Other Completed Transactions.
(g) The pro forma adjustment to weighted average shares outstanding
represents the issuance of 5.5 million shares to complete the Costar merger
in September 1993.
Note 3--Earnings Per Share:
Earnings per common share are computed by dividing net income less preferred
dividends by the weighted average number of common shares outstanding during
each period. Preferred dividends amounted to $2.1 million during the year
ended January 2, 1994.
Note 4--Unilab Transaction:
Corning, through a wholly owned subsidiary, owned 43% of Unilab. In November
1993, Corning acquired 100 percent of certain Unilab facilities in exchange
for a majority of the Unilab shares owned by Corning, the assumption of
approximately $70 million of Unilab debt and Corning's investment in J.S.
Pathology PLC ("J.S. Pathology"). Corning retained a 12% equity investment in
Unilab.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
First Quarter 1994 Performance
Net sales for the first quarter 1994 totaled $948.9 million, up 16 percent
from the same period last year. Approximately half of the sales increase was
due to the 1993 acquisition of Damon. The other 1993 acquisitions also
contributed positively to sales growth. Net income was $58.0 million ($0.28
per share) for the first quarter of 1994 compared to $49.8 million ($0.26 per
share) for the first quarter 1993. Excluding the impact of a non-operating
gain in 1993, net income and earnings per share for the first quarter 1994
were up 23 percent and 15 percent, respectively, when compared to the same
period last year.
Earnings from consolidated operations for the first quarter 1994, excluding
the non-operating gain in 1993, increased 4 percent over the same period last
year.
First quarter 1994 equity in earnings of associated companies was $16.5
million compared with $7.2 million in the same period last year. Increased
earnings were due to strong operating performance at Dow Corning and the
elimination of losses from Vitro Corning, which was divested in late 1993.
Segment Overview
Corning's products and services are grouped into four industry segments:
Specialty Materials, Communications, Laboratory Services and Consumer
Products. Sales and earnings for the first quarter 1994 increased in all
segments except laboratory services which was negatively impacted by severe
winter weather in the eastern half of the United States.
Sales and earnings growth in the specialty materials segment was led by the
environmental products business which experienced increased demand for
ceramic substrates in its North American market. The science products
business, which included results of Corning Costar Corporation which was
acquired in 1993, and the optical products business also contributed to the
earnings growth in this segment.
Increased sales and earnings in the communications segment were primarily due
to strong volume gains in the optical-fiber and optical-cable businesses.
Sales and earnings in the conventional video components and projection video
businesses also contributed to the growth in this segment. Earnings
improvements were offset somewhat by continued development spending in the
advanced display products and ceramic memory disk businesses.
First quarter sales of the laboratory services segment improved significantly
over the prior year primarily as a result of the 1993 acquisition of Damon.
First quarter segment earnings were level with 1993. Sales and earnings of
this segment were negatively impacted by the severe winter weather in the
eastern half of the United States. The Damon acquisition contributed
positively to the operating results of this segment; however, the gain was
offset by increased goodwill amoritization resulting from the acquisition.
Sales and earnings gains in the consumer products segment were driven by
improved domestic volume. Strong manufacturing performance and a continued
focus on cost controls also contributed to the earnings growth in this
segment.
At year end 1993, Corning had restructuring and acquisition integration
reserves totaling $232.5 million, of which $155 million were short-term and
$77.5 million were long-term. Corning's restructuring and integration
programs are proceeding as planned. At the end of April 1994, the activities
associated with the corporate-wide restructuring program were more than half
complete and MetPath and Damon laboratories had been fully integrated in five
of ten primary locations. Of the $199.1 million in restructuring reserves at
the end of the first quarter, $128.4 million were classified as short-term
and $70.7 million were classified as long-term. The majority of these
reserves are expected to be paid in cash for severance-related items and
facility exit expenses. The restructuring program and the integration of
Damon are expected to be substantially complete by the end of the third
quarter 1994.
Taxes on Income
Corning's effective tax rate was 37% in the first quarter 1994 and 34% in the
first quarter 1993. The change in the effective tax rate was primarily due to
the increase in the U.S. corporate statutory tax rate (which was effective in
the third quarter 1993) and an increase in non-deductible amortization of
intangibles and other expenses.
Liquidity and Capital Resources
Corning's working capital of $452.5 million at March 27, 1994 was relatively
unchanged from $451.4 million at the end of 1993. The ratio of current assets
to current liabilities of 1.4 was also unchanged from
<PAGE>
year-end 1993. Corning's long-term debt as a percentage of total capital was
42% at the end of the first quarter compared to 45% at year-end 1993. The
improvement in this ratio is due primarily to the issuance of common stock in
February 1994. Corning intends to repay a significant portion of the
remaining $400 million Damon acquisition debt with the proceeds from the sale
of the Damon laboratories in California and the net proceeds from this
Offering.
Cash Flows
Cash and short-term investments declined from year-end 1993 by $62.6 million
due to operating and investing activities which used cash of $63.8 million
and $334.7 million, respectively, offset by financing activities which
provided cash of $335.7 million. Net cash used in operating activities
increased in the first quarter 1994 compared to the same period in 1993 due
primarily to an increase in accounts receivable. Net cash used in investing
activities increased during the same period due to the acquisition of assets
from Northern Telecom Limited and the purchase of Corning Vitro stock from
Vitro. Net cash provided by financing activities increased in the first
quarter 1994 over 1993 primarily as a result of the issuance of common stock
in February 1994 to finance the Northern Telecom and Vitro transactions.
1993 Performance
Corning's consolidated sales of $4,004.8 million in 1993 were up 8% from
1992. Approximately half of this growth was attributable to recent
acquisitions, with the remaining growth led by the Laboratory Services and
Communications segments. Consolidated sales in 1992 increased 14% from 1991
also as a result of strong performance by the Laboratory Services segment,
due in part to acquisitions, and the Communications segment.
As a result of non-recurring charges, Corning incurred a net loss in both
1993 and 1992.
Net losses totaled $15.2 million ($0.09 per common share) in 1993 and
included net non-recurring charges against consolidated operations totaling
$202.8 million ($117.9 million after tax and minority interest). These
charges included $36.5 million for the settlement and related legal expenses
incurred in the compromise agreement between MetPath, Corning's
clinical-testing business, and the Civil Division of the Department of
Justice; a restructuring charge of $170.5 million as a result of costs to
integrate the Damon and Costar acquisitions and a planned company-wide
program to reduce assets and overhead costs during the next year; and a
non-operating gain of $4.2 million. Corning also recorded a $203.1 million
reduction in equity earnings as a result of a charge taken by Dow Corning
related to breast-implant litigation and a $9.5 million reduction in equity
earnings as a result of a restructuring charge taken by Vitro Corning.
As a result of non-recurring charges in 1992, Corning recorded a net loss of
$12.6 million ($0.08 per common share) compared with net income of $316.8
million ($1.69 per common share) in 1991. Non-recurring charges in 1992
included an after-tax charge of $294.8 million ($1.56 per common share) to
reflect the cumulative effect of adoption of Financial Accounting Standard
No. 106, "Employers' Accounting for Postretirement Benefits Other than
Pensions," (FAS 106) for all consolidated and equity companies and a gain of
$8.2 million ($0.04 per common share) to reflect Corning's equity in the
cumulative effect of adoption of Financial Accounting Standard No. 109,
"Accounting for Income Taxes," by an equity company.
Earnings from consolidated operations, excluding non-recurring gains and
losses, declined 4% in 1993 when compared with 1992. This decline was
principally due to weak performance in the Consumer Products segment and the
cyclical businesses of the Specialty Materials segment, especially those in
Europe. In addition, lower prices reduced the rate of growth in both the
MetPath clinical-testing business and the optical-fiber and optical-cable
businesses. Earnings were also impacted by increased interest expense on debt
incurred to finance the acquisition of Damon and capital expansion programs.
Equity earnings in 1993, excluding non-recurring charges, were up 14% over
1992 primarily as a result of improved performance at Samsung-Corning
Company, Ltd. ("Samsung-Corning") and Dow Corning. These gains were offset
somewhat by a decline in earnings from the optical-fiber equity companies and
continued poor operating performance at Vitro Corning.
In 1992, earnings from consolidated operations increased 12% over 1991 with
the growth led by the Communications and Laboratory Services segments. Equity
earnings in 1992 declined substantially from 1991 levels due to non-recurring
charges and reduced operating earnings at Dow Corning and losses at both
Vitro Corning and Unilab.
<PAGE>
Segment Overview
In the following discussion, the sales and earnings of Corning's equity
affiliates are discussed in terms of the Company's four industry segments.
Specialty Materials
(In millions)
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Consolidated sales $758.7 $750.1 (1) $704.4
Income before taxes (2) 73.6(3) 93.8 (1) 92.2
</TABLE>
(1) The 1992 results of certain businesses which have been transferred from
the Consumer Products segment to the Specialty Materials segment have been
reclassified to conform to the current year's presentation.
(2) Both 1992 and 1993 include the incremental expense due to the adoption
of FAS 106 which totaled $8.5 million in 1992.
(3) Includes $26.5 million of restructuring charges.
Consolidated operations:
Consolidated sales of this segment have increased modestly in each of the
last three years. The increase in 1993 segment sales resulted primarily from
the acquisition of Costar. Excluding the impact of restructuring charges,
earnings have also increased over the past three years. Restructuring charges
in 1993 included $8 million of transaction costs related to the Costar
acquisition and $18.5 million of severance and other costs to restructure
operations both in the United States and in Europe.
Segment performance in 1993 was led by the science-products businesses. Sales
and earnings of the science-products businesses were up significantly over
1992 reflecting improved manufacturing efficiencies in both the plastic and
glass product lines, continued strength in the market for plastic science
products, and the acquisition of Costar. In the third quarter, Corning
acquired Costar, a manufacturer of disposable plastic products, membrane
filters, cartridge and filtration equipment used in life-science laboratories
and industrial plants throughout the world. With this acquisition, Corning
more than doubled the size of its existing plastics business. The modest
sales growth of the science-products businesses in 1992 over 1991 was
attributable to the growth in the market for plastic products. Earnings gains
in 1992 were primarily due to manufacturing efficiencies in the plastics
line.
Sales of the environmental-products business in 1993 were up slightly over
1992 due primarily to strong sales in North America offset by declines in the
European markets. Legislation mandating the use of pollution-control devices
continues to drive the increase in demand for automotive and diesel
substrates. Earnings in 1993 were down when compared with 1992 due to the
weak European economies. Sales and earnings of this business increased in
1992 over 1991 due to volume and manufacturing efficiency gains.
Sales of Corning's other Specialty Materials businesses, consisting of
optical products, lighting, and other advanced materials, declined in 1993
and 1992. Sales of these businesses in 1993 increased in the United States
but were down significantly in Europe due to weak economic conditions. Growth
in the optical products business continues to be negatively impacted by
plastic optical products. Earnings of these businesses in total declined in
1993 and 1992.
In December 1993, Corning sold its process systems business which had annual
sales of approximately $40 million. Both the operating results of this
business and impact of this transaction were not material.
Equity companies:
(In millions)
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Net sales $2,322.4 $2,230.6 $2,090.5
Corning's share of net income (loss) (139.2) 20.3 (1) 83.5
</TABLE>
(1) Before equity in changes in accounting methods.
Corning is an investor in and receives income from a number of equity
companies in the Specialty Materials segment, including Dow Corning,
Pittsburgh Corning Corporation and Pittsburgh Corning Europe, N.V. Dow
Corning's sales increased in each of the last three years. Corning's equity
in earnings of Dow Corning was reduced by $203.1 million, $24.5 million and
$8.2 million in 1993, 1992 and 1991, respectively, as a result of charges
taken by Dow Corning related to its terminated breast-implant business and by
restructuring charges totaling $13.2 million in 1992. Excluding special
charges, earnings were up
<PAGE>
in 1993 following a decline in 1992 due to improved operating performance at
Dow Corning. The 1992 decline was caused by weak worldwide economies and the
increase in postretirement benefit expense caused by the adoption of FAS 106
at Dow Corning.
In September 1993, Dow Corning announced that a proposal had been developed
to settle, on a global basis, matters involved in litigation over
silicone-gel breast-implant products. In March 1994, Dow Corning, along with
other defendants and representatives of breast implant litigation plaintiffs,
signed a Breast Implant Litigation Settlement Agreement (the "Settlement
Agreement"). Under the Settlement Agreement and related agreements, industry
participants would contribute approximately $4.2 billion over a period of
more than thirty years to establish several special purpose funds. See
"Business of Corning--Recent Developments--Breast Implant Litigation."
Dow Corning recorded an accounting charge of $415 million after tax in the
fourth quarter of 1993 which included Dow Corning's best estimate of the net
present value of its potential liability for breast-implant litigation based
on current settlement negotiations, and also included provisions for legal,
administrative and research costs related to breast implants. As
breast-implant litigation settlement negotiations continue, additional facts
and circumstances may develop which may require Dow Corning to revise its
current estimate or record additional provisions.
Corning does not believe that its share of any additional accounting charge
taken by Dow Corning resulting from the proposed settlement will have a
material adverse effect upon Corning's overall financial condition. However,
it is possible that Corning's share of any such charge taken by Dow Corning
will have a material adverse effect upon Corning's earnings in the quarter in
which any such charge is recognized by Dow Corning.
Outlook:
The modest positive sales trend experienced in this segment over the last
three years is expected to continue in 1994. Sales growth is expected to come
primarily from the continued strength of the plastics science-products
business and from the ceramic substrates business as new and pending
environmental regulations become effective in the United States and foreign
countries. Although performance of this segment will continue to be affected
by the European and Japanese economies, consolidated earnings are expected to
grow modestly due primarily to continued cost control and restructuring
measures and manufacturing efficiencies. Dow Corning's sales and operating
earnings are expected to improve in 1994.
Communications
(In millions)
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Consolidated sales $1,192.0 $1,036.6 $901.8
Income before taxes (1) 243.3(2) 230.1 189.1
</TABLE>
(1) Both 1992 and 1993 include the incremental expense due to the adoption of
FAS 106 which totaled $9.1 million in 1992.
(2) Includes $10.7 million of restructuring charges.
Consolidated operations:
Consolidated sales in this segment have grown during the past three years
driven by continued strong growth in worldwide demand for optical fiber and
optical cable. The conventional-video components and advanced display
products businesses also experienced strong sales increases in 1993.
Excluding restructuring charges, earnings were up in 1993 due to volume
growth and improved manufacturing performance in the advanced display
products and conventional-video components businesses and a modest increase
in earnings of the optical-fiber and optical-cable businesses. Sales and
earnings in the projection-video business reached record levels in 1993.
Restructuring charges of $10.7 million in 1993 included severance and other
costs associated with an overhead reduction program. Segment earnings in 1992
increased over 1991.
Sales of Corning's optical-fiber and optical-cable businesses increased
significantly in both 1993 and 1992. Market growth has been led by the
increased use of fiber-optic cable in the feeder portions of telephone
networks and the rapidly growing use of fiber in cable-television systems.
Despite record volume growth, earnings of the optical-fiber and optical-cable
businesses increased only slightly due to aggressive pricing to secure
long-term optical-cable supply contracts. Earnings in 1992 increased over
1991. Corning continues to invest in the development of several businesses in
this segment which provide a variety of optical components to bring optical
fiber to the home.
In 1993, Corning increased its acquisition activity in this segment to expand
its market for optical-fiber products and related optical components. In the
third quarter of 1993, Siecor Corporation ("Siecor") acquired the
telecommunications business of GTE Control Devices Incorporated which
manufactures
<PAGE>
single- and multi-line network interface devices, solid state protection
devices for central office and building entrance terminals, and optical
hardware products. In February 1994, Corning and Siecor acquired the assets
relating to the optical-fiber and optical-cable businesses of Northern
Telecom Limited for $130 million in a transaction accounted for as a
purchase. Northern Telecom is a major supplier of optical fiber and optical
cable to Canadian and international markets.
Sales in the conventional-video components and projection-video businesses
increased significantly in 1993. The recovering U.S. television market and a
shift in product mix from medium to larger size video components contributed
to the strong sales increase. Sales in 1992 increased over 1991. Earnings
were up in 1993 and 1992 as a result of higher volume and continuing
manufacturing efficiency improvements.
Sales in the advanced display products business, which produces
liquid-crystal display glass, increased significantly in both 1993 and 1992.
As a result of the growth in sales and solid manufacturing gains, this
business experienced profitability for the first time in 1993 despite
continued significant investment in research and development. In 1993,
Corning began construction of melting units in Japan and in the United States
which will significantly increase production capacity to meet the demands of
this growing market.
In 1993, Corning and Seagate Technology, Inc. ("Seagate") entered into the
first major sales contract for Corning's new MemCor(tm) glass-ceramic memory
disk which is used for high-performance disk drives in computers. This
product significantly increases storage capacity and, because of its
strength, improves reliability. Although the Seagate contract represents an
important milestone in the development of this product, the profitability of
this business will continue to be impacted by significant development
spending.
Sales of Biosym Technologies Inc. ("Biosym"), which was acquired in the third
quarter of 1992, contributed to the sales growth of this segment. Biosym
specializes in the development, marketing, and support of computer-aided
molecular design software. Biosym's profitability was impacted by the weak
economies in Japan and Europe and a slowdown in sales to pharmaceutical
companies caused by uncertainty surrounding the impact of health-care reform.
Equity companies:
(In millions)
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Net sales $680.2 $685.8 $609.1
Corning's share of net income 35.4 37.4 25.8
</TABLE>
Samsung-Corning, a South Korean manufacturer, produces glass panels and
funnels for entertainment television and display monitors. Samsung-Corning's
sales and earnings increased in 1993 and 1992. The 1993 increase in sales and
earnings reflected higher volumes and share gains due to the strengthening
yen along with reduced financing costs. The 1992 increase was primarily a
result of increased sales and improved manufacturing performance. In 1993,
Samsung-Corning completed a transaction which will expand its manufacturing
capacity into Eastern Europe.
Sales and earnings of Corning's optical-fiber equity companies declined in
1993 due primarily to a decrease in volume and pricing pressures felt most
heavily in Europe. Earnings were flat in 1992 compared with 1991 primarily as
a result of adverse market conditions in the United Kingdom.
Outlook:
Segment performance is expected to improve in 1994. Sales volumes in the
optical-fiber and optical-cable businesses are expected to continue to grow,
although the rate of growth in earnings will continue to be impacted by
worldwide pricing pressures. Sales and earnings of the advanced display
products business are expected to continue their rapid growth trend. Sales
and earnings in the conventional-video components and projection-video
businesses are expected to continue their upward trend. Equity earnings in
this segment are expected to decline due to the impact of two major glass
furnace repairs on Samsung-Corning sales offset by a slight improvement in
the optical-fiber equity companies.
Laboratory Services
(In millions)
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Consolidated sales $1,319.5 $1,149.8 $884.3
Income before taxes 125.3(1) 203.1 155.5
</TABLE>
(1) Includes a $36.5 million charge for the MetPath settlement and $58.5
million of restructuring charges.
<PAGE>
Consolidated operations:
Consolidated sales in this segment achieved record levels in each of the last
three years, reflecting the strong performance trend in existing businesses
and the impact of strategic acquisitions. Earnings were significantly
impacted by non-recurring charges in 1993. Excluding these charges, earnings
increased, but at a slower pace in 1993 than in prior years as a result of
pricing pressures and significant uncertainty in the health care industry.
In August 1993, MetPath completed the acquisition of Damon, a
clinical-testing business. In addition, in November 1993, MetPath completed a
transaction with Unilab which resulted in the acquisition of Unilab's
laboratories in Denver, Dallas, and Phoenix. With the completion of these
transactions, MetPath is strategically positioned with efficient low-cost
operations throughout the United States.
MetPath's sales increased in both 1993 and 1992. Approximately 75% of the
1993 sales growth resulted from Damon and other acquisitions. Excluding the
impact of non-recurring charges, MetPath's 1993 earnings were up slightly due
to the acquisition of Damon. Earnings growth in 1993 was hindered by
competitive pricing pressures and an increasingly higher mix of business from
lower-priced managed-care clients. MetPath recorded a $58.5 million
restructuring charge in 1993 primarily for costs of closing MetPath
facilities as a result of the integration of Damon and MetPath operations.
This integration should provide MetPath with significant synergies and
additional opportunities to reduce unit costs in 1994 and 1995.
In September 1993, MetPath recorded a charge of $36.5 million to reflect the
settlement and related legal expenses associated with its compromise
agreement with the Civil Division of the Department of Justice to settle
claims brought on behalf of the Inspector General, U.S. Department of Health
and Human Services. The claims related to the marketing, sale, pricing and
billing of certain blood-test series provided to Medicare patients. The
settlement does not constitute an admission by MetPath with respect to any
issue arising from the civil action. In the third quarter 1993, MetPath,
along with other major clinical laboratories, received subpoenas for
additional information relating to certain other tests. In addition, certain
payors are reviewing their reimbursement practices for laboratory tests in
response to announcements by certain competitors and continued pressure by
government agencies. The outcome of these events is uncertain but could
increase the current downward price trend in the clinical-testing industry.
See "Business of Corning--Recent Developments--Department of Justice
Investigation."
Sales of the pharmaceutical services businesses have increased during the
last three years. Earnings improved significantly in 1993 and 1992 primarily
as a result of strong volume growth and cost-reduction actions. SciCor, Inc.
("SciCor"), which was acquired in 1991, reported increased revenues and
operating profits in both 1993 and 1992 as the market for clinical drug
trials continues to grow.
Sales at Enseco, the environmental-laboratory testing company, declined
slightly in 1993 due to weak market conditions and a scale-back in
operations. Sales in 1992 increased over 1991 levels primarily due to a late
1991 acquisition. Earnings increased slightly in both 1993 and 1992 resulting
from improved operating efficiencies and cost-reduction programs.
Equity companies:
(In millions)
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Net sales $18.0 $228.4 $198.7
Corning's share of net income (loss) (0.5) (8.5) 0.7
</TABLE>
In November 1993, MetPath acquired 100% of certain Unilab facilities in
exchange for a majority of the Unilab shares owned by MetPath, the assumption
of approximately $70 million of Unilab debt, and MetPath's investment in J.S.
Pathology PLC. MetPath retained a 12% equity investment in Unilab. At year
end 1992, MetPath owned 43% of Unilab and, in contemplation of this
transaction, accounted for it using the cost method of accounting for
investments in 1993.
Outlook:
Sales of the Laboratory Services segment are expected to increase as a result
of the Damon acquisition and volume gains in all businesses. MetPath's
earnings are expected to increase as a result of significant cost reductions
over the next year and synergies from the Damon acquisition offset somewhat
by the continuing price pressures in the health care industry. Solid growth
is expected to continue in the pharmaceutical services businesses. The
environmental-laboratory testing business will continue to emphasize cost
efficiencies and quality.
<PAGE>
Consumer Products
(In millions)
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Consolidated sales $734.6 $772.2(1) $768.7
Income before taxes (2) (3) (35.4) (20.3)(1) 57.7
</TABLE>
(1) The 1992 results of certain businesses which have been transferred from
the Consumer Products segment to the Specialty Materials segment have been
reclassified to conform to the current year's presentation.
(2) Both 1992 and 1993 include the incremental expense due to the adoption of
FAS 106 which totaled $6.3 million in 1992.
(3) Includes $46.5 million and $63.3 million of restructuring charges in 1993
and 1992, respectively.
Consolidated operations:
Consolidated sales in the Consumer Products segment declined in 1993 in
comparison with 1992 due to the impact of a poor worldwide retail sales
environment and the recent exit from the Brazilian market. Profitability has
been affected by increased promotion costs, reduced manufacturing to realign
inventory levels with lower sales volumes and reserves for certain inventory
and product claims. Segment profits were also adversely impacted in 1993 by
restructuring charges. Sales in 1992 were up in comparison with 1991;
however, earnings in 1992 were down primarily due to a restructuring
provision for the shutdown of operations in Brazil.
In December 1993, Corning and Vitro of Mexico agreed to end their cross
ownership of Corning Vitro in the United States and Vitro Corning in Mexico.
As a result of the agreement, in December 1993, Vitro purchased the shares of
capital stock of Vitro Corning owned by Corning and, in February 1994,
Corning purchased the shares of capital stock of Corning Vitro held by Vitro.
The net cost to Corning was $131 million. As a result of the transactions,
Corning Vitro has changed its name to Corning Consumer Products Company.
Corning and Vitro will continue their consumer products alliance through
cross distribution and supply agreements.
Corning Consumer Products' sales decreased in the North American and European
markets in 1993. The decline in the U.S. market was attributable primarily to
trade inventory corrections and reduced promotional activity. European sales
continue to be impacted by the weak economy. In 1992, sales increased in
North America but declined in Europe. Sales improved in Asia-Pacific in both
1993 and 1992.
Sales of Corning Ware(R) cookware and Pyrex(R) ware improved in 1993 compared
with 1992. These increases were offset, however, by declines in sales of
Visions(R) ware, due partially to Corning Consumer Products' exit from
Brazil. Sales of Corelle(R) dinnerware and Revere Ware(R) cookware declined
slightly. Corelle(R) dinnerware volume was affected by trade inventory
corrections and reduced trade promotional activity.
Restructuring charges totaling $46.5 million in this segment included costs
of a reduction in the salaried work force, the consolidation of Corning
Ware(R) cookware and Visions(R) ware manufacturing, and the consolidation of
North American packaging operations.
Sales of Steuben(R) crystal increased over 1992 due to a general increase in
volume as well as the opening of several new retail stores and wholesale
galleries and new product introductions. Earnings of this business improved
slightly in 1993 due to improved glass melting performance and quality
initiatives.
Equity companies:
(In millions)
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Net sales $285.2 $273.4 $87.7
Corning's share of net income (loss) (15.7) (5.4) 1.7
</TABLE>
Equity in earnings in 1993 continued to be negatively impacted by the poor
operating results of Vitro Corning due to the combined impact of the weak
Mexican economy, domestic Mexican inflation, increasing foreign competition
in Mexico and the strength of the Mexican peso. Vitro Corning's 1993
operating losses were offset somewhat by a favorable non-recurring tax
adjustment. Corning also recorded a $9.5 million reduction in equity earnings
resulting from a restructuring charge taken by Vitro Corning in 1993. The
decline in 1992 was the result of equity losses recorded by Vitro Corning,
due primarily to adverse retail market conditions in Mexico.
Outlook:
Sales and earnings are expected to improve in 1994 as the benefits of
restructuring programs implemented in 1993 and a focused marketing strategy
positively impact performance. The change from cross
<PAGE>
ownership to distribution and supply agreements with Vitro is expected to
have a modest positive impact on earnings. Economic uncertainties, especially
in Europe, will continue to impact this segment.
Other Revenues and Deductions
Non-operating gains and losses:
In 1993, Corning recognized a non-operating gain of $4.2 million ($2.6
million after tax).
In 1992, Corning recognized net non-operating gains from consolidated
operations totaling $7.0 million ($21.7 million after tax), including a gain
of $10.1 million (before and after tax) from the sale of an additional equity
interest in Corning Japan K.K. and a pre-tax loss of $7.3 million ($9.0
million after-tax gain) from the formation of the consumer housewares venture
with Vitro.
In 1991, Corning recognized net non-operating gains from consolidated
operations totaling $8.1 million ($14.6 million after tax) which included a
gain of $5.3 million (before and after tax) on the sale of an equity interest
in Corning Japan.
Provision for restructuring and other special charges:
In 1993, Corning recorded a charge of $170.5 million ($98.5 million after tax
of $64.6 million and minority interest of $7.4 million) as a result of costs
to integrate the Damon and Costar acquisitions and as a result of a planned
company-wide restructuring program to reduce assets and overhead costs during
the next year. Also in 1993, MetPath recorded a charge of $36.5 million
($22.0 million after tax) to reflect the settlement and related legal
expenses associated with its compromise agreement with the Civil Division of
the Department of Justice to settle claims brought on behalf of the Inspector
General, U.S. Department of Health and Human Services.
In 1992, Corning recorded a charge of $63.3 million ($32.1 million after tax
of $22.9 million and minority interest of $8.3 million) as a result of
Corning Vitro's decision to restructure its Brazilian operations.
Equity earnings:
In 1993, Corning recognized a $203.1 million reduction in equity earnings as
a result of an accounting charge taken by Dow Corning related to
breast-implant litigation and a $9.5 million reduction in equity earnings as
a result of a restructuring charge taken by Vitro Corning.
In 1992, Corning recognized a $37.7 million reduction in equity earnings
which included $24.5 million of accounting charges associated with Dow
Corning's terminated breast-implant business and $13.2 million of
restructuring charges associated with Dow Corning's exit from its Brazilian
operations and other cost-reduction programs.
In 1991, Corning recognized an $8.2 million reduction in equity earnings to
reflect an accounting charge recorded by Dow Corning for costs associated
with its terminated breast-implant business.
Taxes
Corning's effective tax rate varies between years due primarily to the impact
of certain non-operating gains and losses and restructuring charges. The
effective tax rates, excluding these items, were 31% in 1993, 33% in 1992,
and 37% in 1991. The reduced 1993 rate is primarily due to tax benefits
associated with the sale of the process systems business and the revaluation
of deferred tax assets discussed below. The reduced 1992 rate resulted from
the implementation of repatriation programs and increased utilization of tax
credits.
Corning adopted FAS 109 at the beginning of 1993. The impact of adoption of
FAS 109 was not material. On August 10, 1993, the Revenue Reconciliation Act
of 1993 (the "Act") was signed into law. The Act increased the U.S. corporate
statutory tax rate from 34% to 35% for years beginning after December 31,
1992, changed the deductibility of certain expenses and extended certain tax
credits. The increase in the statutory tax rate resulted in a gain from the
revaluation of Corning's net deferred tax assets in the third quarter 1993
which lowered the 1993 effective tax rate. Excluding this gain, the impact of
the Act did not have a material impact on Corning's effective tax rate.
Liquidity and Capital Resources
Corning's working capital of $451.4 million at the end of 1993 declined
slightly from $465.2 million at the end of 1992. The ratio of current assets
to current liabilities was 1.4 at the end of 1993 compared with 1.6 at the
end of 1992. Corning's ratio of long-term debt to total capital increased to
45% at the end of 1993 from 28% at the end of 1992. The change in the ratio
of long-term debt to total capital is primarily due to the financing of the
Damon acquisition.
<PAGE>
In 1993, Corning increased its available bank credit lines by $155 million.
In addition, Corning borrowed $600 million under agreements with two banks to
finance the acquisition of Damon for approximately $405 million in cash and
the refinancing of approximately $167 million of Damon's debt. In September
1993, Corning issued $200 million of long-term debt securities in public
offerings and used the proceeds of such offerings to repay an equivalent
amount of the acquisition debt. Corning intends to refinance a significant
portion of the remaining acquisition debt with the net proceeds from this
Offering.
Cash Flows
Cash flows from operating activities increased in 1993 compared with 1992
primarily due to a significant reduction in net current operating assets and
liabilities (excluding the impact of acquisitions) offset by the payment by
MetPath to the Department of Justice and the suspension of dividends from Dow
Corning. Cash flows from operating activities increased in 1992 over 1991
primarily due to improved operations.
Cash used in investing activities increased significantly in 1993 over 1992
primarily due to the acquisition of Damon for approximately $405 million.
Cash used in investing activities also increased in 1992 over 1991 primarily
due to increased investments in plant and equipment and acquisitions in the
Laboratory Services segment, partially offset by the receipt of $137 million
of net proceeds from the formation of Corning Vitro and Vitro Corning.
Capital spending increased in 1993 when compared with 1992 primarily due to
the expansion of the liquid-crystal display facility in Japan and the
completion of Corning's corporate headquarters building. Capital spending
increased in 1992 over 1991 primarily due to the continued expansion of the
Wilmington, North Carolina, optical-fiber manufacturing facility, the
construction of additional facilities to support growth in the Laboratory
Services segment and the construction of the corporate headquarters building.
At year end 1993, Corning's capital commitments totaled approximately $199.2
million.
In 1993, cash provided by financing activities increased significantly over
1992 primarily as a result of increased borrowings to finance the acquisition
of Damon and the telecommunications business of GTE Control Devices
Incorporated and to finance continued capital expansion programs. In 1992,
cash used in financing activities increased significantly over 1991 due to
higher levels of common stock repurchases and the timing of dividend
payments.
Corning repurchased 1,323,700; 2,910,500; and 1,989,000 shares of its common
stock in 1993, 1992, and 1991, respectively, pursuant to a systematic plan
authorized by the Board of Directors. This activity is designed to provide
shares for Corning's various employee-benefit programs. Corning suspended its
share repurchase program in May 1993 to conserve cash for acquisition
purposes.
Dividends paid to common shareholders in 1993 totaled $134.1 million compared
with $176.7 million in 1992 and $92.6 million in 1991. The higher 1992
payment resulted from a $0.15 per-share special dividend declared in 1991 and
paid in 1992 and the payment of the fourth quarter 1992 dividend prior to the
end of fiscal 1992. Excluding these items, the increase in dividends paid was
caused by an increase in the dividend rate of 10% and 17% in 1993 and 1992,
respectively, and the increase in common shares outstanding.
Environment
Corning has been named by the Environmental Protection Agency under the
Superfund Act, or by state governments under similar state laws, as a
potentially responsible party for 22 hazardous waste sites. Under the
Superfund Act, all parties who may have contributed any waste to a hazardous
waste site, identified by such Agency, are jointly and severally liable for
the cost of cleanup unless the Agency agrees otherwise. It is Corning's
policy to accrue for its estimated liability based on expert analysis and
continual monitoring by both internal and external consultants. Corning has
accrued for its estimated liability with respect to each of these sites and
has not reduced the liability for any potential insurance recoveries. The
aggregate liability is not material to the Company's operations or financial
position.
Effects of Inflation
Amounts reflected in the financial statements do not provide for the effect
of inflation on operations or financial position. The expenses and asset
values, specifically those related to long-lived assets, reflect historical
cost and do not necessarily represent replacement cost or charges to
operations based on replacement cost. Corning's operations are geared to
provide funds from operations which would be sufficient along with other
sources to replace fixed assets as necessary. Net income would be lower than
reported if the effects of inflation were reflected by charging operations
for replacement costs.
<PAGE>
BUSINESS OF CORNING
General
Corning traces its origin to a glass business established by the Houghton
family in 1851. The present corporation was incorporated in the State of New
York in December 1936, and its name was changed from Corning Glass Works to
Corning Incorporated on April 28, 1989.
Corning is an international corporation competing in four broadly-based
business segments: Specialty Materials, Communications, Laboratory Services
and Consumer Products. Corning is engaged principally in the manufacture and
sale of products made from specialty glasses and related inorganic materials
having special properties of chemical stability, electrical resistance, heat
resistance, light transmission and mechanical strength. Corning and its
subsidiaries annually produce some 60,000 different products at 44 plants in
eight countries. In addition, Corning, through subsidiaries and affiliates,
engages in laboratory services businesses, including life and environmental
sciences and clinical-laboratory testing at 62 facilities in ten countries.
Corning's strategy includes growth from new products developed from Corning's
long-standing commitment to research and development and from mergers and
acquisitions. Accordingly, Corning continuously reviews potential acquisition
opportunities, primarily in the laboratory services and communications areas.
However, there can be no assurance that Corning will pursue any such
acquisition opportunity.
In addition to the restructuring programs already under way, Corning is
currently engaged in a comprehensive review of its business and cost
structure. Corning expects this review to be substantially completed by the
end of 1994.
Specialty Materials
Corning's Specialty Materials segment sells more than 40,000 products and has
evolved from Corning's historical business base in materials development. The
major business units within the Specialty Materials segment are: automotive
substrates, ophthalmic and optical products, automotive lighting, science
products, and other advanced materials. Products manufactured by these
businesses include cellular ceramics for automotive and stationary
emission-control devices, plastic and glass ware for laboratory applications
and glass optical lenses.
Corning's long standing commitment to research, development and engineering
has driven the introduction of new products and technologies. In the 1970's
Corning developed the technology and created products for the substrates used
in emission control systems. Today the environmental products business
continues to be a driving force within the Specialty Materials segment.
Corning continues to develop new products and technologies to meet increasing
demand as a result of tightened regulations in the United States and Europe
and new regulations in other parts of the world. For example, to meet
tightening clean air standards, Corning has developed as a prototype an
electrically heated automotive catalytic converter substrate that begins
working within seconds of ignition, which is when most of the pollutants are
generated. Corning has developed a new family of materials, glass-polymers,
the properties of which make them well suited for components in automobiles,
aircraft, lighting systems and electronic devices.
Corning's equity company investments in this segment include Dow Corning,
Pittsburgh Corning and Cormetech, Inc., an equity company which manufactures
and sells stationary emission control devices for power plants.
Communications
Corning's Communications segment consists of the following major product
lines: optical fiber, optical cable, optical components, liquid-crystal
display glass, television bulbs, lenses for projection television, and
magnetic memory disks.
Corning's Communications segment also originates from Corning's commitment to
research and development in new materials. Corning led the development of the
modern opto-electronics market with its invention of optical fiber in the
late 1960's and is the leading supplier of optical fiber and such supporting
components as couplers and signal splitters. Corning is also a leading
supplier of optical cable through its 50% ownership of Siecor. In addition,
Corning has several equity investments in companies that produce optical
fiber internationally.
Approximately two-thirds of the revenues in the Communications segment are
generated by sales of opto-electronic products. Today, optical fiber is
penetrating the communications market as optical fiber
<PAGE>
is rapidly becoming the preferred way to transmit telephone, cable-TV and
computer data worldwide. Optical fiber permits the transmission of
substantially more data over greater distances with less distortion than does
copper, the product it is principally replacing. As users of optical fiber
increase applications and expand services, Corning continues to provide new
and improved optical-fiber products and corollary components to an expanding
market. During the next few years, management believes that more fiber will
be deployed in distribution cables and that utilization of fiber to the home
will increase.
Corning continues to be a leading producer of glass panels and funnels for
television picture tubes through Corning Asahi Video Products Company, and is
also a world leader in the production of projection television lenses through
its wholly owned subsidiary, U.S. Precision Lens Inc.
The market for liquid-crystal display glass continues to grow, currently
driven by notebook computer and portable-TV sales. Future applications are
expected to include desktop-computer displays, projection-TV systems, video
phones and automotive applications. Corning is the world's leading supplier
in this market.
Another Corning invention, the MemCor(tm) glass-ceramic memory disk for
high-performance hard-disk drives in computers, significantly increases
storage capacity and improves reliability.
Also included in this segment is Biosym, which develops and markets
computer-aided molecular design software.
Laboratory Services
Corning entered the laboratory services market in the early 1970's with its
initial investment in MetPath, a regional U.S. clinical laboratory which
Corning acquired in 1982. Since 1982, Corning has made several other
acquisitions in the clinical, biological, pharmaceutical and
environmental-services industries. In 1991 Corning combined its
laboratory-service business units into a wholly owned subsidiary, Corning Lab
Services Inc. ("CLSI"), to better manage the development of its business in
this rapidly growing area. Today CLSI operates 62 facilities in ten countries
that provide clinical, pharmaceutical and environmental testing services.
CLSI's clinical testing subsidiary, MetPath, performs more than 1,400
different clinical tests for physicians, hospitals, laboratories, industries,
health-maintenance organizations and other managed-care providers through a
quick-response network of regional U.S. laboratories. MetPath is a leader in
providing cost-effective and reliable clinical diagnostic testing services.
See "--Recent Developments--Department of Justice Investigation."
In August 1993 Corning acquired all of the outstanding shares of common stock
of Damon in a transaction accounted for as a purchase. The total purchase
price of this transaction was approximately $405 million, including
acquisition expenses. In addition, approximately $167 million of indebtedness
of Damon has been refinanced. Corning has financed the acquisition of Damon
and the refinancing of Damon's debt with financing agreements entered into
with certain commercial banks. Approximately $200 million of such financing
has been retired with the proceeds from the issuance of long-term debt of
Corning. Corning intends to retire a significant portion of the remaining
acquisition debt with the net proceeds of the Offering.
Damon's principal line of business is clinical-laboratory testing, providing
to the medical profession a full range of routine and esoteric testing
services that are used in the diagnosis, monitoring and treatment of disease.
Damon provides its services to physicians, hospitals, nursing homes, managed
care institutions, corporations and governmental agencies, including agencies
of the United States of America.
On May 4, 1994, Corning signed a definitive agreement to acquire all of the
outstanding shares of Maryland Medical and several affiliates for
approximately 4.5 million shares of Corning Common Stock in a pooling of
interests transaction. The transaction, which is subject to regulatory
approval, is expected to close in the second or third quarter 1994.
CLSI's pharmaceutical-testing businesses are conducted by MetPath's wholly
owned subsidiaries, G.H. Besselaar Associates, Hazelton Corporation and
SciCor. These businesses perform chemical and biological testing, clinical
research and data management services primarily for the pharmaceutical
industry. Corning's environmental-laboratory testing business is conducted by
MetPath's Enseco division and provides tests for environmental contaminants
in soil, water and air for industry and government.
On May 2, 1994, Corning and International Technology signed a definitive
agreement to create a jointly owned company to provide environmental testing
and related services. Under the terms of the
<PAGE>
agreement, Corning will transfer the net assets of its environmental testing
laboratory business to the new company and International Technology will
transfer the assets of its IT Analytical Services business to the new
company. Corning and International Technology each will own 50 percent of the
company. The transaction, which is subject to regulatory approval, is
expected to close in the second or third quarter 1994. See "--Recent
Developments--Creation of Environmental Testing Services Company."
Corning's Laboratory Services segment is being affected by new federal
legislation implemented in January 1994. The new legislation reduces Medicare
reimbursement rates and will limit future laboratory fee increases. In
addition, the Clinton Administration's health-care plan calls for managed
competition with limitations on total national health-care expenditures and
on the annual growth of such expenditures. A health-care reform model based
on managed competition will likely reduce reimbursements for clinical
laboratory services as managed care networks continue to proliferate. As the
plan also calls for insurance coverage for some 37 million people who
currently have no such coverage, it is expected that demand for such services
will increase. Demand should also increase as a result of a stronger emphasis
on testing as a preventative measure. It is not clear how quickly or to what
extent Medicare and Medicaid programs will be incorporated into the health
reform system. Management believes that while the entire health-care industry
faces dramatic challenges to build a more effective means of delivery of
services, MetPath's leading market position in major geographic areas will
allow Corning to continue to benefit from the ongoing and increasing
consolidation in the industry.
Consumer Products
Corning is well known for its line of consumer housewares with strong brand
names and consumer franchise. Key product lines are Pyrex(R) glassware,
Corelle(R) tableware, Corning Ware(R), Visions(R) cookware, and Revere
Ware(R) cookware. Other Corning consumer products include the prestigious
Steuben(R) crystal and Serengeti(R) sunglasses.
Corning's executive offices are located at One Riverfront Plaza, Corning, New
York 14831, and its telephone number at such offices is (607) 974-9000.
Recent Developments
Disposition of Clinical Laboratory Testing Operations. On April 4, 1994,
MetPath sold the clinical laboratory testing operations of Damon in
California for approximately $51 million in cash. No gain or loss will be
recognized as a result of this transaction. The proceeds from the transaction
will be used to retire a portion of the debt incurred in connection with the
acquisition of Damon in August 1993.
Creation of Environmental Testing Services Company. On May 2, 1994, Corning
and International Technology signed a definitive agreement to create a
jointly owned company to provide environmental testing and related services.
Under terms of the agreement, Corning will transfer the net assets of its
environmental testing laboratory business to the new company and
International Technology will transfer the assets of its IT Analytical
Services business to the new company. Corning and International Technology
each will own 50 percent of the company. The transaction, which is subject to
regulatory approval, is expected to close in the second or third quarter
1994. Corning will account for its investment in the newly created company
using the equity method of accounting for investments. The impact of the
transaction is not expected to be material to Corning's financial statements.
Acquisition of Maryland Medical. On May 4, 1994, Corning signed a definitive
agreement to acquire all of the outstanding shares of Maryland Medical for
approximately 4.5 million shares of Corning Common Stock in a pooling of
interests transaction. The transaction, which is subject to regulatory
approval, is expected to close in the second or third quarter 1994. The
impact of the transaction is not expected to be material to Corning's
financial statements.
Sale of Parkersburg Plant. On May 23, 1994, Corning sold its Parkersburg,
West Virginia, glass-tubing products plant to Schott Scientific Glass, Inc.,
a subsidiary of Schott Corporation, for $57 million. The transaction is
expected to result in a modest after-tax gain.
Breast Implant Litigation. Corning continues to be a defendant in two types
of cases previously reported involving the silicone-gel breast implant
products or materials formerly manufactured or supplied by Dow Corning or a
Dow Corning subsidiary. These cases include (1) several purported federal
securities class action lawsuits and shareholder derivative lawsuits filed
against Corning by shareholders of Corning alleging, among other things,
misrepresentations and omissions of material facts, breach of duty to
shareholders and waste of corporate assets relative to the silicone-gel
breast implant business conducted by Dow Corning and (2) as of May 23, 1994
over 3,490 lawsuits filed in various state courts against Corning
<PAGE>
and others (including Dow Corning) by persons claiming injury from the
silicone-gel breast implant products or materials formerly manufactured by
Dow Corning or a Dow Corning subsidiary. Several of such suits have been
styled as class actions and others involve multiple plaintiffs.
All of the more than 3,000 tort lawsuits filed against Corning in federal
courts were consolidated in the United States District Court, Northern
District of Alabama, and in early December 1993, Corning was dismissed from
these cases. This decision by the District Court is non-appealable and,
although the District Court noted that it was "highly unlikely" that
additional discovery would produce new evidence, the decision is subject to
reconsideration if additional information is discovered or if there is a
change in state law. Certain state court tort cases against Corning have also
been consolidated for the purposes of discovery and pretrial matters. During
1994, Corning has made several motions for summary judgment in state courts
and judges have dismissed Corning from all of the over 2,500 tort cases filed
in California, Michigan, New York and Pennsylvania. Corning's motions seeking
dismissal remain pending in various other states. The federal securities
suits are all pending in the United States District Court for the Southern
District of New York.
Corning's management does not believe that the purported securities class
action lawsuits or the purported shareholder derivative lawsuits or the tort
actions filed against Corning described above will have a material adverse
effect on Corning's financial condition or the results of its operations.
Dow Corning has informed Corning that as of April 15, 1994, Dow Corning has
been named in 45 purported breast implant product liability class action
lawsuits and approximately 14,500 individual breast implant product liability
lawsuits (which number includes all or substantially all of the 3,490
lawsuits referred to above) and that Dow Corning anticipates that it will be
named as a defendant in additional breast implant lawsuits in the future. Dow
Corning has also stated that it is vigorously defending this litigation.
Verdicts in breast implant litigation against Dow Corning and other
defendants which have gone to judgment have varied widely, ranging from
dismissal to the award of significant compensatory and punitive damages.
Dow Corning has also informed Corning that Dow Corning believes that a
substantial portion of the indemnity and defense costs related to the breast
implant litigation brought and to be brought against it is and will be
covered by product liability insurance available to it but that the insurance
companies issuing the policies in question have reserved the right to deny
coverage under various theories and in many cases have refused to pay defense
and indemnity costs which have been incurred by Dow Corning. In this regard,
on June 30, 1993, Dow Corning instituted litigation in California against
certain insurance companies which had issued product liability insurance
policies to it from 1962 through 1985 seeking declaratory judgments that the
insurance company defendants are liable to indemnify Dow Corning for such
liabilities and costs and, in the case of certain insurance company
defendants, damages including punitive damages. In September 1993, several of
Dow Corning's insurers filed a complaint against Dow Corning and other
insurers for declaratory relief in Michigan and moved for the action brought
by Dow Corning in California to be dismissed in favor of the Michigan
litigation. In October 1993, this motion was granted. In March 1994, the
Michigan court ruled that certain of Dow Corning's primary insurers had a
duty to defend Dow Corning with respect to certain breast implant product
liability lawsuits. These insurers were directed to reimburse Dow Corning for
certain defense costs previously incurred. Dow Corning has informed Corning
that it is continuing negotiations with such insurance companies to obtain an
agreement on a formula for the allocation among these insurers of payments of
defense and indemnity expenses related to breast implant products liability
lawsuits and claims.
In March 1994, Dow Corning, along with other defendants and representatives
of breast implant litigation plaintiffs, signed a Breast Implant Litigation
Settlement Agreement (the "Settlement Agreement"). Under the Settlement
Agreement and related agreements, industry participants (the "Funding
Participants") would contribute approximately $4.2 billion over a period of
more than thirty years to establish several special purpose funds. The
Settlement Agreement, if implemented, would provide for a claims based
structured resolution of claims arising out of silicone breast implants,
define the circumstances under which payments from the funds would be made
and include a number of other provisions related to claims and
administration. The Settlement Agreement defines periods during which breast
implant plaintiffs may elect not to settle their claims by way of the
Settlement Agreement and to continue their individual breast implant
litigation against manufacturers and other defendants (the "Opt Out
Plaintiffs"). In certain circumstances, if Dow Corning considers the number
of Opt Out Plaintiffs to be excessive, Dow Corning is entitled to withdraw
from participation in the Settlement Agreement. Corning would not be required
to make any contribution to the funds established under the Settlement
Agreement.
<PAGE>
In April 1994, the U.S. District Court for the Northern District of Alabama
preliminarily approved the Settlement Agreement and temporarily stayed and
suspended federal and state class action certification or notice proceedings
relative to federal or state class action lawsuits filed by plaintiffs
included in the settlement class.
In April 1994, the Court also notified the breast implant plaintiffs eligible
to participate in the settlement of a 60-day period during which they have
the ability to become initial Opt Out Plaintiffs. A Court-supervised fairness
review process of the Settlement Agreement must be completed before the
Settlement Agreement can be implemented. Once the Settlement Agreement is
approved by the Court, claims can then be validated. The Court's approval of
the Settlement Agreement would be subject to appeal.
Dow Corning recorded a pre-tax charge of $640 million ($415 million after
tax) against its earnings for the fourth quarter of 1993 to reflect its best
estimate as of January 1994 of the net present value of its net liabilities
and costs as a result of its involvement in breast implant litigation and, as
a result of Dow Corning's decision to take this charge, Corning recorded a
charge of $203 million after tax against its equity in earnings of associated
companies for the fourth quarter of 1993 and against the carrying value of
its investment in Dow Corning at the end of fiscal 1993.
If the tort actions filed against Dow Corning or any settlement of the breast
implant controversy should require Dow Corning to record any additional
charges against income, the effect on Corning of any such additional charges
would be limited to their consequent impact (in the amount of approximately
50% of the amount thereof) on Corning's reported equity in earnings of
associated companies for the period such charges were recognized, on the book
value of Corning's equity investment in Dow Corning and on Corning's retained
earnings. Corning does not believe that its share of any additional charges
taken by Dow Corning resulting from the breast implant controversy will have
a material adverse effect upon Corning's financial condition. However, it is
possible that Corning's shares of any such additional charges taken by Dow
Corning could have a material adverse effect upon Corning's earnings in the
quarters in which any such charges were recognized by Dow Corning.
Other Dow Corning Matters. Dow Corning received a request dated July 9, 1993
from the Boston Regional Office of the Commission for certain documents and
information related to silicone breast implants. The request stated that the
Boston Regional Office was conducting an informal investigation which
"concerns Dow Corning, its subsidiary Dow Corning Wright and parent
corporations, Dow Chemical Co. and Corning Inc." Dow Corning has informed
Corning that Dow Corning has responded to this request enclosing the
documents and information requested along with related information and
continues to cooperate with the Boston Regional Office.
During the first quarter of 1993, Dow Corning received two federal grand jury
subpoenas initiated by the United States Department of Justice ("DOJ")
seeking documents and information related to silicone breast implants. Dow
Corning has informed Corning that it has delivered the documents and
information requested and continues to cooperate with the DOJ as this grand
jury investigation proceeds.
Department of Justice Investigation. In September 1993, MetPath and MetWest
Inc. ("MetWest"), a wholly owned subsidiary of Unilab, in which Corning had
at the time an interest of approximately 43%, entered into a Settlement
Agreement (the "MetPath Settlement Agreement") with the DOJ and the Inspector
General of the Department of Health and Human Services (the "Inspector
General"). Pursuant to the MetPath Settlement Agreement, MetPath and MetWest
paid to the United States a total of $39.8 million in settlement of civil
claims by the DOJ and the Inspector General that MetPath and MetWest had
wrongfully induced physicians to order certain laboratory tests without
realizing that such tests would be billed to Medicare at rates higher than
those the physicians believed were applicable.
Several state and private insurers have made claims based on the practices
covered by the MetPath Settlement Agreement. Several have settled but it is
not clear at this time what, if any, additional exposure Corning may have to
these entities and to other persons who may assert claims on the basis of
these or other practices.
During August 1993, MetPath, MetWest and Damon (which was acquired by Corning
in that month) together with other participants in the industry received
subpoenas from the Inspector General seeking information regarding their
practices with respect to 14 enumerated tests offered in conjunction with
automatic chemical test panels. Of these 14 tests, 5 were covered by the
MetPath Settlement Agreement and consequently MetPath and MetWest are not
being required to provide further information with regard to them. MetPath,
MetWest and Damon have completed this process of complying with these
subpoenas.
<PAGE>
The results of these investigations cannot currently be predicted but the
possibility that they may result in additional claims by the DOJ or the
Inspector General or additional claims or settlements with parties other than
the DOJ and the Inspector General cannot be excluded.
Other Legal Proceedings. During September 1993, two individuals filed in the
Supreme Court of the State of New York (one in New York County and one in
Suffolk County) separate purported derivative actions against Corning, as
nominal defendant, and Corning's Directors and certain of its officers
seeking on behalf of Corning compensatory and punitive damages in unspecified
amounts (and plaintiffs' costs and disbursements including attorneys' and
experts' fees) by reason of the alleged responsibility of the actual
defendants for the conduct which gave rise to the settlement in the MetPath
litigation described above and their alleged failure to cause Corning to make
timely disclosure thereof. The parties have agreed to consolidate such
actions in a single action before the Supreme Court of the State of New York
in New York County.
During October 1993, two individuals instituted in the United States District
Court for the Southern District of New York separate purported class actions
on behalf of purchasers of Corning securities in the open market during the
period from September 17 to October 6, 1993 against Corning, certain of its
Directors and officers and the underwriters of Corning's offering, on
September 17, 1993, of $100 million of 6.75% Debentures due on September 15,
2013. The complaints generally allege that the defendants failed to make
timely disclosures of adverse developments in Corning's business and seek
compensatory and punitive damages in unspecified amounts (and plaintiffs'
costs and expenses including attorneys' fees and disbursements). These two
actions have been consolidated.
Two class actions have been filed in the Court of Chancery for the State of
Delaware against Damon and certain of its officers and directors. These suits
allege damages arising from Damon's failure to mention in the press release
that announced the initial merger agreement it had reached with a company
other than Corning that an unnamed bidder (Corning) had also expressed
interest in acquiring Damon. The class of plaintiffs are those who sold their
stock at the price offered by the other company, rather than the higher
amount later offered and paid by Corning.
Corning's management does not believe that the purported class action
lawsuits or the purported shareholder derivative lawsuits described above
will have a material adverse effect on Corning's financial condition or the
results of its operations.
CORNING DELAWARE
Corning Delaware is a special purpose limited partnership formed under the
laws of the State of Delaware. All of its partnership interests (other than
the Preferred Securities) are and will be beneficially owned directly or
indirectly by Corning. Corning is the sole general partner in Corning
Delaware. Corning Finance Corporation, a Delaware corporation and a
wholly-owned subsidiary of Corning ("Corning Finance"), initially will be the
sole limited partner in Corning Delaware. Upon issuance of the Preferred
Securities, which securities represent limited partnership interests in
Corning Delaware, the holders of such Preferred Securities will become
limited partners in Corning Delaware and Corning Finance will withdraw as a
limited partner. The General Partner will agree to contribute capital to the
extent required to maintain its capital at 21% of all capital in Corning
Delaware. Corning Delaware will exist for a maximum term of 45 years, unless
earlier dissolved. The Amended and Restated Limited Partnership Agreement of
Corning Delaware (the "Limited Partnership Agreement") provides that the
General Partner will have liability for the debts and obligations of Corning
Delaware (including tax obligations as provided herein, but excluding
obligations to holders of Preferred Securities in their capacities as
holders, such obligations being separately guaranteed pursuant to the
Guarantee). Under Delaware law, limited partners in a Delaware limited
partnership (i.e., holders of the Preferred Securities) will not be liable
for the debts, obligations and liabilities of such limited partnership,
whether arising in contract, tort or otherwise, solely by reason of being a
limited partner of Corning Delaware (subject to any obligation such holders
have to repay any funds that may have been wrongfully distributed to them).
All of Corning Delaware's business and affairs will be conducted by the
General Partner. The location of the principal executive offices of the
General Partner is One Riverfront Plaza, Corning, New York 14831, telephone
number (607) 974-9000. Corning Delaware exists for the purpose of issuing the
Preferred Securities and investing the proceeds thereof, together with
substantially all of the capital contributed by the General Partner in the
Subordinated Debentures.
DESCRIPTION OF SECURITIES OFFERED
The securities offered hereby are % Convertible Monthly Income Preferred
Securities of Corning Delaware with a liquidation preference of $50 per
security. The Preferred Securities are convertible at the
<PAGE>
option of the holder into shares of Corning Common Stock at the rate of
shares of Corning Common Stock for each Preferred Security
(equivalent to a conversion price of $ per share of Corning Common
Stock), subject to adjustment in certain circumstances. The Preferred
Securities are guaranteed, to the extent described herein, by Corning as to
dividends, redemption proceeds and cash and other distributions payable on
liquidation. In certain circumstances the holders can cause Corning Delaware
to exchange all of the Subordinated Debentures for shares of Corning Series C
Preferred Stock and distribute such shares in exchange for the Preferred
Securities.
The following is a description of the principal terms of the Preferred
Securities; the Corning Common Stock and the Corning Series C Preferred Stock
into or for which the Preferred Securities may be converted or exchanged; the
Guarantee pursuant to which Corning will guarantee, to the extent described
therein, certain payments with respect to the Preferred Securities; and the
Subordinated Debentures and the fiscal agency agreement pursuant to which the
Subordinated Debentures will be issued (the "Fiscal Agency Agreement").
Preferred Securities
The following summary of principal terms and provisions of the Preferred
Securities does not purport to be complete and is subject to, and qualified
in its entirety by reference to, the Limited PartnershipAgreement, a copy of
which is filed as an exhibit to the Registration Statement of which this
Prospectus is a part.
General
All of the partnership interests in Corning Delaware other than the Preferred
Securities offered hereby are, and at all times while the Preferred
Securities are outstanding will be, owned directly or indirectly by Corning.
The Limited Partnership Agreement authorizes and creates the Preferred
Securities, which represent limited partnership interests in Corning
Delaware. The limited partnership interests represented by the Preferred
Securities will have a preference with respect to cash distributions and
amounts payable on liquidation and redemption over the General Partner's
interest in Corning Delaware. The Limited Partnership Agreement does not
permit the issuance of other limited partnership interests without the prior
approval of holders of not less than 662/3% of the aggregate liquidation
preference of the Preferred Securities then outstanding.
Dividends
Dividends (as defined herein) will be payable when, as, and if declared by
the General Partner, except as otherwise described below. The dividends
payable on each Preferred Security will be fixed at a rate per annum of $
or % of the liquidation preference of $50. The amount of
dividends payable for any period will be computed on the basis of twelve
30-day months and a 360-day year and, for any period shorter than a full
month, will be computed on the basis of the actual number of days elapsed in
such period. Payment of dividends is limited to the funds held by Corning
Delaware and legally available therefor. See "--Description of the
Subordinated Debentures--Interest" and "--Description of the
Guarantee--General."
Dividends on the Preferred Securities must be paid on the dates payable to
the extent that Corning Delaware has funds legally available for the payment
of such dividends and cash on hand sufficient to permit such payments. It is
anticipated that Corning Delaware's funds will be limited principally to
payments received under the Subordinated Debentures in which Corning Delaware
will invest the proceeds from this Offering. See "--Description of the
Subordinated Debentures."
Corning has the right under the Subordinated Debentures to extend, from time
to time, the interest payment periods on the Subordinated Debentures for up
to 60 months. Monthly dividends on the Preferred Securities would be deferred
(but would continue to compound interest monthly) by Corning Delaware during
any such extended interest payment period. See "--Description of the
Subordinated Debentures--Interest" and "--Option to Extend Interest Payment
Period." The failure of holders to receive dividends in full for 15
consecutive months would trigger the right of holders of a majority of the
aggregate liquidation preference of the Preferred Securities then outstanding
to cause Corning Delaware to exchange all of the Subordinated Debentures for
shares of Corning Series C Preferred Stock at the Exchange Price and to
distribute such shares to the holders of Preferred Securities in exchange for
all of the Preferred Securities then outstanding. "Exchange Price" means one
share of Corning Series C Preferred Stock for each $100 principal amount of
Subordinated Debentures (which rate of exchange is equivalent to two
Preferred Securities for one share of Corning Series C Preferred Stock). See
"--Optional Exchange for Corning Series C Preferred Stock."
<PAGE>
Three months after the date of notice (the "Notice Date") of a Tax Event
distributed by the General Partner to the holders of Preferred Securities or,
if earlier, the date of a vote at any special partnership meeting (the
"Meeting Date") called by the holders of the Preferred Securities to cause
the exchange of all Preferred Securities for shares of Corning Series C
Preferred Stock, all dividends and distributions by Corning Delaware
(including distributions to the General Partner) shall be reduced by
Additional Taxes. See "--Optional Exchange for Corning Series C Preferred
Stock."
"Tax Event" means that Corning shall have obtained an opinion of nationally
recognized independent tax counsel experienced in such matters to the effect
that, as a result of (a) any amendment to, or change (including any announced
prospective change) in, the laws (or any regulations thereunder) of the
United States or any political subdivision or taxing authority thereof or
therein, (b) any amendment to, or change in, an interpretation or application
of any such laws or regulations by any legislative body, court, governmental
agency or regulatory authority (including the enactment of any legislation
and the publication of any judicial decision or regulatory determination on
or after such date), (c) any interpretation or pronouncement that provides
for a position with respect to such laws or regulations that differs from the
generally accepted position or (d) any action taken by any governmental
agency or regulatory authority, which amendment or change is enacted,
promulgated, issued or effective or which interpretation or pronouncement is
issued or announced or which action is taken, in each case above on or after
the date of this Prospectus, there is more than an insubstantial risk that
(i) Corning Delaware is subject to federal income tax with respect to
interest accrued or received on the Subordinated Debentures, (ii) interest
payable to Corning Delaware on the Subordinated Debentures will not be
deductible for federal income tax purposes or (iii) Corning Delaware is
subject to more than a de minimis amount of taxes, duties or other
governmental charges.
"Additional Taxes" means the sum of any additional income taxes, duties and
other governmental charges to which Corning Delaware has become subject from
time to time as a result of a Tax Event described in the preceding clauses
(i) and (iii), except for U.S. withholding taxes.
Corning will agree as General Partner in the Limited Partnership Agreement to
pay any and all Additional Taxes, liabilities, costs and expenses with
respect to such Additional Taxes of Corning Delaware for the period from the
formation of Corning Delaware through the earlier of the Notice Date and the
Meeting Date.
Dividends declared on the Preferred Securities will be payable to the holders
thereof as they appear on the books and records of Corning Delaware on the
relevant record dates, which will be one Business Day (as defined below)
prior to the relevant payment dates. Subject to any applicable laws and
regulations and the Limited Partnership Agreement, each such payment will be
made as described under "--Book-Entry-Only Issuance--The Depository Trust
Company" below. In the event that any date on which dividends are payable on
the Preferred Securities is not a Business Day, then payment of the dividend
payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any
such delay) except that, if such Business Day is in the next succeeding
calendar year, such payment will be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such
date. A "Business Day" means any day other than a day on which banking
institutions in The City of New York are authorized or obligated by law or
executive order to close.
Certain Restrictions on Corning Delaware
If accumulated and unpaid dividends have not been paid in full on the
Preferred Securities, Corning Delaware may not:
(i) pay, or declare and set aside for payment, any dividends on any other
partnership interests; or
(ii) redeem, purchase, or otherwise acquire any other partnership
interests;
until, in each case, such time as all accumulated and unpaid dividends on all
of the Preferred Securities shall have been paid in full for all dividend
periods terminating on or prior to the date of such payment or the date of
such redemption, purchase, or acquisition, as the case may be.
If accumulated and unpaid dividends have been paid in full on the Preferred
Securities for all prior whole dividend periods, then holders of Preferred
Securities will not be entitled to receive or share in any dividends paid,
declared or set aside for payment on any other partnership interest in
Corning Delaware.
<PAGE>
Optional Redemption
Corning Delaware may not redeem the Preferred Securities prior to ,
1998. On and after such date, Corning Delaware at its option may redeem the
Preferred Securities, in whole or in part, on not fewer than 30 nor more than
60 days' prior notice, at any time or from time to time, during the
twelve-month periods beginning on , 1998 in each of the
following years at the redemption price indicated below, plus accumulated and
unpaid dividends (the "Redemption Price"):
<TABLE>
<CAPTION>
Date Redemption Price
<S> <C>
, 1998
, 1999
, 2000
, 2001
, 2002
, 2003
, 2004 and thereafter
</TABLE>
Corning Delaware may not redeem the Preferred Securities in part unless all
accumulated and unpaid dividends have been paid in full on all Preferred
Securities for all monthly dividend periods terminating on or prior to the
date of redemption.
In the event that fewer than all of the outstanding Preferred Securities are
to be redeemed, the Preferred Securities to be redeemed will be selected by
lot as described under "--Book-Entry-Only Issuance--The Depository Trust
Company" below.
Mandatory Redemption
Upon repayment or prepayment by Corning of the Subordinated Debentures, the
proceeds from such repayment or prepayment will be applied to redeem the
allocable portion of the Preferred Securities at the applicable Redemption
Price.
Redemption Procedures
Notice of any redemption of Preferred Securities (which notice will be
irrevocable) will be given by Corning Delaware to Corning and each record
holder of Preferred Securities that are being redeemed not fewer than 30 nor
more than 60 days prior to the date fixed for redemption thereof. If Corning
Delaware gives a notice of redemption, then, by 12:00 noon, New York time, on
the redemption date, Corning will repay an aggregate principal amount of the
Subordinated Debentures plus accrued and unpaid interest in an amount equal
to the applicable Redemption Price for the Preferred Securities to be
redeemed. Corning Delaware will irrevocably deposit such funds with The
Depository Trust Company ("DTC") and give DTC irrevocable instructions and
authority to pay the applicable Redemption Price to the holders of the
Preferred Securities to be redeemed. See "--Book-Entry-Only Issuance--The
Depository Trust Company." If notice of redemption has been given and funds
deposited with DTC as required, then immediately prior to the close of
business on the date of such deposit, all rights of holders of such Preferred
Securities so called for redemption will cease, except the right of the
holders to receive the Redemption Price, but without additional interest. In
the event that any date fixed for redemption of Preferred Securities is not a
Business Day, then payment of the Redemption Price payable on such date will
be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day falls in the next calendar year, such payment will be made on
the immediately preceding Business Day. In the event that payment of the
Redemption Price is improperly withheld or refused and not paid by either
Corning Delaware or Corning pursuant to the Guarantee described under
"--Description of the Guarantee" below, dividends on such securities will
continue to accumulate at the then applicable rate, from the original
redemption date to the date that the Redemption Price is actually paid.
Subject to the foregoing and applicable law (including, without limitation,
U.S. federal securities laws), Corning or its subsidiaries or affiliates may
at any time and from time to time purchase outstanding Preferred Securities
by tender, in the open market or by private agreement.
Conversion Rights
General. The Preferred Securities will be convertible at any time, at the
option of the holder thereof, through Corning Delaware into shares of Corning
Common Stock at an initial conversion price of $ per share of Corning
Common Stock (equivalent to a conversion rate of shares of Corning
<PAGE>
Common Stock for each Preferred Security), subject to adjustment as described
below. Upon receiving an irrevocable notice by a holder of a Preferred
Security to exercise its conversion right, Corning Delaware, on behalf of
such holder, will exercise its option to convert such holder's allocable
portion of the Subordinated Debentures into Corning Common Stock and will
distribute such shares of Corning Common Stock to such holder in exchange for
a corresponding portion of such holder's Preferred Securities. Preferred
Securities that have been called for redemption will not be convertible after
the close of business two calendar days preceding the date fixed for
redemption, unless Corning Delaware defaults in making payment of the amount
payable upon such redemption date. Conversion rights will terminate upon the
making of an Exchange Election referred to below under "--Optional Exchange
for Corning Series C Preferred Stock" and upon the issuance of Corning Series
C Preferred Stock pursuant to such Exchange Election.
Holders of Preferred Securities at the close of business on a dividend
payment record date will be entitled to receive the dividend payable on such
securities on the corresponding dividend payment date notwithstanding the
conversion of such Preferred Securities following such dividend payment
record date and on or prior to such dividend payment date. Except as provided
above, Corning Delaware and Corning will make no payment or allowance for
accumulated and unpaid dividends, whether or not in arrears, on converted
securities or for dividends on the shares of Corning Common Stock issued upon
such conversion. Each conversion will be deemed to have been effected
immediately prior to the close of business on the day on which notice was
received by Corning Delaware.
No fractional shares of Corning Common Stock will be issued as a result of
conversion, but in lieu thereof, in the sole discretion of the General
Partner, such fractional interest will either be (i) rounded up to the next
whole share or (ii) paid in cash by Corning.
Conversion Price Adjustments. The conversion price will be subject to
adjustment in certain events including, without duplication: (i) the payment
of dividends (and other distributions) payable in Corning Common Stock on any
class of capital stock of Corning; (ii) the issuance to all holders of
Corning Common Stock of rights or warrants entitling holders of such rights
or warrants to subscribe for or purchase Corning Common Stock at less than
the current market price; (iii) subdivisions and combinations of Corning
Common Stock; (iv) the payment of dividends (and other distributions) to all
holders of Corning Common Stock of evidence of indebtedness of Corning,
securities or capital stock, cash, or assets (including securities, but
excluding those rights, warrants, dividends, and distributions referred to in
clause (ii) and dividends and distributions paid exclusively in cash); (v)
the payment of dividends (and other distributions) on Corning Common Stock
paid exclusively in cash, excluding (A) cash dividends that do not exceed the
per share amount of the immediately preceding quarterly or semi-annual, as
applicable, cash dividend (as adjusted to reflect any of the events referred
to in clauses (i) through (vi) of this sentence), or (B) cash dividends if
the per share amount thereof multiplied by four with respect to quarterly
dividends and multiplied by two with respect to semi-annual dividends does
not exceed 15% of the current market price of Corning Common Stock on the
trading day immediately preceding the date of declaration of such dividend;
and (vi) payment in respect of a tender or exchange offer (other than an
odd-lot offer) by Corning or any subsidiary of Corning for Corning Common
Stock in excess of 10% of the current market price of Corning Common Stock on
the trading day next succeeding the last date tenders or exchanges may be
made pursuant to such tender or exchange offer.
If after the Distribution Date for the preferred share purchase rights (the
"Rights") of Corning, as presently constituted or under any similar plan (see
"Description of Corning Capital Stock--Preferred Share Purchase Rights"),
converting holders of the Preferred Securities are not entitled to receive
the Rights that would otherwise be attributable (but for the date of
conversion) to the shares of Corning Common Stock received upon such
conversion, then adjustment of the conversion price shall be made under
clause (iv) of the preceding paragraph as if the Rights were then being
distributed to the common stockholders. If such an adjustment is made and the
Rights are later redeemed, invalidated, or terminated, then a corresponding
reversing adjustment shall be made to the conversion price, on an equitable
basis, to take account of such event.
Corning from time to time may reduce the conversion price by any amount
selected by Corning for any period of at least 20 days, in which case Corning
shall give at least 15 days' notice of such reduction. Corning may, at its
option, make such reductions in the conversion price, in addition to those
set forth above, as the Board of Directors deems advisable to avoid or
diminish any income tax to holders of Corning Common Stock resulting from any
dividend or distribution of stock (or rights to acquire stock) or from any
event treated as such for income tax purposes.
<PAGE>
In the event that Corning is a party to any transaction (including, without
limitation, a merger, consolidation, sale of all or substantially all of
Corning's assets, recapitalization or reclassification of Corning Common
Stock or any compulsory share exchange (each of the foregoing being referred
to as a "Transaction")), in each case (except in the case of a Common Stock
Fundamental Change referred to below) as a result of which shares of Corning
Common Stock shall be converted into the right to receive securities, cash,
or other property, each Preferred Security shall thereafter be convertible
into the kind and amount of securities, cash, and other property receivable
upon the consummation of such Transaction by a holder of that number of
shares of Corning Common Stock into which a Preferred Security was
convertible immediately prior to such Transaction (but after giving effect to
any adjustment discussed below relating to a Fundamental Change if such
Transaction constitutes a Fundamental Change, and subject to funds being
legally available for such purpose under applicable law at the time of such
conversion).
If any Fundamental Change occurs, then the conversion price in effect will be
adjusted immediately after such Fundamental Change as described below. In
addition, in the event of a Common Stock Fundamental Change (as defined),
each Preferred Security shall be convertible solely into common stock of the
kind received by holders of Corning Common Stock as a result of such Common
Stock Fundamental Change.
For purposes of calculating any adjustment to be made pursuant to the
preceding paragraph in the event of a Fundamental Change, immediately after
such Fundamental Change:
(i) in the case of a Non-Stock Fundamental Change (as defined below), the
conversion price of the Preferred Security will thereupon become the lower of
(A) the conversion price in effect immediately prior to such Non-Stock
Fundamental Change, but after giving effect to any other prior adjustments,
and (B) the result obtained by multiplying the greater of the Applicable
Price (as defined below) or the then applicable Reference Market Price (as
defined below) by a fraction of which the numerator will be $50 and the
denominator will be the then current redemption price per Preferred Security
(or, for periods prior to , 1998, an amount per Preferred Security
determined by the General Partner in its sole discretion); and
(ii) in the case of a Common Stock Fundamental Change, the conversion price
of the Preferred Securities in effect immediately prior to such Common Stock
Fundamental Change, but after giving effect to any other prior adjustments,
will thereupon be adjusted by multiplying such conversion price by a fraction
of which the numerator will be the Purchaser Stock Price (as defined below)
and the denominator will be the Applicable Price; provided, however, that in
the event of a Common Stock Fundamental Change in which (A) 100% of the value
of the consideration received by a holder of Corning Common Stock is common
stock of the successor, acquiror, or other third party (and cash, if any, is
paid with respect to any fractional interests in such common stock resulting
from such Common Stock Fundamental Change) and (B) all of the Corning Common
Stock will have been exchanged for, converted into, or acquired for common
stock (and cash with respect to fractional interests) of the successor,
acquiror, or other third party, the conversion price of the Preferred
Securities in effect immediately prior to such Common Stock Fundamental
Change will thereupon be adjusted by multiplying such conversion price by a
fraction of which the numerator will be one and the denominator will be the
number of securities of common stock of the successor, acquiror, or other
third party received by a holder of one share of Corning Common Stock as a
result of such Common Stock Fundamental Change.
In the absence of the Fundamental Change provisions in the case of a
Transaction, each Preferred Security would become convertible into the
securities, cash, or property receivable by a holder of the number of shares
of Corning Common Stock into which such Preferred Security was convertible
immediately before such Transaction. This change could substantially lessen
or eliminate the value of the conversion privilege associated with the
Preferred Securities. For example, if Corning were acquired in a cash merger,
each Preferred Security would become convertible solely into cash (in an
amount less than the liquidation preference if the per share merger
consideration is lower than the then applicable conversion price) and would
no longer be convertible into securities whose value would vary depending on
the future prospects of the issuer and other factors.
The foregoing conversion price adjustments are designed, in "Fundamental
Change" transactions where all or substantially all the Corning Common Stock
is converted into securities, cash, or property and not more than 50% of the
value received by the holders of Corning Common Stock consists of stock
listed or admitted for listing subject to notice of issuance on a national
securities exchange or quoted on
<PAGE>
the National Market System of the National Association of Securities Dealers,
Inc. (a "Non-Stock Fundamental Change," as defined below), to increase the
securities, cash, or property into which each Preferred Security is
convertible.
In a Non-Stock Fundamental Change transaction where the initial value
received per share of Corning Common Stock (measured as described in the
definition of Applicable Price below) is lower than the then applicable
conversion price of a Preferred Security but greater than or equal to the
"Reference Market Price" (initially $ but subject to adjustment in
certain events as described below), the conversion price will be adjusted as
described above with the effect that each Preferred Security will (subject to
the existence of legally available funds) be convertible into securities,
cash, or property of the same type received by the holders of Corning Common
Stock in the transaction but in an amount that would at the time of the
transaction have had a value (measured by reference to the value determined
as described in the definition of Applicable Price below) equal to the then
current Redemption Price per Preferred Security (or, for periods prior to
, 1998, an amount per Preferred Security determined by the
General Partner in its sole discretion).
In a Non-Stock Fundamental Change transaction where the initial value
received per share of Corning Common Stock (measured as described in the
definition of Applicable Price) is lower than both the Applicable Conversion
Price of a Preferred Security and the Reference Market Price, the conversion
price will be adjusted as described above but calculated as though such
initial value had been the Reference Market Price, with the effect that each
Preferred Security will (subject to the existence of legally available funds)
be convertible into securities, cash, or property in an amount that would at
the time of the transaction have had a value (measured as aforesaid) equal to
(a) such initial value divided by the Reference Market Price times (b) the
then current Redemption Price per Preferred Security (or, for periods prior
to , 1998 an amount per Preferred Security determined by the
General Partner in its sole discretion).
In a Fundamental Change transaction where all or substantially all the
Corning Common Stock is converted into securities, cash, or property and more
than 50% of the value received by the holders of Corning Common Stock
consists of listed or National Market System traded common stock (a "Common
Stock Fundamental Change," as defined below), the foregoing adjustments are
designed to provide in effect that (a) where Corning Common Stock is
converted partly into such common stock and partly into other securities,
cash, or property, each Preferred Security will be convertible solely into a
number of shares of such common stock determined so that the initial value of
such shares (measured as described in the definition of "Purchaser Stock
Price" below) equals the value of the shares of Corning Common Stock into
which such Preferred Security was convertible immediately before the
transaction (measured as aforesaid) and (b) where Corning Common Stock is
converted solely into such common stock, each Preferred Security will be
convertible into the same number of shares of such common stock receivable by
a holder of the number of shares of Corning Common Stock into which such
Preferred Security was convertible immediately before such transaction.
The term "Applicable Price" means (i) in the case of a Non-Stock Fundamental
Change in which the holders of the Corning Common Stock receive only cash,
the amount of cash received by the holder of one share of Corning Common
Stock and (ii) in the event of any other Non-Stock Fundamental Change or any
Common Stock Fundamental Change, the average of the Closing Prices for the
Corning Common Stock during the ten trading days prior to and including the
record date for the determination of the holders of Corning Common Stock
entitled to receive such securities, cash, or other property in connection
with such Non-Stock Fundamental Change or Common Stock Fundamental Change or,
if there is no such record date, the date upon which the holders of the
Corning Common Stock shall have the right to receive such securities, cash,
or other property (such record date or distribution date being hereinafter
referred to the "Entitlement Date"), in each case as adjusted in good faith
by the Board of Directors of Corning to appropriately reflect any of the
events referred to in clauses (i) through (vi) of the first paragraph of this
subsection.
The term "Closing Price" means on any day the reported last sales price on
such day or in case no sale takes place on such day, the average of the
reported closing bid and asked prices in each case on the New York Stock
Exchange Composite Tape or, if the stock is not listed or admitted to trading
on such Exchange, on the principal national securities exchange on which such
stock is listed or admitted to trading or if not listed or admitted to
trading on any national securities exchange, the average of the closing bid
and asked prices as furnished by any New York Stock Exchange member firm,
selected by the Board of Directors of Corning for that purpose.
<PAGE>
The term "Common Stock Fundamental Change" means any Fundamental Change in
which more than 50% of the value (as determined in good faith by the Board of
Directors of Corning) of the consideration received by holders of Corning
Common Stock consists of common stock that for each of the ten consecutive
trading days prior to the Entitlement Date has been admitted for listing or
admitted for listing subject to notice of issuance on a national securities
exchange or quoted on the National Market System of the National Association
of Securities Dealers, Inc.; provided, however, that a Fundamental Change
shall not be a Common Stock Fundamental Change unless either (i) Corning
continues to exist after the occurrence of such Fundamental Change and the
outstanding Preferred Securities continue to exist as outstanding Preferred
Securities or (ii) not later than the occurrence of such Fundamental Change,
the outstanding Preferred Securities are converted into or exchanged for
shares of convertible preferred stock of an entity succeeding to the business
of Corning, which convertible preferred stock has powers, preferences, and
relative, participating, optional, or other rights, and qualifications,
limitations, and restrictions, substantially similar to those of the
Preferred Securities.
The term "Fundamental Change" means the occurrence of any transaction or
event in connection with a plan pursuant to which all or substantially all of
the Corning Common Stock shall be exchanged for, converted into, acquired
for, or constitute solely the right to receive securities, cash, or other
property (whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization, or
otherwise), provided, that, in the case of a plan involving more than one
such transaction or event, for purposes of adjustment of the conversion
price, such Fundamental Change shall be deemed to have occurred when
substantially all of the Corning Common Stock shall be exchanged for,
converted into, or acquired for or constitute solely the right to receive
securities, cash, or other property, but the adjustment shall be based upon
the highest weighted average per share consideration that a holder of Corning
Common Stock could have received in such transaction or event as a result of
which more than 50% of the Corning Common Stock shall have been exchanged
for, converted into, or acquired for or constitute solely the right to
receive securities, cash, or other property.
The term "Non-Stock Fundamental Change" means any Fundamental Change other
than a Common Stock Fundamental Change.
The term "Purchaser Stock Price" means, with respect to any Common Stock
Fundamental Change, the average of the Closing Prices for the common stock
received in such Common Stock Fundamental Change for the ten consecutive
trading days prior to and including the Entitlement Date, as adjusted in good
faith by the Board of Directors of Corning to appropriately reflect any of
the events referred to in clauses (i) through (vi) of the first paragraph of
this subsection; provided, however, if no such Closing Prices exist, then the
Purchaser Stock Price shall be set at a price determined in good faith by the
Corning Board of Directors.
The term "Reference Market Price" shall initially mean $ (which is an
amount equal to 66-2/3% of the reported last sale price for the Corning
Common Stock on the NYSE on , 1994), and in the event of any
adjustment to the conversion price other than as a result of a Non-Stock
Fundamental Change, the Reference Market Price shall also be adjusted so that
the ratio of the Reference Market Price to the conversion price after giving
effect to any such adjustment shall always be the same as the ratio of $
to the initial conversion price of the Preferred Securities.
No adjustment of the conversion price will be made upon the issuance of any
shares of Corning Common Stock pursuant to any present or future plan
providing for the reinvestment of dividends or interest payable on securities
of Corning and the investment of additional optional amounts in shares of
Corning Common Stock under any such plan, or the issuance of any shares of
Corning Common Stock or options or rights to purchase such shares pursuant to
any present or future employee benefit plan or program of Corning or pursuant
to any option, warrant, right, or exercisable, exchangeable, or convertible
security outstanding as of the date the Preferred Securities were first
designated. There shall also be no adjustment of the conversion price in case
of the issuance of any stock (or securities convertible into or exchangeable
for stock) of Corning, except as specifically described above. If any action
would require adjustment of the conversion price pursuant to more than one of
the provisions described above, only one adjustment shall be made and such
adjustment shall be the amount of adjustment that has the highest absolute
value to holders of the Preferred Securities. No adjustment in the conversion
price will be required unless such adjustment would require an increase or
decrease of at least 1% of the conversion price, but any adjustment that
would otherwise be required to be made shall be carried forward and taken
into account in any subsequent adjustment.
<PAGE>
Optional Exchange for Corning Series C Preferred Stock
Upon the occurrence of an Exchange Event (as defined below), the holders of a
majority of the aggregate liquidation preference of Preferred Securities then
outstanding, voting as a class or by written consent, may, at their option,
cause Corning Delaware to exchange all of the Subordinated Debentures for
shares of Corning Series C Preferred Stock at the Exchange Price and
distribute such shares to the holders of Preferred Securities.
The Corning Series C Preferred Stock issued upon any such exchange will have
terms substantially identical to the terms of the Preferred Securities,
except that, among other things, the Corning Series C Preferred Stock will
have the right to elect two additional directors of Corning whenever
dividends on the Corning Series C Preferred Stock are in arrears for 18
months (including for this purpose any arrearage with respect to the
Preferred Securities) and will not be subject to mandatory redemption. See
"--Description of Corning Series C Preferred Stock." The terms of the Corning
Series C Preferred Stock provide that all accumulated and unpaid dividends
(including any Additional Interest) on the Preferred Securities that are not
paid by Corning pursuant to the Guarantee shall be treated as accrued and
unpaid dividends on the Corning Series C Preferred Stock. See "--Description
of the Guarantee."
The following events are "Exchange Events":
(a) The failure of holders of Preferred Securities to receive, for 15
consecutive months, the full amount of dividend payments on the Preferred
Securities; or
(b) The occurrence of a Tax Event.
As soon as practicable, but in no event later than 30 days after the
occurrence of an Exchange Event, the General Partner will convene a general
meeting of the holders of Preferred Securities (an "Exchange Election
Meeting") for the purpose of acting on the matter of whether to cause Corning
Delaware to exchange the Subordinated Debentures for shares of Corning Series
C Preferred Stock or, in the case of a Tax Event, to continue to hold the
Preferred Securities. If the General Partner fails to convene such Exchange
Election Meeting within such 30-day period, the holders of at least 10% of
the outstanding Preferred Securities will be entitled to convene such
Exchange Election Meeting. Upon the affirmative vote of the holders of
Preferred Securities representing not less than a majority of the aggregate
liquidation preference of the Preferred Securities then outstanding at an
Exchange Election Meeting or, in the absence of such meeting, upon receipt by
Corning Delaware of written consents signed by the holders of a majority of
the aggregate liquidation preference of the outstanding Preferred Securities,
an election to exchange all outstanding Preferred Securities on the basis
described above (an "Exchange Election") will be deemed to have been made. In
the case of certain Tax Events, Corning Delaware will continue to pay
dividends on the Preferred Securities without adjustment for Additional Taxes
until the earlier of (i) three months after the Notice Date and (ii) the
Meeting Date. During such time, Corning will pay any and all Additional Taxes
of Corning Delaware.
Holders of Preferred Securities, by purchasing such Preferred Securities,
will be deemed to have agreed to be bound by these optional exchange
provisions in regard to the exchange of such Preferred Securities for Corning
Series C Preferred Stock on the terms described above.
Liquidation Rights
In the event of any voluntary or involuntary liquidation, dissolution, or
winding-up of Corning Delaware, the holders of Preferred Securities at the
time outstanding will be entitled to receive a liquidation preference of $50
per Preferred Security plus all accumulated and unpaid dividends (whether or
not earned or declared) to the date of payment (the "Liquidation
Distribution") out of the assets of Corning Delaware legally available for
distribution to partners prior to any other distribution by Corning Delaware.
If, upon any liquidation of Corning Delaware, the holders of Preferred
Securities are paid in full the aggregate Liquidation Distribution to which
they are entitled, then such holders will not be entitled to receive or share
in any other assets of Corning Delaware thereafter available for distribution
to any other holders of partnership interests in Corning Delaware.
Pursuant to the Limited Partnership Agreement, Corning Delaware shall be
dissolved and its affairs shall be wound up upon the earliest to occur of:
(i) the expiration of the term of Corning Delaware; (ii) the retirement,
resignation, expulsion, bankruptcy or dissolution of the General Partner or
the occurrence of any other event under the Delaware Revised Uniform Limited
Partnership Act whereby Corning ceases
<PAGE>
to be the General Partner, except for a merger or consolidation of Corning
with or into, or the sale, transfer or lease of all or substantially all of
Corning's assets to, a permitted successor General Partner under the Limited
Partnership Agreement; (iii) upon the entry of a decree of a judicial
dissolution; or (iv) upon the written consent of all partners of Corning
Delaware.
Merger, Consolidation or Sale of Assets of Corning Delaware
The General Partner is authorized and directed to conduct its affairs and to
operate Corning Delaware in such a way that Corning Delaware will not be
deemed to be an "investment company" required to be registered under the
Investment Company Act of 1940 (the "1940 Act") or taxed as a corporation for
federal income tax purposes and so that the Subordinated Debentures will be
treated as indebtedness of Corning for federal income tax purposes. In this
connection, the General Partner is authorized to take any action not
inconsistent with applicable law, the Certificate of Limited Partnership of
Corning Delaware or the Limited Partnership Agreement that does not adversely
affect the interests of the holders of the Preferred Securities and that the
General Partner determines in its discretion to be necessary or desirable for
such purposes.
Corning Delaware may not consolidate, merge with or into, or be replaced by,
or convey, transfer or lease its properties and assets substantially as an
entirety to any entity, except as described below. Corning Delaware may, for
purposes of changing its state of domicile in order to avoid federal income
tax or 1940 Act consequences adverse to Corning or Corning Delaware or to the
holders of the Preferred Securities, without the consent of the holders of
the Preferred Securities, consolidate, merge with or into, or be replaced by
a limited partnership or trust organized as such under the laws of any state
of the United States of America; provided, that (i) such successor entity
either (x) expressly assumes all of the obligations of Corning Delaware under
the Preferred Securities or (y) substitutes for the Preferred Securities
other securities having substantially the same terms as the Preferred
Securities (the "Successor Securities") so long as the Successor Securities
rank, with respect to participation in the profits or assets of the successor
entity, at least as high as the Preferred Securities rank with respect to
participation in the profits or assets of Corning Delaware, (ii) Corning
expressly acknowledges such successor entity as the holder of the
Subordinated Debentures, (iii) such merger, consolidation, or replacement
does not cause the Preferred Securities (or any Successor Securities) to be
delisted by any national securities exchange or other organization on which
the Preferred Securities are then listed, (iv) such merger, consolidation or
replacement does not cause the Preferred Securities (including any Successor
Securities) to be downgraded by any nationally recognized statistical rating
organization, (v) such merger, consolidation or replacement does not
adversely affect the powers, preferences and other special rights of the
holders of the Preferred Securities (including any Successor Securities) in
any material respect (other than with respect to any dilution of the holders'
interest in the new entity), (vi) prior to such merger, consolidation or
replacement Corning has received an opinion of nationally recognized
independent counsel to Corning Delaware experienced in such matters to the
effect that (x) such successor entity will be treated as a partnership for
federal income tax purposes, (y) following such merger, consolidation or
replacement, Corning and such successor entity will be in compliance with the
1940 Act without registering thereunder as an investment company and (z) such
merger, consolidation or replacement will not adversely affect the limited
liability of the holders of the Preferred Securities.
Voting Rights
Except as provided below and under "--Description of the
Guarantee--Amendments and Assignment" and as otherwise required by law and
the Limited Partnership Agreement, the holders of the Preferred Securities
will have no voting rights.
If (i) Corning Delaware fails to pay dividends in full on the Preferred
Securities for 15 consecutive months; (ii) an Event of Default (as defined in
the Fiscal Agency Agreement) occurs and is continuing with respect to the
Subordinated Debentures; or (iii) Corning is in default under any of its
payment obligations under the Guarantee (as described under "--Description of
the Guarantee"), then the holders of the Preferred Securities will be
entitled to appoint and authorize a special general partner (a "Special
General Partner") to enforce Corning Delaware's rights under the Subordinated
Debentures, enforce the rights of the holders of Preferred Securities under
the Guarantee and enforce the rights of the holders to receive dividends on
the Preferred Securities. For purposes of determining whether Corning
Delaware has failed to pay dividends in full for 15 consecutive months,
dividends shall be deemed to remain in arrears, notwithstanding any partial
payments in respect thereof, until all accumulated and unpaid dividends have
been or contemporaneously are paid. Not later than 30 days after such right
to appoint a Special General
<PAGE>
Partner arises, the General Partner will convene a meeting to elect a Special
General Partner. If the General Partner fails to convene such meeting within
such 30-day period, the holders of 10% of the aggregate liquidation
preference of the Preferred Securities then outstanding will be entitled to
convene such meeting. Any Special General Partner so appointed shall vacate
office immediately if Corning Delaware (or Corning pursuant to the Guarantee)
shall have paid in full all accumulated and unpaid dividends on the Preferred
Securities or such default or breach, as the case may be, shall have been
cured. Notwithstanding the appointment of any such Special General Partner,
Corning will retain all rights as obligor under the Subordinated Debentures,
including the right to extend the interest payment period as provided under
"--Description of the Subordinated Debentures--Option to Extend Interest
Payment Period."
If any proposed amendment to the Limited Partnership Agreement provides for,
or the General Partner otherwise proposes to effect , (x) any action that
would materially adversely affect the powers, preferences or special rights
of the Preferred Securities, whether by way of amendment to the Limited
Partnership Agreement or otherwise (including, without limitation, the
authorization or issuance of any limited partnership interests in Corning
Delaware ranking, as to participation in the profits or assets of Corning
Delaware, pari passu with or senior to the Preferred Securities), or (y) the
dissolution, winding-up or termination of Corning Delaware (other than in
connection with the exchange of Corning Series C Preferred Stock for
Preferred Securities upon the occurrence of an Exchange Event or as described
under "--Merger, Consolidation or Sale of Assets of Corning Delaware"), then
the holders of outstanding Preferred Securities will be entitled to vote on
such amendment or action of the General Partner (but not on any other
amendment or action), and such amendment or action shall not be effective
except with the approval of the holders of at least 66-2/3% or more of the
aggregate liquidation preference of the Preferred Securities then
outstanding; provided, however, that no such approval shall be required if
the dissolution, winding-up or termination of Corning Delaware is proposed or
initiated pursuant to the Limited Partnership Agreement or upon the
initiation of proceedings, or after proceedings have been initiated, for the
liquidation, dissolution or winding-up of Corning.
The rights attached to the Preferred Securities will be deemed to be
materially adversely affected by the creation or issue of, and a vote of the
holders of Preferred Securities will be required for the creation or issue
of, any other partnership interests of Corning Delaware.
Holders of Preferred Securities will have no preemptive rights.
So long as any Subordinated Debentures are held by Corning Delaware, the
General Partner shall not (i) direct the time, method and place of conducting
any proceeding for any remedy available to the Special General Partner or the
Fiscal Agent (as defined below), or executing any trust or power conferred on
the Special General Partner or the Fiscal Agent with respect to the
Subordinated Debentures, (ii) waive any past default, which is waivable under
the Fiscal Agency Agreement, (iii) exercise any right to rescind or annul a
declaration that the principal of all the Subordinated Debentures shall be
due and payable, (iv) consent to any amendment, modification or termination
of the Subordinated Debentures or of the Fiscal Agency Agreement without, in
each case, obtaining the prior approval of the holders of at least 66-2/3% or
more of the aggregate liquidation preference of the Preferred Securities then
outstanding, provided, however, that where a consent under the Subordinated
Debentures would require the consent of each holder affected thereby, no such
consent shall be given by the General Partner without the prior consent of
each holder of the Preferred Securities. The General Partner shall not revoke
any action previously authorized or approved by a vote of Preferred
Securities, without the approval of the holders of Preferred Securities
representing 66-2/3% or more of the aggregate liquidation preference of the
Preferred Securities then outstanding. The General Partner shall notify all
holders of Preferred Securities of any notice of default received from the
Fiscal Agent with respect to the Subordinated Debentures.
Any required approval of holders of Preferred Securities may be given at a
meeting of such holders convened for such purpose or pursuant to written
consent. Corning Delaware will cause a notice of any meeting at which holders
of Preferred Securities are entitled to vote, or of any matter upon which
action by written consent of such holders is to be taken, to be mailed to
each holder of record of Preferred Securities. Each such notice will include
a statement setting forth (i) the date of such meeting or the date by which
such action is to be taken, (ii) a description of any matter on which such
holders are entitled to vote or of such matter upon which written consent is
sought and (iii) instructions for the delivery of proxies or consents.
Holders of the Preferred Securities will not have the right to remove or
replace the General Partner.
<PAGE>
Book-Entry-Only Issuance--The Depository Trust Company
DTC will act as securities depository for the Preferred Securities. The
Preferred Securities will be issued only as fully-registered securities
registered in the name of Cede & Co. (as nominee for DTC). One or more
fully-registered global Preferred Security certificates will be issued,
representing in the aggregate the total number of Preferred Securities, and
will be deposited with DTC.
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of securities in definitive form. Such laws may impair
the ability to transfer beneficial interests in a global Preferred Security.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants ("Participants") deposit with DTC. DTC
also facilitates the settlement among Participants of securities
transactions, such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in Participants' accounts, thereby
eliminating the need for physical movement of securities certificates. Direct
Participants include securities brokers and dealers, banks, trust companies,
clearing corporations, and certain other organizations ("Direct
Participants"). Access to the DTC system is also available to others such as
securities brokers and dealers, banks and trust companies that clear through
or maintain a custodial relationship with a Direct Participant, either
directly or indirectly ("Indirect Participants").
Purchases of Preferred Securities within the DTC system must be made by or
through Direct Participants, which will receive a credit for the Preferred
Securities on DTC's records. The ownership interest of each actual purchaser
of a Preferred Security ("Beneficial Owner") is in turn to be recorded on the
Direct or Indirect Participants' records. Beneficial Owners will not receive
written confirmation from DTC of their purchases, but Beneficial Owners are
expected to receive written confirmations providing details of the
transactions, as well as periodic statements of their holdings, from the
Direct or Indirect Participants through which the Beneficial Owners purchased
Preferred Securities. Transfers of ownership interests in Preferred
Securities are to be accomplished by entries made on the books of
Participants acting on behalf of Beneficial Owners. Beneficial Owners will
not receive certificates representing their ownership interests in Preferred
Securities, except if there is an Event of Default under the Subordinated
Debentures, or if the book-entry system for the Preferred Securities is
discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Preferred
Securities; DTC's records reflect only the identity of the Direct
Participants to whose accounts such Preferred Securities are credited, which
may or may not be the Beneficial Owners. The Participants will remain
responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by DTC to Direct Participants,
by Direct Participants to Indirect Participants, and by Direct Participants
and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements
as may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of the
Preferred Securities are being redeemed, DTC's practice is to determine by
lot the amount of the interest of each Direct Participant in such securities
to be redeemed.
Although voting with respect to the Preferred Securities is limited, in those
cases where a vote is required, neither DTC nor Cede & Co. will itself
consent or vote with respect to Preferred Securities. Under its usual
procedures, DTC would mail an Omnibus Proxy to Corning Delaware as soon as
possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts
the Preferred Securities are credited on the record date (identified in a
listing attached to the Omnibus Proxy).
Dividend payments on the Preferred Securities will be made to DTC. DTC's
practice is to credit Direct Participants' accounts on the relevant payment
date in accordance with their respective holdings shown on DTC's records
unless DTC has reason to believe that it will not receive payments on such
payment date. Payments by Participants to Beneficial Owners will be governed
by standing instructions and customary practices and will be the
responsibility of such Participant and not of DTC, Corning Delaware or
<PAGE>
Corning, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of dividends to DTC is the responsibility
of Corning Delaware, disbursement of such payments to Direct Participants is
the responsibility of DTC, and disbursement of such payments to the
Beneficial Owners is the responsibility of Direct and Indirect Participants.
Except as provided herein, a Beneficial Owner in a global Preferred Security
will not be entitled to receive physical delivery of Preferred Securities.
Accordingly, each Beneficial Owner must rely on the procedures of DTC to
exercise any rights under the Preferred Securities.
DTC may discontinue providing its services as securities depository with
respect to the Preferred Securities at any time by giving reasonable notice
to Corning Delaware. Under such circumstances, in the event that a successor
securities depository is not obtained, certificates representing the
Preferred Securities will be printed and delivered. If an Event of Default
occurs under the Subordinated Debentures or if Corning Delaware decides to
discontinue use of the system of book-entry transfers through DTC (or a
successor depository), certificates representing the Preferred Securities
will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that Corning and Corning Delaware believe to
be reliable, but neither Corning nor Corning Delaware takes responsibility
for the accuracy thereof.
Registrar and Transfer Agent
Harris Trust and Savings Bank will act as registrar and transfer agent for
the Preferred Securities.
Registration of transfers of Preferred Securities will be effected without
charge by or on behalf of Corning Delaware, but upon payment (with the giving
of such indemnity as Corning Delaware or Corning may require) in respect of
any tax or other government charges which may be imposed in relation to it.
Corning Delaware will not be required to register or cause to be registered
the transfer of Preferred Securities after such Preferred Securities have
been called for redemption and redeemed.
Description of Corning Series C Preferred Stock
As described under "--Preferred Securities--Optional Exchange for Corning
Series C Preferred Stock" above, the Preferred Securities may be exchanged in
certain circumstances for Corning Series C Preferred Stock. The following
description of the principal terms of the Corning Series C Preferred Stock
does not purport to be complete or to give full effect to the provisions of
statutory or other law and is qualified in its entirety by reference to the
Corning Restated Certificate of Incorporation as amended (the "Restated
Certificate") and the Certificate of Amendment, Preferences and Rights of the
Corning Series C Preferred Stock (the "Certificate of Amendment"), which are
filed as exhibits to the Registration Statement of which this Prospectus is a
part.
The Board of Directors of Corning has designated, and Corning will keep
available, shares ( shares if the Underwriters'
over-allotment option is exercised in full) of Corning Series C Preferred
Stock for issuance upon exchange of the Preferred Securities (as described
under " --Preferred Securities--Optional Exchange for Corning Series C
Preferred Stock" above). At the time the Preferred Securities are issued, all
corporate action required in connection with the issuance of the Corning
Series C Preferred Stock upon the making of an Exchange Election will have
been taken. The terms of the Corning Series C Preferred Stock, together with
the provisions of the Guarantee, are substantially identical to those of the
Preferred Securities with the following principal exceptions:
(a) Accumulated and unpaid dividends (including any Additional Interest
thereon) on the Preferred Securities, if any, at the time of the making of an
Exchange Election will become accumulated and unpaid dividends on the Corning
Series C Preferred Stock;
(b) If dividends are not paid on the Corning Series C Preferred Stock for
18 monthly dividend periods, the number of directors of Corning shall be
increased by two persons and the holders of the Corning Series C Preferred
Stock will be entitled to elect the persons to fill such positions;
(c) Dividends on the Corning Series C Preferred Stock need not be declared
even if Corning has funds legally available therefor and cash on hand
sufficient to pay dividends. However, if Corning fails to declare such
dividends, no dividends would be payable on any other securities of Corning
ranking pari passu with or junior to the Corning Series C Preferred Stock;
and
<PAGE>
(d) The Corning Series C Preferred Stock will be perpetual and will not be
subject to mandatory redemption.
The Corning Series C Preferred Stock will rank senior to the Corning Common
Stock and the Corning Series A Preferred Stock. The Corning Series C
Preferred Stock will rank on a parity with the Series B Preferred Stock with
respect to the payment of dividends and amounts upon liquidation, dissolution
or winding-up. In the event dividends are not paid in full on either the
Corning Series B or Series C Preferred Stock, the holders of the Corning
Series B and Series C Preferred Stock will share ratably with respect to any
dividend payment in proportion to the respective amounts of the accumulated
and unpaid dividends due on such preferred stock .
In the event of a voluntary or involuntary bankruptcy, liquidation,
dissolution or winding-up of Corning, the holders of Corning Series C
Preferred Stock are entitled to receive out of the net assets of Corning, but
before any distribution is made on any class of securities ranking junior to
the Corning Series C Preferred Stock, $100 per share in cash plus accumulated
and unpaid dividends (whether or not earned or declared) to the date of final
distribution to such holders. After payment of the full amount of the
liquidation distribution to which they are entitled, the holders of shares of
Corning Series C Preferred Stock will not be entitled to any further
participation in any distribution of assets of Corning.
In the event that the assets available for distribution are insufficient to
pay in full the liquidation preference to the holders of the Corning Series B
and Series C Preferred Stock, the holders of such preferred stock will share
in the remaining assets, based on the proportion of their liquidation
preference to the entire amount of unpaid liquidation preference.
So long as the Subordinated Debentures are exchangeable for the Corning
Series C Preferred Stock, Corning may not authorize or issue any other
preferred stock ranking senior to the Corning Series C Preferred Stock
without the approval of the holders of at least 66-2/3% of the aggregate
liquidation preference of the Preferred Securities then outstanding. However,
no such vote shall be required for the issuance by Corning of additional
preferred stock ranking pari passu to the Corning Series C Preferred Stock as
to the payment of dividends and amounts upon liquidation, dissolution and
winding-up.
Description of the Guarantee
The following is a description of the principal terms and provisions of the
Guarantee Agreement (the "Guarantee"), which will be executed and delivered
by Corning for the benefit of the holders from time to time of the Preferred
Securities. The following description is qualified in its entirety by
reference to such agreement, a copy of the form of which is filed as an
exhibit to the Registration Statement of which this Prospectus is a part.
General
Pursuant to the Guarantee, Corning will irrevocably and unconditionally
agree, on a subordinated basis and to the extent set forth therein, to pay in
full to the holders of the Preferred Securities, the Guarantee Payments (as
defined below) (except to the extent previously paid by Corning Delaware), as
and when due, regardless of any defense, right of set-off or counterclaim
that Corning Delaware may have or assert. The following payments, to the
extent not paid by Corning Delaware, are the "Guarantee Payments": (a) any
accumulated and unpaid dividends (including any Additional Interest thereon)
that have been theretofore declared on the Preferred Securities from monies
legally available therefor; (b) the Redemption Price payable with respect to
Preferred Securities called for redemption by Corning Delaware out of funds
legally available therefor; and (c) upon a liquidation of Corning Delaware,
the lesser of (i) the Liquidation Distribution and (ii) the amount of assets
of Corning Delaware available for distribution to holders of Preferred
Securities in liquidation of Corning Delaware. Corning's obligation to make a
Guarantee Payment may be satisfied by Corning's direct payment of the
required amounts to the holders of Preferred Securities or by Corning's
causing Corning Delaware to pay such amounts to such holders.
Certain Covenants of Corning
In the Guarantee, Corning will covenant and agree that, so long as any
Preferred Securities are outstanding, neither Corning nor any majority owned
subsidiary of Corning shall declare or pay any dividend or distribution on,
or redeem, purchase or otherwise acquire or make a liquidation payment with
respect to, any of Corning's capital stock (other than as a result of a
reclassification of capital stock or the exchange or conversion of one class
or series of capital stock for another class or series of capital stock) or
make any guarantee payments with respect to the foregoing (other than
payments under the Guarantee or
<PAGE>
dividends or guarantee payments to Corning), if at such time Corning is in
default with respect to its payment or other obligations under the Guarantee
or there shall have occurred any event that, with the giving of notice or the
lapse of time or both, would constitute an Event of Default under the
Subordinated Debentures. Corning will covenant to take all actions necessary
to ensure the compliance of its subsidiaries with the above covenant.
Corning will also covenant that, so long as any Preferred Securities are
outstanding, it will (a) maintain direct 100% ownership of the partnership
interests and any other interests in Corning Delaware other than the
Preferred Securities, (b) cause at least 21% of the total value of Corning
Delaware and at least 21% of all interest in the capital, income, gain, loss,
deduction and credit of Corning Delaware to be held by Corning, as General
Partner, (c) not voluntarily dissolve, wind-up or liquidate itself or Corning
Delaware, (d) remain the General Partner and timely perform all of its duties
as General Partner of Corning Delaware (including the duty to cause Corning
Delaware to declare and pay dividends on the Preferred Securities), unless a
permitted successor General Partner is appointed, and (e) subject to the
terms of the Preferred Securities, use reasonable efforts to cause Corning
Delaware to remain a Delaware limited partnership and otherwise continue to
be treated as a partnership for United States federal income tax purposes.
Subordination
Corning's obligations under the Guarantee to make Guarantee Payments will
constitute an unsecured obligation of Corning that will rank (i) subordinate
and junior in right of payment to all liabilities of Corning, (ii) pari passu
with the Series B Preferred Stock or the most senior preferred or preference
stock hereafter issued by Corning and with any guarantee now or hereafter
entered into by Corning in respect of any preferred or preference stock of
any affiliate of Corning and (iii) senior to Corning Common Stock and the
Series A Preferred Stock. For purposes of clause (ii) herein, pari passu
means that any payments to which beneficiaries of the Guarantee are entitled
must be shared with holders of any preferred or preference stock to which
Corning's obligations to make Guarantee Payments under the Guarantee are
stated to be pari passu ("Pari Passu Stock") to the same extent as would be
required under applicable law if instead the Guarantee constituted a class of
preferred or preference stock of Corning ranking pari passu with such Pari
Passu Stock as to such payments.
Corning's obligations under the Guarantee will constitute a guarantee of
payment and not of collection. A holder of Preferred Securities may enforce
such obligations directly against Corning, and Corning waives any right or
remedy to require that any action be brought against Corning Delaware or any
other person or entity before proceeding against Corning. Such obligations
will not be discharged except by payment of the Guarantee Payments in full
and by complete performance of all obligations of Corning under the
Guarantee.
Amendments and Assignment
The terms of the Guarantee may be amended only with the prior approval of the
holders of not less than 66-2/3% of the aggregate liquidation preference of
the Preferred Securities then outstanding. The manner of obtaining any such
approval of holders of the Preferred Securities will be as set forth in
"--Preferred Securities--Voting Rights." All provisions contained in the
Guarantee will bind the successors, assigns, receivers, trustees and
representatives of Corning and will inure to the benefit of the holders of
the Preferred Securities. Except in connection with any merger or
consolidation of Corning with or into another entity or any sale, transfer or
lease of Corning's assets to another entity permitted under the Guarantee,
Corning may not assign its rights or delegate its obligations under the
Guarantee without the prior approval of the holders of not less than 66-2/3%
of the aggregate liquidation preference of the Preferred Securities then
outstanding.
Termination
Corning's obligation to make Guarantee Payments under the Guarantee will
terminate as to each holder of Preferred Securities and be of no further
force and effect upon (a) full payment of the Redemption Price of such
holder's Preferred Securities, (b) full payment of the amounts payable to
such holder upon liquidation of Corning Delaware, (c) the distribution of
Corning Common Stock to such holder in respect of the conversion of the
Subordinated Debentures into Corning Common Stock or (d) the distribution of
Corning Series C Preferred Stock to such holder in respect of the exchange of
the Subordinated Debentures for Corning Series C Preferred Stock.
Notwithstanding the foregoing, Corning's obligation to make Guarantee
Payments will continue to be effective or will be reinstated, as the case may
be, as to a holder if at any time such holder must restore payment of any
sums paid under the Preferred Securities or under the Guarantee for any
reason whatsoever.
<PAGE>
Merger
The Guarantee provides that Corning may merge or consolidate with or into
another entity or may permit another entity to merge or consolidate with or
into Corning if (i) at such time no Event of Default (as defined in the
Fiscal Agency Agreement) shall have occurred and be continuing, or would
occur as a result of such merger or consolidation and (ii) the survivor of
such merger or consolidation is an entity organized under the laws of the
United States or any state thereof, becomes the General Partner, assumes all
of Corning's obligations under the Guarantee and has a net worth equal to at
least 10% of the total contributions to Corning Delaware.
Governing Law
The Guarantee will be governed by and construed in accordance with the laws
of the State of New York.
Description of the Subordinated Debentures
The following summary of principal terms and provisions of the Subordinated
Debentures in which Corning Delaware will invest the proceeds of the issuance
and sale of the Preferred Securities and substantially all of the capital
contributed to Corning Delaware by the General Partner (the "General Partner
Payment") does not purport to be complete and is qualified in its entirety by
reference to the Fiscal Agency Agreement among Corning, Corning Delaware and
Harris Trust and Savings Bank, as fiscal agent (the "Fiscal Agent"), a form
of which has been filed as an exhibit to the Registration Statement of which
this Prospectus is a part. All of the Subordinated Debentures will be issued
under the Fiscal Agency Agreement.
General
The Subordinated Debentures will be limited in aggregate principal amount to
the sum of the aggregate amount of the proceeds received by Corning Delaware
from the Offering and the General Partner Payment less 1% of such sum.
The entire principal amount of the Subordinated Debentures will become due
and payable, together with any accrued and unpaid interest thereon, including
Additional Interest (as defined below), on the earliest of , 2024
or the date upon which Corning Delaware is dissolved, wound-up, liquidated or
terminated.
Prepayment
Corning will have the right to prepay the Subordinated Debentures, in whole
or in part (together with any accrued but unpaid interest on the portion
being prepaid) at any time on or after , 1998, during the twelve-month
periods beginning on , 1998 in each of the following years at the
following prepayment prices (expressed as a percentage of the principal
amount of the Subordinated Debentures being prepaid):
<TABLE>
<CAPTION>
Prepayment Price
Year (% of principal amount)
<S> <C>
1998 %
1999
2000
2001
2002
2003
2004 and thereafter
</TABLE>
<PAGE>
Interest
The Subordinated Debentures will bear interest at the rate of % per annum
from the original date of issuance, payable monthly in arrears on the last
day of each calendar month of each year (each an "Interest Payment Date"),
commencing , 1994. Interest will compound monthly and will accrue
at the annual rate of % on any interest installment not paid when due.
The amount of interest payable for any period will be computed on the basis
of twelve 30-day months and a 360-day year and, for any period shorter than a
full monthly interest period, will be computed on the basis of the actual
number of days elapsed in such period. In the event that any date on which
interest is payable on the Subordinated Debentures is not a Business Day,
then a payment of the interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is
in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date. A "Business Day" shall mean any day other
than a day on which banking institutions in The City of New York are
authorized or required by law to close.
Option to Extend Interest Payment Period
Corning shall have the right at any time and from time to time during the
term of the Subordinated Debentures to extend interest payment periods for up
to 60 months, during which periods interest will compound monthly and during
which Corning shall have the right to make partial payments of interest or at
the end of which period Corning shall pay all interest then accrued and
unpaid (together with such compounded interest); provided that, during any
such extended interest payment period neither Corning nor any majority-owned
subsidiary of Corning shall declare or pay any dividend on, or redeem,
purchase, acquire for value or make a liquidation payment with respect to,
any of Corning's capital stock or make any guarantee payments with respect to
the foregoing (other than payments under the Guarantee). Prior to the
termination of any such extended interest payment period, Corning may further
extend the interest payment period, provided that such extended interest
payment period together with all such further extensions thereof may not
exceed 60 months. Corning shall give Corning Delaware notice of its selection
of an extended interest payment period one Business Day prior to the earlier
of (i) the date the related dividends are payable or (ii) the date Corning
Delaware is required to give notice of the record or payment date of such
related dividend to the New York Stock Exchange or other applicable
self-regulatory organization or to holders of the Preferred Securities, but
in any event not less than two Business Days prior to such record date. The
General Partner shall give notice of Corning's selection of an extended
interest payment period to the holders of the Preferred Securities.
Additional Interest
Corning shall be required to pay interest upon interest that has not been
paid on the Subordinated Debentures. Accordingly, in such circumstance,
Corning will pay an amount of interest (i.e., monthly compounding) on the
Subordinated Debentures in order that Corning Delaware may pay interest on
dividends in arrears in respect of the Preferred Securities, i.e., monthly
compounding (the amounts payable to effect monthly compounding on the
Subordinated Debentures and on the Preferred Securities being referred to
herein as "Additional Interest").
Set-Off
Corning shall have the right to set-off any payment it is otherwise required
to make to the extent that it makes payments under the Guarantee.
Subordination
The Fiscal Agency Agreement provides that the Subordinated Debentures are
subordinate and junior in right of payment to all Senior Indebtedness (as
defined below) of Corning and will rank pari passu with the claims of
Corning's general unsecured creditors.
<PAGE>
The term "Senior Indebtedness" is defined to mean the principal of, premium,
if any, interest on, and any other payment due pursuant to any of the
following, whether outstanding at the date of execution of the Fiscal Agency
Agreement or thereafter incurred, created or assumed:
(a) all indebtedness of Corning for money borrowed (including any
indebtedness secured by a mortgage or other lien which is (i) given to secure
all or part of the purchase price of property subject thereto, whether given
to the vendor of such property or to another or (ii) existing on property at
the time of acquisition thereof) but, in either case, excluding trade
accounts payable or similar accrued liabilities arising in the ordinary
course of business;
(b) all indebtedness of Corning for money borrowed evidenced by notes,
debentures, bonds or other securities;
(c) all lease obligations of Corning which are capitalized on the books of
Corning in accordance with generally accepted accounting principles;
(d) all indebtedness of others of the kinds described in either of the
preceding clauses (a) or (b) and all lease obligations of others of the kind
described in the preceding clause (c) assumed by or guaranteed in any manner
by Corning or in effect guaranteed by Corning through an agreement to
purchase, contingent or otherwise;
(e) all obligations of Corning with respect to letters of credit issued in
connection with indebtedness of others of the kind described in the preceding
clauses (a) or (b) or lease obligations of the kind described in the
preceding clause (c); and
(f) all renewals, extensions or refundings of indebtedness of the kinds
described in any of the preceding clauses (a), (b) or (d), all renewals or
extensions of lease obligations of the kinds described in either the
preceding clauses (c) and (d) and all renewals or extensions of obligations
with respect to letters of credit of the kind described in the preceding
clause (e);
unless, in the case of any particular indebtedness, lease obligation,
renewal, extension, refunding or obligations with respect to letters of
credit, the instrument or lease creating or evidencing the same or the
assumption or guarantee of the same expressly provides that such
indebtedness, lease, obligation, renewal, extension or refunding is not
superior in right of payment to or is pari passu with the Subordinated
Debentures. Such Senior Indebtedness shall continue to be Senior Indebtedness
and entitled to the benefits of the subordination provisions irrespective of
any amendment, modification or waiver of any term of such Senior
Indebtedness. As of March 27, 1994, Senior Indebtedness of Corning aggregated
approximately $1.9 billion.
Certain Covenants of Corning
Corning will covenant that neither it nor any majority owned subsidiary of
Corning will declare or pay any dividend on, or redeem, purchase, acquire for
value or make a liquidation payment with respect to, any of Corning's capital
stock, or make any guarantee payments with respect to the foregoing if at
such time (i) there shall have occurred any event that, with the giving of
notice or the lapse of time or both would constitute an Event of Default (as
defined below) under the Subordinated Debentures, (ii) Corning shall be in
default with respect to its payment or other obligations under the Guarantee
or (iii) Corning shall have given notice of its selection of an extended
interest payment period as provided in the Subordinated Debentures and such
period or any extension thereof shall be continuing. Corning will also
covenant (i) to remain the General Partner of Corning Delaware, provided that
any permitted successor of Corning under the Fiscal Agency Agreement may
succeed to Corning's duties as General Partner, (ii) to cause at least 21% of
the total value of Corning Delaware and at least 21% of all interests in the
capital, income, gain, loss, deduction and credit of Corning Delaware to be
held by Corning, (iii) not to voluntarily dissolve, wind-up or liquidate
Corning Delaware, (iv) to perform timely all of its duties as General Partner
(including the duty to pay dividends on the Preferred Securities as described
under "--Description of the Guarantee--General"), (v) to maintain ownership
of all partnership interests of Corning Delaware other than the Preferred
Securities, (vi) to use its reasonable efforts to cause Corning Delaware to
remain a limited partnership and otherwise to continue to be treated as a
partnership for United States federal income tax purposes and (vii) to
exchange Corning Series C Preferred Stock or convert Corning Common Stock
upon an election by Corning Delaware to exchange or convert the Subordinated
Debentures.
<PAGE>
Events of Default
If one or more of the following events (each an "Event of Default") shall
occur and be continuing while Corning Delaware holds the Subordinated
Debentures:
(a) failure to pay any principal of the Subordinated Debentures when due;
(b) failure to pay any interest on the Subordinated Debentures, including
any Additional Interest, when due and such failure continues for a period of
10 days; provided that a valid extension of the interest payment period by
Corning shall not constitute a default in the payment of interest for this
purpose;
(c) failure by Corning to exchange Corning Series C Preferred Stock or
convert Corning Common Stock upon an election by Corning Delaware to exchange
or convert the Subordinated Debentures;
(d) failure by Corning to perform in any material respect any other
covenant in the Fiscal Agency Agreement for the benefit of the holders of
Subordinated Debentures continued for a period of 60 days after written
notice to Corning from Corning Delaware or any holder of Preferred
Securities;
(e) the dissolution, winding-up, liquidation or termination of Corning
Delaware; or
(f) certain events of bankruptcy, insolvency or liquidation of Corning;
then Corning Delaware will have the right to declare the principal of and the
interest on the Subordinated Debentures (including any Additional Interest)
and any other amounts payable under the Subordinated Debentures to be
forthwith due and payable and to enforce its other rights as a creditor with
respect to the Subordinated Debentures. Additionally, under the terms of the
Preferred Securities, the holders of outstanding Preferred Securities will
have the rights described above under "--Preferred Securities--Voting
Rights," including the right to appoint a Special General Partner, which
Special General Partner shall be authorized to exercise Corning Delaware's
right to accelerate the principal amount of the Subordinated Debentures and
to enforce Corning Delaware's other rights as a creditor under the
Subordinated Debentures.
Conversion of the Subordinated Debentures
The Subordinated Debentures will be convertible into Corning Common Stock at
the option of Corning Delaware at any time on or before the close of business
on the maturity date thereof at the initial conversion price set forth on the
cover page of this Prospectus subject to the adjustments described under
"--Preferred Securities--Conversion Rights." Upon conversion of the Preferred
Securities, Corning Delaware will convert $100 principal amount of the
Subordinated Debentures for every two Preferred Securities so converted.
Corning's delivery to Corning Delaware of the fixed number of shares of
Corning Common Stock into which the Subordinated Debentures are convertible
(together with the cash payment, if any, in lieu of fractional shares) will
be deemed to satisfy Corning's obligation to pay the principal amount of the
Subordinated Debentures, including any applicable redemption premium, and the
accrued and unpaid interest attributable to the period from the last date to
which interest has been paid or duly provided for.
Exchange of the Subordinated Debentures
The Subordinated Debentures will be exchangeable for shares of Corning Series
C Preferred Stock upon an Exchange Event on or before the close of business
on the maturity date thereof at the rate of two shares of Corning Series C
Preferred Stock for each $100 principal amount of the Subordinated
Debentures. Any accumulated and unpaid interest (including Additional
Interest) on the Subordinated Debentures shall be treated as accrued and
unpaid dividends on the Corning Series C Preferred Stock.
Modification of the Fiscal Agency Agreement
The Fiscal Agency Agreement may be amended by mutual consent of the parties
in the manner the parties shall agree; provided that, so long as any of the
Preferred Securities remain outstanding, no such amendment may be made that
adversely affects the holders of Preferred Securities, and no termination of
the Fiscal Agency Agreement may occur, and no Event of Default or compliance
with any covenant under the Fiscal Agency Agreement may be waived by Corning
Delaware, without the prior consent of the holders of at least 66-2/3% of the
aggregate liquidation preference of the Preferred Securities then outstanding
unless and until the Subordinated Debentures and all accrued and unpaid
interest thereon has been paid in full.
<PAGE>
Governing Law
The Fiscal Agency Agreement and the Subordinated Debentures will be governed
by, and construed in accordance with, the laws of the State of New York.
Information Concerning the Fiscal Agent
The Fiscal Agent is an agent of Corning and owes no duty to the holders of
Subordinated Debentures or holders of the Preferred Securities. Corning and
Corning Delaware have agreed in the Fiscal Agency Agreement to indemnify and
hold harmless the Fiscal Agent against any losses or damages it may suffer as
Fiscal Agent.
Harris Trust and Savings Bank, the Fiscal Agent under the Fiscal Agency
Agreement, has from time to time engaged in transactions with, or performed
services for, Corning in the ordinary course of business.
DESCRIPTION OF CORNING CAPITAL STOCK
General
The following is a brief summary of certain provisions of the Restated
Certificate and does not relate to or give effect to provisions of statutory
or other law except as specifically stated. The Restated Certificate
authorizes the issuance of 500,000,000 shares of Common Stock. As of May ,
1994, shares of Common Stock were outstanding. The rights of
holders of Corning Common Stock are governed by the Restated Certificate, the
Company's By-Laws and by the New York Business Corporation Law (the "NYBCL").
Voting Rights
Subject to the voting of any shares of Series Preferred Stock that may be
outstanding, voting power is vested in the Common Stock, each share having
one vote.
Preemptive Rights
The Restated Certificate provides that no holder of Common Stock or Series
Preferred Stock (as defined below) of the Company shall have any preemptive
rights except as the Board of Directors of the Company may determine from
time to time. No such rights have been granted by the Board of Directors of
the Company.
Liquidation Rights
Subject to the preferential rights of any outstanding Series Preferred Stock,
in the event of any liquidation of the Company, holders of Common Stock then
outstanding are entitled to share ratably in the assets of the Company
available for distribution to such holders.
Dividend Rights and Restrictions
Subject to any preferential rights of any outstanding Series Preferred Stock
and any outstanding Preferred Securities, such dividends as may be determined
by the Board of Directors may be declared and paid on the Common Stock from
time to time out of any funds legally available therefor. The Company has
regularly paid cash dividends since 1881 and currently expects to continue to
pay cash dividends. The Company's current quarterly cash dividend is $.17 per
share of Common Stock. The continued declaration of dividends by the Board of
Directors of the Company is subject to, among other things, the Company's
current and prospective earnings, financial condition and capital
requirements and such other factors as the Board of Directors may deem
relevant.
Other Provisions
The Common Stock has no redemption, sinking fund or conversion privileges
applicable thereto and holders of Common Stock are not liable to assessments
or to further call.
Series Preferred Stock
The Restated Certificate authorizes the issuance of up to 10,000,000 shares
of Series Preferred Stock, par value $100 per share (the "Series Preferred
Stock"). The Company's Board of Directors has the authority to issue such
shares from time to time, without stockholder approval, and the authority to
determine the designations, preferences, rights, including voting rights, and
restrictions of such shares, subject to the NYBCL. Pursuant to this
authority, the Board of Directors has designated 600,000 shares of Series
Preferred Stock as Series A Preferred Stock, 500,000 shares of Series
Preferred Stock as Series B Preferred Stock (the "Series B Preferred Stock"),
and shares of Series Preferred Stock as Series
<PAGE>
C Preferred Stock. No other class of Series Preferred Stock has been
designated by the Board of Directors. For a description of the Corning Series
C Preferred Stock, see "Description of Securities Offered--Corning Series C
Preferred Stock."
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. The Company 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, the Series C Preferred Stock and the Preferred
Securities.
Holders of Series B Preferred Stock are entitled to vote, voting together
with the Common Stock and not 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 the Company, holders of Series
B Preferred Stock shall 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 the Company, at any time, at the following redemption prices per
share:
<TABLE>
<CAPTION>
During the Twelve-
Month Period
Beginning October 1, Price Per Share
<S> <C>
1993 $104.00
1994 $103.00
1995 $102.00
1996 $101.00
</TABLE>
and thereafter at $100.00 per share plus, in each case, accrued and unpaid
dividends.
The Series B Preferred Stock is subject to redemption, at the option of the
holder, at any time upon five Business Days' notice, at a redemption price
equal to $100 plus accrued and unpaid dividends, if the proceeds are
necessary (i) to make a distribution pursuant to an investment election made
under the employee benefit plan or (ii) to satisfy any indebtedness to which
the employee benefit plan is subject, provided that such payment is necessary
to remedy or prevent a default under such indebtedness.
The Company, 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 such shares 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 $25 per share of Common
Stock, each share of Series B Preferred Stock being valued at $100 for the
purpose of such conversion, producing a conversion ratio equal to four shares
of Common Stock for each share of Series B Preferred Stock so converted,
subject to certain adjustments to prevent dilution.
Preferred Share Purchase Rights
Attached to each share of Common Stock is one preferred share purchase right
("Right"). Each Right entitles the registered holder to purchase from the
Company one four-hundredth of a share of Series A Preferred Stock at a price
of $62.50 per one four-hundredth of a share of Series A Preferred Stock (the
"Exercise Price"), subject to adjustment. The Rights expire on July 15, 1996
(the "Final Expiration Date"), unless the Final Expiration Date is extended
or unless the Rights are earlier redeemed by the Company.
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 (i) ten days following the public announcement by the Company or
an Acquiring Person (as defined below) that a person or group has acquired
beneficial ownership of 20% or more of the Company's Common Stock (an
"Acquiring Person") or (ii) ten business days (or such later date as the
Board of Directors may determine) 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 Company's outstanding Common
Stock (the earlier of such dates being called the
<PAGE>
"Distribution Date"). Separate certificates for the Rights will be mailed to
holders of record of the Common Stock as of such 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
thereafter 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 the Company is acquired in a merger, consolidation, or other
business combination transaction or more than 50% of the Company's assets,
cash flow or earning power is sold or transferred, each Right, other than the
Rights owned by an Acquiring Person, will thereafter entitle the holder
thereof 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.
The Rights are redeemable in whole, but not in part, at $.0125 per Right at
any time on or prior to any person or group becoming an Acquiring Person,
provided that the Rights may no longer be redeemed if such person or group
shall have acquired beneficial ownership of 90% or more of the Common Stock.
The right to exercise the Rights terminates at the time that the Board of
Directors elects to redeem the Rights. Notice of redemption shall be given by
mailing such notice 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 "Rights Agent").
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 (i) in the
event of a stock dividend on, or a subdivision, combination or
reclassification of, the shares of Series A Preferred Stock, (ii) upon the
grant to holders of the shares of Series A Preferred Stock of certain 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 (iii) 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 four-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 certain exceptions, no adjustment
in the exercise price will be required until cumulative adjustments require
an adjustment of at least 1% in such exercise price.
Upon exercise of the Rights, no fractional shares of Series A Preferred Stock
will be issued (other than fractions which are integral multiples of one
four-hundredth of a share, which may, at the election of the Company, be
evidenced by depositary receipts) and in lieu thereof an adjustment in cash
will be made.
The Rights have certain anti-takeover effects. The Rights may cause
substantial dilution to a person or group that attempts to acquire the
Company on terms not approved by the Board of Directors of the Company,
except pursuant to 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 the Rights may
be redeemed by the Company at $.0125 per Right prior to the fifteenth day
after the acquisition by a person or group of beneficial ownership of 20% or
more of the Common Stock (subject to certain exceptions).
The shares of Series A Preferred Stock purchasable upon exercise of the
Rights will rank junior to all other series of the Company's Preferred Stock
(including the Series B and Series C Preferred Stock) or any similar stock
that specifically provides that they shall rank 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 $10 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
<PAGE>
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 foregoing description of the Rights does not purport to be complete and
is qualified in its entirety by reference to the description of the Rights
contained in the Rights Agreement, dated as of July 2, 1986 between the
Company and the Rights Agent, as amended by the Amended Rights Agreement,
dated as of October 4, 1989, included as an exhibit to this Registration
Statement.
Corning's Fair Price Amendment
In 1985, the Company's stockholders adopted an amendment (the "Fair Price
Amendment") to the Restated Certificate that, in general, requires the
approval by the holders of at least 80% of the voting power of the
outstanding capital stock of the Company (other than the Series C Preferred
Stock) entitled to vote generally in the election of directors (the "Voting
Stock") as a condition for mergers and certain other business combinations
with any beneficial owner of more than 10% of such voting power unless (1)
the transaction is approved by at least a majority of the Continuing
Directors (as defined in the Restated Certificate) or (2) certain minimum
price, form of consideration and procedural requirements are met. Certain
terms used herein are defined in the Restated Certificate.
Amendment or repeal of this provision or the adoption of any provision
inconsistent therewith would require 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.
Certain Other Provisions of the Restated Certificate and By-Laws
In addition to the Preferred Share Purchase Rights and the Fair Price
Amendment, the Restated Certificate and By-Laws contain other provisions that
may discourage a third party from seeking to acquire the Company or to
commence a proxy contest or other takeover-related action. The Company has
classified its Board of Directors such 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 the Company adopt any provisions inconsistent therewith,
without the affirmative vote of at least 80% of the Voting Stock of the
Company or the approval of two-thirds of the entire Board of Directors.
The Company's By-Laws contain certain procedural requirements with respect to
the nomination of directors by stockholders that require, among other things,
delivery of notice by such stockholders to the Secretary of the Company not
later than 60 days nor more than 90 days prior to the date of the
stockholders meeting at which such nomination is to be considered. The
By-Laws do not provide that a meeting of the Board of Directors may be called
by stockholders.
The Restated Certificate provides that no director will be liable to the
Company or its stockholders for a breach of duty as a director except as
provided by the NYBCL.
The effect of these provisions may be to deter attempts either to obtain
control of the Company or to acquire a substantial amount of its stock, even
if such a proposed 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 the Company, even though some
or a majority of the holders of Common Stock may believe such actions to be
beneficial.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
General
The following is a summary of certain federal income tax considerations
relevant to the purchase, ownership and disposition of the Preferred
Securities. This summary does not purport to deal with all aspects of federal
income taxation that may be relevant to holders of the Preferred Securities,
nor to certain types of holders subject to special treatment under the
federal income tax laws (for example, banks, life insurance companies,
dealers, tax-exempt organizations, persons whose functional currency is not
the
<PAGE>
U.S. dollar or foreign persons and foreign entities). This discussion is
based upon current provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), the Treasury regulations (proposed, temporary and
final) promulgated thereunder, judicial decisions and Internal Revenue
Service ("IRS") rulings, all of which are subject to change, which change may
be retroactively applied in a manner that could adversely affect a holder of
the Preferred Securities. Unless otherwise indicated, the information below
is directed at initial purchasers that acquire Preferred Securities at
original issue for their initial offering price, and that hold Preferred
Securities as capital assets (generally property held for investment.)
Prospective investors are advised to consult their own tax advisors with
regard to the federal income, estate and gift tax consequences of purchasing,
holding and disposing of Preferred Securities, as well as the tax
consequences arising under the laws of any state, foreign country or other
jurisdiction. The following summary represents the opinion of Shearman &
Sterling, special federal income tax counsel to Corning and Corning Delaware,
insofar as such summary relates to matters of law and legal conclusions. An
opinion of counsel, however, is not binding on the IRS or the courts, and
neither Corning nor Corning Delaware have sought, nor do they intend to seek,
a ruling from the IRS that the position as reflected in the discussion below
will be accepted by the IRS. Moreover, there are no cases or rulings on
similar transactions and, as a result, there can be no assurance that the IRS
will agree with the conclusions and discussions below.
Tax Classification
While the following matters are not free from doubt, Shearman & Sterling is
of the opinion that (i) Corning Delaware will be classified as a partnership
for federal income tax purposes and not as an association (or as a publicly
traded partnership) taxable as a corporation, and (ii) the Subordinated
Debentures will be classified as indebtedness of Corning for such purposes.
This advice is based upon the terms of the Limited Partnership Agreement, the
Fiscal Agency Agreement and related documents and transactions as described
in this Prospectus (and assumes ongoing compliance with such agreement and
documents) and upon the conclusion by Shearman & Sterling that the nature of
the income of Corning Delaware will exempt it from the rule that certain
publicly traded partnerships are taxable as corporations (assuming Corning
Delaware will not register under the 1940 Act).
Prospective investors and their advisors should be aware, however, that the
proper characterization of the arrangement involving Corning Delaware, the
Preferred Securities and the Subordinated Debentures is not entirely clear
and the IRS has recently announced that it will scrutinize and may challenge
certain aspects of transactions with some features that are similar to this
arrangement. If, contrary to the opinion of tax counsel, the IRS successfully
argued that Corning Delaware should be taxable as a corporation, Corning
Delaware (including the income from the Subordinated Debentures) would be
subject to federal income tax at corporate rates and distributions to holders
of Preferred Securities likely would be taxable as dividend income to the
extent of the earnings and profits of Corning Delaware. Similarly, if,
contrary to the opinion of tax counsel, the IRS successfully asserted that
the Subordinated Debentures were properly classified as stock or other equity
in Corning, then payments on the Subordinated Debentures would not be
deductible by Corning as interest, but instead likely would be treated as
distributions to holders taxable as dividends to the extent of the earnings
and profits of Corning. Either event could have adverse tax consequences for
certain holders and could result in substantially reduced amounts payable to
holders, as well as resulting in holders receiving Corning Series C Preferred
Stock in a taxable transaction that has other possible adverse tax
consequences. See "--Exchange of Preferred Securities for Corning Series C
Preferred Stock."
Prospective investors should also be aware that the IRS recently issued a
proposed Treasury regulation under which the IRS can disregard or recast the
form of a transaction if a partnership is formed or availed of in connection
with a transaction (or series of related transactions) "with a principal
purpose of substantially reducing the present value of the partners'
aggregate federal tax liability" in a manner inconsistent with the intent of
the partnership provisions of the Code. In the view of Shearman & Sterling,
based in part upon certain representations of Corning, Corning Delaware
should not be considered to be formed or availed of with such a purpose
because the transactions involving Corning Delaware are not of the type
intended to fall within the scope of such proposed regulation. There can be
no assurance, however, that the IRS will agree with this view. Unless
otherwise noted, the remainder of this summary assumes, in accordance with
the opinion of Shearman & Sterling, that Corning Delaware is properly
classified as a partnership and the Subordinated Debentures are properly
classified as indebtedness of Corning for income tax purposes.
<PAGE>
Income from Preferred Securities
As partners in a partnership, each holder of Preferred Securities will be
required to include in gross income its distributive share of the net income
of Corning Delaware, which net income generally will be equal to the amount
of interest received or accrued on the Subordinated Debentures. See
"--Original Issue Discount" below. Any amount so included in a holder's gross
income will increase its tax basis in the Preferred Securities, and the
amount of distributions of cash or other property by Corning Delaware to the
holder will reduce such holder's tax basis in the Preferred Securities. No
portion of the amounts received on the Preferred Securities will be eligible
for the dividends received deduction.
Corning Delaware does not presently intend to make an election under Section
754 of the Code. As a result, a subsequent purchaser of Preferred Securities
will not be permitted to adjust the tax basis in its allocable share of
Corning Delaware's assets so as to reflect any difference between its
purchase price for the Preferred Securities and the underlying tax basis of
Corning Delaware in its assets. As a result, a Security holder may be
allocated a larger or smaller amount of Corning Delaware income than would
otherwise be appropriate based upon such holder's purchase price for the
Preferred Security.
Under Section 708 of the Code, Corning Delaware will be deemed to terminate
for federal income tax purposes if 50% or more of the capital and profits
interests in Corning Delaware are sold or exchanged within a 12-month period.
If such a termination occurs, there will be a closing of the partnership's
taxable year for all partners and Corning Delaware will be considered to
distribute its assets to the partners, who would then be treated as
recontributing those assets to Corning Delaware, as a new partnership.
Corning Delaware will not comply with certain technical requirements that
might apply when such a constructive termination occurs. As a result, Corning
Delaware may be subject to certain tax penalties and may incur additional
expenses if it is required to comply with those requirements. (Furthermore,
Corning Delaware might not be able to comply due to lack of data.)
Original Issue Discount
Under Treasury Regulations, the stated interest payments on the Subordinated
Debentures will be treated as "original issue discount" because of the option
that Corning has, under the terms of the Subordinated Debentures, to extend
interest payment periods for up to 60 months. Under the Code, holders of debt
with original issue discount must include that discount in income on an
economic accrual basis and before the receipt of cash attributable to the
interest regardless of their method of tax accounting. In the event that the
interest payment period is extended, Corning Delaware will continue to accrue
income equal to the amount of the interest payment due at the end of the
extended interest payment period on an economic accrual basis over the length
of the extended interest payment period.
Accrued income will be allocated, but not distributed, to holders of record
on the Business Day preceding the last day of each calendar month. As a
result, holders of record during an extended interest payment period will
include interest in gross income in advance of the receipt of cash, and any
such holders who dispose of Preferred Securities prior to the record date for
the payment of dividends following such extended interest payment period will
include such holder's allocable share of such interest in gross income but
will not receive any cash related thereto. The tax basis of a Preferred
Security will be increased by the amount of any interest that is included in
income without a corresponding receipt of cash and will be decreased when and
if such cash is subsequently received from Corning Delaware.
Under Treasury Regulations, no portion of the price paid for a debt
instrument is to be allocated to the right to convert into, or the right to
exchange for, stock of the corporation issuing the debt instrument. As such,
neither Corning Delaware nor the holders of Preferred Securities should be
required to allocate a portion of their purchase price to the right of
Corning Delaware to convert the Subordinated Debentures into Corning Common
Stock or to exchange the Subordinated Debentures for Corning Series C
Preferred Stock. Nevertheless, the IRS may take a contrary view, or may
require an allocation of purchase price to the Corning guarantee. If the IRS
were successful in requiring an allocation, a holder could be required to
include an incremental amount of original issue discount (in addition to
stated interest) in income over the life of the Preferred Securities. Corning
intends to take the position that no allocation that would result in
additional original issue discount (in excess of stated interest) is
required.
Disposition of Preferred Securities
Generally, capital gain or loss will be recognized on a sale of Preferred
Securities, including a complete redemption for cash, equal to the difference
between the amount realized and the holder's tax basis in the Preferred
Securities sold. Gain or loss recognized by a holder on the sale or exchange
of a Preferred
<PAGE>
Security held for more than one year generally will be taxable as long-term
capital gain or loss. The adjusted tax basis of the Preferred Securities sold
will equal the amount paid for the Preferred Securities, plus accrued but
unpaid original issue discount, if any, as described herein allocated to such
holder and reduced by any cash or other property distributed to such holder
by Corning Delaware. A holder acquiring Preferred Securities at different
prices may be required to maintain a single aggregate adjusted tax basis in
such Preferred Securities, and, upon sale or other disposition of some of the
Preferred Securities, allocate a pro rata portion of such aggregate tax basis
to the Preferred Securities sold (rather than maintaining a separate tax
basis in each Preferred Security for purposes of computing gain or loss on a
sale of that Preferred Security).
If a holder of Preferred Securities is required to recognize an aggregate
amount of income over the life of the Preferred Security that exceeds the
aggregate cash distribution with respect thereto, such excess generally will
result in a capital loss upon the retirement of the Preferred Securities.
Corning Delaware is obligated to redeem the Preferred Securities for cash on
repayment or on any prepayment of the Subordinated Debentures. Corning will
pay a prepayment premium to Corning Delaware if Corning prepays any portion
of the Subordinated Debentures before , 2004 and Corning Delaware will
pay a corresponding redemption premium to holders of Preferred Securities
whose Preferred Securities are redeemed before , 2004. Corning
Delaware will receive a redemption premium on any repayments of the
Subordinated Debentures by Corning before , 2004. Corning Delaware will
recognize capital gain on such prepayments of the Subordinated Debentures to
the extent of the prepayment premium. Corning Delaware's gain will be
allocated to the holder whose Preferred Securities are redeemed, and the
allocated gain should increase the holder's adjusted tax basis in its
Preferred Securities. A holder who has a basis increase due to such
allocation to the holder of Corning Delaware's gain on Corning's prepayment
of the Subordinated Debentures will not have additional taxable gain
attributable to the redemption premium upon Corning Delaware's redemption of
the holder's Preferred Securities.
Corning Delaware will allocate income to holders of Preferred Securities on
the Business Day preceding the last day of each calendar month. As a result
of such monthly allocation, a holder purchasing Preferred Securities may be
allocated tax items attributable to periods before the transfer. The use of
such monthly allocation may not be permitted under applicable Treasury
Regulations, and, if not allowed, taxable income of Corning Delaware may be
reallocated among holders of Preferred Securities. The General Partner is
authorized to adjust allocations if necessary to reflect the economic income
of holders or as otherwise required by the Code.
Exchange of Preferred Securities for Corning Common Stock
The Subordinated Debentures may be converted at the option of Corning
Delaware into Corning Common Stock and the Limited Partnership Agreement
allows a holder to direct Corning Delaware to make such a conversion for the
holder to the extent of such holder's allocable share of the Subordinated
Debentures and distribute Corning Common Stock to such holder in exchange for
such holder's Preferred Securities. A holder's exchange of Preferred
Securities through Corning Delaware for shares of Corning Common Stock should
be treated as a distribution of Corning Common Stock by Corning Delaware in
redemption of all or part of the holder's interest in a partnership. Neither
a holder nor Corning Delaware should recognize gain or loss on the conversion
or the exchange. However, when Corning Delaware exchanges Subordinated
Debentures with Corning to obtain shares of Corning Common Stock for delivery
to a holder in exchange for the holder's Preferred Securities, interest
income which has accrued on that portion of the Subordinated Debentures since
the last interest payment date will be allocated to the holder exchanging
Preferred Securities, but no cash will be distributed in connection with this
income. As a result, holders of Preferred Securities who exchange these
securities on a date other than an interest payment date will include some
interest in gross income but will not receive any cash related to that
interest. This income will increase the holder's basis in its Preferred
Securities. In addition, under the current advance ruling policy of the IRS,
cash received by Corning Delaware in lieu of a fractional share of Corning
Common Stock upon conversion of all or part of the Subordinated Debentures
should be treated as a payment in exchange for the fractional share of
Corning Common Stock. This treatment will result in Corning Delaware
recognizing gain or loss, if any, measured by the difference between the cash
received for the fractional share interest and Corning Delaware's tax basis
in such fractional share interest. This gain will be allocated to the holder
of Preferred Securities who converts those shares through Corning Delaware
into shares of Corning Common Stock, and the cash which Corning Delaware
receives in lieu of a fractional share interest will be distributed to that
holder.
<PAGE>
In the case of an exchange upon conversion for all of the holder's Preferred
Securities, the holder's tax basis in the shares of Corning Common Stock
received will equal the holder's tax basis in the Preferred Securities
immediately before such exchange increased by the gain allocated to the
holder on any fractional share interest redeemed by Corning and reduced by
any cash distributed to the holder with respect to such fractional share
interest. In the case of an exchange for less than all of a holder's
Preferred Securities, the holder's tax basis in the shares of Corning Common
Stock received will be the lesser of the holder's tax basis in such holder's
Preferred Securities immediately before such exchange or Corning Delaware's
tax basis in the portion of the Subordinated Debentures converted for those
shares of Corning Common Stock increased by any gain recognized by Corning
Delaware on conversion in respect of any fractional share interest redeemed
by Corning and decreased by any cash received by Corning Delaware in
connection therewith. In such case, the holder's aggregate tax basis in its
remaining Preferred Securities will be its aggregate tax basis in such
holder's Preferred Securities immediately before such redemption, reduced
(but not below zero) by the sum of Corning Delaware's tax basis in the shares
of Corning Common Stock delivered in such redemption as described above, and
the amount of cash paid in lieu of fractional shares, if any.
The holding period for Corning Common Stock received in exchange for a
holder's Preferred Securities will begin on the date Corning Delaware
acquired the Subordinated Debentures, except that the holding period of
Corning Common Stock received by Corning Delaware in satisfaction of accrued
but unpaid interest, if any, may commence on the date of conversion, although
there is no authority precisely on point. Gain or loss upon a sale or other
disposition of the Corning Common Stock will be capital gain or loss if the
Corning Common Stock is a capital asset in the hands of the holder.
Holders should be aware that the tax treatment of the conversion feature is
not entirely clear and the IRS might argue that, for tax purposes, the
conversion of a Subordinated Debenture into Corning Common Stock (and Corning
Delaware's subsequent distribution of such stock to a holder) should be
treated as an exchange by the holder of its Preferred Securities against
Corning for Corning Common Stock. While unlikely, if this argument were
asserted and sustained, the conversion of the Preferred Securities by a
holder for Corning Common Stock would be a taxable transaction in which a
holder recognizes capital gain or loss.
Adjustment of Conversion Price
Treasury Regulations promulgated under section 305 of the Code would treat
Corning Delaware (and, thus, holders of Preferred Securities) as having
received a constructive distribution from Corning in the event the conversion
ratio of the Subordinated Debentures were adjusted if (i) as a result of such
adjustment, the proportionate interest of Corning Delaware in the assets or
earnings and profits of Corning were increased and (ii) the adjustment was
not made pursuant to a bona fide, reasonable antidilution formula. An
adjustment in the conversion ratio would not be considered made pursuant to
such a formula if the adjustment was made to compensate for certain taxable
distributions with respect to the stock into which the Subordinated
Debentures are convertible. Thus, under certain circumstances, a reduction in
the conversion price for the Subordinated Debentures is likely to be taxable
to Corning Delaware as a dividend to the extent of the current or accumulated
earnings and profits of Corning. The holders of the Preferred Securities
would be required to include their allocable share of such constructive
dividend in gross income but will not receive any cash related thereto. In
addition, the failure to fully adjust the conversion price of the
Subordinated Debentures to reflect distributions of stock dividends with
respect to the Corning Common Stock may result in a taxable dividend to the
holders of the Corning Common Stock.
Similarly, under Section 305 of the Code, adjustments to the conversion price
of the Corning Series C Preferred Stock, which may occur under certain
circumstances, may result in deemed dividend income to holders of the Corning
Series C Preferred Stock if such adjustments are not made pursuant to a bona
fide, reasonable antidilution formula, and failure to make such adjustments
to the conversion price of the Corning Series C Preferred Stock may result in
deemed dividend income to holders of the Corning Common Stock.
Exchange of Preferred Securities for Corning Series C Preferred Stock
Under certain circumstances, as described under the caption "Description of
Securities Offered--Preferred Securities--Optional Exchange for Corning
Series C Preferred Stock," Subordinated Debentures will be exchanged by
Corning Delaware for Corning Series C Preferred Stock which would then be
distributed to the holders of the Preferred Securities in liquidation of
Corning Delaware. If Corning Delaware is taxed as a partnership, Corning
Delaware's subsequent distribution of the Corning Series C Pre-
<PAGE>
ferred Stock to the holders in exchange for the holders' Preferred Securities
should be treated as a non-taxable exchange to Corning Delaware and to each
holder of Preferred Securities and should result in the holder of such
Preferred Securities receiving an aggregate tax basis in the Corning Series C
Preferred Stock equal to such holder's aggregate tax basis in its Preferred
Securities. A holder's holding period in the Corning Series C Preferred Stock
so received in liquidation of Corning Delaware as a partnership would include
the period for which the Preferred Securities were held by such holder. Under
a change in law, a change in legal interpretation or the other circumstances
giving rise to a Tax Event, however, the liquidation of Corning Delaware
could be a taxable event both to Corning Delaware and to holders of the
Preferred Securities.
Notwithstanding partnership treatment, however, holders should be aware that
the taxation of the exchange feature is not entirely clear and the IRS might
argue that, for tax purposes, the exchange of Subordinated Debentures for
Corning Series C Preferred Stock (and Corning Delaware's subsequent
distribution of such stock to a holder) should be treated as an exchange by
the holder of its Preferred Securities against Corning for Corning Series C
Preferred Stock. If this argument were asserted and sustained, the exchange
of the Preferred Securities by a holder for Corning Series C Preferred Stock
would be a taxable transaction in which a holder recognizes capital gain or
loss.
If Corning exercises its option to extend interest payment periods under the
Subordinated Debentures for more than fifteen months, holders will have the
option of causing Corning Delaware to exchange the Subordinated Debentures
for Corning Series C Preferred Stock and to distribute such stock to such
holders in exchange for their Preferred Securities. Holders who exchange
their Preferred Securities for Corning Series C Preferred Stock, however, may
be subject to additional income tax to the extent accrued but unpaid interest
(taxed as original issue discount) on the Subordinated Debentures is
converted into accumulated and unpaid dividends on the Corning Series C
Preferred Stock received in exchange for the Preferred Securities. This is
because holders first would be subject to tax on their distributive share of
Corning Delaware's unpaid interest income on the Subordinated Debentures as
such interest accrues during the extended period (with a corresponding
increase in the tax basis of the holders' Preferred Securities). If the
holders exchange their Preferred Securities for Corning Series C Preferred
Stock when there is accrued but unpaid interest due on the Subordinated
Debentures and such unpaid interest is converted into accumulated and unpaid
dividends on the Corning Series C Preferred Stock received in the exchange,
the holders would be subject to tax again on the previously taxed accrued
interest to the extent Corning subsequently paid such amount as dividends to
the holders. Moreover, if such accumulated, unpaid dividends on the Corning
Series C Preferred Stock were considered to cause the dividend rate on the
Corning Series C Preferred Stock to decline in the future, then, under
section 1059(f) of the Code, such dividends may be treated as "extraordinary
dividends" for tax purposes (regardless of the period over which a holder has
or is deemed to have held the Corning Series C Preferred Stock) and corporate
holders generally would be required to reduce their tax basis in their
Corning Series C Preferred Stock by the "non-taxed" portion of such dividends
(which portion generally reflects the dividends received deduction claimed by
the corporate holder with respect to such extraordinary dividend).
Holders are urged to consult their own tax advisors as to the tax
consequences to them of an exchange of their Preferred Securities for Corning
Series C Preferred Stock.
Corning Delaware Information Returns and Audit Procedures
The General Partner in Corning Delaware will furnish each holder with a
Schedule K-1 each year setting forth such holder's allocable share of income
for the prior calendar year. The General Partner is required to furnish such
Schedule K-1 as soon as practicable following the end of the taxable year,
but in any event prior to March 15th of each succeeding year.
Any person who holds Preferred Securities as nominee for another person is
required to furnish to Corning Delaware (a) the name, address and taxpayer
identification number of the beneficial owner and the nominee; (b)
information as to whether the beneficial owner is (i) a person that is not a
United States person, (ii) a foreign government, an international
organization or any wholly owned agency or instrumentality of either of the
foregoing, or (iii) a tax-exempt entity; (c) the amount and description of
Preferred Securities held, acquired or transferred for the beneficial owner;
and (d) certain information including the dates of acquisitions and
transfers, means of acquisitions and transfers, and acquisition cost for
purchases, as well as the amount of net proceeds from sales. Brokers and
financial institutions are required to furnish additional information,
including whether they are United States persons and certain information on
Preferred Securities they acquire, hold or transfer for their own accounts. A
penalty of $50 per failure (up to
<PAGE>
a maximum of $100,000 per calendar year) is imposed by the Code for failure
to report such information to Corning Delaware. The nominee is required to
supply the beneficial owners of the Preferred Securities with the information
furnished to Corning Delaware.
The General Partner, as the tax matters partner, will be responsible for
representing the holders in any dispute with the IRS. The Code provides for
administrative examination of a partnership as if the partnership were a
separate and distinct taxpayer. Generally, the statute of limitations for
partnership items does not expire before three years since the later of the
filing or the last date for filing of the partnership information return. Any
adverse determination following an audit of the return of Corning Delaware by
the appropriate taxing authorities could result in an adjustment of the
returns of the holders, and, under certain circumstances, a holder may be
precluded from separately litigating a proposed adjustment to the items of
the partnership. An adjustment could also result in an audit of a holder's
return and adjustments of items not related to the income and losses of
Corning Delaware.
Foreign Holders
Ownership of Preferred Securities by nonresident aliens, foreign corporations
and other foreign persons raises tax considerations unique to such persons
and may have substantially adverse tax consequences to them. Therefore,
prospective investors who are foreign persons or which are foreign entities
are urged to consult with their U.S. tax advisors as to whether an investment
in a Preferred Security represents an appropriate investment in light of
those unique tax considerations and possible adverse tax consequences.
Backup Withholding and Information Reporting
In general, information reporting requirements will apply to payments to
noncorporate United States holders of the proceeds of the sale of Preferred
Securities, Corning Series C Preferred Stock or Corning Common Stock within
the United States and "backup withholding" at a rate of 31% will apply to
such payments if the United States holder fails to provide an accurate
taxpayer identification number.
Proposed Tax Legislation
Legislation pending before Congress would apply special rules to "large
partnerships," generally defined as partnerships with at least 250 partners
during a taxable year (counting towards such total each owner during the year
of a partnership interest that is transferred during the year). Under the
legislation, certain computations are made at the partnership level rather
than the partner level. In particular, taxable income is calculated at the
partnership level, and is calculated generally in the same manner as for an
individual, except that 70% of miscellaneous itemized deductions (such as
expenses for the production of non-business income) are disallowed. As a
result, all partners (including corporations) might have a portion of their
share of partnership deductions (other than interest expense) disallowed. In
addition, large partnerships would become subject to new audit procedures;
among other things, an adjustment to taxable income of the partnership for a
prior year would flow through to current partners in the year the audit was
settled, and the partnership itself (rather than the partners) would be
subject to any applicable interest or penalties. Moreover, under the
legislation, a large partnership would not be deemed to have terminated under
Section 708 of the Code solely because 50% or more of its interests are sold
or exchanged within a 12-month period. As proposed, these rules would apply
to partnership taxable years ending on or after December 31, 1994.
This legislation is currently pending before Congress; however, no prediction
can be made whether this proposal or similar legislation might be enacted in
the future, or the ultimate effective date of such legislation or whether the
number of holders would cause Corning Delaware to be considered a "large
partnership."
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT
TO THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF
THE PREFERRED SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL,
FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR
OTHER TAX LAWS.
<PAGE>
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, Corning
Delaware has agreed to sell to each of the Underwriters named below, and each
of such Underwriters, for whom Goldman, Sachs & Co. and Lazard Freres & Co.
are acting as representatives, has severally agreed to purchase from Corning
Delaware, the respective number of Preferred Securities set forth opposite
its name below:
<TABLE>
<CAPTION>
Number of
Underwriter Preferred Securities
<S> <C>
Goldman, Sachs & Co.
Lazard Freres & Co.
Total ,000
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all such Preferred Securities
offered hereby, if any are taken.
The Underwriters propose to offer the Preferred Securities in part directly
to the public at the initial public offering price set forth on the cover
page of this Prospectus, and in part to certain securities dealers at such
price less a concession of $ . per Preferred Security. The Underwriters
may allow, and such dealers may reallow, a concession not in excess of $ .
per Preferred Security to certain brokers and dealers. After the Preferred
Securities are released for sale to the public, the offering price and other
selling terms may from time to time be varied by the representatives.
In view of the fact that the proceeds from the sale of the Preferred
Securities will be used by Corning Delaware to purchase the Subordinated
Debentures of Corning, the Underwriting Agreement provides that Corning will
pay as compensation to the Underwriters ("Underwriters' Compensation"), a
commission of $ . per Preferred Security.
Corning and Corning Delaware have granted the Underwriters an option
exercisable for 30 days after the date of this Prospectus to purchase up to
an aggregate of additional Preferred Securities solely to cover
over-allotments, if any. If the Underwriters exercise their over-allotment
option, the Underwriters have severally agreed, subject to certain
conditions, to purchase approximately the same percentage thereof that the
number of Preferred Securities to be purchased by each of them, as shown in
the foregoing table, bears to the Preferred Securities offered.
Corning and Corning Delaware have agreed not to offer, sell, contract to
sell, or otherwise dispose of any shares of Corning Common Stock, any other
capital stock of Corning, any other security convertible into or exercisable
or exchangeable for Corning Common Stock or any such other capital stock or
debt securities substantially similar to the Subordinated Debentures for a
period of 90 days after the date of this Prospectus without the prior written
consent of the representatives, except for (a) the Preferred Securities
offered hereby, (b) Corning Common Stock or Corning Series C Preferred Stock
issued or delivered upon conversion or exchange of the Subordinated
Debentures, (c) securities issued or delivered upon conversion, exchange or
exercise of any other securities of Corning outstanding on the date of this
Prospectus, (d) securities issued pursuant to Corning's stock option or other
benefit or incentive plans maintained for its officers, directors or
employees, (e) securities issued in connection with mergers, acqui-
<PAGE>
sitions or similar transactions or (f) partnership interests of Corning
Delaware issued to Corning in connection with the sale of the over-allotment
shares in order to maintain Corning's 21% interest in the total capital of
Corning Delaware.
Certain of the Underwriters are customers of, or engage in transactions with,
and from time to time have performed services for, Corning and its
subsidiaries and associated companies in the ordinary course of business.
Prior to this Offering, there has been no public market for the Preferred
Securities. Application will be made to list the Preferred Securities on the
New York Stock Exchange under the symbol "GLW pfM." In order to meet one of
the requirements for listing the Preferred Securities on the New York Stock
Exchange, the Underwriters will undertake to sell lots of 100 or more
Preferred Securities to a minimum of 2,000 beneficial holders.
Corning and Corning Delaware have agreed to indemnify the several
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended.
VALIDITY OF THE SECURITIES
The validity of the Preferred Securities, the Guarantee, the Corning Common
Stock and the Corning Series C Preferred Stock issuable upon conversion or
exchange of the Subordinated Debentures will be passed upon for Corning by
William C. Ughetta, Esq., Senior Vice President and General Counsel of
Corning, and for the Underwriters by Sullivan & Cromwell, New York, New York.
Additionally, certain matters as to (i) the formation of Corning Delaware and
the authority of Corning and Corning Delaware to enter into certain
agreements relating to the transaction and (ii) United States taxation will
be passed upon by Shearman & Sterling, New York, New York. Mr. Ughetta owns
substantially less than 1% of the outstanding shares of Corning Common Stock.
EXPERTS
The consolidated financial statements of Corning and of Dow Corning
incorporated in this Prospectus by reference to Corning's 1993 Annual Report
on Form 10-K for the year ended January 2, 1994, have been so incorporated in
reliance on the reports of Price Waterhouse, independent accountants, given
on the authority of said firm as experts in auditing and accounting.
The consolidated financial statements of Damon, as of December 31, 1992 and
1991, and for each of the three years ended December 31, 1992, incorporated
by reference in this Prospectus by reference to Corning's Current Report on
Form 8-K dated August 4, 1993 have been so incorporated in reliance on the
report of Arthur Andersen & Co., independent public accountants, given on the
authority of said firm as experts in accounting and auditing.
<PAGE>
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, and, if given
or made, such information or representations must not be relied upon as
having been authorized. This Prospectus does not constitute an offer to sell
or the solicitation of an offer to buy any securities other than the
securities to which it relates or an offer to sell or the solicitation of an
offer to buy such securities in any circumstances in which such offer or
solicitation is unlawful. Neither the delivery of this Prospectus nor any
sale made hereunder shall, under any circumstances, create any implication
that there has been no change in the affairs of Corning and Corning Delaware
since the date hereof or that the information contained herein is correct as
of any time subsequent to its date.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Available Information 3
Incorporation of Certain Documents by
Reference 3
Prospectus Summary 4
Use of Proceeds 10
Investment Considerations 10
Capitalization 11
Ratios of Earnings to Combined Fixed
Charges and Preferred Stock
Dividends 12
Market Prices of Corning Common Stock
and Dividends 13
Selected Consolidated Financial Data 13
Corning Unaudited Pro Forma Combined
1993 Statement of Income 16
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 19
Business of Corning 28
Corning Delaware 33
Description of Securities Offered 33
Description of Corning Capital Stock 52
Certain Federal Income Tax
Considerations 55
Underwriting 62
Validity of the Securities 63
Experts 63
</TABLE>
,000
CORNING DELAWARE
GUARANTEED BY
Corning Incorporated
% Convertible Monthly Income
Preferred Securities
Goldman, Sachs & Co.
Lazard Freres & Co.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the estimated expenses to be incurred in
connection with the distribution of the securities to be registered, other
than underwriting commissions. Corning will pay the following expenses:
<TABLE>
<CAPTION>
<S> <C>
Registration Fee--Securities and Exchange
Commission $109,053
Filing Fee--New York Stock Exchange *
Legal Fees and Expenses *
Printing Fees *
Accounting Fees *
Blue Sky Fees and Expenses *
Rating Agency Fees *
Fiscal Agent Fees *
Miscellaneous *
Total $ *
</TABLE>
* To be completed.
Item 15. Indemnification of Directors and Officers.
Sections 722 and 723 of the Business Corporation Law of the State of New York
(the "NYBCL") provide that a corporation may indemnify its current and former
directors and officers under certain circumstances.
Article VIII of Corning's By-Laws provides that Corning shall indemnify each
director and officer against all costs and expenses actually and reasonably
incurred by him in connection with the defense of any claim, action, suit or
proceeding against him by reason of his being or having been a director or
officer of the registrant to the full extent permitted by, and consistent
with, the NYBCL.
Item 16. Exhibits.
<TABLE>
<CAPTION>
Number Description
<S> <C>
1.1 Form of Underwriting Agreement*
2.1 Certificate of Limited Partnership of Corning Delaware
2.2 Form of Amended and Restated Limited Partnership Agreement of Corning Delaware*
3.1 Restated Certificate of Incorporation, dated July 12, 1989, and the Certificate of Amendment, dated
September 28, 1989, to the Restated Certificate of Incorporation of Corning (incorporated by reference
to Exhibit 3(a) of Corning's Annual Report on Form 10-K for the fiscal year ended December 31, 1989)
3.2 By-laws of Corning (incorporated by reference to Exhibit 3(a) of Corning's Annual Report on Form 10-K
for the fiscal year ended December 30, 1990)
3.3 Certificate of Amendment, dated April 30, 1992, of the Restated Certificate of Incorporation of Corning
(incorporated by reference to Exhibit 3(a) of Corning's Annual Report on Form 10-K for the fiscal
year ended January 3, 1993)
4.1 Form and terms of Corning Delaware Preferred Securities (included in Exhibit 2.2)
4.2 Form and terms of Corning Series C Preferred Stock*
4.3 Form of Fiscal Agency Agreement*
4.4 Form of Subordinated Debenture*
4.5 Form of Guarantee*
4.6 Form of Corning Common Stock Certificate (incorporated by reference to Exhibit 4 to Registration Statement
on Form S-4 filed with the Commission on June 17, 1992 (Registration Statement No. 33-48488))
4.7 Rights Agreement, dated as of July 2, 1986, between Corning Incorporated and Harris Trust and Savings
Bank, as amended (incorporated by reference to Exhibit 1 to Registration Statement on Form 8-A, filed
with the Commission on July 2, 1986, and Exhibit 1 to Amendment No. 1 on Form 8, filed with the Commission
on October 10, 1989)
4.8 Form of Corning Preferred Share Purchase Right (included in Exhibit 4.7)
5.1 Opinion of William C. Ughetta, Esq., Senior Vice President and General Counsel*
8.1 Opinion of Shearman & Sterling as to tax matters*
<PAGE>
12.1 Ratio of Earnings to Combined Fixed Charges and Preferred Dividends
23.1 Consent of Price Waterhouse, independent accountants
23.2 Consent of Arthur Andersen & Co., independent public accountants
23.3 Consent of William C. Ughetta, Esq. (included in Exhibit 5.1)
23.4 Consent of Shearman & Sterling (included in Exhibit 8.1)
24.1 Powers of Attorney
</TABLE>
* To be filed by amendment.
Item 17. Undertakings.
Corning and Corning Delaware hereby undertake (1) to file, during any period
in which offers or sales are being made, a post-effective amendment to this
Registration Statement: (i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1993; (ii) to reflect in the prospectus any
facts or events arising after the effective date of this Registration
Statement (or the most recent post-effective amendment thereto) which,
individually or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement; and (iii) to include any
material information with respect to the plan of distribution not previously
disclosed in this Registration Statement or any material change to such
information in the Registration Statement; provided, however, that paragraphs
(1)(i) and (1)(ii) do not apply if the information required to be included in
a post-effective amendment thereby is contained in periodic reports filed by
the Company pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the Registration
Statement; (2) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; (3) to remove from registration by means
of post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering; and (4) that, for purposes
of determining any liability under the Securities Act of 1933, each filing of
Corning's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Corning and Corning Delaware hereby undertake that, (1) for purposes of
determining any liability under the Securities Act, the information omitted
from the form of prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of prospectus filed by the
registrants pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities
Act shall be deemed to be part of this registration statement as of the time
it was declared effective; and (2) for purposes of determining any liability
under the Securities Act, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of Corning
and Corning Delaware pursuant to the foregoing provisions, or otherwise,
Corning and Corning Delaware have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in such Act and is, therefore, unenforceable. In the
event a claim for indemnification against such liabilities (other than the
payment by Corning or Corning Delaware of expenses incurred or paid by a
director, officer or controlling person of Corning or Corning Delaware in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, Corning and Corning Delaware will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in such Act and will be governed
by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant,
Corning Delaware, L.P., a Delaware limited partnership, certifies that it has
reasonable grounds to believe it meets all the requirements for filing on
Form S-3 and has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Corning,
State of New York, on the 26th day of May, 1994.
Corning Delaware, L.P.
(Registrant)
By Corning Incorporated as General Partner
By /s/ William C. Ughetta
William C. Ughetta, Senior Vice President
Pursuant to the requirements of the Securities Act of 1933, Corning
Incorporated, a New York corporation, certifies that it has reasonable
grounds to believe it meets all the requirements for filing on Form S-3 and
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Corning, State of New
York, on the 26th day of May, 1994.
Corning Incorporated
(Registrant)
By /s/ William C. Ughetta
William C. Ughetta, Senior Vice President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below on May 26, 1994 by the following directors
and officers of Corning Incorporated in the capacities indicated:
Signature Capacity
/s/
James R. Houghton Chairman of the Board, Principal Executive
(James R. Houghton) Officer and Director
/s/
Van C. Campbell Vice Chairman, Principal Financial Officer
(Van C. Campbell) and Director
/s/
Larry Aiello, Jr. Vice President, Controller, and Principal
(Larry Aiello, Jr.) Accounting Officer
*
(Roger G. Ackerman) President, Principal Operating Officer and
Director
*
(Robert Barker) Director
*
(Mary L. Bundy) Director
*
(Barber B. Conable, Jr.) Director
*
(David A. Duke) Director <PAGE>
Signature Capacity
*
(E. Martin Gibson) Director
*
(Gordon Gund) Director
(John M. Hennessy) Director
(Vernon E. Jordan, Jr.) Director
*
(James W. Kinnear) Director
*
(James J. O'Connor) Director
*
(Catherine A. Rein) Director
*
(Henry Rosovsky) Director
*
(William D. Smithburg) Director
*
(Robert G. Stone, Jr.) Director
* By /s/ William C. Ughetta
(William C. Ughetta)
Attorney-in-fact
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Page
Number Description Number
<S> <C> <C>
1.1 Form of Underwriting Agreement*
2.1 Certificate of Limited Partnership of Corning Delaware
2.2 Form of Amended and Restated Limited Partnership Agreement of Corning Delaware*
3.1 Restated Certificate of Incorporation, dated July 12, 1989, and the Certificate of
Amendment, dated September 28, 1989, to the Restated Certificate of Incorporation of
Corning (incorporated by reference to Exhibit 3(a) of Corning's Annual Report on Form
10-K for the fiscal year ended December 31, 1989)
3.2 By-laws of Corning (incorporated by reference to Exhibit 3(a) of Corning's Annual Report
on Form 10-K for the fiscal year ended December 30, 1990)
3.3 Certificate of Amendment, dated April 30, 1992, of the Restated Certificate of Incorporation
of Corning (incorporated by reference to Exhibit 3(a) of Corning's Annual Report on
Form 10-K for the fiscal year ended January 3, 1993)
4.1 Form and terms of Corning Delaware Preferred Securities (included in Exhibit 2.2)
4.2 Form and terms of Corning Series C Preferred Stock*
4.3 Form of Fiscal Agency Agreement*
4.4 Form of Subordinated Debenture*
4.5 Form of Guarantee*
4.6 Form of Corning Common Stock Certificate (incorporated by reference to Exhibit 4 to
Registration Statement on Form S-4 filed with the Commission on June 17, 1992 (Registration
Statement No. 33-48488))
4.7 Rights Agreement, dated as of July 2, 1986, between Corning Incorporated and Harris
Trust and Savings Bank, as amended (incorporated by reference to Exhibit 1 to Registration
Statement on Form 8-A, filed with the Commission on July 2, 1986, and Exhibit 1 to
Amendment No. 1 on Form 8, filed with the Commission on October 10, 1989)
4.8 Form of Corning Preferred Share Purchase Right (included in Exhibit 4.7)
5.1 Opinion of William C. Ughetta, Esq., Senior Vice President and General Counsel*
8.1 Opinion of Shearman & Sterling as to tax matters*
12.1 Ratio of Earnings to Combined Fixed Charges and Preferred Dividends
23.1 Consent of Price Waterhouse, independent accountants
23.2 Consent of Arthur Andersen & Co., independent public accountants
23.3 Consent of William C. Ughetta, Esq. (included in Exhibit 5.1)
23.4 Consent of Shearman & Sterling (included in Exhibit 8.1)
24.1 Powers of Attorney
</TABLE>
* To be filed by amendment
<PAGE>
EXHIBIT 2.1
CERTIFICATE OF LIMITED PARTNERSHIP
OF
CORNING DELAWARE, L.P.
This Certificate of Limited Partnership of Corning Delaware, L.P. (the
"Partnership") is being executed and filed by the undersigned General Partner
(the "General Partner") to form a limited partnership under the Delaware
Revised Uniform Limited Partnership Act (6 Del. C. S. 17-101 et seq.).
ARTICLE ONE
The name of the limited partnership formed hereby is Corning Delaware, L.P.
ARTICLE TWO
The address of the registered office of the Partnership in the State of
Delaware is at Corporation Trust Center, 1209 Orange Street, Wilmington, New
Castle County, Delaware 19801, and the name and address of the registered
agent for service of process of the Partnership in the State of Delaware is
The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street,
Wilmington, New Castle County, Delaware 19801.
ARTICLE THREE
The name and business address of the General Partner of the Partnership are
as follows:
NAME BUSINESS ADDRESS
Corning Incorporated One Riverfront Plaza
Corning, New York 14831
IN WITNESS WHEREOF, the undersigned has executed this Certificate of Limited
Partnership as of the 18th day of May, 1994.
GENERAL PARTNER:
Corning Incorporated
By: /s/ William C. Ughetta
Name: William C. Ughetta
Title: Senior Vice President and
General Counsel
<PAGE>
EXHIBIT 12
COMPUTATION OF RATIO OF EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED DIVIDENDS
(DOLLARS IN MILLIONS, EXCEPT RATIOS)
<TABLE>
<CAPTION>
12 WEEKS ENDED FISCAL YEAR ENDED
MAR. 27, MAR. 28, JAN. 2, JAN. 3, DEC. 29, DEC. 30, DEC. 31,
1994 1993 1994 1993 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C> <C>
Income before taxes on income $ 79.0 $ 69.6 $ 156.7 $336.6 $327.4 $328.1 $253.8
Adjustments:
Share of earnings (losses)
before taxes of 50% owned
companies 26.9 23.1 (137.0) 103.2 165.4 175.9 206.9
Loss before taxes of greater
than 50% owned
unconsolidated subsidiaries (1.7) (1.4) (3.1) (2.1) (2.2) (2.0) (1.3)
Distributed income of less
than 50% owned companies and
share of loss if debt is
guaranteed 1.5 4.5 (4.3) 6.6 0.9 3.3
Amortization of capitalized
interest 2.9 2.7 13.0 11.8 10.2 8.8 7.2
Fixed charges net of
capitalized interest 42.2 29.3 155.8 130.3 126.4 112.5 91.2
Earnings before taxes and
fixed charges as adjusted $149.3 $124.8 $ 189.9 $575.5 $633.8 $624.2 $561.1
Fixed charges:
Interest incurred $ 26.4 $ 18.1 $ 94.0 $ 68.9 $ 60.4 $ 58.6 $ 53.0
Share of interest incurred of
50% owned companies and
interest on guaranteed debt
of less than 50% owned
companies 9.0 6.8 40.9 42.0 47.5 45.3 33.9
Interest incurred by greater
than 50% owned
unconsolidated subsidiaries 0.2 0.2 0.8 0.9 0.9 1.0 1.2
Portion of rent expense which
represents interest factor 8.2 6.8 29.9 27.6 23.0 19.7 15.8
Share of portion of rent
expense which represents
interest factor for 50%
owned companies 1.3 1.5 9.1 9.2 9.0 7.6 6.9
Portion of rent expense which
represents interest factor
for greater than 50% owned
unconsolidated subsidiaries 0.3 0.1 0.1 0.1 0.1 0.1
Amortization of debt costs 0.5 1.8 1.5 0.4 0.4 0.3
Total fixed charges 45.6 33.7 176.6 150.2 141.3 132.7 111.2
Capitalized interest (3.4) (4.4) (20.8) (19.9) (14.9) (20.2) (20.0)
Total fixed charges net of
capitalized interest $ 42.2 $ 29.3 $ 155.8 $130.3 $126.4 $112.5 $ 91.2
Preferred dividends:
Preferred dividend
requirement $ 0.5 $ 0.5 $ 2.1 $ 2.2 $ 2.4 $ 2.5 $ 0.6
Ratio of pre-tax income to
net income 1.60 1.52 1.29 1.38 1.51 1.71 1.85
Pre-tax preferred dividend
requirement 0.8 0.8 2.7 3.0 3.6 4.3 1.1
Fixed charges 45.6 33.7 176.6 150.2 141.3 132.7 111.2
Fixed charges and pre-tax
preferred dividend
requirement $ 46.4 $ 34.5 $ 179.3 $153.2 $144.9 $137.0 $112.3
Ratio of earnings to combined
fixed charges and preferred
dividends 3.2x 3.6x 1.1x 3.8x 4.4x 4.6x 5.0x
</TABLE>
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report
dated January 24, 1994 (except Note 16 which is as of February 7, 1994),
appearing on Page 21 of the Corning Incorporated 1993 Annual Report on Form
10-K for the year ended January 2, 1994. We also consent to the incorporation
by reference of our report dated January 20, 1994 on the financial statements
of Dow Corning Corporation, which appears on Page 56 of the Corning
Incorporated Annual Report on Form 10-K for the year ended January 2, 1994.
We also consent to the references to us under the heading "Experts" and
"Selected Consolidated Financial Data" in such Prospectus. However, it should
be noted that Price Waterhouse has not prepared or certified such "Selected
Consolidated Financial Data".
/s/ Price Waterhouse
1177 Avenue of the Americas
New York, New York
May 23, 1994
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in the Prospectus constituting part of this Registration Statement
on Form S-3 of our report dated March 11, 1993 (except with respect to Note
N, as to which the date is July 3, 1993) on the consolidated financial
statements of Damon Corporation and Subsidiaries as of December 31, 1992 and
1991 and for each of the three years ended December 31, 1992 which are
included in Corning's Current Report on Form 8-K filed on August 4, 1993
which is incorporated into this Prospectus. We also consent to the reference
to us under the heading "Experts" in such Prospectus.
/s/ Arthur Andersen & Co.
Boston, Massachusetts
May 23, 1994
<PAGE>
EXHIBIT 24
CORNING INCORPORATED
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned Director and/or Officer
of Corning Incorporated, a New York corporation ("Corning"), hereby
constitutes and appoints Van C. Campbell, Larry Aiello, Jr. and William C.
Ughetta, or any of them, his true and lawful attorneys and agents, in the
name and on behalf of the undersigned, to do any and all acts and things and
execute any and all instruments which the said attorneys and agents, or any
one of them, may deem necessary or advisable to enable Corning Incorporated
to comply with the Securities Act of 1933, as amended (the "Securities Act"),
and any rules, regulations and requirements of the Securities and Exchange
Commission in respect thereof, in connection with the registration under the
Securities Act of the Preferred Securities of Corning Delaware, L.P. having a
maximum aggregate offering price of up to $316,250,000, guaranteed by Corning
to the extent set forth in the Registration Statement, the subordinated
convertible debentures of Corning in which the proceeds of such offering will
be invested, the shares of the Common Stock of Corning into which such
Preferred Securities may be converted and the shares of Series C Convertible
Preferred Stock of Corning for which such Preferred Securities may be
exchanged, including specifically, but without limiting the generality of the
foregoing, the power and authority to sign the name of the undersigned in his
capacity as Director and/or Officer of Corning Incorporated to a Registration
Statement on Form S-3 and/or such other form as may be appropriate to be
filed with the Securities and Exchange Commission in respect of said
securities, to any and all amendments to the said Registration Statements,
including Post-Effective Amendments, and to any and all instruments and
documents filed as a part of or in connection with the said Registration
Statement or amendments thereto; HEREBY RATIFYING AND CONFIRMING all that
said attorneys and agents, or any one of them, shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 19th
day of May, 1994.
/s/ James R. Houghton
<PAGE>
EXHIBIT 24
CORNING INCORPORATED
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned Director and/or Officer
of Corning Incorporated, a New York corporation ("Corning"), hereby
constitutes and appoints Van C. Campbell, Larry Aiello, Jr. and William C.
Ughetta, or any of them, his true and lawful attorneys and agents, in the
name and on behalf of the undersigned, to do any and all acts and things and
execute any and all instruments which the said attorneys and agents, or any
one of them, may deem necessary or advisable to enable Corning Incorporated
to comply with the Securities Act of 1933, as amended (the "Securities Act"),
and any rules, regulations and requirements of the Securities and Exchange
Commission in respect thereof, in connection with the registration under the
Securities Act of the Preferred Securities of Corning Delaware, L.P. having a
maximum aggregate offering price of up to $316,250,000, guaranteed by Corning
to the extent set forth in the Registration Statement, the subordinated
convertible debentures of Corning in which the proceeds of such offering will
be invested, the shares of the Common Stock of Corning into which such
Preferred Securities may be converted and the shares of Series C Convertible
Preferred Stock of Corning for which such Preferred Securities may be
exchanged, including specifically, but without limiting the generality of the
foregoing, the power and authority to sign the name of the undersigned in his
capacity as Director and/or Officer of Corning Incorporated to a Registration
Statement on Form S-3 and/or such other form as may be appropriate to be
filed with the Securities and Exchange Commission in respect of said
securities, to any and all amendments to the said Registration Statements,
including Post-Effective Amendments, and to any and all instruments and
documents filed as a part of or in connection with the said Registration
Statement or amendments thereto; HEREBY RATIFYING AND CONFIRMING all that
said attorneys and agents, or any one of them, shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 17th
day of May, 1994.
/s/ Van C. Campbell
<PAGE>
EXHIBIT 24
CORNING INCORPORATED
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned Director and/or Officer
of Corning Incorporated, a New York corporation ("Corning"), hereby
constitutes and appoints Van C. Campbell, Larry Aiello, Jr. and William C.
Ughetta, or any of them, his true and lawful attorneys and agents, in the
name and on behalf of the undersigned, to do any and all acts and things and
execute any and all instruments which the said attorneys and agents, or any
one of them, may deem necessary or advisable to enable Corning Incorporated
to comply with the Securities Act of 1933, as amended (the "Securities Act"),
and any rules, regulations and requirements of the Securities and Exchange
Commission in respect thereof, in connection with the registration under the
Securities Act of the Preferred Securities of Corning Delaware, L.P. having a
maximum aggregate offering price of up to $316,250,000, guaranteed by Corning
to the extent set forth in the Registration Statement, the subordinated
convertible debentures of Corning in which the proceeds of such offering will
be invested, the shares of the Common Stock of Corning into which such
Preferred Securities may be converted and the shares of Series C Convertible
Preferred Stock of Corning for which such Preferred Securities may be
exchanged, including specifically, but without limiting the generality of the
foregoing, the power and authority to sign the name of the undersigned in his
capacity as Director and/or Officer of Corning Incorporated to a Registration
Statement on Form S-3 and/or such other form as may be appropriate to be
filed with the Securities and Exchange Commission in respect of said
securities, to any and all amendments to the said Registration Statements,
including Post-Effective Amendments, and to any and all instruments and
documents filed as a part of or in connection with the said Registration
Statement or amendments thereto; HEREBY RATIFYING AND CONFIRMING all that
said attorneys and agents, or any one of them, shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 17th
day of May, 1994.
/s/ Roger G. Ackerman
<PAGE>
EXHIBIT 24
CORNING INCORPORATED
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned Director and/or Officer
of Corning Incorporated, a New York corporation ("Corning"), hereby
constitutes and appoints Van C. Campbell, Larry Aiello, Jr. and William C.
Ughetta, or any of them, his true and lawful attorneys and agents, in the
name and on behalf of the undersigned, to do any and all acts and things and
execute any and all instruments which the said attorneys and agents, or any
one of them, may deem necessary or advisable to enable Corning Incorporated
to comply with the Securities Act of 1933, as amended (the "Securities Act"),
and any rules, regulations and requirements of the Securities and Exchange
Commission in respect thereof, in connection with the registration under the
Securities Act of the Preferred Securities of Corning Delaware, L.P. having a
maximum aggregate offering price of up to $316,250,000, guaranteed by Corning
to the extent set forth in the Registration Statement, the subordinated
convertible debentures of Corning in which the proceeds of such offering will
be invested, the shares of the Common Stock of Corning into which such
Preferred Securities may be converted and the shares of Series C Convertible
Preferred Stock of Corning for which such Preferred Securities may be
exchanged, including specifically, but without limiting the generality of the
foregoing, the power and authority to sign the name of the undersigned in his
capacity as Director and/or Officer of Corning Incorporated to a Registration
Statement on Form S-3 and/or such other form as may be appropriate to be
filed with the Securities and Exchange Commission in respect of said
securities, to any and all amendments to the said Registration Statements,
including Post-Effective Amendments, and to any and all instruments and
documents filed as a part of or in connection with the said Registration
Statement or amendments thereto; HEREBY RATIFYING AND CONFIRMING all that
said attorneys and agents, or any one of them, shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 18th
day of May, 1994.
/s/ Robert Barker
<PAGE>
EXHIBIT 24
CORNING INCORPORATED
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned Director and/or Officer
of Corning Incorporated, a New York corporation ("Corning"), hereby
constitutes and appoints Van C. Campbell, Larry Aiello, Jr. and William C.
Ughetta, or any of them, his true and lawful attorneys and agents, in the
name and on behalf of the undersigned, to do any and all acts and things and
execute any and all instruments which the said attorneys and agents, or any
one of them, may deem necessary or advisable to enable Corning Incorporated
to comply with the Securities Act of 1933, as amended (the "Securities Act"),
and any rules, regulations and requirements of the Securities and Exchange
Commission in respect thereof, in connection with the registration under the
Securities Act of the Preferred Securities of Corning Delaware, L.P. having a
maximum aggregate offering price of up to $316,250,000, guaranteed by Corning
to the extent set forth in the Registration Statement, the subordinated
convertible debentures of Corning in which the proceeds of such offering will
be invested, the shares of the Common Stock of Corning into which such
Preferred Securities may be converted and the shares of Series C Convertible
Preferred Stock of Corning for which such Preferred Securities may be
exchanged, including specifically, but without limiting the generality of the
foregoing, the power and authority to sign the name of the undersigned in his
capacity as Director and/or Officer of Corning Incorporated to a Registration
Statement on Form S-3 and/or such other form as may be appropriate to be
filed with the Securities and Exchange Commission in respect of said
securities, to any and all amendments to the said Registration Statements,
including Post-Effective Amendments, and to any and all instruments and
documents filed as a part of or in connection with the said Registration
Statement or amendments thereto; HEREBY RATIFYING AND CONFIRMING all that
said attorneys and agents, or any one of them, shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 18th
day of May, 1994.
/s/ Mary L. Bundy
<PAGE>
EXHIBIT 24
CORNING INCORPORATED
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned Director and/or Officer
of Corning Incorporated, a New York corporation ("Corning"), hereby
constitutes and appoints Van C. Campbell, Larry Aiello, Jr. and William C.
Ughetta, or any of them, his true and lawful attorneys and agents, in the
name and on behalf of the undersigned, to do any and all acts and things and
execute any and all instruments which the said attorneys and agents, or any
one of them, may deem necessary or advisable to enable Corning Incorporated
to comply with the Securities Act of 1933, as amended (the "Securities Act"),
and any rules, regulations and requirements of the Securities and Exchange
Commission in respect thereof, in connection with the registration under the
Securities Act of the Preferred Securities of Corning Delaware, L.P. having a
maximum aggregate offering price of up to $316,250,000, guaranteed by Corning
to the extent set forth in the Registration Statement, the subordinated
convertible debentures of Corning in which the proceeds of such offering will
be invested, the shares of the Common Stock of Corning into which such
Preferred Securities may be converted and the shares of Series C Convertible
Preferred Stock of Corning for which such Preferred Securities may be
exchanged, including specifically, but without limiting the generality of the
foregoing, the power and authority to sign the name of the undersigned in his
capacity as Director and/or Officer of Corning Incorporated to a Registration
Statement on Form S-3 and/or such other form as may be appropriate to be
filed with the Securities and Exchange Commission in respect of said
securities, to any and all amendments to the said Registration Statements,
including Post-Effective Amendments, and to any and all instruments and
documents filed as a part of or in connection with the said Registration
Statement or amendments thereto; HEREBY RATIFYING AND CONFIRMING all that
said attorneys and agents, or any one of them, shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 17th
day of May, 1994.
/s/ David A. Duke
<PAGE>
EXHIBIT 24
CORNING INCORPORATED
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned Director and/or Officer
of Corning Incorporated, a New York corporation ("Corning"), hereby
constitutes and appoints Van C. Campbell, Larry Aiello, Jr. and William C.
Ughetta, or any of them, his true and lawful attorneys and agents, in the
name and on behalf of the undersigned, to do any and all acts and things and
execute any and all instruments which the said attorneys and agents, or any
one of them, may deem necessary or advisable to enable Corning Incorporated
to comply with the Securities Act of 1933, as amended (the "Securities Act"),
and any rules, regulations and requirements of the Securities and Exchange
Commission in respect thereof, in connection with the registration under the
Securities Act of the Preferred Securities of Corning Delaware, L.P. having a
maximum aggregate offering price of up to $316,250,000, guaranteed by Corning
to the extent set forth in the Registration Statement, the subordinated
convertible debentures of Corning in which the proceeds of such offering will
be invested, the shares of the Common Stock of Corning into which such
Preferred Securities may be converted and the shares of Series C Convertible
Preferred Stock of Corning for which such Preferred Securities may be
exchanged, including specifically, but without limiting the generality of the
foregoing, the power and authority to sign the name of the undersigned in his
capacity as Director and/or Officer of Corning Incorporated to a Registration
Statement on Form S-3 and/or such other form as may be appropriate to be
filed with the Securities and Exchange Commission in respect of said
securities, to any and all amendments to the said Registration Statements,
including Post-Effective Amendments, and to any and all instruments and
documents filed as a part of or in connection with the said Registration
Statement or amendments thereto; HEREBY RATIFYING AND CONFIRMING all that
said attorneys and agents, or any one of them, shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 18th
day of May, 1994.
/s/ E. Martin Gibson
<PAGE>
EXHIBIT 24
CORNING INCORPORATED
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned Director and/or Officer
of Corning Incorporated, a New York corporation ("Corning"), hereby
constitutes and appoints Van C. Campbell, Larry Aiello, Jr. and William C.
Ughetta, or any of them, his true and lawful attorneys and agents, in the
name and on behalf of the undersigned, to do any and all acts and things and
execute any and all instruments which the said attorneys and agents, or any
one of them, may deem necessary or advisable to enable Corning Incorporated
to comply with the Securities Act of 1933, as amended (the "Securities Act"),
and any rules, regulations and requirements of the Securities and Exchange
Commission in respect thereof, in connection with the registration under the
Securities Act of the Preferred Securities of Corning Delaware, L.P. having a
maximum aggregate offering price of up to $316,250,000, guaranteed by Corning
to the extent set forth in the Registration Statement, the subordinated
convertible debentures of Corning in which the proceeds of such offering will
be invested, the shares of the Common Stock of Corning into which such
Preferred Securities may be converted and the shares of Series C Convertible
Preferred Stock of Corning for which such Preferred Securities may be
exchanged, including specifically, but without limiting the generality of the
foregoing, the power and authority to sign the name of the undersigned in his
capacity as Director and/or Officer of Corning Incorporated to a Registration
Statement on Form S-3 and/or such other form as may be appropriate to be
filed with the Securities and Exchange Commission in respect of said
securities, to any and all amendments to the said Registration Statements,
including Post-Effective Amendments, and to any and all instruments and
documents filed as a part of or in connection with the said Registration
Statement or amendments thereto; HEREBY RATIFYING AND CONFIRMING all that
said attorneys and agents, or any one of them, shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 20th
day of May, 1994.
/s/ Gordon Gund
<PAGE>
EXHIBIT 24
CORNING INCORPORATED
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned Director and/or Officer
of Corning Incorporated, a New York corporation ("Corning"), hereby
constitutes and appoints Van C. Campbell, Larry Aiello, Jr. and William C.
Ughetta, or any of them, his true and lawful attorneys and agents, in the
name and on behalf of the undersigned, to do any and all acts and things and
execute any and all instruments which the said attorneys and agents, or any
one of them, may deem necessary or advisable to enable Corning Incorporated
to comply with the Securities Act of 1933, as amended (the "Securities Act"),
and any rules, regulations and requirements of the Securities and Exchange
Commission in respect thereof, in connection with the registration under the
Securities Act of the Preferred Securities of Corning Delaware, L.P. having a
maximum aggregate offering price of up to $316,250,000, guaranteed by Corning
to the extent set forth in the Registration Statement, the subordinated
convertible debentures of Corning in which the proceeds of such offering will
be invested, the shares of the Common Stock of Corning into which such
Preferred Securities may be converted and the shares of Series C Convertible
Preferred Stock of Corning for which such Preferred Securities may be
exchanged, including specifically, but without limiting the generality of the
foregoing, the power and authority to sign the name of the undersigned in his
capacity as Director and/or Officer of Corning Incorporated to a Registration
Statement on Form S-3 and/or such other form as may be appropriate to be
filed with the Securities and Exchange Commission in respect of said
securities, to any and all amendments to the said Registration Statements,
including Post-Effective Amendments, and to any and all instruments and
documents filed as a part of or in connection with the said Registration
Statement or amendments thereto; HEREBY RATIFYING AND CONFIRMING all that
said attorneys and agents, or any one of them, shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 19th
day of May, 1994.
/s/ James W. Kinnear
<PAGE>
EXHIBIT 24
CORNING INCORPORATED
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned Director and/or Officer
of Corning Incorporated, a New York corporation ("Corning"), hereby
constitutes and appoints Van C. Campbell, Larry Aiello, Jr. and William C.
Ughetta, or any of them, his true and lawful attorneys and agents, in the
name and on behalf of the undersigned, to do any and all acts and things and
execute any and all instruments which the said attorneys and agents, or any
one of them, may deem necessary or advisable to enable Corning Incorporated
to comply with the Securities Act of 1933, as amended (the "Securities Act"),
and any rules, regulations and requirements of the Securities and Exchange
Commission in respect thereof, in connection with the registration under the
Securities Act of the Preferred Securities of Corning Delaware, L.P. having a
maximum aggregate offering price of up to $316,250,000, guaranteed by Corning
to the extent set forth in the Registration Statement, the subordinated
convertible debentures of Corning in which the proceeds of such offering will
be invested, the shares of the Common Stock of Corning into which such
Preferred Securities may be converted and the shares of Series C Convertible
Preferred Stock of Corning for which such Preferred Securities may be
exchanged, including specifically, but without limiting the generality of the
foregoing, the power and authority to sign the name of the undersigned in his
capacity as Director and/or Officer of Corning Incorporated to a Registration
Statement on Form S-3 and/or such other form as may be appropriate to be
filed with the Securities and Exchange Commission in respect of said
securities, to any and all amendments to the said Registration Statements,
including Post-Effective Amendments, and to any and all instruments and
documents filed as a part of or in connection with the said Registration
Statement or amendments thereto; HEREBY RATIFYING AND CONFIRMING all that
said attorneys and agents, or any one of them, shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 18th
day of May, 1994.
/s/ James J. O'Connor
<PAGE>
EXHIBIT 24
CORNING INCORPORATED
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned Director and/or Officer
of Corning Incorporated, a New York corporation ("Corning"), hereby
constitutes and appoints Van C. Campbell, Larry Aiello, Jr. and William C.
Ughetta, or any of them, his true and lawful attorneys and agents, in the
name and on behalf of the undersigned, to do any and all acts and things and
execute any and all instruments which the said attorneys and agents, or any
one of them, may deem necessary or advisable to enable Corning Incorporated
to comply with the Securities Act of 1933, as amended (the "Securities Act"),
and any rules, regulations and requirements of the Securities and Exchange
Commission in respect thereof, in connection with the registration under the
Securities Act of the Preferred Securities of Corning Delaware, L.P. having a
maximum aggregate offering price of up to $316,250,000, guaranteed by Corning
to the extent set forth in the Registration Statement, the subordinated
convertible debentures of Corning in which the proceeds of such offering will
be invested, the shares of the Common Stock of Corning into which such
Preferred Securities may be converted and the shares of Series C Convertible
Preferred Stock of Corning for which such Preferred Securities may be
exchanged, including specifically, but without limiting the generality of the
foregoing, the power and authority to sign the name of the undersigned in his
capacity as Director and/or Officer of Corning Incorporated to a Registration
Statement on Form S-3 and/or such other form as may be appropriate to be
filed with the Securities and Exchange Commission in respect of said
securities, to any and all amendments to the said Registration Statements,
including Post-Effective Amendments, and to any and all instruments and
documents filed as a part of or in connection with the said Registration
Statement or amendments thereto; HEREBY RATIFYING AND CONFIRMING all that
said attorneys and agents, or any one of them, shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 20th
day of May, 1994.
/s/ Catherine A. Rein
<PAGE>
EXHIBIT 24
CORNING INCORPORATED
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned Director and/or Officer
of Corning Incorporated, a New York corporation ("Corning"), hereby
constitutes and appoints Van C. Campbell, Larry Aiello, Jr. and William C.
Ughetta, or any of them, his true and lawful attorneys and agents, in the
name and on behalf of the undersigned, to do any and all acts and things and
execute any and all instruments which the said attorneys and agents, or any
one of them, may deem necessary or advisable to enable Corning Incorporated
to comply with the Securities Act of 1933, as amended (the "Securities Act"),
and any rules, regulations and requirements of the Securities and Exchange
Commission in respect thereof, in connection with the registration under the
Securities Act of the Preferred Securities of Corning Delaware, L.P. having a
maximum aggregate offering price of up to $316,250,000, guaranteed by Corning
to the extent set forth in the Registration Statement, the subordinated
convertible debentures of Corning in which the proceeds of such offering will
be invested, the shares of the Common Stock of Corning into which such
Preferred Securities may be converted and the shares of Series C Convertible
Preferred Stock of Corning for which such Preferred Securities may be
exchanged, including specifically, but without limiting the generality of the
foregoing, the power and authority to sign the name of the undersigned in his
capacity as Director and/or Officer of Corning Incorporated to a Registration
Statement on Form S-3 and/or such other form as may be appropriate to be
filed with the Securities and Exchange Commission in respect of said
securities, to any and all amendments to the said Registration Statements,
including Post-Effective Amendments, and to any and all instruments and
documents filed as a part of or in connection with the said Registration
Statement or amendments thereto; HEREBY RATIFYING AND CONFIRMING all that
said attorneys and agents, or any one of them, shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 18th
day of May, 1994.
/s/ Henry Rosovsky
<PAGE>
EXHIBIT 24
CORNING INCORPORATED
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned Director and/or Officer
of Corning Incorporated, a New York corporation ("Corning"), hereby
constitutes and appoints Van C. Campbell, Larry Aiello, Jr. and William C.
Ughetta, or any of them, his true and lawful attorneys and agents, in the
name and on behalf of the undersigned, to do any and all acts and things and
execute any and all instruments which the said attorneys and agents, or any
one of them, may deem necessary or advisable to enable Corning Incorporated
to comply with the Securities Act of 1933, as amended (the "Securities Act"),
and any rules, regulations and requirements of the Securities and Exchange
Commission in respect thereof, in connection with the registration under the
Securities Act of the Preferred Securities of Corning Delaware, L.P. having a
maximum aggregate offering price of up to $316,250,000, guaranteed by Corning
to the extent set forth in the Registration Statement, the subordinated
convertible debentures of Corning in which the proceeds of such offering will
be invested, the shares of the Common Stock of Corning into which such
Preferred Securities may be converted and the shares of Series C Convertible
Preferred Stock of Corning for which such Preferred Securities may be
exchanged, including specifically, but without limiting the generality of the
foregoing, the power and authority to sign the name of the undersigned in his
capacity as Director and/or Officer of Corning Incorporated to a Registration
Statement on Form S-3 and/or such other form as may be appropriate to be
filed with the Securities and Exchange Commission in respect of said
securities, to any and all amendments to the said Registration Statements,
including Post-Effective Amendments, and to any and all instruments and
documents filed as a part of or in connection with the said Registration
Statement or amendments thereto; HEREBY RATIFYING AND CONFIRMING all that
said attorneys and agents, or any one of them, shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 23rd
day of May, 1994.
/s/ William D. Smithburg
<PAGE>
EXHIBIT 24
CORNING INCORPORATED
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned Director and/or Officer
of Corning Incorporated, a New York corporation ("Corning"), hereby
constitutes and appoints Van C. Campbell, Larry Aiello, Jr. and William C.
Ughetta, or any of them, his true and lawful attorneys and agents, in the
name and on behalf of the undersigned, to do any and all acts and things and
execute any and all instruments which the said attorneys and agents, or any
one of them, may deem necessary or advisable to enable Corning Incorporated
to comply with the Securities Act of 1933, as amended (the "Securities Act"),
and any rules, regulations and requirements of the Securities and Exchange
Commission in respect thereof, in connection with the registration under the
Securities Act of the Preferred Securities of Corning Delaware, L.P. having a
maximum aggregate offering price of up to $316,250,000, guaranteed by Corning
to the extent set forth in the Registration Statement, the subordinated
convertible debentures of Corning in which the proceeds of such offering will
be invested, the shares of the Common Stock of Corning into which such
Preferred Securities may be converted and the shares of Series C Convertible
Preferred Stock of Corning for which such Preferred Securities may be
exchanged, including specifically, but without limiting the generality of the
foregoing, the power and authority to sign the name of the undersigned in his
capacity as Director and/or Officer of Corning Incorporated to a Registration
Statement on Form S-3 and/or such other form as may be appropriate to be
filed with the Securities and Exchange Commission in respect of said
securities, to any and all amendments to the said Registration Statements,
including Post-Effective Amendments, and to any and all instruments and
documents filed as a part of or in connection with the said Registration
Statement or amendments thereto; HEREBY RATIFYING AND CONFIRMING all that
said attorneys and agents, or any one of them, shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 18th
day of May, 1994.
/s/ Robert G. Stone, Jr.
<PAGE>
EXHIBIT 24
CORNING INCORPORATED
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned Director and/or Officer
of Corning Incorporated, a New York corporation ("Corning"), hereby
constitutes and appoints Van C. Campbell, Larry Aiello, Jr. and William C.
Ughetta, or any of them, his true and lawful attorneys and agents, in the
name and on behalf of the undersigned, to do any and all acts and things and
execute any and all instruments which the said attorneys and agents, or any
one of them, may deem necessary or advisable to enable Corning Incorporated
to comply with the Securities Act of 1933, as amended (the "Securities Act"),
and any rules, regulations and requirements of the Securities and Exchange
Commission in respect thereof, in connection with the registration under the
Securities Act of the Preferred Securities of Corning Delaware, L.P. having a
maximum aggregate offering price of up to $316,250,000, guaranteed by Corning
to the extent set forth in the Registration Statement, the subordinated
convertible debentures of Corning in which the proceeds of such offering will
be invested, the shares of the Common Stock of Corning into which such
Preferred Securities may be converted and the shares of Series C Convertible
Preferred Stock of Corning for which such Preferred Securities may be
exchanged, including specifically, but without limiting the generality of the
foregoing, the power and authority to sign the name of the undersigned in his
capacity as Director and/or Officer of Corning Incorporated to a Registration
Statement on Form S-3 and/or such other form as may be appropriate to be
filed with the Securities and Exchange Commission in respect of said
securities, to any and all amendments to the said Registration Statements,
including Post-Effective Amendments, and to any and all instruments and
documents filed as a part of or in connection with the said Registration
Statement or amendments thereto; HEREBY RATIFYING AND CONFIRMING all that
said attorneys and agents, or any one of them, shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this 21st
day of May, 1994.
/s/ Barber B. Conable, Jr.
