Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange
Act of 1934 (Amendment No. )
Filed by the Registrant
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Definitive Proxy
Statement |
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Definitive Additional
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Soliciting Material Pursuant to §240.14a-12 |
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CORNING INCORPORATED |
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(Name of Registrant as
Specified In Its Charter) |
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of Person(s) Filing Proxy Statement, if other than the
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Table of Contents
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Table of Contents
Dear Fellow Shareholder:
I hope you will join Corning
Incorporateds Board of Directors, senior leadership, and other stakeholders at
our 2016 Annual Meeting in Corning, New York, on April 28 at 11 a.m. Eastern
Time. The Annual Meeting is your chance to hear directly from leadership about
Cornings 2015 performance, our expectations for 2016, and the Companys near-
and long-term growth drivers. It is also one of your opportunities to
participate in our corporate governance process. Shareholders will vote on the
annual election of directors and the ratification of Cornings independent
registered public accounting firm for 2016. They will also provide an advisory
vote on the 2015 compensation for our named executive officers.
The following pages contain the formal
notice of meeting and the proxy statement. I encourage you to sign and return
your proxy card or vote by telephone or Internet prior to April 28 so that your
shares will be represented and voted at the meeting. Corning appreciates every
vote.
We work hard to maintain your trust,
and took several key actions in 2015 that highlight our ongoing commitment to
strong governance. Following discussions with shareholders, Cornings Board of
Directors adopted proxy access, which provides eligible shareholders a process
for nominating director candidates to be included in the Companys proxy
materials. The Board also endorsed the principles embodied in the
Shareholder-Director Exchange (SDX) Protocol to facilitate effective, mutually
beneficial engagement between shareholders and Board members. Additionally, this
year we are taking advantage of Securities and Exchange Commission rules that
allow us to furnish proxy materials and our Annual Report on the Internet. We
believe this will provide greater convenience and flexibility for our
shareholders, while reducing our printing costs and environmental impact.
The primary way we earn your trust will
always be our performance. In 2015, we delivered solid financial results in a
tough economic environment while introducing new innovations in all our
businesses. We also outlined our strategy to utilize Cornings financial
strength to focus our portfolio to drive growth and create value for
shareholders in the years ahead.
I look forward to sharing more details
about Corning at the Annual Meeting. Thank you for your investment in Corning
and your participation in our governance process.
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Sincerely,
![](http://www.sec.gov/Archives/edgar/data/24741/000120677416004903/corning_def14a1x2x2.jpg)
Wendell P. Weeks
Chairman of the Board, Chief
Executive Officer and President |
CORNING INCORPORATED - 2016 Proxy Statement 3
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Notice of
2016 Annual Meeting of Shareholders |
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Thursday, April 28, 2016
11:00 a.m. Eastern Time
Corning Museum of Glass, One Museum
Way, Corning, New York 14830
TO OUR SHAREHOLDERS
You are invited to attend Corning
Incorporateds 2016 Annual Meeting of Shareholders to be held at the Corning
Museum of Glass located at One Museum Way, Corning, New York 14830, on Thursday,
April 28, 2016 at 11:00 a.m. Eastern Time.
Items of Business
1. |
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Election of all 13 directors to our Board of Directors for the
coming year; |
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Ratification of the appointment of PricewaterhouseCoopers LLP as
our independent registered public accounting firm; |
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Approval, on an advisory basis, of our executive compensation;
and |
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Transaction of any other business
properly brought before the meeting or any
adjournment. |
Record Date
You may vote at our 2016 Annual Meeting
if you were a shareholder of record at the close of business on February 29,
2016.
Your vote is important to us. Please
exercise your right to vote.
Important Notice Regarding the
Availability of Proxy Materials for the Annual Meeting to be held on April 28,
2016: our Proxy Statement, 2015 Annual Report and other materials are available
on our website at www.corning.com/2016-proxy.
Sincerely,
![](http://www.sec.gov/Archives/edgar/data/24741/000120677416004903/corning_def14a1x3x1.jpg)
Linda E. Jolly
Vice President and Corporate
Secretary
March 15, 2016
4 CORNING INCORPORATED
- 2016
Proxy Statement
Table of Contents
Welcome to the Corning Incorporated
2016 Annual Meeting of
Shareholders
Your vote is very important. Whether or
not you plan to attend the Annual Meeting, please promptly submit your proxy or
voting instructions by Internet, telephone or mail in order to ensure the
presence of a quorum. You may also vote in person at our Annual Meeting. If you
are a shareholder of record, your admission ticket is attached to your proxy
card. If your shares are held in the name of a broker, nominee or other
intermediary, you must bring proof of ownership with you to the
meeting.
By telephone |
By Internet using a
smartphone or tablet |
By mail |
By Internet using a computer |
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Dial toll-free
24/7 1-800-652-8683 |
Scan this QR code 24/7 to
vote with your mobile device (may require free software) |
Cast your ballot, sign proxy
card and send by mail |
Visit 24/7 www.investorvote.com/glw |
VISIT OUR ANNUAL MEETING
WEBSITE |
www.corning.com/2016-proxy |
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●Review and download this Proxy Statement and our Annual
Report.
●Sign up for electronic delivery of future Annual Meeting materials
to reduce Cornings impact on the
environment. |
Corning is providing these proxy
materials in connection with our Annual Meeting on April 28, 2016. This proxy
statement, the accompanying proxy card and Cornings 2015 Annual Report were
first distributed or made available to shareholders on or about March 15, 2016.
As used in this proxy statement, Corning, the Company and we may refer to
Corning Incorporated itself, one or more of its subsidiaries, or Corning
Incorporated and its consolidated subsidiaries.
CORNING INCORPORATED - 2016 Proxy
Statement 5
Table of Contents
Table of Contents
6 CORNING
INCORPORATED - 2016 Proxy Statement
Table of Contents
CORNING INCORPORATED - 2016 Proxy
Statement 7
Table of Contents
PROXY
STATEMENT SUMMARY
Annual Meeting of Shareholders
Date and
Time |
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April 28, 2016, 11:00 a.m.
(ET) |
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Place |
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The Corning Museum of
Glass |
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One Museum Way |
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Corning, New York
14830 |
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Record
Date |
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February 29, 2016 |
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Admission |
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See
the instructions contained in Frequently Asked Questions about the
Meeting and Voting on page 66. |
On March 15, 2016, we posted on our
website at www.corning.com/2016-proxy, and began mailing to shareholders who
requested paper copies, this proxy statement and our 2015 Annual Report.
This summary highlights information
contained elsewhere in this proxy statement. This summary does not contain all
of the information that you should consider, and you should read the entire
proxy statement carefully before voting.
Proposals that Require Your Vote
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Board Vote |
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More |
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Proposal |
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Recommendation |
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Information |
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1 Election of directors |
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FOR EACH
NOMINEE |
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page 19 |
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2 Ratification of appointment of |
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FOR |
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page 31 |
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independent registered
public |
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accounting firm |
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3 Advisory vote to approve |
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FOR |
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page 33 |
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the Companys
executive |
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compensation |
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Business Information Who We Are
Corning is one of the worlds leading
innovators in materials science. For more than 160 years, Corning has applied
its unparalleled expertise in specialty glass, ceramics and optical physics to
develop products that have created new industries and transformed peoples
lives.
Our reportable segments are as follows:
● |
Display
Technologies manufactures glass substrates for flat panel
liquid crystal displays, representing 39% of our core net sales in
2015. |
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Optical
Communications manufactures carrier network and enterprise
network components for the telecommunications industry, representing 30%
of our core net sales in 2015. |
● |
Environmental
Technologies manufactures ceramic substrates and filters for
automotive and diesel applications, representing 11% of our core net sales
in 2015. |
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Specialty
Materials manufactures products that provide more than 150
material formulations for glass, glass ceramics and fluoride crystals to
meet demand for unique customer needs, representing 11% of our core net
sales in 2015. |
● |
Life Sciences manufactures glass and plastic
labware, equipment, media and reagents to provide workflow solutions for
scientific applications, representing 8% of our core net sales in
2015. |
Our
2015 Performance Highlights
$9.8B Core Net Sales |
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$1.40 Core EPS |
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$3.219B Adjusted Operating Cash
Flow |
Core net sales, core EPS and adjusted
operating cash flow for compensation purposes (adjusted operating cash flow) are
non-GAAP financial measures. See Appendix A to this proxy statement for a
reconciliation of these non-GAAP measures to our audited GAAP financial
statements.
Additional Company performance
highlights can be found under 2015 Company Performance on page 35.
New
Strategy and Capital Allocation Framework
In October 2015, after significant
Board engagement and approval, Corning announced a new strategy and capital
allocation framework that reflects the Companys financial and operational
strengths, as well as its ongoing commitment to increasing shareholder
value.
Our probability of success increases
when we focus on our best-in-the-world capabilities. As a result, we intend to
invest 80% of our resources in areas where we can apply our leadership positions
in two of our three core competencies: core technologies, manufacturing and
engineering platforms and market access platforms. This strategy will allow us
to quickly apply our talents and repurpose our assets as needed.
Our financial strength also allows us
to increase our return to shareholders. Through 2019, we expect to generate and
deploy more than $20 billion in cash and to return more than $10 billion to
shareholders through share repurchases and dividends. We expect to increase our
dividend per common share by at least 10% annually through 2019.
Creating Shareholder Value
Despite recent global economic
headwinds, our financial position remains strong as we continue to generate a
significant amount of cash from operating activities. In 2015, we generated
$3.219 billion in adjusted operating cash flow.
In addition to delivering on
short-term goals and investing for long-term growth, our capital allocation
framework utilizes our financial strength to continue returning value to
shareholders. Since reinstating our dividend in 2007, we have increased our
quarterly dividend five times, for a cumulative increase of almost 170%. In the
past five years, we have returned more than $11 billion to shareholders through
repurchases and common stock dividends. In October 2015, our Board authorized $4
billion in new share repurchases, including a $1.25 billion accelerated share
repurchase program, which we completed in January 2016. And, in February 2016,
we increased our dividend by 12.5%.
8 CORNING INCORPORATED
- 2016
Proxy Statement
Table of Contents
Proxy Summary
Our Director Nominees
You are being
asked to vote on the election of the 13 directors listed below. Directors are
elected by a majority of votes cast. Detailed information about each directors
background, skills and expertise can be found in Proposal 1 Election of
Directors on page 19.
Name & Primary
Occupation |
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Age |
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Director since |
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Independent |
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Committee Memberships* |
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Other Public Company
Boards |
Donald W. Blair |
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57 |
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2014 |
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Y |
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Audit |
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0 |
Retired Executive Vice President
and Chief Financial Officer, |
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Finance |
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NIKE, Inc. |
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Stephanie A. Burns |
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61 |
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2012 |
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Y |
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Corporate Relations (Chair) |
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3 |
Retired Chairman and Chief
Executive Officer, |
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Dow Corning
Corporation |
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John A. Canning, Jr. |
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71 |
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2010 |
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Y |
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Executive |
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1 |
Chairman, |
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Finance |
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Madison Dearborn Partners,
LLC |
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Governance |
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Richard T. Clark |
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69 |
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2011 |
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Y |
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Compensation |
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1 |
Retired Chairman, President and
Chief Executive Officer, |
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Independent |
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Executive |
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Merck & Co.,
Inc. |
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Lead Director |
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Governance |
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Robert F. Cummings, Jr. |
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66 |
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2006 |
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Y |
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Executive |
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1 |
Retired Vice Chairman of
Investment Banking, |
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Finance
(Chair) |
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JPMorgan Chase &
Co. |
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Governance |
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Deborah A. Henretta |
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54 |
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2013 |
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Y |
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Audit |
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2 |
Retired Group President of Global
E-Business, |
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Corporate Relations |
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Procter & Gamble
Company |
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Daniel P. Huttenlocher |
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57 |
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2015 |
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Y |
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Audit |
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0 |
Dean and Vice
Provost, |
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Finance |
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Cornell Tech |
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Kurt M. Landgraf |
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69 |
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2007 |
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Y |
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Audit (Chair) |
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1 |
Retired President and Chief
Executive Officer, |
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Compensation |
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Educational Testing
Service |
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Executive |
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Kevin J. Martin |
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49 |
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2013 |
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Y |
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Corporate
Relations |
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1 |
Vice President, Mobile and Global
Access Policy, |
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Governance |
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Facebook, Inc. |
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Deborah D. Rieman |
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66 |
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1999 |
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Y |
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Audit |
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1 |
Executive Chairman, |
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Compensation (Chair) |
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MetaMarkets Group |
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Hansel E. Tookes II |
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68 |
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2001 |
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Y |
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Compensation |
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3 |
Retired Chairman and Chief
Executive Officer, |
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Executive |
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Raytheon Aircraft
Company |
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Governance
(Chair) |
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Wendell P. Weeks |
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56 |
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2000 |
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N |
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Executive (Chair) |
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2 |
Chairman, Chief Executive Officer
and President, |
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Corning
Incorporated |
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Mark S. Wrighton |
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66 |
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2009 |
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Y |
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Audit |
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2 |
Chancellor and Professor of
Chemistry, |
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Finance |
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Washington University in St.
Louis |
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* |
Audit = Audit Committee; Compensation = Compensation
Committee; Corporate Relations = Corporate Relations Committee; Executive
= Executive Committee; Finance = Finance Committee; Governance =
Nominating and Corporate Governance
Committee |
CORNING INCORPORATED - 2016 Proxy
Statement 9
Table of
Contents
Proxy Summary
Governance Highlights
Corning is committed to maintaining
good corporate governance as a critical component of driving sustained
shareholder value. The Board of Directors continually monitors emerging best
practices in governance to best serve the interests of the Companys
shareholders.
Since the beginning of 2015, we have
enhanced our governance in the following ways:
● |
amended our by-laws
to adopt proxy access, after significant shareholder engagement;
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● |
adopted the
principles embodied in the Shareholder-Director Exchange (SDX) Protocol;
and |
● |
agreed to
enhance our public disclosures regarding political spending and lobbying
activities. |
The Corporate Governance section
beginning on page 12 describes our governance framework, which includes the
following:
● |
Annual election
of all directors |
● |
Majority vote
standard for the election of directors in uncontested
elections |
● |
Active
shareholder engagement to better understand investor
perspectives |
● |
Independent Lead
Director |
● |
Independent
board committees, with all committees (except the Executive Committee)
consisting entirely of independent directors |
● |
Executive
sessions of independent directors held at each regularly scheduled Board
meeting |
● |
Stock ownership
guidelines for directors and named executive officers |
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- |
Significant
requirements of 5x annual retainer for our directors, 6x base salary for
our CEO and 3x base salary for other named executive
officers |
● |
Prohibition on
pledging and hedging for directors and employees |
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- |
Company policies
prohibit our directors and employees from pledging or hedging or trading
in derivatives of the Companys stock |
● |
Clawback
policy |
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- |
Executives
incentives are subject to a clawback that applies in the event of certain
financial restatements |
Shareholder Communication
Communicating our strategy and financial performance to our shareholders
and the broader investment community is critically important and is effected
through quarterly earnings conference calls and materials, SEC filings, Investor
Day, investor conferences, our website at www.corning.com and other web
communications. In addition, senior executives engage throughout the year with
shareholders and organizations interested in our performance or business
practices through meetings and calls.
In 2015, our Board endorsed
the
principles embodied in the Shareholder-Director
Exchange (SDX)
Protocol.
In 2014, we expanded our outreach
program to discuss a wider range of issues with a broader group of shareholders,
and we continued this practice in 2015. Outreach discussions in the fall tend to
focus on corporate governance matters and discussions in the spring tend to
focus on issues related to the proxy statement. In the fall of 2015, our Board
endorsed the principles embodied in the Shareholder-Director Exchange (SDX)
Protocol, as a guide for effective, mutually beneficial engagement between
shareholders and directors.
In 2015, as part of our shareholder
outreach program, we met with shareholders representing over 42% of our
outstanding shares. In these interactive meetings, we heard many constructive
comments on strategy, capital allocation, governance, compensation, shareholder
communications, and shareholder proposals. We learned through these meetings
that our shareholders generally approved of our new strategy and capital
allocation framework. These shareholders also were generally supportive of our
executive compensation program. As in previous years, major shareholders were
not prescriptive about compensation plan design. Instead, they were more
interested to see that the results and outcomes delivered by the plans were
aligned appropriately with performance. Additionally, pursuant to shareholder
input, we will begin providing voluntary, meaningful semi-annual disclosure on
www.corning.com regarding our political contributions and lobbying activities,
beginning July 1, 2016.
10 CORNING
INCORPORATED - 2016 Proxy Statement
Table of
Contents
Proxy Summary
Executive Compensation Highlights
We solicit an annual advisory vote on
our executive compensation (Proposal 3). Our Board of Directors requests that
you approve the compensation of our Named Executive Officers (NEOs).
Our Compensation Pay Mix
Approximately 88% of the CEOs target
total compensation and 79% of the other NEOs target total compensation in 2015
is variable and impacted by operating or stock price performance. Target total
compensation includes base salary and target short- and long-term
incentives.
Target Total Compensation
![](http://www.sec.gov/Archives/edgar/data/24741/000120677416004903/corning_def14a2x3x1.jpg)
Our Compensation Performance Metrics
Our goals for short- and long-term
incentives focus on the key drivers for sustaining and/or creating long-term
shareholder value: cash generation, profitability and revenue
growth.
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![](http://www.sec.gov/Archives/edgar/data/24741/000120677416004903/corning_def14a2x3x2.jpg) |
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Adjusted Operating Cash Flow: generating strong positive cash flow enables our ongoing
investment in innovation and returns to shareholders.
Core Net Sales: growing sales
both organically through innovation and through acquisition
is critical to our short-term and long-term success. The time
horizon for the short-term and long-term goals differ.
Core Earning per Share (Core
EPS): Core EPS is our key measure
of profitability. |
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![](http://www.sec.gov/Archives/edgar/data/24741/000120677416004903/corning_def14a2x3x3.jpg) |
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Short Term
Cash Incentives Earned for NEOs |
2015 |
Performance Incentive
Plan - 67% of
target GoalSharing 5.69%
payout |
2014 |
Performance Incentive
Plan - 123%
of target GoalSharing 6.75%
payout |
Long-term
Cash Incentives Earned (CPUs) for NEOs |
2015 |
Average of 2015,
2016 and 2017 performance |
100%, TBD,
TBD 3 year average: TBD |
2014 |
Average of 2014,
2015 and 2016 performance |
121%, 100%,
TBD 3 year average:
TBD |
In 2016, we will be adding a three-year
return on invested capital modifier to our CPUs, reflecting our commitment to
invest in areas that will encourage Company growth (see Whats New in 2016 on
page 46).
CORNING INCORPORATED - 2016 Proxy
Statement 11
Table of
Contents
Corporate
Governance and the Board of Directors
Corporate Governance
Our Board of Directors recognizes that
our corporate governance practices must continually evolve to appropriately
balance the interests of the Board, shareholders, and management to effectively
serve our shareholders, customers, employees, and the communities in which we do
business. Supporting that philosophy, we have adopted many leading corporate
governance practices, including:
Practice |
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Description |
BOARD COMPOSITION AND ACCOUNTABILITY |
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Independence |
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A majority
of our directors must be independent. Currently, 92% of our directors are
independent. With the exception of our Executive Committee, each of our
Board committees consists entirely of independent directors. See page
15. |
Skills and Qualifications |
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The composition of our Board represents broad perspectives, skills,
experiences, and knowledge relevant to our business. A matrix of relevant
skills can be found on page 19. |
Independent Lead Director |
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Our
Corporate Governance Guidelines require an Independent Lead Director with
specific responsibilities to ensure independent oversight of management
whenever our CEO is also the Chair of the Board. See page 13. |
Annual Management Succession Planning
Review |
|
Our Board conducts an annual review of management development and
succession planning. See page 13. |
Director Tenure Policies |
|
Our director
tenure policy requires a director to retire at the annual meeting of
shareholders following the directors 74th birthday. In addition, a
director is required to submit an offer of resignation for consideration
by the Board upon any significant change in the directors principal
employment or responsibilities. See page 20. |
Director Overboarding Policy |
|
We have a policy to help provide confidence that each of our
directors is able to dedicate the meaningful amount of time necessary to
be a highly effective member of the Board. Absent approval by the
Nominating and Corporate Governance Committee, a director who is not
serving as CEO of a public company may serve on no more than four total
public company boards (including our Board) and a director serving as the
CEO of a public company (including our CEO) may serve on no more than two
total public company boards (which includes our Board). In February 2016,
Mr. Weeks sought approval from the Nominating and Corporate Governance
Committee to join the board of Amazon.com, Inc., which was approved after
a careful assessment of the commitments required. |
|
|
|
SHAREHOLDER RIGHTS |
|
|
Annual Election of Directors |
|
All directors are elected annually, which reinforces our Boards
accountability to shareholders. |
Majority Voting Standard for Director Elections |
|
Our by-laws
mandate that directors be elected under a majority voting standard in
uncontested elections. Each director must receive more votes For his or
her election than votes Against in order to be elected. |
Proxy Access |
|
Beginning with our 2017 Annual Meeting, eligible shareholders will
be able to include their nominees for director in the Companys proxy
materials. |
Director Resignation Policy |
|
Any
incumbent nominee for director who does not receive the affirmative vote
of a majority of the votes cast in any uncontested election must promptly
offer to resign. The Nominating and Corporate Governance Committee will
make a recommendation on the offer and the Board must accept or reject the
offer and publicly disclose its decision and rationale. |
Single Voting Class |
|
Corning common stock is the only class of voting shares
outstanding. |
No Poison Pill |
|
We do not have a poison
pill. |
12 CORNING
INCORPORATED - 2016 Proxy Statement
Table of
Contents
Corporate Governance and the Board of
Directors
Board Leadership
Structure
We do not have an explicit policy as to
whether the roles of Chair of the Board and Chief Executive Officer (CEO) should
be combined or separated. Instead, our Board, through our Nominating and
Corporate Governance Committee, annually assesses its leadership structure and
determines which leadership structure best serves the interests of Corning based
on the circumstances. However, if the Chair and CEO roles are combined, our
Corporate Governance Guidelines require that we have an Independent Lead
Director, with strong and clearly articulated responsibilities, to complement
the Chairs role and to serve as the principal liaison between the
non-management directors and the Chair.
Currently, our Chair and CEO roles are
combined. In February 2016, as part of its annual review and assessment of our
leadership structure, corporate governance and succession planning, the Board
determined that the current leadership structure is working well, as it
facilitates effective communication, oversight and governance of the Company
while allowing independent decision-making as appropriate. We believe that
having Mr. Weeks serve as Chair and CEO demonstrates to our investors,
employees, suppliers, customers and other stakeholders that the Company is under
strong leadership, with a single person setting the tone and having primary
responsibility for managing our operations.
The Board believes that the current
leadership structure under which five of the six Board committees are chaired
by independent directors, and our Independent Lead Director assumes certain
responsibilities on behalf of the independent directors remains the optimal
board leadership structure for the Company and our shareholders.
Richard T. Clark was re-elected
effective February 3, 2016, to the role of Independent Lead Director of the
Board by the independent directors.
Independent Lead
Director
Our Independent Lead Director is
elected annually by the independent, non-management directors.
The Independent Lead Directors
regular duties include:
● |
presiding at all
meetings at which the Chair is not present, including executive sessions
of the independent directors (which are held after every Board meeting),
and apprising the Chair of the issues considered; |
● |
facilitating the
annual CEO performance review and management succession planning
reviews; |
● |
making himself available for consultation and direct
communication with the Companys shareholders; |
● |
serving as liaison
between the Chair and the independent directors; |
● |
approving Board
meeting agendas; |
● |
approving
Board meeting schedules to ensure there is sufficient time for discussion
of all agenda items, in consultation with the Chair and the independent
directors; |
● |
approving the type
of information to be provided to directors for Board meetings;
|
● |
calling meetings of
the independent directors when necessary and appropriate; and
|
● |
performing such other duties as the Board may from time to time
designate. |
Our current Independent Lead
Director, Richard T. Clark, performs the following additional
duties:
● |
meeting with the
CEO after regularly scheduled Board meetings to provide feedback on the
independent directors deliberations; and |
● |
regularly
speaking with the CEO in between Board meetings to discuss matters of
concern, often following consultation with other independent
directors. |
Management
Succession Planning
One of the primary responsibilities of
the Board is to ensure that Corning has a high-performing management team in
place. The full Board has responsibility for management succession planning. On
an annual basis, the Board reviews and approves succession plans for the CEO and
other senior executives. The Board conducts this detailed review of management
development and succession planning activities to maximize the pool of internal
candidates who can assume top management positions without undue interruption.
To assist the Board, the CEO annually provides the Board with an assessment of
senior managers and their potential to succeed him or her. The CEO also provides
the Board with an assessment of persons considered potential successors to
certain senior management positions.
CORNING INCORPORATED - 2016 Proxy
Statement 13
Table of
Contents
Corporate Governance and the Board
of Directors
Risk
Oversight
Corning has a comprehensive risk
management program that engages the Companys management and Board. The Company
uses an Enterprise Risk Management (ERM) program modeled on the COSO II
framework. COSO, or The Committee of Sponsoring Organizations, provides thought
leadership and guidance on internal controls, enterprise risk management and
fraud deterrence.
The Corning ERM program utilizes (1) a
Risk Council composed of Corning management and staff to aggregate, prioritize
and assess risks including financial, operational, business, reputational,
governance and managerial risks; and (2) a Compliance Council, which reviews the
Companys compliance with laws and regulations of the countries in which we
conduct business. Management provides reports on the Companys ERM process and
its top risks periodically to the Audit, Finance and Corporate Relations
Committees, as well as annually to the Board. The Compliance Council reports
directly to each of the Audit Committee and Corporate Relations
Committee.
Additionally, the full Board provides
risk oversight through its review of: potential risks which could negatively
impact the proposed budget and plan; the Companys strategy and capital
allocation framework and any risks that may negatively impact it; the proposed
rationale and risks involved in significant investment or divestiture actions by
the Company; and the Companys current research and development projects and
associated risks related to such projects, including safeguards to manage cyber
risk. The full Board also engages in periodic discussions regarding risks with
our CEO, chief financial officer, general counsel, chief compliance officer, and
other company officers, as it deems appropriate. The Boards risk oversight also
occurs by Board Committees, as described above and in each Committees
charter.
Committees
The Board has the following Committees
as of the date of this proxy statement.
|
Committee |
|
Primary
Responsibilities |
|
Number of Meetings in 2015 |
|
|
Audit(1) |
|
● |
Assists the Board
of Directors in its oversight of (i) the integrity of Cornings financial
statements, (ii) the independent registered public accounting firm and
(iii) Cornings compliance with legal and regulatory
requirements |
|
9 |
|
|
|
|
● |
Approves the
appointment of Cornings independent registered public accounting firm,
oversees the firms qualifications, independence and performance, and
determines the appropriateness of fees for the firm |
|
|
|
|
|
|
● |
Reviews the
effectiveness of Cornings internal control over financial reporting,
including disclosure controls |
|
|
|
|
|
|
● |
Reviews the
results of Cornings annual audit and quarterly and annual financial
statements |
|
|
|
|
|
|
● |
Discusses company
policies with respect to risk assessment and risk management |
|
|
|
|
Compensation(2) |
|
● |
Establishes Cornings goals and
objectives with respect to executive compensation |
|
6 |
|
|
|
|
● |
Evaluates the CEOs performance
in light of Cornings goals and objectives |
|
|
|
|
|
|
● |
Determines and approves
compensation for the CEO and other Company officers |
|
|
|
|
|
|
● |
Recommends to the Board the
compensation arrangements of non-management directors |
|
|
|
|
|
|
● |
Oversees Cornings equity
compensation plans and makes recommendations to the Board regarding
non-equity incentive and equity incentive plans |
|
|
|
|
Corporate Relations |
|
● |
Assists the Board
in fulfilling its oversight responsibility by reviewing the Companys
strategies and policies in the areas of public relations and reputation,
employment policy and employee relations, political activities, public
policy, and community responsibility. These areas include: |
|
5 |
|
|
|
|
|
|
Corporate identity, investor
relations, media relations, and product liability |
|
|
|
|
|
|
|
|
Safety and health policies; code
of conduct; values; human resource and industrial relations strategies;
and internal communications strategies |
|
|
|
|
|
|
|
|
Political activities and
relationships with significant governmental agencies in the countries in
which the Company operates |
|
|
|
|
|
|
|
|
Environmental policies,
charitable contribution strategies, and significant projects undertaken to
improve communities within which the Company has significant operations
and employees |
|
|
|
|
Executive |
|
● |
Serves primarily as a means of
taking action requiring Board approval between regularly scheduled
meetings of the Board, and is authorized to act for the full Board on
matters other than those items specifically reserved by New York law to
the Board |
|
5 |
|
14 CORNING
INCORPORATED - 2016 Proxy Statement
Table of
Contents
Corporate Governance and the Board of
Directors
|
Committee |
|
Primary
Responsibilities |
|
Number of Meetings in
2015 |
|
|
Finance |
|
● |
Reviews all potential material transactions, including mergers,
acquisitions, divestitures and investments in third parties |
|
9 |
|
|
|
|
● |
Reviews
capital expenditure plans and capital projects |
|
|
|
|
|
|
● |
Monitors
Cornings short and long term liquidity |
|
|
|
|
|
|
● |
Reviews
Cornings tax position and strategy |
|
|
|
|
|
|
● |
Reviews and
recommends for approval by the Board Cornings capital allocation
framework, declaration of dividends, stock repurchase programs, and short
and long term financing transactions |
|
|
|
|
|
|
● |
Reviews
strategies for managing financial and economic risks including hedging
strategies and insurance programs |
|
|
|
|
Nominating and Corporate
Governance |
|
● |
Determines the
criteria for selecting and assessing director nominees, identifies
individuals qualified to become Board members, reviews candidates
recommended by shareholders, and recommends to the Board director nominees
to be proposed for election at the annual meeting of
shareholders |
|
5 |
|
|
|
|
● |
Monitors significant
developments in the regulation and practice of corporate
governance |
|
|
|
|
|
|
● |
Assists the Board in
assessing the independence of directors and reviews transactions between
Corning and related persons that are required to be disclosed in our
filings with the SEC |
|
|
|
|
|
|
● |
Identifies Board members to
be assigned to the various committees |
|
|
|
|
|
|
● |
Oversees and assists the
Board in the review of the Boards performance |
|
|
|
|
|
|
● |
Reviews
activities of Board members and senior executives for potential conflicts
of interest |
|
|
|
(1) |
The Board of Directors has determined that all members
of the Audit Committee satisfy the applicable audit committee independence
requirements of the New York Stock Exchange (NYSE) and the Securities and
Exchange Commission (SEC). The Board also determined that Mr. Landgraf,
Mr. Blair and Dr. Wrighton have acquired the attributes necessary to
qualify them as audit committee financial experts as defined by
applicable SEC rules. |
(2) |
The Board of Directors
has determined that all members of the Compensation Committee satisfy the
applicable compensation committee independence requirements of the NYSE
and the SEC. |
Board and
Shareholder Meeting Attendance
The Board of Directors met 10 times
during 2015. Director attendance averaged 96% for the year, and each incumbent
director attended at least 85% of the meetings of the Board and standing
Committees on which the director served during 2015. Cornings Corporate
Governance Guidelines require that, in addition to attendance at each board
meeting, each director be prepared and participate meaningfully in each meeting.
All of our then-serving directors
attended our 2015 Annual Meeting of Shareholders. The Board has a policy
requiring all directors to attend all Annual Meetings of Shareholders, absent
extraordinary circumstances.
Director
Independence and Transactions Considered in Independence
Determinations
Independent oversight bolsters our
success. Our Board has determined that each of our non-employee directors
qualifies as independent in accordance with the listing requirements of the
New York Stock Exchange (NYSE), applicable U.S. Securities and Exchange
Commission (SEC) rules and the Companys director qualification
standards.
Of our 13 directors, 12 (92%) are
independent under the NYSE listing requirements, applicable SEC rules, and the
Companys director qualification standards. Mr. Weeks is not independent because
he is an executive officer of Corning.
The NYSE listing requirements state
that no director may be qualified as independent unless our Board
affirmatively determines that the director has no material relationship with
Corning. The Board considers all relevant facts and circumstances when making
independence determinations, including application of the following NYSE
criteria, any of which would bar a director from being determined to be
independent:
● |
the director or an
immediate family member is, or has been within the last three years, an
executive officer of Corning |
● |
the director has
received, or has an immediate family member who has received, during any
12-month period within the last three years, more than $120,000 in direct
compensation from Corning, other than director and committee fees and
pension or other forms of deferred compensation for prior
service |
CORNING INCORPORATED - 2016 Proxy
Statement 15
Table of
Contents
Corporate Governance and the Board
of Directors
● |
the director or an
immediate family member is a current partner or employee of a firm that is
Cornings internal or external auditor (and in the case of the family
member, such person personally works on Cornings audit), or at any time
during the past three years the director or the family member was a
partner or employee of such firm and personally worked on Cornings
audit |
● |
the director or an
immediate family member is, or has been within the last three years,
employed as an executive officer of another company where any of Cornings
present executive officers at the same time serve or served on that
companys compensation committee, and |
● |
the director is a
current employee, or an immediate family member is a current executive
officer, of a company that has made payments to, or received payments
from, Corning for property or services in an amount which, in any of the
last three fiscal years, exceeds the greater of $1 million, or 2% of such
other companys consolidated gross revenues |
In addition, in accordance
with NYSE listing requirements, in determining the independence of any
director who will serve on the Compensation Committee, our Board considers
all factors specifically relevant to determining whether a director has a
relationship with Corning that is material to that directors ability to
be independent from management in connection with fulfilling his or her
duties as a Compensation Committee member, including but not limited to
the source of compensation of such director, including any consulting,
advisory or other compensatory fees paid by Corning to the director, and
whether such director is affiliated with Corning or any of its
subsidiaries or affiliates.
Further, directors who serve on the
Audit Committee must satisfy standards established by the SEC which provide that
to qualify as independent for purposes of audit committee membership, members
may not accept directly or indirectly any consulting, advisory or other
compensatory fees from the Company other than their director compensation, and
they may not be affiliates of Corning.
Our Corporate Governance Guidelines
require the Board to make an annual determination regarding the independence of
each of our directors. In making its independence determinations, the Board
considered transactions that occurred since the beginning of 2013 between
Corning and entities associated with our independent directors or members of
their immediate family.
In making director independence
determinations, the Board reviewed and discussed information provided by the
directors and the Company with regard to each directors business and personal
activities as they may relate to Corning and Cornings management. The Boards
independence determinations included reviewing the following:
● |
Each of Mr.
Cummings, Mr. Martin, Ms. Henretta and Drs. Huttenlocher and Wrighton is
or was, during the previous three years, an employee of a company or
organization that did business with Corning at some time during those
years. Cornings business relationships with such company or organization
were ordinary course/arms length dealings, and no Corning director had a
personal interest in, or received a personal benefit from, such
relationships. Payments or contributions to or from each of these entities
constituted less than the greater of $1 million, or 2% of such entities
consolidated gross revenues in each of those years.
|
● |
Mr. Cummings is a
former employee of JPMorgan Chase & Co. (JPM). He retired from JPM as
of February 1, 2016. He was not an executive officer of JPM. JPM is one of
various investment banks that provide services to Corning, and Cornings
relationship with JPM precedes both Mr. Cummings service as a director of
the Company and his employment with JPM. During his employment with JPM,
Mr. Cummings was precluded from participating in services provided by JPM
to Corning and fees Corning paid to JPM. He had no involvement in
Cornings decision as to what services Corning requested from JPM. Mr.
Cummings had no personal interest in, nor did he receive any personal
benefit from, Cornings business relationship with JPM. Cornings payments
to JPM and its affiliates for these services constituted less than the
greater of $1 million, or 2% of JPMs consolidated gross revenues in each
of the last three years. |
● |
Dr. Burns is a
former Chairman, President and CEO of Dow Corning Corporation (DCC). She
retired from DCC in December 2011. DCC is an independently managed company
in which Corning has a 50 percent equity interest; it is not controlled by
Corning; it is not consolidated in Cornings financial statements; and it
has never been a subsidiary of Corning. In December 2015, The Dow Chemical
Company (Dow) and Corning announced the signing of a definitive agreement
to realign the ownership of DCC such that Dow will become the 100 percent
owner of DCC. |
In determining that each of the
relationships set forth above is not material, the Board considered the
following additional facts: that such relationships arise only from such
directors position as an employee or director of the relevant company with
which Corning does business; that such director has no direct or indirect
material interest in any of the business relationships or transactions; that
such director had no role or financial interest in any decisions about any of
these relationships or transactions; and that such a relationship does not bar
independence under the NYSE listing requirements, applicable SEC rules or
Cornings director qualification standards.
Based on all of the relevant facts and
circumstances, the Board concluded that none of the director relationships
mentioned above constituted a material relationship with Corning that represents
a potential conflict of interest, or otherwise interferes with the exercise by
any of these directors of his or her independent judgment with respect to
Corning.
Policy on Transactions with Related
Persons
The Board of Directors has adopted a
written policy requiring that any transaction (a) involving Corning (b) in which
one of our directors, nominees for director, executive officers, or greater than
5% shareholders, or their immediate family members, have a direct or indirect
material interest and (c) where the amount involved exceeds $120,000 in any
fiscal year, be approved or ratified by a majority of independent directors of
the full Board or by a designated committee of the Board. The Board has
designated the Nominating and Corporate Governance Committee with responsibility
for reviewing and approving any such transactions.
In determining whether to approve or
ratify any such transaction, the independent directors or relevant committee
must consider, in addition to other factors deemed appropriate, whether the
transaction is on terms no less favorable to Corning than those involving
unrelated parties. No director may participate in any review, approval or
ratification of any transaction if he or she, or his or her immediate family
member, has a direct or indirect material interest in the
transaction.
We did not have any transactions
requiring review and approval in accordance with this policy during
2015.
16 CORNING
INCORPORATED - 2016 Proxy Statement
Table of Contents
Corporate Governance and the Board of
Directors
Compensation Committee Interlocks
and Insider Participation
No member of the Compensation Committee
is now, or has ever been, an officer or employee of the Company. No member of
the Compensation Committee had any relationship with the Company or any of its
subsidiaries during 2015 pursuant to which disclosure would be required under
applicable rules of the SEC pertaining to the disclosure of transactions with
related persons. None of the executive officers of the Company currently serves
or served during 2015 on the board of directors or compensation committee of
another company at any time during which an executive officer of such other
company served on Cornings Board of Directors or Compensation Committee.
Other Matters
Corning is headquartered in a small
community in upstate New York. Throughout its history, the Company has routinely
made contributions to civic, educational, charitable, cultural and other
institutions that improve the quality of life and increase the resources of the
surrounding community, making it more attractive to employees. In a small
community, inevitably employees, including executives and their spouses, have
relationships with the non-profit organizations that receive such contributions
from the Company.
The Company undertakes its
philanthropic endeavors both directly and indirectly through The Corning
Incorporated Foundation (the Foundation). We believe in being an active
corporate citizen and the Foundation directs its efforts toward the communities
where Corning operates, promoting educational and social progress that improves
the quality of life for the entire community. The Foundations grant activity is
aimed at five areas: education, culture, community, health and human services
and disaster relief. In 2015, Corning donated $6 million to the Foundation.
During 2015, the Foundation disbursed approximately $5.6 million, of which over
60% was directed toward educational institutions, including the Corning Painted
Post Area School District and Corning Community College.
Cornings direct giving includes annual
contributions to various cultural and educational institutions locally in
Corning, New York, and internationally. Locally, the Corning Museum of Glass
(CMoG) the worlds leading glass museum is the largest benefactor of support
from Corning. Wendell P. Weeks (chairman, CEO and president), David Morse
(executive vice president and chief technology officer), Jeffrey W. Evenson
(senior vice president and operations chief of staff), and Mark S. Rogus (senior
vice president and treasurer) serve on the CMoG board of trustees. In 2015,
Corning provided cash and non-cash contributions of services to CMoG of
approximately $32 million.
Corning provides financial support to
the Alternative School for Math and Science (ASMS), a private middle school
located in Corning, New York, with an advanced curriculum focusing on science
and math. Currently, children of Corning employees represent approximately 50%
of its enrollment. In 2015, non-cash contributions totaled approximately $1.3
million and cash contributions totaled $288,000. Mark S. Rogus (senior vice
president and treasurer), Christine M. Pambianchi, (senior vice president, Human
Resources), and Kim Frock Weeks (spouse of Wendell P. Weeks, our chairman, CEO
and president) serve on the ASMS board of trustees. Ms. Frock Weeks also serves
as administrative head of school at ASMS, but receives no salary or benefits in
this role. Corning also provides financial support to other educational
institutions. In 2015, Corning donated cash of approximately $1 million to
support other local K-12 schools in areas where Corning facilities are
located.
Ethics and Conduct
We are committed to conducting business
lawfully and ethically. All of our directors and NEOs, like all Corning
employees, are required to act at all times with honesty and integrity. Our Code
of Conduct covers areas of professional conduct, including conflicts of
interest, the protection of corporate opportunities and assets, employment
policies, non-discrimination policies, confidentiality, vendor standards and
intellectual property, and requires strict adherence to all laws and regulations
applicable to our business. Our Code of Conduct also describes the means by
which any employee can provide an anonymous report of an actual or apparent
violation of our Code of Conduct.
We will disclose any future amendments
to, or waivers from, any provision of our Code of Conduct involving our
directors, our principal executive officer, principal financial officer,
principal accounting officer, controller or other persons performing similar
functions on our website within four business days following the date of any
such amendment or waiver. No such waivers were sought or granted in 2015.
Communications with
Directors
Shareholders and interested parties may
communicate concerns to any director, committee member or the Board by writing
to the following address: Corning Incorporated Board of Directors, Corning
Incorporated, One Riverfront Plaza, Corning, New York 14831, Attention:
Corporate Secretary. Please specify to whom your correspondence should be
directed. The Corporate Secretary has been instructed by the Board to promptly
forward all correspondence (except advertising, spam, junk mail and other mass
mailings, product inquiries and suggestions, resumes, surveys or any unduly
hostile, threatening or illegal materials) to the relevant director, committee
member or the full Board, as indicated in the correspondence.
CORNING INCORPORATED - 2016 Proxy
Statement 17
Table of Contents
Corporate Governance and the Board
of Directors
Corporate Governance Materials
Available on Cornings Website
In addition to our Corporate Governance
Guidelines and Director Qualification Standards, other information relating to
corporate governance at the Company is available on the Investor Relations
Governance Downloads section of our website (http://www.corning.com/worldwide/en/about-us/investor-relations/board-download-library.html) including:
● |
Audit Committee Charter |
● |
Compensation Committee Charter |
● |
Corporate Relations Committee Charter |
● |
Finance Committee Charter |
● |
Nominating and Corporate Governance Committee
Charter |
● |
Code of Conduct for Directors and Executive
Officers |
● |
Code of Ethics for Chief Executive Officer &
Financial Executives |
● |
Corning Incorporated By-Laws |
● |
Our Code of
Conduct |
18 CORNING
INCORPORATED - 2016 Proxy Statement
Table of Contents
Proposal 1 Election of
Directors
Board of Directors Qualifications
and Experience
Our Board is composed of accomplished
professionals with diverse areas of expertise, including leadership, finance and
investing, industry experience, technology, research and development,
innovation, commercial, international business, operations, government,
academia, science, marketing, manufacturing, management, and entrepreneurship.
We believe that the broad range of skills, knowledge, opinions and fields of
expertise represented on our Board is one of its core strengths.
We believe our directors wide range of
professional experiences and backgrounds, education and skills has proved to be
of significant value to the Company, and we intend to continue leveraging this
strength.
The following table describes key
competencies and skills of our Board.
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Key Competencies |
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Financial, Investment, and/or Banking
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Technology, R&D,
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International Experience |
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Academia, Law, Government,
Politics or Regulatory Experience |
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Other
Designations |
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Independent
Director |
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Audit Committee Financial Expert |
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Leadership. These directors have CEO or other senior officer experience,
and a demonstrated record of leadership qualities, which includes a practical
understanding of organizations, processes, strategy, risk and risk management
and methods to drive change and growth.
Industry Experience. These directors have experience in or directly relevant to
our businesses, which fosters active participation in, the development and
implementation of our operating plan and business strategy. They have valuable
perspectives on issues specific to the Companys business.
Financial, Investment, and/or
Banking Experience. These directors possess
an acute understanding of finance and financial reporting processes. Accurate
financial reporting and robust auditing are critical to the Companys
success.
Technology, R&D, Innovation
and/or Entrepreneurial/Commercial Experience.
These directors provide valuable perspectives on developing and investing in new
technologies, skills critical to Corning as a science, technology, and
innovation company.
International
Experience. Cornings future success depends,
in part, on our success in growing our businesses outside the United States. Our
directors with global business or international experience provide valued
perspective on our operations.
Academia, Law, Government, Politics
or Regulatory Experience. These directors
have strong critical thinking and verbal communications skills as well as
diversity of views. Legal, government and regulatory experience is relevant to
the Company as industry regulations can be critical to the financial welfare and
growth of the various businesses.
CORNING INCORPORATED - 2016 Proxy
Statement 19
Table of Contents
Proposal 1 Election of
Directors
2016 Board Committees
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Board
Committees* |
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Audit |
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C |
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Compensation |
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Corporate Relations |
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Nominating and
Corporate Governance |
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* Committee membership as of February
4, 2016; C denotes the Chair of the committee.
Board Nomination and Renewal
Process
The Nominating and Corporate Governance
Committee is responsible for identifying individuals qualified to become Board
members and making recommendations on director nominees to the full Board. When
identifying and selecting director nominees, the Committee considers the impact
a nominee would have on the Boards balance of professional experience,
background, viewpoints, skills and areas of expertise. Additionally, the
Committee considers input from the Boards self-evaluation process to identify
the backgrounds or skill sets that are desired and future needs of the Board in
light of anticipated director retirements under our Board tenure policies
recognizing that the appropriate mix of director competencies and experiences
evolves over time. The Committee also considers diversity of race, gender and
national origin of potential director candidates.
We believe that our diverse mix of
directors fosters candid and challenging discussions, in service of the best
decisions for the Company and its shareholders.
The Nominating and Corporate Governance
Committee has retained an independent search firm to assist in identifying
director candidates, and will also consider recommendations from shareholders.
If you wish to nominate a candidate, please forward the candidates name and a
detailed description of the candidates qualifications, skills and experience, a
document indicating the candidates willingness to serve and evidence of the
nominating shareholders ownership of Cornings shares to: Corporate Secretary,
Corning Incorporated, One Riverfront Plaza, Corning, New York 14831. A
shareholder wishing to nominate a candidate must also comply with the notice
requirements described on page 69.
The Board does not have a specific
policy regarding consideration of gender, ethnic or other diversity criteria in
identifying director candidates; however, the Board has had a longstanding
commitment to, and practice of, maintaining diverse representation on the
Board.
Tenure
Our Boards composition represents a
balanced approach to director tenure, allowing the Board to benefit from the
experience of longer-serving directors combined with fresh perspectives from
newer directors:
Tenure on Board |
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Number of Director
Nominees |
More than 10
years |
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3 |
5 to 10 years |
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3 |
Less than 5 years |
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7 |
The Board maintains the following
tenure policies (contained in our Corporate Governance Guidelines) as a means of
ensuring that the Board is regularly renewed with fresh perspectives:
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Tenure Policies |
Mandatory Retirement |
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Directors must retire at
the annual meeting of shareholders following the directors 74th
birthday |
Change in Principal Employment |
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Directors must offer to resign upon any significant
change in principal employment or
responsibilities |
Since our 2015 Annual Meeting, James B.
Flaws retired from the Board as of November 30, 2015, in conjunction with his
retirement from Corning Incorporated after 42 years of service.
20 CORNING
INCORPORATED - 2016 Proxy Statement
Table of Contents
Proposal 1 Election of
Directors
Shareholder Nominations of Director
Candidates
In December 2015, we amended our
by-laws to permit a group of up to 20 shareholders who have owned a minimum of
3% of our outstanding capital stock for at least three years to submit director
nominees for up to the greater of 2 directors or 20% of the board for inclusion
in our proxy statement, subject to complying with the requirements identified in
our by-laws. Shareholders who wish to nominate directors for inclusion in our
proxy statement or directly at an annual meeting in accordance with the
procedures in our by-laws should follow the instructions under How Do I Submit
A Shareholder Proposal For, Or Nominate a Director For Election At, Next Years
Annual Meeting in this proxy statement.
CORNING INCORPORATED - 2016 Proxy
Statement 21
Table of Contents
Proposal 1 Election of
Directors
2016 Nominees for
Director
After considering the recommendations
of the Nominating and Corporate Governance Committee, the Board has set the
number of directors at 13 and nominated the persons described below to stand for
election. Each of Messrs. Blair, Canning, Clark, Cummings, Landgraf, Martin,
Tookes and Weeks, Ms. Henretta, and Drs. Burns, Huttenlocher, Rieman and
Wrighton were elected by Cornings shareholders at the 2015 Annual Meeting. All
of the nominees have consented to being named in this proxy statement and to
serve as director if elected. The Board believes that each of these nominees is
qualified to serve as a director of Corning and the skills and qualifications of
each nominee that were considered by the Board are included with the nominees
biographical information. Equally important, the Board believes that the
combination of backgrounds, skills and experiences has produced a Board that is
well-equipped to exercise oversight responsibilities for Cornings shareholders
and other stakeholders.
Our Board unanimously recommends
that shareholders vote FOR all of our director nominees.
If elected by our shareholders, the 13
director nominees will serve for a one-year term expiring at our 2017 Annual
Meeting of Shareholders. Each director will hold office until his or her
successor has been elected and qualified or until the directors earlier
resignation or removal.
All of our director nominees are
currently members of our Board. Each has been recommended for election by our
Nominating and Corporate Governance Committee and approved and nominated for
election by our Board.
Below is biographical information about
our director nominees. This information is current as of March 1, 2016, and has
been confirmed by each of our director nominees for inclusion in our proxy
statement.
Donald W.
Blair |
![](http://www.sec.gov/Archives/edgar/data/24741/000120677416004903/corning_def14a3x6x1.jpg) |
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Age: 57 Director
Since: 2014 Retired Executive
Vice President and Chief Financial Officer, NIKE,
Inc. |
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Skills and
Qualifications:
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Expertise in finance and management
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Executive leadership experience
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Experience in international business and
finance |
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Committees:
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Audit
●
Finance
Current Public Company Directorships:
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None
Public Company
Directorships Held During the Past 5 Years:
●
None |
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Mr. Blair was the executive vice
president and chief financial officer of NIKE, Inc. from 1999 to October
2015. Prior to joining NIKE, he served 15 years at PepsiCo, Inc. in a
number of senior executive-level corporate and operating unit financial
assignments, including chief financial officer roles for PepsiCo Japan
(based in Tokyo) and Pepsi-Cola Internationals Asia Division (based in
Hong Kong). He began his career in 1981 as an accountant with Deloitte
Haskins & Sells.
Mr. Blair brings 35 years of
financial expertise and management experience at the international,
operational, and corporate levels. He also has proven experience in
developing and implementing strategies for delivering sustainable,
profitable growth. Mr. Blairs financial expertise and audit experience
are valuable assets to our Finance and Audit
committees. |
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Stephanie A.
Burns |
![](http://www.sec.gov/Archives/edgar/data/24741/000120677416004903/corning_def14a3x6x2.jpg) |
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Age: 61 Director
Since: 2012 Retired Chairman
and Chief Executive Officer, Dow Corning Corporation |
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Skills and
Qualifications:
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Global innovation and business leadership
experience
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Significant expertise in scientific research,
issues management, science and technology leadership and business
management |
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Committees:
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Corporate Relations (Chair)
Current Public Company Directorships:
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GlaxoSmithKline plc.
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HP Inc.
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Kellogg Company
Public Company
Directorships Held During the Past 5 Years:
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None |
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Dr. Burns has nearly 33 years of
global innovation and business leadership experience. Dr. Burns joined Dow
Corning in 1983 as a researcher and specialist in organosilicon chemistry.
In 1994, she became the companys first director of womens health. She
was elected to the Dow Corning Board of Directors in 2001 and elected as
president in 2003. She served as chief executive officer from 2004 until
May 2011 and served as chair from 2006 until her retirement in December
2011.
Dr. Burns brings significant
expertise in scientific research, issues management, science and
technology leadership and business management to the Board, as well as
skills related to her Ph.D. in organic chemistry. She is the past honorary
president of the Society of Chemical Industry and was appointed by
President Obama to the Presidents Export Council. Dr. Burns is a former
chair of the American Chemistry
Council. |
22 CORNING
INCORPORATED - 2016 Proxy Statement
Table of Contents
Proposal 1 Election of
Directors
John A.
Canning, Jr. |
![](http://www.sec.gov/Archives/edgar/data/24741/000120677416004903/corning_def14a3x7x1.jpg) |
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Age: 71 Director
Since: 2010 Chairman, Madison
Dearborn Partners, LLC |
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Skills and
Qualifications:
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Experience in private equity investing, including
reviewing financial statements and audit results and making investment and
acquisition decisions
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Has insight into economic trends important to our
business
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Law degree
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Experience in banking and managing
investments |
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Committees:
●
Executive
●
Finance
●
Nominating and Corporate Governance
Current Public Company Directorships:
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Exelon Corporation
Public Company
Directorships Held During the Past 5 Years:
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TransUnion |
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Mr. Canning co-founded Madison
Dearborn Partners, LLC in 1992, serving as its chief executive officer
until he became chairman in 2007. He previously spent 24 years with First
Chicago Corporation, most recently as executive vice president of The
First National Bank of Chicago and president of First Chicago Venture
Capital. Mr. Canning is trustee and chairman of several Chicago-area
non-profit organizations. He is a former commissioner of the Irish Reserve
Fund and a former director and chairman of the Federal Reserve Bank of
Chicago.
Mr. Canning brings 35 years of
experience in private equity investing, including reviewing financial
statements and audit results and making investment and acquisition
decisions. As a former director and chairman of the Federal Reserve Bank
of Chicago, he has insight into economic trends important to our business.
In addition to his business experience, he also has a law degree and is a
recognized leader in the Chicago business community. Mr. Cannings
experience in banking and managing investments make him a valued member of
our Finance Committee. |
|
Richard T.
Clark |
![](http://www.sec.gov/Archives/edgar/data/24741/000120677416004903/corning_def14a3x7x2.jpg) |
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Age: 69 Director
Since: 2011 Retired
Chairman, President and Chief Executive Officer Merck & Co.,
Inc.
Independent Lead
Director |
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Skills and
Qualifications:
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Broad managerial expertise, operational expertise
and deep business knowledge
●
Extensive experience in the issues facing public
companies and multinational businesses |
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Committees:
●
Compensation
●
Executive
●
Nominating and Corporate Governance
Current Public Company Directorships:
●
ADP, LLC
Public Company
Directorships Held During the Past 5 Years:
●
Merck & Co., Inc. |
|
Mr. Clark retired from Merck in
2011. He joined Merck in 1972 and held a broad range of senior management positions. He became
president
and chief executive officer of Merck in May 2005 and chairman of the board
in April 2007. He transitioned from the chief executive officer role in
January 2011 and served as Merck board chairman through November 2011. He
was president of the Merck Manufacturing Division (June 2003 to May 2005)
of Merck Sharp & Dohme Corp. He serves on the advisory board of
American Securities LLC, a private equity firm. He is chairman of the
board of Project Hope and a trustee of several charitable non-profit
organizations.
As the former chairman, president
and chief executive officer of a Fortune 100 company, Mr. Clark brings
broad managerial expertise, operational expertise and deep business
knowledge, as well as a track record of
achievement. |
Robert F.
Cummings, Jr. |
![](http://www.sec.gov/Archives/edgar/data/24741/000120677416004903/corning_def14a3x7x3.jpg) |
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Age: 66 Director
Since: 2006 Retired Vice Chairman
of Investment Banking JPMorgan Chase & Co. |
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Skills and
Qualifications:
●
Extensive investment banking experience including
finance, business development and mergers and acquisitions
●
Knowledge in the areas of technology,
telecommunications, private equity and real estate |
|
Committees:
●
Executive
●
Finance (Chair)
●
Nominating and Corporate Governance
Current Public Company Directorships:
●
W. R. Grace & Co.
Public Company
Directorships Held During the Past 5 Years:
●
Viasystems Group, Inc. |
|
Mr. Cummings retired as vice
chairman of Investment Banking at JPMorgan Chase & Co. in February
2016. He had served in that role since December 2010, where he advised on
client opportunities across sectors and industry groups. Mr. Cummings
began his business career in the investment banking division of Goldman,
Sachs & Co. in 1973 and was a partner of the firm from 1986 until his
retirement in 1998. He served as an advisory director at Goldman Sachs
until 2002.
Mr. Cummings Board
qualifications include more than 31 years of investment banking experience
at Goldman Sachs and JPM, where he advised corporate clients on
financings, business development, mergers, and acquisitions and other
strategic financial issues. Additionally, he brings knowledge in the areas
of technology, telecommunications, private equity, and real estate to the
Board. |
CORNING INCORPORATED - 2016 Proxy
Statement 23
Table of Contents
Proposal 1 Election of
Directors
Deborah A.
Henretta |
![](http://www.sec.gov/Archives/edgar/data/24741/000120677416004903/corning_def14a3x8x1.jpg) |
|
Age: 54 Director
Since: 2013 Retired Group President
of Global E-Business, Procter & Gamble |
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Skills and
Qualifications:
●
Significant experience in business leadership and
operations, P&L responsibility
●
Skilled in brand building, marketing and emerging
market management
|
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Committees:
●
Audit
●
Corporate Relations
Current Public Company Directorships:
●
Meritage Homes Corporation
●
NiSource, Inc.
Public Company
Directorships Held During the Past 5 Years:
●
None |
|
Ms. Henretta has over 30 years of
business leadership experience across both developed and developing
markets, as well as expertise in brand building, marketing, philanthropic
program development and government relations. She joined Procter &
Gamble (P&G) in 1985. In 2005, she was appointed President of
P&Gs business in ASEAN, Australia and India. She was appointed group
president, P&G Asia in 2007, group president of P&G Global Beauty
Sector in June 2013, and group president of P&G E-Business in February
2015. She retired from P&G in June 2015.
Ms. Henretta was a member of
Singapores Economic Development Board (EDB) from 2007 to 2013. She
contributed to the growth strategies for Singapore, and was selected to
serve on the EDBs Economic Strategies Committee between 2009 and 2011. In
2008, she received a U.S. State Department appointment to the Asia-Pacific
Economic Cooperations Business Advisory Council. In 2011, she was
appointed chair of this 21-economy council, becoming the first woman to
hold the position. In that role, she advised top government officials,
including President Barack Obama and former Secretary of State Hillary
Clinton. |
|
Daniel P.
Huttenlocher |
![](http://www.sec.gov/Archives/edgar/data/24741/000120677416004903/corning_def14a3x8x2.jpg) |
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Age: 57 Director
Since: 2015 Dean and Vice
Provost, Cornell Tech |
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Skills and
Qualifications:
●
Extensive experience in technology innovation and
commercialization
●
Expertise in information technology and computer
software
●
Leadership experience
●
Investment experience |
|
Committees:
●
Audit
●
Finance
Current Public Company Directorships:
●
None
Public Company
Directorships Held During the Past 5 Years:
●
None |
|
Dr. Huttenlocher is the founding
dean of Cornell Tech, the technology graduate school of Cornell University
located in New York City, a position he has held since 2012. In addition
to positions as a professor and dean at Cornell, Dr. Huttenlocher has
served as chief technology officer at Intelligent Markets, Inc. and as a
principal scientist and member of the senior leadership team at the Xerox
Palo Alto Research Center.
Dr. Huttenlocher holds a Ph.D. in
computer science and a Master of Science degree in Electrical Engineering,
both from the Massachusetts Institute of Technology, and a Bachelor of
Arts degree in Computer Science and Psychology from the University of
Michigan. He is a renowned computer science researcher and educator, and a
prolific inventor with two dozen US patents. He also brings to the board
extensive experience in technology innovation and commercialization, and
expertise in developing next-generation products and
services. |
Kurt M.
Landgraf |
![](http://www.sec.gov/Archives/edgar/data/24741/000120677416004903/corning_def14a3x8x3.jpg) |
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Age: 69 Director
Since: 2007 Retired President
and Chief Executive Officer Educational Testing
Service |
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Skills and
Qualifications:
●
Extensive executive management experience in
public companies, non-profit entities, higher education and
government
●
Financial expertise
●
Operations skills and experience
●
Specialized knowledge including technology,
transportation, education, pharmaceuticals, health care, energy, materials
and mergers and acquisitions |
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Committees:
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Audit (Chair)
●
Compensation
●
Executive
Current Public Company Directorships:
●
Louisiana-Pacific Corporation
Public Company
Directorships Held During the Past 5 Years:
●
None |
|
Mr. Landgraf retired as president
and chief executive officer of Educational Testing Service (ETS), a
private non-profit educational testing and measurement organization in
December 2013. Mr. Landgraf had served in that position since 2000. Prior
to that, he was executive vice president and chief operating officer of
E.I. Du Pont de Nemours and Company (DuPont), where he previously held a
number of senior leadership positions, including chief financial
officer.
Mr. Landgraf was selected for his
wealth of executive management experience in public companies, non-profit
entities, higher education, and government. He brings to the Board his
financial expertise and operations skills and experience, represented by
his positions at ETS and DuPont. Mr. Landgrafs other areas of specialized
knowledge include technology, transportation, education, finance,
pharmaceuticals, health care, energy, materials, and mergers and
acquisitions. |
24 CORNING
INCORPORATED - 2016 Proxy Statement
Table of Contents
Proposal 1 Election of
Directors
Kevin J.
Martin |
![](http://www.sec.gov/Archives/edgar/data/24741/000120677416004903/corning_def14a4x1x1.jpg) |
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Age: 49 Director
Since: 2013 Vice President, Mobile
and Global Access Policy Facebook, Inc. |
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Skills and
Qualifications:
●
Extensive knowledge of government policy and
regulatory environment
●
Specialized knowledge of telecommunications and
information technology industries
●
Experience in private equity
investing |
|
Committees:
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Corporate Relations
●
Nominating and Corporate Governance
Current Public Company Directorships:
●
Xtera Communications, Inc.
Public Company
Directorships Held During the Past 5 Years:
●
None |
|
Mr. Martin is Vice President,
Mobile and Global Access Policy at Facebook, Inc. Prior to this, Mr.
Martin was a partner and co-chair of the telecommunications practice at
Squire Patton Boggs, an international law firm, from 2009 to 2015, and
chairman of the Federal Communications Commission (FCC) from March 2005 to
January 2009.
Mr. Martin has nearly two decades
experience as a lawyer and policymaker in the telecommunications field,
including his tenure as chairman of the FCC. Before joining the FCC as a
commissioner in 2001, Mr. Martin was a special assistant to the president
for Economic Policy and served on the staff of the National Economic
Council, focusing on commerce and technology policy issues. He served as
the official U.S. government representative to the G-8s Digital
Opportunity Task Force.
Mr. Martin brings deep experience
to the board in the telecommunications, economics, governmental and legal
arenas. |
|
Deborah D.
Rieman |
![](http://www.sec.gov/Archives/edgar/data/24741/000120677416004903/corning_def14a4x1x3.jpg) |
|
Age: 66 Director
Since: 1999 Executive
Chairman MetaMarkets Group
|
|
Skills and
Qualifications:
●
Expertise in information technology, innovation
and entrepreneurial endeavors
●
Ph.D. in mathematics
●
Experience in technology development, marketing,
business development and support, investor relations and
investing |
|
Committees:
●
Audit
●
Compensation (Chair)
Current Public Company Directorships:
●
Neustar, Inc.
Public Company
Directorships Held During the Past 5 Years:
●
Keynote Systems |
|
Dr. Rieman has more than 28 years
of experience in the software industry. Currently, she is executive
chairman of MetaMarkets Group. Previously, she was managing director of
Equus Management Company, a private investment fund. From 1995 to 1999,
she served as president and chief executive officer of Check Point
Software Technologies, Incorporated.
Dr. Rieman brings significant
expertise in information technology, innovation and entrepreneurial
endeavors to the Board and skills related to her Ph.D. in mathematics. She
is also the former president and chief executive officer of a software
company specializing in security and has experience in technology
development, marketing, business development and support, investor
relations and investing. |
Hansel E.
Tookes II |
![](http://www.sec.gov/Archives/edgar/data/24741/000120677416004903/corning_def14a4x1x2.jpg) |
|
Age: 68 Director
Since: 2001 Retired Chairman
and Chief Executive Officer Raytheon Aircraft Company |
|
Skills and
Qualifications:
●
Extensive experience in operations, manufacturing,
performance excellence, business development, technology-driven business
environments and military and government contracting
●
Education, training and knowledge in science and
engineering |
|
Committees:
●
Compensation
●
Executive
●
Nominating and Corporate Governance
(Chair)
Current Public Company Directorships:
●
Harris Corporation
●
NextEra Energy, inc.
●
Ryder Systems Inc.
Public Company
Directorships Held During the Past 5 Years:
●
BBA Aviation plc. |
|
Mr. Tookes retired from Raytheon
Company in December 2002. He joined Raytheon in 1999 and served as
president of Raytheon International, chairman and chief executive officer
of Raytheon Aircraft and executive vice president of Raytheon Company.
From 1980 to 1999, Mr. Tookes served United Technologies Corporation as
president of Pratt and Whitneys Large Military Engines Group and in a
variety of other leadership positions.
Mr. Tookes provides extensive
experience in operations, manufacturing, performance excellence, business
development, technology-driven business environments, and military and
government contracting. He also brings his science and engineering
education, training and knowledge to the Board. Mr. Tookes industry
expertise includes aviation, aerospace and defense, transportation and
technology. |
CORNING INCORPORATED - 2016 Proxy
Statement 25
Table of Contents
Proposal 1 Election of
Directors
Wendell P.
Weeks |
![](http://www.sec.gov/Archives/edgar/data/24741/000120677416004903/corning_def14a4x2x1.jpg) |
|
Age: 56 Director
Since: 2000 Chairman, Chief
Executive Officer and President Corning Incorporated |
|
Skills and
Qualifications:
●
Wide range of experience including financial
management, business development, commercial leadership, and general
management
●
Experience in many of Cornings businesses and
technologies
●
Experience as chief executive officer
|
|
Committees:
●
Executive (Chair)
Current Public Company Directorships:
●
Amazon.com, Inc.
●
Merck & Co., Inc.
Public Company
Directorships Held During the Past 5 Years:
●
None |
|
Mr. Weeks joined Corning in 1983.
He was named vice president and general manager of the Optical Fiber
business in 1996; senior vice president in 1997; senior vice president of
Opto Electronics in 1998; executive vice president in 1999; and president,
Corning Optical Communications in 2001. Mr. Weeks was named president and
chief operating officer of Corning in 2002; president and chief executive
officer in 2005; and chairman and chief executive officer on April 26,
2007. He added the title of president in December
2010.
Mr. Weeks brings deep and broad
knowledge of the Company based on his long career across a wide range of
Cornings staff groups and major businesses. Mr. Weeks has 32 years of
Corning experience including financial management, business development,
commercial leadership, and general management. His experiences in many of
Cornings businesses and technologies, and 11 years as chief executive
officer, have given him a unique understanding of Cornings diverse
business operations and innovations. |
|
Mark S.
Wrighton |
![](http://www.sec.gov/Archives/edgar/data/24741/000120677416004903/corning_def14a4x2x2.jpg) |
|
Age: 66 Director
Since: 2009 Chancellor and
Professor of Chemistry, Washington University in St.
Louis |
|
Skills and
Qualifications:
●
Expertise in materials and chemistry; research
interests in the areas of transition metal catalysis, photochemistry,
surface chemistry, molecular electronics, and photo processes at
electrodes
●
Executive leadership experience |
|
Committees:
●
Audit
●
Finance
Current Public Company Directorships:
●
Brooks Automation, Inc.
●
Cabot Corporation
Public Company
Directorships Held During the Past 5 Years:
●
None |
|
Since 1995, Dr. Wrighton has been
chancellor and professor of Chemistry at Washington University in St.
Louis, a major research university. Before joining Washington University,
he was a researcher and professor at the Massachusetts Institute of
Technology, where he was head of the Department of Chemistry from 1987 to
1990, and then provost from 1990 to 1995. Dr. Wrighton served as a
presidential appointee to the National Science Board from 2000 to 2006. He
was elected to membership in the American Academy of Arts and Sciences and
the American Philosophical Society, and he is a Fellow of the American
Association for the Advancement of Science.
Dr. Wrighton is a professor,
chemist and research scientist with expertise in materials and research
interests in the areas of transition metal catalysis, photochemistry,
surface chemistry, molecular electronics, and in photoprocesses at
electrodes. Under Dr. Wrightons leadership, Washington University has
grown significantly in academic stature, research enterprise,
infrastructure, student quality, curriculum and international reputation.
In addition to his executive leadership, Dr. Wrighton brings to the Board
his vast scientific knowledge and understanding of complex research and
development issues. |
26 CORNING INCORPORATED - 2016 Proxy
Statement
Table of Contents
Director
Compensation
The Company uses a combination of cash
and stock-based compensation to attract and retain qualified candidates to serve
on the Board, as described below. Members of the Board who are employees of the
Company are not compensated for service on the Board or any of its
Committees.
Directors may elect to defer all or a
portion of their cash compensation. Amounts deferred may be paid in cash or
stock, as applicable, and while deferred may be allocated to (1) an account
earning interest, compounded quarterly, at the rate equal to the prime rate of
Citibank, N.A. at the end of each calendar quarter, (2) a restricted stock unit
account, or (3) a combination of such accounts. At December 31, 2015, six
directors had elected to defer compensation.
2015 Director
Compensation |
Annual Retainer |
|
$60,000 |
Independent
Lead Director Retainer |
|
Our Independent Lead Director
receives an additional retainer of $25,000 per year. Beginning in 2016,
the Independent Lead Directors additional retainer will be $35,000 per
year. |
Committee Chair Retainer |
|
In 2015, we increased the Audit
Committee Chair retainer to $20,000 per year. Beginning in 2016, the
Compensation Committee Chairs retainer will also be $20,000 per year.
Other Committee Chairs receive an additional retainer of $15,000 per
year. |
Board and
Committee Meeting Attendance |
|
$1,750 for each Board meeting,
committee meeting or special session attended. (Each two-day Board meeting
typically consists of three Board sessions and two committee meetings for
each director.) |
Annual Equity
Grants |
|
Each non-employee director annually receives a form of
long-term equity compensation approved by the Board. Non-employee
directors generally receive their awards at the February meeting. If,
however, a non-employee director is appointed between the February meeting
and December 31, then that director will receive a pro-rata award shortly
after joining the Board.
In 2015, we increased our directors annual equity
compensation by $10,000, and issued 5,974 shares of restricted stock (with
a grant date value of approximately $145,000) to each non-employee
director under the 2010 Equity Plan for Non-Employee Directors, except for
Daniel P. Huttenlocher, who joined the Board in February 2015 and received
5,477 shares. These restricted shares are not available for transfer or
exercise until six months after the date of a directors retirement or
resignation. Beginning in 2016, the directors annual equity compensation
will be $155,000 per year. |
In 2015, independent directors below
performed these Board committee functions:
Name |
Role During 2015 |
Dr. Burns |
Corporate Relations
Committee Chair |
Mr. Clark |
Independent Lead Director |
Mr.
Cummings |
Finance Committee
Chair |
Mr. Landgraf |
Audit Committee Chair |
Dr. Rieman |
Compensation Committee
Chair |
Mr.
Tookes |
Nominating and Corporate Governance Committee
Chair |
Non-employee directors are reimbursed
for expenses (including costs of travel, food, and lodging) incurred in
attending Board, committee, and shareholder meetings. While travel to such
meetings may include the use of Company aircraft, if available or appropriate
under the circumstances, the directors generally use commercial transportation
or their own transportation. Directors are also reimbursed for reasonable
expenses associated with participation in director education
programs.
Corning has a Directors Charitable
Giving Program pursuant to which a director may direct the Company to make a
charitable bequest to one or more qualified charitable organizations recommended
by such director and approved by Corning in the amount of $1,000,000 (employee
directors) or $1,250,000 (non-employee directors) following his or her death. We
fund this program by purchasing insurance policies on the lives of the
directors. However, we are under no obligation to use the proceeds of the
insurance policies to fund a directors bequest and can elect to retain any
proceeds from the policies as assets of Corning and use another source of funds
to pay the directors bequests. In 2015, we paid a total of $142,651 in premiums
and fees on such policies for our current directors. Because the charitable
deductions and cash surrender value of life insurance policies accrue solely to
Corning, the directors derive no financial benefit from the program, and we do
not include these amounts in the directors compensation. Generally, one must be
a director for five years to participate in the program. In 2015, Messrs.
Canning, Cummings, Flaws, Landgraf, Tookes and Weeks, and Drs. Rieman and
Wrighton were eligible to participate in the program.
Directors are also eligible to
participate in the Corning Foundation Matching Gift Program for eligible
charitable organizations. This Program is available to all Corning employees.
The maximum matching gift amount available from the Foundation for each
participant in the Program is $7,500 per calendar year.
Corning also pays premiums on
directors and officers liability insurance policies covering
directors.
CORNING INCORPORATED - 2016 Proxy
Statement 27
Table of Contents
Director Compensation
2015 Director Compensation
Table |
Name |
|
Fees Earned or Paid in
Cash(1) |
|
Stock Awards(2) |
|
All
Other Compensation(3) |
|
Total |
Donald W. Blair |
|
$ |
138,750 |
|
$ |
144,989 |
|
|
$
|
7,500 |
|
|
$ |
291,239 |
Stephanie A. Burns |
|
|
141,500 |
|
|
144,989 |
|
|
|
0 |
|
|
|
286,489 |
John A. Canning, Jr. |
|
|
133,500 |
|
|
144,989 |
|
|
|
7,500 |
|
|
|
285,989 |
Richard T. Clark |
|
|
160,250 |
|
|
144,989 |
|
|
|
0 |
|
|
|
305,239 |
Robert F. Cummings, Jr. |
|
|
153,750 |
|
|
144,989 |
|
|
|
0 |
|
|
|
298,739 |
Deborah A. Henretta |
|
|
130,000 |
|
|
144,989 |
|
|
|
0 |
|
|
|
274,989 |
Daniel P. Huttenlocher |
|
|
130,250 |
|
|
132,927 |
|
|
|
0 |
|
|
|
263,177 |
Kurt M. Landgraf |
|
|
162,250 |
|
|
144,989 |
|
|
|
1,000 |
|
|
|
308,239 |
Kevin J. Martin |
|
|
121,250 |
|
|
144,989 |
|
|
|
0 |
|
|
|
266,239 |
Deborah D. Rieman |
|
|
148,500 |
|
|
144,989 |
|
|
|
7,500 |
|
|
|
300,989 |
Hansel E. Tookes II |
|
|
150,250 |
|
|
144,989 |
|
|
|
0 |
|
|
|
295,239 |
Mark S. Wrighton |
|
|
130,000 |
|
|
144,989 |
|
|
|
7,500 |
|
|
|
282,489 |
(1) |
Includes all fees and retainers paid or deferred
pursuant to the Corning Incorporated Non-Employee Directors Deferred
Compensation Plan. |
(2) |
The amounts in this column reflect the aggregate grant
date fair value computed in accordance with FASB ASC Topic 718 of awards
of restricted stock granted pursuant to the 2010 Equity Plan for
Non-Employee Directors. Assumptions used in the calculation of these
amounts are included in Note 19 to the Companys audited financial
statements for the fiscal year ended December 31, 2015 included in the
Companys Annual Report on Form 10-K filed with the SEC on February 12,
2016. There can be no assurance that the grant date fair value amounts
will ever be realized. The total number of award shares outstanding each
Director had as of December 31, 2015 is shown in the table below. Total
stock holdings for directors as of December 31, 2015 are shown in the
Beneficial Ownership of Directors and Officers table. |
(3) |
The amounts in this column reflect charitable donation
matches made by Corning Foundations Matching Gift
Program. |
The following are the total number of
award shares outstanding for each Director as of December 31, 2015:
Name |
|
Award
Shares Outstanding at December 31, 2015 |
|
Options Outstanding
at December 31, 2015(1) |
Donald W. Blair |
|
|
8,810 |
|
|
|
0 |
|
Stephanie A. Burns |
|
|
32,101 |
|
|
|
0 |
|
John A. Canning,
Jr. |
|
|
40,717 |
|
|
|
1,323 |
|
Richard T. Clark |
|
|
33,529 |
|
|
|
0 |
|
Robert F. Cummings,
Jr. |
|
|
56,253 |
|
|
|
11,872 |
|
Deborah A. Henretta |
|
|
17,532 |
|
|
|
0 |
|
Daniel P.
Huttenlocher |
|
|
5,477 |
|
|
|
0 |
|
Kurt M. Landgraf |
|
|
54,524 |
|
|
|
3,093 |
|
Kevin J. Martin |
|
|
23,073 |
|
|
|
0 |
|
Deborah D. Rieman |
|
|
91,180 |
|
|
|
14,888 |
|
Hansel E. Tookes
II |
|
|
78,430 |
|
|
|
14,888 |
|
Mark S. Wrighton |
|
|
49,880 |
|
|
|
6,775 |
|
(1) |
No options were granted to
non-employee directors in 2015. |
28 CORNING INCORPORATED - 2016 Proxy
Statement
Table of Contents
Stock Ownership
Information
Stock Ownership
Guidelines
We believe in the importance of equity
ownership by directors and executive management as an effective link to
shareholders, and as such, all directors and named executive officers (NEOs) are
expected to achieve the required levels of ownership under our stock ownership
guidelines within five years of their election, appointment or designation. All
directors and NEOs who have been so for five years or more currently comply with
our guidelines.
Directors |
CEO |
Other
NEOs |
5X Annual Cash Retainer |
6X Base Salary |
3X Base Salary |
Beneficial Ownership of Directors
and Officers
The following table shows, as of
December 31, 2015, the number of shares of Corning common stock beneficially
owned and the aggregate number of shares of common stock and common stock-based
equity, including stock options and RSUs that will vest or become exercisable
within 60 days, as applicable, held by each director and NEO, and all directors,
Section 16 officers and NEOs as a group.
|
|
Shares Directly
or Indirectly Owned(1)(2)(3) |
|
Stock
Options Exercisable Within 60 Days |
|
Restricted Share
Units Vesting Within 60 Days |
|
Total
Shares Beneficially Owned |
|
Percent of
Class |
DIRECTORS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Donald W. Blair |
|
|
8,810 |
|
|
|
|
0 |
|
|
|
0 |
|
|
|
8,810 |
|
|
|
Stephanie A.
Burns |
|
|
34,464 |
|
|
|
|
0 |
|
|
|
4,121 |
|
|
|
38,585 |
|
|
|
John A. Canning, Jr. |
|
|
100,717 |
|
|
|
|
1,323 |
|
|
|
0 |
|
|
|
102,040 |
|
|
|
Richard T. Clark |
|
|
33,529 |
|
|
|
|
0 |
|
|
|
0 |
|
|
|
33,529 |
|
|
|
Robert F. Cummings, Jr. |
|
|
136,253 |
|
|
|
|
11,872 |
|
|
|
0 |
|
|
|
148,129 |
|
|
|
Deborah A.
Henretta |
|
|
17,532 |
|
|
|
|
0 |
|
|
|
0 |
|
|
|
17,532 |
|
|
|
Daniel P. Huttenlocher |
|
|
5,477 |
|
|
|
|
0 |
|
|
|
0 |
|
|
|
5,477 |
|
|
|
Kurt M. Landgraf |
|
|
54,524 |
|
|
|
|
3,093 |
|
|
|
0 |
|
|
|
57,617 |
|
|
|
Kevin J. Martin |
|
|
23,073 |
|
|
|
|
0 |
|
|
|
0 |
|
|
|
23,073 |
|
|
|
Deborah D.
Rieman |
|
|
126,430 |
|
|
|
|
14,888 |
|
|
|
0 |
|
|
|
141,318 |
|
|
|
Hansel E. Tookes II |
|
|
88,430 |
|
|
|
|
14,888 |
|
|
|
0 |
|
|
|
103,318 |
|
|
|
Mark S. Wrighton |
|
|
50,880 |
|
|
|
|
6,775 |
|
|
|
0 |
|
|
|
57,655 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NAMED EXECUTIVE
OFFICERS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wendell P. Weeks |
|
|
715,952 |
(4) |
|
|
|
1,377,597 |
|
|
|
0 |
|
|
|
2,093,549 |
|
|
|
James B. Flaws |
|
|
344,593 |
|
|
|
|
322,615 |
|
|
|
0 |
|
|
|
667,208 |
|
|
|
R. Tony Tripeny |
|
|
30,298 |
|
|
|
|
258,344 |
|
|
|
0 |
|
|
|
288,642 |
|
|
|
James P. Clappin |
|
|
55,807 |
|
|
|
|
303,800 |
|
|
|
0 |
|
|
|
359,607 |
|
|
|
Lawrence D.
McRae |
|
|
105,506 |
|
|
|
|
336,760 |
|
|
|
0 |
|
|
|
442,266 |
|
|
|
Kirk P. Gregg |
|
|
146,429 |
|
|
|
|
376,810 |
|
|
|
80,697 |
|
|
|
603,936 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ALL DIRECTORS, SECTION 16 OFFICERS AND NEOS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
a group (27 persons) |
|
|
2,423,322 |
(5)(6) |
|
|
|
4,298,891 |
|
|
|
84,818 |
|
|
|
6,807,031 |
|
|
0.60% |
(1) |
Includes shares of common stock subject to forfeiture and
restrictions on transfer, granted under Cornings Incentive Stock
Plans. |
(2) |
Includes shares of common stock subject to forfeiture and
restrictions on transfer, granted under Cornings Restricted Stock Plans
for non-employee directors. |
(3) |
Includes shares of common stock held by The Bank of New York Mellon
Corporation as the trustee of Cornings Investment Plans for the benefit
of the members of the group, who may instruct the trustee as to the voting
of such shares. If no instructions are received, the trustee votes the
shares in the same proportion as it votes the shares for which
instructions were received. The power to dispose of shares of common stock
is also restricted by the provisions of the plans. The trustee holds for
the benefit of Messrs. Weeks, Flaws, Tripeny, Clappin, McRae and Gregg all
executive officers as a group the equivalent of 11,783; 0; 0; 2,166;
6,315; 0; and 23,099 shares of common stock, respectively. It also holds
for the benefit of all employees who participate in the plans the
equivalent of 15,515,838 shares of common stock (being 1.37% of the
class). |
CORNING INCORPORATED - 2016 Proxy
Statement 29
Table of Contents
Stock Ownership
Information
(4) |
Includes 704,169 shares held by a
revocable trust of which Mr. Weeks is the beneficiary, and he currently
has no voting authority over these shares. |
(5) |
Does not include 34,982 shares owned by the spouses and minor
children of certain executive officers and directors as to which such
officers and directors disclaim beneficial ownership. |
(6) |
As of December 31, 2015, none of our directors or executive
officers had pledged any such shares. |
Beneficial Ownership of Cornings
Largest Shareholders
The following table shows those persons
known to the Company to be the beneficial owners of 5% or more of the Companys
common stock as of December 31, 2015. In furnishing the information below, the
Company has relied on information filed with the SEC by the beneficial
owners.
|
Name and Address of
Beneficial Owner |
|
Number of Common
Shares Beneficially Owned |
|
Percent
of Class |
|
|
The Vanguard Group 100 Vanguard
Blvd. Malvern, PA 19355 |
|
|
67,419,010 |
(1) |
|
|
|
5.69 |
% |
|
|
|
BlackRock, Inc. 55 East 52nd
Street New York, NY 10022 |
|
|
61,434,609 |
(2) |
|
|
|
5.2 |
% |
|
|
(1) |
Reflects shares beneficially owned by The Vanguard Group
(Vanguard), according to a Schedule 13G filed by Vanguard with the SEC on
February 10, 2016, reflecting ownership of shares as of December 31, 2015.
Vanguard has sole voting power and/or sole dispositive power with respect
to 65,071,266 shares and shared voting power and/or shared dispositive
power with respect to 2,347,744 shares. According to the Schedule 13G,
Vanguard beneficially owned 5.69% of our common stock as of December 31,
2015. |
(2) |
Reflects shares beneficially owned by BlackRock, Inc. (BlackRock),
according to a Schedule 13G filed by BlackRock with the SEC on January 26,
2016, reflecting ownership of shares as of December 31,2015. BlackRock has
sole voting power and/or sole dispositive power with respect to 61,385,593
shares and shared voting power and/or shared dispositive power with
respect to 49,016 shares. According to the Schedule 13G, BlackRock
beneficially owned 5.2% of our common stock as of December 31,
2015. |
Section 16(a) Beneficial Ownership
Reporting Compliance
SEC rules require disclosure of those
directors, officers, and beneficial owners of more than 10% of our common stock
who fail to timely file reports required by Section 16(a) of the Securities
Exchange Act of 1934 during the most recent fiscal year. Based solely on review
of reports furnished to us and written representations that no other reports
were required during the fiscal year ended December 31, 2015, all Section 16(a)
filing requirements were met.
30 CORNING INCORPORATED - 2016 Proxy
Statement
Table of Contents
Proposal 2
Ratification of Appointment of Independent Registered Public Accounting Firm
The Audit Committee evaluates the
selection of our independent auditor each year and has selected
PricewaterhouseCoopers LLP (PwC) as our independent registered public accounting
firm for 2016. PwC has served in this role since 1944. The Audit Committee
concluded that many factors contribute to the continued support of PwCs
independence, such as the oversight of the Public Company Accounting Oversight
Board (PCAOB) through the establishment of audit, quality, ethics, and
independence standards in addition to conducting audit inspections; the
mandating of reports on internal control over financial reporting; PCAOB
requirements for audit partner rotation; and limitations imposed by regulation
and by the Audit Committee on non-audit services provided by PwC. The Audit
Committee preapproves all audit and permitted non-audit services that PwC
performs for the Company, and it approves the audit fees associated with the
engagement of PwC. All services provided to Corning by PwC in 2014 and 2015 were
pre-approved by the Audit Committee in accordance with the policy.
In conjunction with the mandated
rotation of the PwCs lead engagement partner, the Audit Committee and its
chairperson are directly involved in the selection of PwCs new lead engagement
partner. In considering continuing auditor independence, the Audit Committee
periodically considers whether there should be a regular rotation of the
independent registered public accounting firm. The Committee has determined that
such a rotation would likely cause significant disruption to the Company without
providing any significant benefit. The members of the Audit Committee and the
Board believe that the continued retention of PwC to serve as the Companys
independent registered public accounting firm is in the best interests of the
Company and its investors.
As a matter of good corporate
governance, the Board submits the selection of the independent audit firm to our
stockholders for ratification. If the selection of PwC is not ratified by a
majority of the shares of common stock present or represented at the annual
meeting and entitled to vote on the matter, the Audit Committee will review its
future selection of an independent registered public accounting firm in light of
that vote result. Even if the selection is ratified, the Audit Committee in its
discretion may appoint a different registered public accounting firm at any time
during the year if the committee determines that such change would be
appropriate.
Corning expects representatives of PwC
to be present at the Annual Meeting and available to respond to questions that
may be raised there. These representatives may comment on the financial
statements if they so desire.
Our Board unanimously recommends a
vote FOR the ratification of the appointment of PricewaterhouseCoopers LLP as
our independent registered public accounting firm for the fiscal year ending
December 31, 2016.
Fees Paid to Independent Registered
Public Accounting Firm
Aggregate fees for professional
services rendered by PwC in 2014 and 2015:
|
|
|
2014 |
|
2015 |
|
|
Audit Fees |
|
$ |
9,354,000 |
|
$ |
9,123,000 |
|
|
Audit Related Fees |
|
|
1,487,000 |
|
|
315,000 |
|
|
Tax Fees |
|
|
1,606,000 |
|
|
475,000 |
|
|
All
Other Fees |
|
|
358,000 |
|
|
503,000 |
|
|
Total Fees |
|
$ |
12,805,000 |
|
$ |
10,416,000 |
|
Audit Fees. These fees are composed of professional services rendered in
connection with the annual audit of Cornings consolidated financial statements,
including the audit of the effectiveness of internal control over financial
reporting, and reviews of Cornings quarterly consolidated financial statements
on Form 10-Q that are customary under auditing standards generally accepted in
the United States. Audit fees also include statutory audits of Cornings foreign
jurisdiction subsidiaries, audit of new information technology systems, tax
related audit support, comfort letters, consents for other SEC filings and
reviews of documents filed with the SEC.
Audit-Related Fees. These fees are composed of professional services rendered in
connection with due diligence pertaining to acquisitions, procedures to
translate certain financial statements for foreign subsidiaries, employee
benefit plan audits, agreed-upon procedures and the evaluation of new accounting
policies.
Tax Fees. These fees are composed of statutory tax compliance,
assistance for Cornings foreign jurisdiction subsidiaries tax returns,
expatriate tax return compliance, other tax compliance projects and assistance
in reviewing Cornings transfer pricing policies.
All Other Fees. These fees are composed of a strategy consulting project with
respect to new product development, an information technology security
assessment, a fee relating to licensing technical accounting software from the
independent registered public accounting firm and a fee to subscribe to certain
benchmarking studies published by the independent registered public accounting
firm.
CORNING INCORPORATED - 2016 Proxy
Statement 31
Table of Contents
Proposal 2 Ratification of
Appointment of Independent Registered Public Accounting Firm
Policy Regarding Audit Committee
Pre-Approval of Audit and Permitted Non-Audit Services of Independent Registered
Public Accounting Firm
The Audit Committee has adopted a
policy for pre-approval of audit and permitted non-audit services by Cornings
independent registered public accounting firm. The full Audit Committee approves
annually projected services and fee estimates for these services and other major
types of services. The Audit Committee chairman has been designated by the Audit
Committee to approve any services arising during the year that were not
pre-approved by the Audit Committee and services that were pre-approved, but for
which the associated fees will materially exceed the budget established for the
type of service at issue. Services approved by the chairman are communicated to
the full Audit Committee at its next regular meeting. For each proposed service,
the independent registered public accounting firm is required to provide
supporting documentation detailing said service and confirm that the provision
of such services does not impair its independence. The Audit Committee regularly
reviews reports detailing services provided to Corning by its independent
registered public accounting firm.
Report of the Audit
Committee
The purpose of the Audit Committee is
to assist the Board of Directors in its general oversight of Cornings financial
reporting, internal controls and audit functions. The Audit Committee operates
under a written charter adopted by the Board of Directors. The directors who
serve on the Audit Committee have no financial or personal ties to Corning
(other than director compensation and equity ownership as described in this
proxy statement) and are all financially literate and independent for
purposes of the New York Stock Exchange listing standards. The Board of
Directors has determined that none of the Audit Committee members have a
relationship with Corning that may interfere with the members independence from
Corning and its management.
The Audit Committee met with management
periodically during the year to consider the adequacy of Cornings internal
controls and the objectivity of its financial reporting. The Audit Committee
discussed these matters with Cornings independent registered public accounting
firm and with the appropriate financial personnel and internal auditors. The
Audit Committee also discussed with Cornings senior management and independent
registered public accounting firm the process used for certifications by
Cornings chief executive officer and chief financial officer that are required
for certain of Cornings filings with the SEC. The Audit Committee met privately
with both the independent registered public accounting firm and the internal
auditors, both of whom have unrestricted access to the Audit
Committee.
The Audit Committee has reviewed and
discussed the consolidated financial statements with management and the
independent registered public accounting firm. Management is responsible for:
the preparation, presentation and integrity of Cornings financial statements;
accounting and financial reporting principles; establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e));
establishing and maintaining internal control over financial reporting (as
defined in Exchange Act Rule 13a-15(f)); evaluating the effectiveness of
disclosure controls and procedures; evaluating the effectiveness of internal
control over financial reporting; and evaluating any change that has materially
affected, or is reasonably likely to materially affect, internal control over
financial reporting. The independent registered public accounting firm is
responsible for performing an independent audit of the consolidated financial
statements and expressing an opinion on the conformity of those financial
statements with accounting principles generally accepted in the United States,
as well as expressing an opinion on the effectiveness of internal control over
financial reporting.
During the course of 2015, management
updated the documentation, and performed testing and evaluation of Cornings
system of internal control over financial reporting in response to the
requirements set forth in Section 404 of the Sarbanes-Oxley Act of 2002 and
related regulations. The Audit Committee was kept apprised of the progress of
the evaluation, and it provided oversight and advice to management during the
process. In connection with this oversight, the Audit Committee received
periodic updates provided by management, internal audit and the independent
registered public accounting firm at each regularly scheduled Audit Committee
meeting. At the conclusion of the process, management provided the Audit
Committee with, and the Audit Committee reviewed a report on, the effectiveness
of Cornings internal control over financial reporting. The Audit Committee also
reviewed: the report of management contained in Cornings Annual Report on Form
10-K for the year ended December 31, 2015, filed with the SEC; as well as
PricewaterhouseCoopers LLPs Report of Independent Registered Public Accounting
Firm included in Cornings Annual Report on Form 10-K for the year ended
December 31, 2015 related to its audits of the consolidated financial statements
and financial statement schedule, and the effectiveness of internal control over
financial reporting.
The Audit Committee has discussed with
the independent registered public accounting firm the matters required by the
applicable requirements of the Public Company Accounting Oversight Board. In
addition, the Audit Committee has received from the independent registered
public accounting firm the written disclosures and the letter required by
applicable requirements of the Public Company Accounting Oversight Board
regarding the independent registered public accounting firms communications
with the Audit Committee concerning independence and discussed with them their
independence from Corning and its management. The Audit Committee has considered
whether the provision of permitted non-audit services by the independent
registered public accounting firm to Corning is compatible with the auditors
independence.
Based on these reviews and discussions,
the Audit Committee recommended to the Board of Directors and the Board of
Directors approved that the audited financial statements be included in
Cornings Annual Report on Form 10-K for the year ended December 31,
2015.
The Audit Committee:
Kurt M. Landgraf, Chair
Donald W. Blair
Stephanie A. Burns
Deborah A. Henretta
Daniel P. Huttenlocher
Deborah D. Rieman
Mark S. Wrighton
32 CORNING INCORPORATED - 2016 Proxy
Statement
Table of Contents
Proposal 3 Advisory Vote to Approve
Executive Compensation (Say on Pay)
Our Board of Directors requests that
shareholders approve the compensation of our Named Executive Officers (NEOs),
pursuant to Section 14A of the Securities Exchange Act of 1934, as disclosed in
this proxy statement, which includes the Compensation Discussion and Analysis,
the Summary Compensation Table and the supporting tabular and narrative
disclosure on executive compensation.
This vote is advisory and not binding
on the Company, but the Board of Directors values shareholder opinion and will
consider the outcome of the vote in determining our executive compensation
programs.
Say on Pay Proposal
Our Board maintains a pay for
performance philosophy that forms the foundation for all of the Compensation
Committees decisions regarding executive compensation. In addition, our
compensation programs are designed to facilitate strong corporate governance,
foster collaboration and support our short- and long-term corporate
strategy.
The Compensation Discussion and
Analysis portion of this proxy statement contains a detailed description of our
executive compensation philosophy and programs, the compensation decisions the
Compensation Committee has made under those programs and the factors considered
in making those decisions, including 2015 Company performance, focusing on the
compensation of our NEOs. Our shareholders have affirmed their support of our
programs in our outreach discussions and in last years Say on Pay results. We
believe that we have created a compensation program deserving of shareholder
support.
For these reasons, the Board of
Directors recommends that shareholders vote in favor of the
resolution:
RESOLVED, that on an advisory
non-binding basis, the total compensation paid to the Companys Named Executive
Officers (CEO, retired CFO, current incumbent CFO and three other most highly
compensated executives), as disclosed in the proxy statement for the 2016 Annual
Meeting of Shareholders pursuant to Section 14A of the Securities Exchange Act
of 1934, including the Compensation Discussion and Analysis, the Summary
Compensation Table, and the supporting tabular and related narrative disclosure
on executive compensation, is hereby APPROVED.
Our Board unanimously recommends a
vote FOR the resolution approving the compensation of our Named Executive
Officers.
CORNING INCORPORATED
- 2016
Proxy Statement 33
Table of Contents
Compensation Discussion &
Analysis
This Compensation Discussion and
Analysis (CD&A) focuses on the 2015 compensation of our Named Executive
Officers (NEOs) and how this compensation aligns with our pay for performance
philosophy.
Our NEOs in fiscal year 2015
were:
|
Named Executive Officer |
|
Role |
|
Tenure in role |
|
Total years of Corning
service |
|
|
Wendell P. Weeks |
|
Chairman, Chief Executive Officer (CEO) and
President |
|
11 Years as CEO (9 years as CEO/Chairman) |
|
33 Years |
|
|
James B. Flaws* |
|
Vice Chairman and Chief Financial Officer
(retired) |
|
18 Years as CFO |
|
42 Years |
|
|
R. Tony Tripeny* |
|
Senior Vice President and
Chief Financial Officer |
|
New CFO in 2015 |
|
30 Years |
|
|
James P. Clappin |
|
President, Corning Glass
Technologies |
|
10 Years |
|
36 Years |
|
|
Lawrence D.
McRae* |
|
Vice Chairman and
Corporate Development Officer |
|
New Vice Chairman in 2015 |
|
30 Years |
|
|
Kirk P. Gregg* |
|
Executive Vice President and Chief Administrative
Officer |
|
18 Years |
|
22 Years |
|
* |
In a planned succession, on August 31, 2015, Mr. Flaws stepped down
as Chief Financial Officer and Mr. Tripeny became Chief Financial Officer
effective September 1, 2015. Mr. McRae was appointed Vice Chairman and
Corporate Development Officer effective September 1, 2015. Mr. Flaws
subsequently retired as Vice Chairman on November 30, 2015. Mr. Gregg
retired on December 31, 2015. |
CD&A Table of
Contents
To assist shareholders in finding
important information, we call your attention to the following sections of the
CD&A:
34 CORNING
INCORPORATED - 2016 Proxy Statement
Table of Contents
Compensation Discussion &
Analysis
Executive Summary
Executive
Compensation Philosophy |
Our compensation program is designed to
attract and retain the most talented employees within our industry segments and
to motivate them to perform at the highest level. Our leaders must possess deep
technical understanding in our core technologies and have broad business,
commercial and leadership experience. In order to attract, retain and motivate
this caliber of talent, the Compensation Committee (the Committee) is committed
to promoting a performance-based culture that motivates executives by tying
rewards to financial metrics that support the creation of long-term value for
our shareholders and strong cash flows.
After a good first half, 2015 became a
challenging year due to global economic headwinds, the continued softening of
retail demand for televisions and IT devices and the negative impact on our
financial results of the stronger U.S. dollar. Despite these conditions, we
generated significant adjusted operating cash flow during the year, which we
consider a key indicator of the health of the Company. However, performance
against some of our other key financial performance objectives was below our
established targets for 2015.
● |
Adjusted Operating Cash Flow:
Increased by 3.1% year-over-year. Lower year-over-year core earnings were
more than offset by the receipt of customer deposits. Results were 130% of
the established target for 2015. |
● |
Core Net
Sales: Slightly lower year-over-year,
impacted by lower sales in our Display Technologies segment due to price
declines and softening in the television and IT device retail markets and
the impact of the overall strengthening of the U.S. dollar on our Optical
Communications, Environmental Technologies, and Life Sciences segments.
This was partially offset by higher sales in our Optical Communications
segment. Results were 30% of the established target for
2015. |
● |
Core EPS: Down year-over-year, driven by lower core earnings in
our Display Technologies, Environmental Technologies and Life Sciences
segments, and lower equity earnings. Results were 79% of the established
target for 2015. |
● |
Total Shareholder Return
(TSR): Negative 1-year TSR (-18.3%) was
below expectations, but 3 year TSR of 15.8% per year is in line with the
median of S&P 500 companies. |
In spite of the challenges, our overall
financial strength enables us to increase our capital return to shareholders, in
a balanced fashion, while continuing to invest in innovative projects. As
discussed under New Strategy and Capital Allocation Framework on page 8, we
expect to generate and deploy more than $20 billion in cash through 2019. We
plan to invest $10 billion in our growth and sustained leadership, and to return
more than $10 billion to shareholders through share repurchases and dividends
through 2019. We also expect to increase our dividend per common share by at
least 10% annually through 2019.
Note
Regarding Core Performance Measures |
Throughout this CD&A we refer to
our core net sales, core earnings, core EPS and adjusted operating cash flow for
compensation purposes (adjusted operating cash flow), which are non-GAAP
financial measures. These core performance measures remove the impact of changes
in the Japanese yen and Korean won exchange rates versus the US dollar, as well
as the impact of other special items that do not reflect the ongoing operating
results of the Company. Please see page 36 of our 2015 Annual Report on Form
10-K for additional information about our core performance measures and why we
use them. Appendix A to this proxy statement contains a reconciliation of these
non-GAAP measures to our audited GAAP financial statements.
2015 Performance and Compensation
Alignment |
Each year we set rigorous and
challenging performance goals aligned with our strategic objectives.
Approximately 88% of the CEOs target
total compensation and 79% of the other NEOs target total compensation is
variable and impacted by operating or stock price performance.
Short-term incentive targets are set in
the Performance Incentive Plan (PIP) and the GoalSharing plan. NEO compensation
under these plans is based on performance against established profitability and
revenue goals, with 100% of the PIP earned on the basis of achievement of
corporate financial goals. In 2015, PIP measures were core earnings per share
(core EPS) (75% weight) and core net sales (25% weight). GoalSharing
compensation objectives reflect a combination of corporate financial (25%
weight) and business unit performance (75% weight). Actual performance in 2015
was below the PIP established target goals, resulting in a payout of 67% of
target.
Long Term Incentive (LTI) awards are
comprised of 60% Cash Performance Units (CPUs), 25% Restricted Stock Units
(RSUs), and 15% stock options. CPU awards are based 70% on adjusted operating
cash flow and 30% on core net sales with ultimate earned amounts based on the
average of three one-year performance cycles for each metric. Actual blended
performance in 2015 of these two goals met the CPU established target goals,
resulting in an earn-out of 100% of target. The final earned award, however,
will not be known until the end of the three-year performance period.
CORNING INCORPORATED - 2016 Proxy
Statement 35
Table of Contents
Compensation Discussion &
Analysis
The following table compares the 2015
actual results and targeted goals for each performance measure with 2014 actual
results.
|
|
|
2015 |
|
2014 |
|
|
Measure |
|
Actual % increase vs. 14
Actual |
|
Target % increase vs. 14
Actual |
|
Actual(1) |
|
Target(1) |
|
|
Adjusted operating cash flow
(millions) |
|
$ |
3,219 |
|
|
$ |
3,034 |
|
|
$ |
3,121 |
|
$ |
3,012 |
|
|
|
|
+3.1 |
% |
|
|
n/a |
(2) |
|
|
|
|
|
|
|
|
Core EPS |
|
$ |
1.40 |
|
|
$ |
1.53 |
|
|
$ |
1.42 |
|
$ |
1.39 |
|
|
|
|
-1.4 |
% |
|
|
+7.7 |
% |
|
|
|
|
|
|
|
|
Core net sales
(millions) |
|
$ |
9,800 |
|
|
$ |
10,352 |
|
|
$ |
9,955 |
|
$ |
9,317 |
|
|
|
|
-1.6 |
% |
|
|
+4.0 |
% |
|
|
|
|
|
|
|
(1) |
In the first quarter of 2015, we
changed the yen-to-dollar core FX rate from ¥93 to ¥99 to align with the
Japanese yen-denominated hedges entered into for the years 2015 through
2017. Prior periods presented have been recast for core earnings, core EPS
and core net sales based on the new rate. Recast financial statements were filed with the SEC on January 27,
2015. Such exchange rate adjustments are necessary because a large
percentage of our sales are made in Japanese yen. |
(2) |
Adjusted operating cash flow
goals are established yearly, independent of the prior year, based on
items that may be unique and non-recurring. |
See Note Regarding Core
Performance Measures on p. 35 for more information on these
measures.
Strong Say on Pay Results.
At our 2015 annual meeting of shareholders,
our Say on Pay proposal received support from 96% of votes cast, consistent with
2014. We view this level of shareholder support as an affirmation of our current
pay practices and pay for performance philosophy, and as a result we did not
make any structural changes to the program design in 2015.
At our 2015 annual meeting of
shareholders, our Say on Pay proposal received support from 96% of votes
cast.
In 2015, as part of our shareholder
outreach program, we met with shareholders representing over 42% of our
outstanding shares. In these interactive meetings, we heard many constructive
comments on strategy, capital allocation,
governance, compensation, shareholder communications, and shareholder proposals.
No significant issues pertaining to our executive compensation programs were
raised in these discussions and shareholders are supportive of our program.
Several shareholders did ask if we were changing performance compensation plan
measures in light of our new strategy and capital allocation framework. In light
of our new strategy and capital allocation framework, effective in 2016 we will
add an ROIC modifier to CPUs and adjust the cash flow measure to include capital
expenditures. For more information see Whats New in 2016 on page 46. We
continue to believe profitability, cash generation and revenue growth are the
most important measures for the successful execution our new
strategy.
Robust
Compensation Program Governance |
Corning has rigorous and robust program
governance with respect to its executive compensation plan:
|
✓ |
Compensation program closely aligns pay with performance over both
the short- and long-term |
|
✓ |
Mix
of cash and equity incentive payouts tied to short-term financial
performance and long-term value creation (over 79% of total compensation
for NEOs is at risk) |
|
✓ |
CEO
total compensation is targeted within a competitive range of the
Compensation Peer Group median |
|
✓ |
Caps on payout levels for annual incentives in a budgeted
down-cycle year |
|
✓ |
Significant NEO share ownership requirements |
|
✓ |
Anti-hedging and pledging policies |
|
✓ |
Clawback policy |
|
✓ |
No
excise tax gross-ups for all officer agreements entered into after July
2004 |
|
✓ |
Limited and modest perquisites that have a sound benefit to the
Companys business |
|
✓ |
No
tax gross-ups or tax assistance on perquisites |
|
✓ |
No
repricing of underwater stock options without shareholder
approval |
|
✓ |
An
independent compensation consultant advises the Compensation
Committee |
|
✓ |
History of demonstrated
responsiveness to shareholder concerns and feedback, and ongoing
commitment to shareholder
engagement |
36 CORNING
INCORPORATED - 2016 Proxy Statement
Table of Contents
Compensation Discussion &
Analysis
Company Performance
Overview
2015 Business Environment and Company
Performance |
Our businesses were impacted in 2015 by
the weakening global economy. Global economic headwinds, continued softening of
retail demand for televisions and devices for IT applications and the negative
impact of the stronger U.S. dollar resulted in year-over-year decline below our
target expectations.
Despite these challenges, our financial
position remained strong and we generated considerable cash flow from
operations, which we consider a key indicator of the health of our Company. We
also made progress on several important initiatives, including our
pharmaceutical glass and automotive glass initiatives, and we continued to
aggressively reduce manufacturing costs. Consumers continue to demand bigger
screens, more bandwidth and touch-enabled devices, and the demand for cleaner
air is accelerating. Our innovation portfolio is rich with opportunities to
address these and other markets.
Total Shareholder Return
Cornings Total Shareholder Return
(TSR), which consists of stock price appreciation plus reinvestment of
dividends, was -18.3% in 2015 and lower than that of the median of S&P 500
companies. Three-year annualized TSR performance was 15.8%,in line with the
median of S&P 500 companies. This 3-year performance was at the 60th
percentile of our compensation benchmarking peers.
![](http://www.sec.gov/Archives/edgar/data/24741/000120677416004903/corning_def14a5x5x1.jpg)
CORNING INCORPORATED - 2016 Proxy
Statement 37
Table of Contents
Compensation Discussion &
Analysis
Operational Objectives
Despite the macroeconomic challenges,
Corning made progress on several important objectives during 2015, and our
long-term opportunities remain strong.
2015 Objective |
|
2015 Achievements |
Continue the positive momentum in
all businesses |
|
Optical Communications delivered
another year of double-digit sales growth, delivering performance ahead of
plan.
Specialty Materials gained share
in China and touch notebooks, and Display Technologies extended a
long-term supply agreement with one of our largest LCD customers to 2025,
and announced that it will locate a Gen 10.5 glass manufacturing facility
adjacent to a customers plant in China. |
Leverage
innovation platform to drive growth |
|
Our commitment to R&D gives
us a strong competitive advantage. Our new Corning® Gorilla® Glass 4 is already present on
hundreds of devices, and is being used for automotive laminates that weigh
approximately 30% less than conventional windshields to help automakers
improve fuel economy.
In 2015, Corning also launched
●
Lotus NTX - our third
generation high performance display glass substrate offering best-in-class
glass dimensional stability in panel makers high-temperature
manufacturing processes.
●
Iris glass which enables
LED TVs as thin as smartphones
●
FLORA technology - a
next-generation ceramic product designed to reduce vehicle emissions at
engine start
●
Edge8 - the industrys
first modular, tip-to-tip optical cabling system
|
Grow sales and
profits |
|
Although sales and profits were
slightly down in 2015, unit spending controls offset many of the economic
challenges.
We continued to generate
significant cash flow, which allows us to maintain a strong balance sheet,
continue to invest in our future and return cash to
shareholders. |
38 CORNING
INCORPORATED - 2016 Proxy Statement
Table of Contents
Compensation Discussion &
Analysis
Return of Value to
Shareholders
In 2015, Corning repurchased
approximately $3 billion of our outstanding common shares. Since 2011, when we
announced expectations of increased free cash flow, we have increased the
dividend 170% (from $0.05 per share per quarter to $0.135 as of March 15, 2016)
and repurchased $8.7 billion of our outstanding common shares. In October 2015,
after significant Board engagement and approval, Corning announced a capital
allocation framework that would return more than $10 billion to shareholders by
2019. As part of this plan, we launched a $1.25 billion accelerated share
repurchase program in the fourth quarter of 2015, which we completed in January
2016. In addition to further share buybacks, we intend to increase our dividend
per share by at least 10% annually through 2019.
Since 2011, Corning has returned over
$11 billion to shareholders. In October 2015, we announced a new strategy and
capital allocation framework designed to return an additional $10 billion to our
shareholders over the next four years. |
$2.7 billion common dividends
paid in the last 5 years |
|
$8.7
billion shares repurchased in the last 5 years |
|
170%
increase in quarterly common dividend since
2011 |
Executive Compensation Program
Overview
To ensure compensation is aligned with
long-term value creation, we believe a well-structured program must balance
near-term financial results with building long-term value through thoughtful
investments in innovation and process engineering.
To that end, our compensation program
provides a number of forms of executive compensation, each tailored to encourage
an aspect of the Companys performance that the Committee believes is important
for thoughtfully driving long-term shareholder value. Given the strategic
importance of growing sales in our businesses, we include a revenue measure in
both our short-term and long-term incentive programs while continuing to place
the most emphasis on profitability and cash generation. We believe that earnings
growth, revenue growth and generating strong positive cash flows are the key
contributors to long-term success and shareholder value.
CORNING INCORPORATED - 2016 Proxy
Statement 39
Table of Contents
Compensation Discussion &
Analysis
Summary of Cornings 2015 Executive
Compensation Program
Key
Pay Elements |
|
Short-Term/Annual
Incentives |
|
Long-Term Incentives |
|
|
|
|
|
|
|
|
|
Form
of Compensation Delivered |
|
Performance Incentive Plan (Cash) |
|
GoalSharing (Company-Wide Unit Plan; Paid in
Cash) |
|
Cash Performance Units (CPUs) |
|
Equity
Incentives: Restricted Stock Units
(RSUs) and Stock Options |
|
|
⬇ |
|
⬇ |
|
⬇ |
|
⬇ |
Performance Metrics |
|
75%
Core EPS 25% Core Net Sales |
|
Weighted Average of Business Unit Plans |
|
60%
of LTI Target, based on: ● 70% Adjusted
Operating Cash Flow ● 30% Core Net Sales
Average performance over three years
|
|
40%
of LTI Target: ● 25% RSUs ● 15% Stock Options
Equity grants vest after 3
years |
We believe these features offer the
following benefits:
Clear, measurable and challenging
goals: We base our performance objectives on
the results of a rigorous goal-setting process that relies on both
business-driven bottom-up and corporate top-down budgets.
Beginning in 2013, we reduced our
economic risk to the Japanese yen and Korean won by executing hedges that
protect us from the impact of exchange rate volatility for these currencies
against the U.S. dollar. Concurrently, we commenced the external reporting of
core performance measures in addition to GAAP financial measures to provide a
clearer view of the Companys core operating results to our shareholders. To
ensure alignment between our external reporting and the manner in which we
measure performance for compensation plan purposes, we set performance targets
in our short-term and long-term incentive programs using core performance
measures. Our core performance results are currently stated at a constant
yen-to-U.S. dollar exchange rate of 99 and a constant won-to-U.S. dollar
exchange rate of 1100 to remove the volatility of currency fluctuations,
allowing more clarity and transparency on the operating drivers of our financial
results and performance-based compensation measures.
Our incentive plans also require
targets to be exceeded by a meaningful margin before payouts increase
significantly and payouts relative to target fall significantly if performance
goals are not achieved, with full forfeiture if specified threshold goals are
not attained. This approach discourages imprudent risk-taking, creates a strong
incentive to set reasonable and challenging goals, and fosters strong focus on
achievement of the annual business plan.
Our rigorous goal setting process is
demonstrated in the following measures for our short- and long-term incentive
plans:
|
|
|
|
|
|
|
Short Term/Annual
Incentive 2015 PIP Measures |
|
Long-Term
Incentive 2015 CPU Measures (Year One of Three-Year Average
Plan) |
|
|
|
|
|
|
|
|
Core EPS Goal (Weighted
75%) |
|
Core Net Sales
Goal (Weighted 25%) |
|
Core Net Sales
Goal (Weighted 30%) |
|
Adjusted Operating
Cash Flow Goal (Weighted 70%) |
|
|
|
|
Achievement
% |
|
Core
Adjusted EPS (in $M) |
|
% of
2015 Plan |
|
Core Net Sales (in
$M) |
|
% of 2014 Core
Net Sales |
|
Core Net Sales (in
$M) |
|
% of 2014 Core
Net Sales |
|
Adjusted Operating
Cash Flow (in $M) |
|
% of
2015 Plan |
|
|
|
|
|
200% |
|
|
|
$ |
1.71 |
|
|
|
112% |
|
|
$ |
11,447 |
|
|
115% |
|
|
Capped at 150% |
|
|
|
|
|
150% |
|
|
|
$ |
1.63 |
|
|
|
110% |
|
|
$ |
10,949 |
|
|
110% |
|
|
$ |
11,447 |
|
|
115% |
|
|
|
$ |
3,398 |
|
|
|
112% |
|
|
|
|
|
|
125% |
|
|
|
$ |
1.60 |
|
|
|
108% |
|
|
$ |
10,452 |
|
|
105% |
|
|
$ |
10,452 |
|
|
110% |
|
|
|
$ |
3,186 |
|
|
|
105% |
|
|
|
TARGET |
|
|
100% |
|
|
|
$ |
1.53 |
|
|
|
100% |
|
|
$ |
10,352 |
|
|
104% |
|
|
$ |
10,352 |
|
|
104% |
|
|
|
$ |
3,034 |
|
|
|
100% |
|
|
|
|
|
|
75% |
|
|
|
$ |
1.37 |
|
|
|
90% |
|
|
$ |
10,253 |
|
|
103% |
|
|
$ |
10,253 |
|
|
103% |
|
|
|
$ |
2,791 |
|
|
|
92% |
|
|
|
|
|
|
50% |
|
|
|
$ |
1.22 |
|
|
|
80% |
|
|
$ |
9,954 |
|
|
100% |
|
|
$ |
9,954 |
|
|
100% |
|
|
|
$ |
2,549 |
|
|
|
84% |
|
|
|
|
|
|
0% |
|
|
|
$ |
1.15 |
|
|
|
75% |
|
|
$ |
9,556 |
|
|
96% |
|
|
$ |
9,556 |
|
|
96% |
|
|
|
$ |
2,427 |
|
|
|
80% |
|
|
As discussed on page 36, Cornings
actual performance results for core EPS and core net sales fell below 100% of
the targeted objectives, with the blended result for short-term incentives being
67% of target; whereas adjusted operating cash flow was above 100% of the
targeted objective, yielding a blended result of 100% of target, for the 2015
earned portion of CPUs.
40 CORNING
INCORPORATED - 2016 Proxy Statement
Table of Contents
Compensation Discussion &
Analysis
Substantial variable and at risk
compensation: Approximately 88% of the CEOs
target total compensation and 79% of the other NEOs target total compensation
is variable and impacted by operating or stock price performance. Target total
compensation includes base salary and target short- and long-term
incentives.
Target Total
Compensation
Performance and Compensation
Alignment |
The following table shows the targeted
goals of each performance plan with 2015 actual results, compared with the prior
years.
2015 financial performance was
below target for PIP and lower than 2014 plan results (as indicated in the
table below), resulting in a below-target payout and aligning
performance-related pay with 2015 performance
results |
Short Term
Incentives Earned for NEOs |
2015 |
|
Performance Incentive Plan - 67% of target GoalSharing
5.69% payout |
2014 |
|
Performance
Incentive Plan - 123% of
target GoalSharing 6.75% payout |
Long-term Incentives
Earned (CPUs) for NEOs |
2015 |
|
Average of 2015, 2016 and 2017 performance |
|
100%, TBD, TBD 3-year average:
TBD |
2014 |
|
Average of 2014, 2015 and
2016 performance |
|
121%, 100%,
TBD 3-year average: TBD |
Executive Compensation Program
Details
Our key compensation program principles
are as follows:
● |
Provide a competitive base salary |
● |
Pay for performance |
● |
Apply a team-based management approach |
● |
Increase the proportion of incentive compensation for
more senior positions |
● |
Align the interests of
our executive group with shareholders |
CORNING INCORPORATED - 2016 Proxy
Statement 41
Table of Contents
Compensation Discussion &
Analysis
Base salaries provide a form of fixed
compensation and are reviewed annually by the Committee using salary surveys,
internal equity and performance as discussed in the Compensation Peer Group
section on page 45. In 2015, all NEOs except Mr. Tripeny and Mr. McRae received
base salary increases of approximately 3.1%, consistent with the salary increase
budget for all other salaried employees. Mr. Tripeny received an increase of
approximately 33% reflecting his significant promotion to the role of Chief
Financial Officer as of September 1, 2015. Mr. McRae received an increase of
9.8% reflecting the expansion of his responsibilities and appointment as Vice
Chairman as of September 1, 2015. Additionally, for each NEO, the actual amount
received during the fiscal year increased by a small amount because fiscal 2015
had 27 biweekly pay periods instead of 26.
Short-term incentives are designed to
reward NEOs for Cornings consolidated annual financial performance supporting
our team-based management approach.
Compensation Element |
|
Target Opportunity |
|
Performance Target |
|
Actual
Results |
|
Earned Award for
2015 |
|
|
|
|
|
|
|
|
|
Annual Cash Bonus Plans |
|
Performance Incentive Plan
(PIP)
●Core EPS
(75%)
●Core Net Sales
(25%)
GoalSharing |
|
CEO: 150%* Other
NEOs: 63%-90%*
5%* |
|
PIP: Core EPS:
$1.526 Core Net Sales: $10,352 million
GoalSharing: Average of 98
unit plans |
|
Core EPS: $1.40 Core Net
Sales: $9,800 million
5.69% |
|
Core EPS result: 79% of
target Core Net Sales result: 30% of target Blended result: 67% of
target
5.69% |
* As a percentage of base
salary
Long-Term Incentives and Equity
Awards |
Long-term incentives (LTI) are designed
as a mixture of cash performance units and equity. Target value amounts are
established by the Committee for each NEO annually in February. Our LTI program
comprises a mix of cash performance units (CPUs), restricted stock units (RSUs)
and stock options (Options). We believe it is important to align LTI amounts to
financial measures that generate long term value to the Company. We also believe
it is important for a portion of compensation to be comprised of equity to
closely align the interests of our NEOs with shareholders and ensure alignment
with the future market performance of Corning stock.
● |
CPUs represent 60% of the annual target LTI value with
payouts based on performance goals that are focused on measures supporting
the long-term financial health and success of the Company. Beginning in
2014, actual CPUs earned will be based on the average performance over
three years. |
● |
RSUs represent 25% of the annual target LTI. The number
of RSUs granted is determined based on the stock price on the date RSUs
are granted at the end of March and cliff vest slightly more than three
years from the grant date. |
● |
Options represent 15%
of the annual target LTI. The number of Options granted is determined
using a Black-Scholes valuation. Options are granted at the end of March,
April and May, cliff vest three years after the grant date, and have a
10-year term. |
LTI targets for 2015 for Mr. Flaws and
Mr. Gregg were unchanged. LTI targets were adjusted for Messrs. Tripeny, Clappin
and McRae due to changes in and/or expansion of their
responsibilities.
● |
Mr. Clappin 2015 LTI target increased from $2,000,000
to $2,100,000 as a result of the addition of Corning Precision Materials
into Corning Glass Technologies. |
● |
Mr. Tripeny 2016 LTI target was approved to increase
from $1,000,000 to $1,400,000 when he was appointed Chief Financial
Officer. |
● |
Mr. McRae 2016 LTI
target was approved to increase from $2,000,000 to $2,250,000 when he was
appointed Vice Chairman and Corporate Development
Officer. |
Mr. Tripeny and Mr. McRae received
special grants of restricted stock in July 2015 valued at $125,000 and $50,000,
respectively, to recognize their promotions in 2015.
42 CORNING
INCORPORATED - 2016 Proxy Statement
Table of Contents
Compensation Discussion &
Analysis
Compensation Element |
|
Target Opportunity |
|
Performance Target |
|
2015 Actual
Results |
|
Earned Award for
2015 |
|
|
|
|
|
|
|
|
|
Cash Performance Units (CPUs) |
|
Adjusted operating Cash Flow
(70%)
Core Net
Sales (30%) |
|
CEO: $4.8 million Other
NEOs: $0.63 million - $2.1 million |
|
Applies to Year 1 of 3
2015 2017 CPUs and Year 2 of 3 2014 2016
CPUs:
Adjusted Operating Cash
Flow: $3,034 million
Core Net Sales: $10,352
million |
|
Adjusted Operating Cash
Flow $3,219 million
Core Net Sales: $9,800
million |
|
2015 2017 CPUs Year 1:
100% of target Year 2: TBD Year 3: TBD 3 Year average: TBD
2014 2016 CPUs Year 1:
121% of target Year 2: 100% of target Year 3:
TBD 3 Year average:
TBD |
Over the past 10 years, under the
leadership of Mr. Weeks, the Company has grown core net sales, core earnings,
and adjusted operating cash flow at double-digit rates. It has beaten the
competition on growth in each of its business segments. It has achieved the
lowest cost position in many key businesses and created new-to-the-world product
categories, such as Corning® Gorilla® Glass, heavy-duty diesel substrates and
filters, and customized fiber-to-the-home solutions.
For the 10-year period ending
2014,
● |
Core net sales increased from $3.9 billion to $10.0
billion (10% CAGR) |
● |
Core earnings increased from $0.7 billion to $2.0
billion (11% CAGR) |
● |
Core earnings per share increased from $0.46 to $1.42
(12% CAGR) |
● |
Annual adjusted
operating cash flow increased from $1.0 billion to $3.1 billion (12%
CAGR) |
The Compensation Committee had not made
any changes to Mr. Weeks target short-term or long-term incentives since 2011
(four years). As a result of the strong sustained performance over a decade,
including excellent 2014 results, and the unique skills and experience of Mr.
Weeks as it relates to Cornings business model and technologies, in February
2015, the Compensation Committee approved increases to Mr. Weeks 2015 target
total compensation from $10.1 to $11.4 million as follows:
● |
Base salary increased by 3.1% in line with base salary
increases for all other U.S. based salaried employees. (Additionally, the
actual amount Mr. Weeks received during the fiscal year increased by a
small amount because fiscal 2015 had 27 biweekly pay periods instead of
26). |
● |
Target Short Term Incentives increased target from
145% to 155% of base salary by increasing the PIP target from 140% to 150%
of base salary. Goal Sharing target remained 5%. |
● |
Target Long Term
Incentives increased 2015 LTI target from $7,000,000 to
$8,000,000. |
Eighty-eight percent of Mr. Weeks pay
is directly tied to Company financial performance and stock price.
Employee Benefits and
Perquisites |
Employee Benefits: Our NEOs are eligible for the same employee benefits plans in
which all other eligible U.S. salaried employees participate. These plans
include medical, dental, life insurance, disability, matching gifts and
qualified defined benefit and defined contribution plans. We also maintain
non-qualified defined benefit and defined contribution retirement and long term
disability plans with the same general features and benefits as our qualified
plans for all U.S. salaried employees affected by tax law compensation,
contribution and/or deduction limits.
In addition to the standard benefits
available to all eligible U.S. salaried employees, the NEOs are eligible for the
following benefits and perquisites:
Executive
Supplemental Pension Plan (ESPP): We maintain
a non-qualified ESPP for approximately 25 active participants, including all of
the NEOs. In 2006, we capped the percentage of cash compensation earned as a
retirement benefit under the ESPP at a maximum of 50% of final average pay for
25 or more years of service. The definition of pay used to determine benefits
includes base salary and annual cash bonuses. Long-term cash or equity
incentives are not included and do not impact retirement benefits. Executives
must have 10 or more years of service to be vested under this plan. All of the
NEOs are currently vested under this plan. For additional details of the ESPP
benefits and plan features, please refer to the section entitled Retirement
Plans on page 62.
We maintain an ESPP to reward and
retain the long-service individuals who are critical to executing Cornings
innovation strategy.
While we seek to maintain well-funded qualified retirement
plans, we do not fund our nonqualified retirement plans.
CORNING INCORPORATED - 2016 Proxy
Statement 43
Table of Contents
Compensation Discussion &
Analysis
Executive Physical and
Wellness: All executives are eligible for an
annual physical exam in addition to wellness programs sponsored by the Company
for all employees.
Relocation and Expatriate-Related
Expenses: As part of our global mobility
program, our policies provide that employees who relocate at our request are
eligible for certain relocation and expatriate benefits to facilitate the
transition and international assignment, including moving expenses, allowances
for housing and goods and services, and tax assistance. These policies are
intended to recognize and compensate employees for incremental costs incurred
with moving and/or with living and working outside of an employees home
country. The goal of these relocation and expatriate assistance programs is to
ensure that employees are not financially advantaged or disadvantaged as a
result of their relocation and/or international assignment - including related
taxes. In 2015, Mr. Clappin continued his leadership of the Glass Technologies
segment and was based in Tokyo, Japan. As a result of this continued long-term
assignment, Mr. Clappin was eligible for expatriate benefits afforded to all
eligible employees under this program. These expenses are detailed in footnote
5, section (v) to the Summary Compensation Table.
Other Executive
Perquisites: We provide the NEOs with an
overall allowance which can be used for home security, modest capped personal
aircraft usage and, beginning in October 2015, limited financial counseling
services. Each NEO is responsible for all taxes on any imputed income resulting
from these perquisites.
Given the limited commercial flight
options available in the Corning, New York area, the Committee believes that a
well-managed program of limited personal aircraft use provides an extremely
important benefit at a reasonable cost to the Company. We closely monitor
business and personal usage of our planes and seek to keep all personal usage at
a low percentage of total usage. Annual personal aircraft usage caps under this
program (both hours and absolute dollar value) are established by the Committee
for each NEO. The established cap for the CEO was 100 hours and $165,000 and
approximately half this level or lower for other NEOs. Actual utilization falls
below these caps. For additional details, refer to footnotes relating to All
Other Compensation included with the Summary Compensation Table starting on
page 49.
Executive Severance: We have entered into severance agreements with each NEO. The
severance agreements provide clarity for both the Company and the executive if
the executives employment terminates. By having an agreement in place, we avoid
the uncertainty, negotiations and potential litigation that may otherwise occur
in the event of termination. The agreements are competitive with market
practices at many other large companies and are helpful in retaining senior
executives. Additional details can be found under Arrangements with Named
Executive Officers on page 63.
Executive Change-in-Control
Agreements: The Committee believes that it is
in the best interests of shareholders, employees and the communities in which
the Company operates to ensure an orderly process if a change in control of the
Company were to occur. The Committee believes that it is important to prevent
the loss of key management personnel (who would be difficult to replace) that
may occur in connection with a potential or actual change in control of the
Company. We have thus provided each NEO with change-in-control agreements
(separate from the severance agreements described above). The change-in-control
agreements generally provide that an executives employment must be terminated
in order to receive severance benefits. Additional details about the specific
agreements can be found under Arrangements with Named Executive Officers on
page 63.
In 2012, the Committee approved updated
forms of agreements for all corporate officers entering into change-in-control
agreements after July 2004, which contain no provision for gross-ups for excise
taxes, and cap severance and other benefits at 2.99 times base salary plus
target bonus, with cash severance for most officers limited to 2 times base
salary plus target bonus. Except for Mr. Tripeny, whose agreement is dated
January 1, 2015, our current NEOs have grandfathered agreements that were
entered into prior to July 2004.
44 CORNING
INCORPORATED - 2016 Proxy Statement
Table of Contents
Compensation Discussion &
Analysis
Compensation Peer
Group
Our peer group for compensation
purposes is different from the group of companies with which our businesses
compete.
Corning is a diversified technology
company with five reportable business segments. The majority of our businesses
do not have peers that are public companies in the United States. Most of our
businesses compete with non-U.S. companies in Asia and Europe, or privately held
companies that do not provide comparable executive compensation disclosure. The
majority of our key customers are non-U.S. companies or extremely large U.S.
companies that would not be appropriate compensation peers for Corning. In
attempting to identify peer companies for compensation purposes, Corning must
look to globally diversified companies or innovation companies in other
industries to find companies of similar size and complexity (when viewed in
terms of revenues, net income, market capitalization, assets and number of
employees).
Our largest competitors and
most relevant financial performance peers are not U.S. companies. Corning
must look to globally diversified companies or innovation companies in
other industries to find companies of similar size and
complexity. |
We currently participate in and use
three general executive compensation surveys for NEO positions: Mercer Executive
Survey, Towers Watson Executive Survey, and Equilar TrueValue Survey. With
respect to the three general surveys, the identity of the individual companies
comprising the survey data is not considered in our evaluation process. In
addition to the three general surveys, we also use proxy data obtained from
service providers, such as Equilar, to review compensation levels of NEOs at
companies in a variety of manufacturing and service industries that are similar
in size or have similar characteristics to Corning (the Compensation Peer
Group).
Cornings reported core net sales of
$9.8 billion are median for revenues of our Compensation Peer Group. Market
capitalization is also close to median compared with the Compensation Peer Group
market capitalization. Cornings net income and total assets are near or within
the top quartile when compared to the same measures of the Compensation Peer
Group.
Percent Rank, Corning versus Compensation
Peer Group
![](http://www.sec.gov/Archives/edgar/data/24741/000120677416004903/corning_def14a6x5x1.jpg)
Percent Rank - Corning vs. Peer
Group
Corning uses the Compensation Peer
Group solely as a reference point, in combination with broader executive
compensation surveys, to assess each NEOs target total direct compensation
(i.e. salary, target bonus, and the grant date fair value of long-term
incentives). Our goal is to position target total direct compensation for our
CEO within a competitive range of the Compensation Peer Group median. Median
target total direct CEO compensation in the Compensation Peer Group was
determined to be $10.8 million and 75th percentile target total direct CEO
compensation was $13.4 million, compared with Corning target total direct CEO
compensation of $11.4 million. Beyond the CEO, external data serves as a
reference point, with internal equity in relation to the CEO being a more
important consideration in establishing a base salary and target total direct
compensation for the other NEOs.
2015 Compensation Peer Group
Advanced Micro Devices, Inc. |
Cummins Inc. |
Medtronic, Inc. |
QUALCOMM, Inc. |
Agilent Technologies, Inc. |
Danaher Corporation |
Monsanto Company |
Rockwell Automation, Inc. |
Applied Materials, Inc. |
Dover Corporation |
Motorola Solutions, Inc. |
TE Connectivity Limited |
BorgWarner, Inc. |
Eaton Corporation PLC |
NetApp, Inc. |
Texas Instruments Incorporated |
Boston Scientific Corporation |
Harris Corporation |
PPG Industries, Inc. |
Thermo Fisher Scientific, Inc. |
Broadcom Corporation |
Juniper Networks, Inc. |
Praxair, Inc. |
|
CORNING INCORPORATED - 2016 Proxy
Statement 45
Table of Contents
Compensation Discussion &
Analysis
Whats New in 2016
Long Term
Incentive Return on Invested Capital (ROIC) Three-Year Performance
Modifier |
We continue to believe profitability,
cash generation and revenue growth are key drivers of how well we execute our
strategy. However, beginning in 2016 we are revising our adjusted operating cash
flow measure to include capital expenditures and adding a three-year ROIC
modifier tied to our new strategy and capital allocation framework to our CPUs.
In 2019, CPUs earned for the 3-year period 2016-2018 will be increased or
decreased by up to 10% depending on the Companys ROIC improvement over the
three-year performance period (2016 through 2018) compared to a pre-established
performance target. These changes support our new capital allocation framework,
including efficient capital management, increasing our ROIC and investing in
areas that will seek to encourage Company growth.
Compensation Program
Governance
Role of Compensation
Consultant |
The Committee has the authority to
retain and terminate a compensation consultant, and to approve the consultants
fees and all other terms of such engagement. Since 2014, the Committee has
directly retained an executive compensation expert from Frederic W. Cook &
Co., Inc. (FWC) as its independent consultant.
In 2015, FWC attended all Committee
meetings. FWC advises the Committee on all matters related to NEO and director
compensation and assists the Committee in interpreting its data as well as data
and recommendations received from the Company.
In 2015, the Company also engaged
Compensation Advisory Partners LLC (CAP), Shearman and Sterling, LLP (S&S)
and Towers Watson (TW) to assist management with various executive compensation
matters.
The Committee conducted an independence
review of FWC and each of CAP, S&S and TW pursuant to SEC and NYSE rules,
and concluded that the work of each firm for the Company did not raise any
conflicts of interest concerns. FWC provides no services to the Company other
than the services rendered to the Committee.
Role of Executive Management in the Executive Compensation
Process |
Cornings senior vice president (SVP),
Human Resources and SVP, Global Compensation and Benefits, working closely with
other members of Cornings Human Resources, Legal and Finance departments, are
responsible for designing and implementing executive compensation and discussing
significant proposals or topics impacting executive compensation at the Company
with the Committee. The SVP, Global Compensation and Benefits, formulates the
targeted total compensation recommendations for all of the NEOs (except the CEO)
and reviews the recommendations for each of the other NEOs with the CEO. The
NEOs do not recommend or suggest individual compensation actions that benefit
them personally.
The CEO may propose adjustments he
deems appropriate prior to submission to the Committee. Recommendations for the
CEOs compensation are prepared by the compensation consultant and are not
discussed or reviewed with the CEO prior to the Committees review and the CEO
is not present when the compensation consultant reviews the CEO compensation
recommendation with the Committee.
The Committee receives managements
recommendations for the compensation plan performance metrics and sets the final
targets for the year.
The CFO historically has attended the annual Committee
meeting to review the CD&A and to attend those portions of Committee
meetings where performance metrics are reviewed.
46 CORNING
INCORPORATED - 2016 Proxy Statement
Table of Contents
Compensation Discussion &
Analysis
Compensation
Risk Analysis |
In February 2016, the Committee
reviewed the conclusions of a risk assessment of our compensation policies and
practices covering all employees, which is conducted annually by a
cross-functional team with representatives from Human Resources, Legal and
Finance. The Committee evaluated the levels of risk-taking that potentially
could be encouraged by our compensation arrangements, taking into account the
arrangements risk-mitigation features, to determine whether they are
appropriate in the context of our strategic plan and annual budget, our overall
compensation arrangements, our compensation objectives and the Companys overall
risk profile. Identified risk-mitigation features included the
following:
● |
The mix of cash and equity payouts tied to both
short-term financial performance, mid-term financial performance and
long-term value creation; |
● |
The time vesting requirements in our long-term incentive
plans, which help align the interests of employees to shareholders;
|
● |
The use of financial performance metrics that are
readily monitored and reviewed; |
● |
The rigorous budget and goal setting processes that
involve both top-down and bottom-up analyses; |
● |
The use of common performance metrics for incentives
across Cornings management team and all eligible employees with corporate
results impacting the compensation of all Corning employees; |
● |
Rigorous goal setting in our annual incentive plan that
is intended to avoid imprudent risk-taking to achieving cliff goals;
|
● |
Capped payout levels for annual incentives, including
sales commission plans and cash performance unit awards; |
● |
Our robust stock ownership, clawback, anti-hedging and
anti-pledging policies for NEOs and other employees; and |
● |
Multiple levels of
review and approval of awards, including Committee approval of all officer
compensation proposals. |
The Committee concluded that we have a
balanced pay and performance executive compensation program that does not drive
excessive financial risk-taking. We believe that Corning does not use
compensation policies or practices that create risks that are reasonably likely
to have a material adverse effect on the Company.
We have a policy that gives the
Committee the sole and absolute discretion to make retroactive adjustments to
any cash or equity-based incentive compensation paid to certain executive
officers and other key employees where such payment was based upon the
achievement of certain financial results that were subsequently the subject of a
restatement. The Committee has discretion to seek recovery of any amount that it
determines was received inappropriately by these individuals.
We have a policy that prohibits any
employee or director from selling or buying publicly traded options on Corning
stock, or trading in any Corning stock derivatives. Additionally, these
individuals may not engage in transactions in which he or she may profit from
short-term speculative swings in the value of Corning stock utilizing short
sales or put or call options.
We have a policy that prohibits any
employee or director from holding Corning stock in a margin account or pledging
Company securities as collateral for a loan.
CORNING INCORPORATED - 2016 Proxy
Statement 47
Table of Contents
Compensation Discussion &
Analysis
Tax Deductibility of
Compensation |
In general, the Company intends to
structure its performance based incentives to qualify as deductible
performance-based compensation. However, the Committee maintains the flexibility
to pay incentive compensation or other compensation that does not meet the
requirements specified under Section 162(m) and is not deductible. The tax
deductibility of other components of compensation, including base salaries above
$1 million, time-based restricted stock units and the taxable value of executive
benefits and perquisites, is potentially limited under current tax rules. In
addition, for other compensation elements, there can be no guarantee that
performance-based compensation requirements for full deductibility will be met
in all instances and, therefore, the tax deductibility of these amounts may also
be limited.
In designing our compensation and
benefit programs, we review the accounting implications of our decisions. We
seek to deliver cost-effective compensation and benefit programs that meet both
the needs of the Company and our employees.
Compensation Committee Report
The Compensation Committee of the Board
of Directors (the Committee), which is composed entirely of independent
directors, is responsible to the Board of Directors and our shareholders for the
oversight and administration of executive compensation at Corning. The Committee
approves the principles guiding the Companys compensation philosophy, reviews
and approves executive compensation levels (including cash compensation, equity
incentives, benefits and perquisites for officers) and reports its actions to
the Board of Directors for review and, as necessary, approval. The Committee is
responsible for interpreting Cornings executive compensation plans and
programs. In the event of any questions or disputes, the Committee may use its
judgment and/or discretion to make final administrative decisions regarding
these plans and programs. It is our practice that all compensation decisions
affecting a corporate officer must be reviewed and approved by the Committee.
Additional details regarding the role and responsibilities of the Committee are
defined in the Committee Charter, located in the Corporate Governance section of
the Companys website.
The Committee has reviewed and
discussed the foregoing CD&A with management. Based on our review and
discussions with management, we recommended to the Board of Directors that the
CD&A be included in this proxy statement and in our Annual Report on Form
10-K for the year ended December 31, 2015.
The Compensation
Committee:
Deborah D. Rieman, Chair
Richard T.
Clark
Kurt M. Landgraf
Hansel E. Tookes II
48 CORNING
INCORPORATED - 2016 Proxy Statement
Table of Contents
Compensation Discussion &
Analysis
Compensation
Tables
2015 Summary
Compensation Table |
This table describes the total
compensation paid to our NEOs for fiscal years 2015, 2014 and 2013, as required.
The components of the total compensation are described in the footnotes below
and in more detail in the tables and narratives that follow. For information on
the role of each component of compensation, see the description
under Compensation Discussion and
Analysis.
|
(a) |
|
(b) |
|
(c) |
|
(d) |
|
(e)(1) |
|
|
(f)(2) |
|
(g)(3) |
|
(h)(4) |
(i)(5) |
|
(j) |
|
|
Named Executive
Officer |
|
Year |
|
Salary |
|
Bonus |
|
Stock Awards |
|
Option Awards |
|
Non-Equity Incentive
Plan Compensation |
|
Change
in Pension Value
And Nonqualified Deferred Compensation Earnings |
|
All
Other Compensation |
|
Total |
|
|
Wendell P. Weeks Chairman,
Chief Executive Officer
and President |
|
2015 |
|
$ |
1,353,096 |
|
$ |
0 |
|
$ |
1,999,990 |
|
$ |
1,116,499 |
|
|
$ |
4,407,018 |
|
|
|
$ |
1,306,544 |
|
|
|
$ |
255,841 |
|
|
$ |
10,438,988 |
|
|
2014 |
|
|
1,261,923 |
|
|
0 |
|
|
1,750,004 |
|
|
1,037,315 |
|
|
|
3,991,718 |
|
|
|
|
4,346,119 |
|
|
|
|
647,382 |
|
|
|
13,034,461 |
|
|
2013 |
|
|
1,223,615 |
|
|
0 |
|
|
1,750,002 |
|
|
1,747,499 |
|
|
|
5,717,784 |
|
|
|
|
0 |
|
|
|
|
774,963 |
|
|
|
11,213,864 |
|
|
James B. Flaws Vice Chairman and Chief
Financial Officer (retired) |
|
2015 |
|
|
942,454 |
|
|
0 |
|
|
874,994 |
|
|
488,468 |
|
|
|
1,942,341 |
|
|
|
|
0 |
|
|
|
|
261,375 |
|
|
|
4,509,632 |
|
|
2014 |
|
|
948,923 |
|
|
1,500,000 |
(6) |
|
875,002 |
|
|
518,653 |
|
|
|
1,979,218 |
|
|
|
|
1,648,692 |
|
|
|
|
222,897 |
|
|
|
7,693,385 |
|
|
2013 |
|
|
921,462 |
|
|
1,500,000 |
(6) |
|
874,995 |
|
|
873,749 |
|
|
|
2,848,929 |
|
|
|
|
0 |
|
|
|
|
233,943 |
|
|
|
7,253,077 |
|
|
R. Tony Tripeny Senior Vice President and
Chief Financial Officer |
|
2015 |
|
|
434,135 |
|
|
0 |
|
|
387,494 |
|
|
146,542 |
|
|
|
650,617 |
|
|
|
|
0 |
|
|
|
|
75,299 |
|
|
|
1,694,087 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James P. Clappin President, Corning Glass
Technologies |
|
2015 |
|
|
695,000 |
|
|
0 |
|
|
524,997 |
|
|
293,084 |
|
|
|
1,200,392 |
|
|
|
|
56,178 |
|
|
|
|
1,672,111 |
|
|
|
4,441,762 |
|
|
2014 |
|
|
641,692 |
|
|
0 |
|
|
710,592 |
|
|
296,377 |
|
|
|
1,137,400 |
|
|
|
|
1,423,940 |
|
|
|
|
1,848,935 |
|
|
|
6,058,936 |
|
|
Lawrence D.
McRae Vice Chairman and Corporate Development
Officer |
|
2015 |
|
|
713,173 |
|
|
0 |
|
|
587,488 |
|
|
300,063 |
|
|
|
1,245,685 |
|
|
|
|
0 |
|
|
|
|
77,177 |
|
|
|
2,923,586 |
|
|
2014 |
|
|
647,615 |
|
|
0 |
|
|
1,131,792 |
|
|
296,377 |
|
|
|
1,137,400 |
|
|
|
|
1,901,017 |
|
|
|
|
64,591 |
|
|
|
5,178,793 |
|
|
2013 |
|
|
626,769 |
|
|
0 |
|
|
499,995 |
|
|
499,287 |
|
|
|
1,630,367 |
|
|
|
|
0 |
|
|
|
|
75,261 |
|
|
|
3,331,679 |
|
|
Kirk P. Gregg Executive Vice President and
Chief Administrative Officer |
|
2015 |
|
|
715,212 |
|
|
0 |
|
|
500,003 |
|
|
279,127 |
|
|
|
1,191,580 |
|
|
|
|
0 |
|
|
|
|
145,577 |
|
|
|
2,831,499 |
|
|
|
2014 |
|
|
668,231 |
|
|
0 |
|
|
499,992 |
|
|
296,377 |
|
|
|
1,156,210 |
|
|
|
|
1,480,993 |
|
|
|
|
130,274 |
|
|
|
4,232,077 |
|
|
|
2013 |
|
|
648,769 |
|
|
0 |
|
|
499,995 |
|
|
499,287 |
|
|
|
1,649,030 |
|
|
|
|
0 |
|
|
|
|
118,071 |
|
|
|
3,415,151 |
|
(1) |
The amounts in column (e) reflect the aggregate grant date fair
value computed in accordance with FASB ASC Topic 718 of awards of
restricted stock units and restricted stock awards granted pursuant to the
2012 Long-Term Incentive Plan. In addition to our regular annual
restricted stock unit grants, Mr. Tripeny and Mr. McRae received a special
grant of 6,558 and 2,623 restricted shares, respectively, on July 15, 2015
to recognize their promotions to Chief Financial Officer and Vice
Chairman, respectively. Assumptions used in the calculation of these
amounts are included in Note 19 to the Companys audited financial
statements for the fiscal year ended December 31, 2015 included in the
Companys Annual Report on Form 10-K filed with the SEC on February 12,
2016. This same method was used for the fiscal years ended December 31,
2014 and 2013. There can be no assurance that the grant date fair value
amounts will ever be realized. Mr. Flaws 2015 RSU award is prorated for
time worked in 2015 (eleven months) prior to his retirement. |
(2) |
The amounts in column (f) reflect the aggregate grant date fair
value computed in accordance with FASB ASC Topic 718 of stock option
awards granted pursuant to the 2012 Long-Term Incentive Plan. Assumptions
used in the calculation of these amounts are included in Note 19 to the
Companys audited financial statements for the fiscal year ended December
31, 2015 included in the Companys Annual Report on Form 10-K filed with
the SEC on February 12, 2016. The grant date fair value amounts may never
be realized. |
CORNING INCORPORATED - 2016 Proxy
Statement 49
Table of Contents
Compensation Discussion &
Analysis
(3)
|
The amounts in column (g) reflect
the sum of annual short term incentive payments and earned cash
performance units. All of the annual cash bonuses paid to the NEOs are
performance-based. Cash bonuses are paid annually through two plans: (i)
GoalSharing; and (ii) the Performance Incentive Plan (PIP). Awards earned
under the 2015 GoalSharing plan were 5.69% of each NEOs year-end base
salary and paid in February 2016. Awards earned under the 2015 PIP were
based on actual corporate performance compared to the core EPS and core
net sales goals established for the plans in February 2015. Based on
actual performance, each of the NEOs earned PIP awards equal to 67% of
their annual target bonus opportunities (established as a percentage of
year-end base salary). Cash awards earned under the PIP for 2015 will be
paid in March 2016. |
|
The following table indicates awards earned under the GoalSharing
Plan and the PIP reflected in column (g)
above: |
Named Executive
Officer |
|
Year End
Base Salary |
|
2015 PIP
Target |
|
Actual 2015
PIP Performance Results (% Tgt.) |
|
2015 PIP $
Award |
|
Actual
2015 GoalSharing Performance |
|
2015 GoalSharing Award |
|
Wendell P. Weeks |
|
|
$ |
1,325,000 |
|
|
|
150% |
|
|
67% |
|
|
$ |
1,331,625 |
|
|
5.69% |
|
|
$ |
75,393 |
|
|
James
B. Flaws* |
|
|
|
993,000 |
|
|
|
90% |
|
|
67% |
|
|
|
548,881 |
|
|
5.69% |
|
|
|
51,793 |
|
|
R. Tony Tripeny |
|
|
|
500,000 |
|
|
|
63% |
|
|
67% |
|
|
|
212,167 |
|
|
5.69% |
|
|
|
28,450 |
|
|
James
P. Clappin |
|
|
|
680,000 |
|
|
|
75% |
|
|
67% |
|
|
|
341,700 |
|
|
5.69% |
|
|
|
38,692 |
|
|
Lawrence D. McRae |
|
|
|
725,000 |
|
|
|
77% |
|
|
67% |
|
|
|
374,432 |
|
|
5.69% |
|
|
|
41,253 |
|
|
Kirk P. Gregg |
|
|
|
700,000 |
|
|
|
75% |
|
|
67% |
|
|
|
351,750 |
|
|
5.69% |
|
|
|
39,830 |
|
|
* |
Mr. Flaws 2015 PIP and 2015 GoalSharing awards were
pro-rated for time worked in 2015 (eleven of twelve months). |
|
In addition to the 2015 PIP award and 2015 GoalSharing award noted
above, the amounts in column (g) also reflect the earned portion of CPU
Awards granted in 2015 and 2014 as long-term incentives which were based
on 2015 performance. 2015 CPU awards are based on actual corporate
performance compared to the established performance goals averaged over
three years (2015, 2016 and 2017). 2014 CPU Awards are based on actual
corporate performance compared to the established performance goals
averaged over three years (2014, 2015 and 2016). The metrics for 2015 were
adjusted operating cash flow (70%) and core net sales (30%). Targets for
2015 were established in February 2015 and targets for 2016 and 2017 are
yet to be established. While the final CPU earned award amount for both
2015 and 2014 is unknown, the table below reflects the target amount of
2014 and 2015 CPUs and the portion of the awards earned based on 2015
performance, which are reflected in column (g)
above. |
Named Executive
Officer |
|
2015
CPU Target Award |
|
2015
CPU Performance Results |
|
Prorated Earned 2015
CPU Award Based on 2015 Performance (Year One of
Three) |
|
2014 CPU Target
Amount |
|
Prorated Earned 2014
CPU Award Based on 2015 Performance (Year Two of
Three) |
|
Wendell P. Weeks |
|
|
$ |
4,800,000 |
|
|
100% |
|
|
$ |
1,600,000 |
|
|
|
$ |
4,200,000 |
|
|
|
$ |
1,400,000 |
|
|
James
B. Flaws* |
|
|
|
2,100,000 |
|
|
100% |
|
|
|
641,667 |
|
|
|
|
2,100,000 |
|
|
|
|
700,000 |
|
|
R. Tony Tripeny |
|
|
|
630,000 |
|
|
100% |
|
|
|
210,000 |
|
|
|
|
600,000 |
|
|
|
|
200,000 |
|
|
James
P. Clappin |
|
|
|
1,260,000 |
|
|
100% |
|
|
|
420,000 |
|
|
|
|
1,200,000 |
|
|
|
|
400,000 |
|
|
Lawrence D. McRae |
|
|
|
1,290,000 |
|
|
100% |
|
|
|
430,000 |
|
|
|
|
1,200,000 |
|
|
|
|
400,000 |
|
|
Kirk P. Gregg |
|
|
|
1,200,000 |
|
|
100% |
|
|
|
400,000 |
|
|
|
|
1,200,000 |
|
|
|
|
400,000 |
|
|
* |
Mr. Flaws 2015 CPU earned award will be pro-rated for time worked
in 2015 (eleven of twelve months) and paid out in February 2018 after the
final average performance is known. |
50 CORNING
INCORPORATED - 2016 Proxy Statement
Table of Contents
Compensation Discussion &
Analysis
(4) |
The amounts in column (h) reflect
the increase in the actuarial present value of the NEOs benefits under
all defined benefit pension plans established by the Company determined
using interest rate and mortality rate assumptions consistent with those
used in the Companys financial statements. Although column (h) is also
used to report the amount of above market earnings on compensation that is
deferred under the nonqualified deferred compensation plans, Corning does
not have any above market earnings under its nonqualified deferred
compensation plan, also referred to as the Supplemental Investment Plan.
In 2015, the discount rate used to value the actuarial liability increased
25 basis points from approximately 4.00% to 4.25%, resulting in a decrease
in the pension values of Messrs. Flaws, Tripeny, McRae and Gregg in the
amounts of -2,008,539, -76,753, -109,531 and -603,200, respectively.
Discount rate changes over the past several years have resulted in
significant year-to-year fluctuations in the present value of pension
benefits as shown below: |
Named Executive
Officer |
|
2015 Present Value
in Pension Benefits |
|
2014 Present Value
in Pension Benefits |
|
2013 Present Value
in Pension Benefits |
|
2012 Present Value
in Pension Benefits |
|
Wendell P. Weeks |
|
|
$ |
23,878,906 |
|
|
|
$ |
22,572,362 |
|
|
|
$ |
18,226,243 |
|
|
|
$ |
19,866,606 |
|
|
James
B. Flaws |
|
|
|
18,824,974 |
|
|
|
|
20,833,513 |
|
|
|
|
19,184,821 |
|
|
|
|
21,303,404 |
|
|
R. Tony Tripeny |
|
|
|
5,116,890 |
|
|
-----------------------------------------Not an NEO---------------------------------- |
|
|
James
P. Clappin |
|
|
|
8,690,064 |
|
|
|
|
8,633,886 |
|
------------------------ Not an
NEO--------------------- |
|
|
Lawrence D. McRae |
|
|
|
9,392,418 |
|
|
|
|
9,501,949 |
|
|
|
|
7,600,932 |
|
|
|
|
8,018,800 |
|
|
Kirk P. Gregg |
|
|
|
10,663,246 |
|
|
|
|
11,266,446 |
|
|
|
|
9,785,453 |
|
|
|
|
10,666,897 |
|
|
Valuation Discount
Rate |
|
|
|
4.25% |
|
|
|
|
4.00% |
|
|
|
|
4.75% |
|
|
|
|
3.75% |
|
|
(5) |
The following table shows All Other Compensation amounts provided
to the NEOs. Capped personal aircraft usage, financial counseling services
and home security are the only perquisites offered to the NEOs. The value
of the personal aircraft rights in the table reflects the incremental cost
of providing such perquisites and is calculated based on the average
variable operating costs to the Company. Hourly rates are developed using
variable operating costs that include fuel costs, mileage, maintenance,
crew travel expense, catering and other miscellaneous variable costs.
Fixed costs that do not change based on usage, such as pilot salaries,
hanger expense and general taxes and insurance are
excluded. |
Named Executive
Officer |
|
Year |
|
Company Match
on Qualified 401(k) Plan |
|
Company Match
on Supplemental Investment Plan |
|
Value
of Personal Aircraft Rights(i) |
|
Value
of Home Security Costs and
Financial Counseling(ii) |
|
Expatriate Benefits |
|
Other(iii) |
|
TOTALS |
|
Wendell P.
Weeks |
|
2015 |
|
|
$ |
9,880 |
|
|
|
$ |
73,674 |
|
|
$ |
83,804 |
|
|
$ |
80,639 |
(iv) |
|
|
|
$ |
0 |
|
|
|
$ |
7,844 |
|
|
|
$ |
255,841 |
|
|
|
|
2014 |
|
|
|
9,468 |
|
|
|
|
185,953 |
|
|
|
62,221 |
|
|
|
384,422 |
(iv) |
|
|
|
|
0 |
|
|
|
|
5,319 |
|
|
|
|
647,382 |
|
|
|
|
2013 |
|
|
|
9,468 |
|
|
|
|
200,144 |
|
|
|
56,143 |
|
|
|
502,938 |
(iv) |
|
|
|
|
0 |
|
|
|
|
6,270 |
|
|
|
|
774,963 |
|
|
James B.
Flaws |
|
2015 |
|
|
|
14,820 |
|
|
|
|
113,055 |
|
|
|
101,084 |
|
|
|
12,776 |
|
|
|
|
|
0 |
|
|
|
|
19,640 |
|
|
|
|
261,375 |
|
|
|
|
2014 |
|
|
|
14,203 |
|
|
|
|
102,527 |
|
|
|
86,877 |
|
|
|
11,472 |
|
|
|
|
|
0 |
|
|
|
|
7,819 |
|
|
|
|
222,897 |
|
|
|
|
2013 |
|
|
|
14,203 |
|
|
|
|
108,853 |
|
|
|
91,592 |
|
|
|
11,472 |
|
|
|
|
|
0 |
|
|
|
|
7,823 |
|
|
|
|
233,943 |
|
|
R. Tony Tripeny |
|
2015 |
|
|
|
4,800 |
|
|
|
|
24,154 |
|
|
|
4,553 |
|
|
|
40,250 |
|
|
|
|
|
0 |
|
|
|
|
1,542 |
|
|
|
|
75,299 |
|
|
James P.
Clappin |
|
2015 |
|
|
|
7,410 |
|
|
|
|
75,854 |
|
|
|
52,796 |
|
|
|
342 |
|
|
|
|
|
1,525,614 |
(v) |
|
|
|
10,095 |
|
|
|
|
1,672,111 |
|
|
|
|
2014 |
|
|
|
7,101 |
|
|
|
|
60,889 |
|
|
|
43,097 |
|
|
|
0 |
|
|
|
|
|
1,720,103 |
(v) |
|
|
|
17,745 |
|
|
|
|
1,848,935 |
|
|
Lawrence D.
McRae |
|
2015 |
|
|
|
16,364 |
|
|
|
|
0 |
|
|
|
45,693 |
|
|
|
14,776 |
|
|
|
|
|
0 |
|
|
|
|
344 |
|
|
|
|
77,177 |
|
|
|
|
2014 |
|
|
|
16,055 |
|
|
|
|
0 |
|
|
|
36,745 |
|
|
|
11,472 |
|
|
|
|
|
0 |
|
|
|
|
319 |
|
|
|
|
64,591 |
|
|
|
|
2013 |
|
|
|
15,746 |
|
|
|
|
0 |
|
|
|
47,719 |
|
|
|
11,472 |
|
|
|
|
|
0 |
|
|
|
|
324 |
|
|
|
|
75,261 |
|
|
Kirk P.
Gregg |
|
2015 |
|
|
|
10,600 |
|
|
|
|
26,888 |
|
|
|
69,029 |
|
|
|
27,776 |
|
|
|
|
|
0 |
|
|
|
|
11,284 |
|
|
|
|
145,577 |
|
|
|
|
2014 |
|
|
|
10,222 |
|
|
|
|
38,868 |
|
|
|
69,393 |
|
|
|
11,472 |
|
|
|
|
|
0 |
|
|
|
|
319 |
|
|
|
|
130,274 |
|
|
|
|
2013 |
|
|
|
10,200 |
|
|
|
|
41,161 |
|
|
|
54,913 |
|
|
|
11,472 |
|
|
|
|
|
0 |
|
|
|
|
324 |
|
|
|
|
118,071 |
|
|
|
(i) |
In 2015, aircraft usage was tracked from December
1 to November 30. |
|
(ii) |
Beginning in October 2015, NEOs may use their executive
allowance for residential security or financial counseling services.
Overall allowance maximums were not adjusted with this program change.
Messrs. Tripeny, McRae and Gregg used a portion of their 2015 allowance
for financial planning and these amounts of $40,250, $2,000 and $15,000,
respectively, are included in this column. |
|
(iii) |
These amounts include costs attributable to executive
physicals, including associated travel costs, an annual Board gift, and
contributions made under the Corning Incorporated Foundation Matching Gift
Program. |
|
(iv) |
This reflects Company-paid expenses relating to personal
and residential security benefitting Mr. Weeks and, through association,
his family. Beginning late in 2014, these costs declined significantly
from the levels of prior years. Mr. Weeks personal safety and security
are of vital importance to the Companys business and prospects, and the
Board considers these costs and the associated expense reduction program
to be appropriate. However, because these costs can be viewed as conveying
a personal benefit to Mr. Weeks, they are reported as perquisites in this
column. |
|
(v) |
This reflects expenses pursuant to our standard global
mobility program in connection with Mr. Clappins assignment in Tokyo,
Japan as President, Corning Glass Technologies. Amounts listed for 2015
include standard expatriate benefits related to housing related costs
($184,382), cost of living related allowances ($93,358), home leave
($32,496), as well as tax equalization and host country tax payments
($1,215,379). Tax equalization expenses arise from additional taxes
payable in respect of Mr. Clappins compensation as a result of his
residency in Japan as well as U.S. taxation. The policies in our global
mobility program are designed to enable us to relocate talent where needed
throughout our global business. |
(6) |
Mr. Flaws was paid a retention payment of $1.5 million in each of
2013 and 2014 for his agreement to stay at the Company past his
anticipated retirement date to allow for staggered NEO retirements and
successions. |
CORNING INCORPORATED - 2016 Proxy
Statement 51
Table of Contents
Compensation Discussion &
Analysis
2015 Grants of
Plan Based Awards |
|
|
|
|
|
|
|
|
Estimated Future Payouts
Under Non-Equity Incentive Plan Awards |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
|
|
(b) |
|
(c) |
|
(d)(1) |
|
(e)(1) |
|
(f)(1) |
|
(g) |
|
(h) |
|
(i) |
|
(j) |
|
(k) |
|
Named
Executive Officer |
|
Award |
|
Grant Date |
|
Date
of Committee Action |
|
Threshold |
|
Target |
|
Maximum |
|
All
Other Stock Awards: Number of Shares of Stock
or Units |
|
All Other Option Awards: Number
of Securities Underlying Options |
|
Exercise or
Base Price of Option Awards |
|
Closing Market Price on Date
of Grant |
|
Grant Date Fair Value of Stock and Option Awards |
|
Wendell
P. |
|
Performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weeks |
|
Incentive
Plan |
|
n/a |
|
|
|
|
$
|
0 |
|
|
$ |
1,987,500 |
|
$ |
3,975,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GoalSharing Plan |
|
n/a |
|
|
|
|
|
0 |
|
|
|
66,250 |
|
|
132,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units |
|
2/4/15 |
|
2/4/15 |
|
|
|
0 |
|
|
|
4,800,000 |
|
|
7,200,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time-Based |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units |
|
3/31/15 |
|
2/4/15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
88,183 |
|
|
|
|
|
|
|
|
22.68 |
|
$ |
1,999,990 |
(2) |
|
|
|
Stock
Options |
|
3/31/15 |
|
2/4/15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44,092 |
|
|
22.68 |
|
22.68 |
|
$ |
383,103 |
(3) |
|
|
|
Stock Options |
|
4/30/15 |
|
2/4/15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
47,778 |
|
|
20.93 |
|
20.93 |
|
$ |
366,698 |
(3) |
|
|
|
Stock Options |
|
5/29/15 |
|
2/4/15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
47,801 |
|
|
20.92 |
|
20.92 |
|
$ |
366,699 |
(3) |
|
James B. |
|
Performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Flaws |
|
Incentive Plan |
|
n/a |
|
|
|
|
|
0 |
|
|
|
893,700 |
|
|
1,787,400 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GoalSharing
Plan |
|
n/a |
|
|
|
|
|
0 |
|
|
|
49,650 |
|
|
99,300 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units |
|
2/4/15 |
|
2/4/15 |
|
|
|
0 |
|
|
|
2,100,000 |
|
|
3,150,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time-Based |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted
Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units |
|
3/31/15 |
|
2/4/15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
38,580 |
|
|
|
|
|
|
|
|
22.68 |
|
|
874,994 |
(2) |
|
|
|
Stock Options |
|
3/31/15 |
|
2/4/15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,290 |
|
|
22.68 |
|
22.68 |
|
|
167,605 |
(3) |
|
|
|
Stock
Options |
|
4/30/15 |
|
2/4/15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,903 |
|
|
20.93 |
|
20.93 |
|
|
160,431 |
(3) |
|
|
|
Stock Options |
|
5/29/15 |
|
2/4/15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,913 |
|
|
20.92 |
|
20.92 |
|
|
160,431 |
(3) |
|
R. Tony |
|
Performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tripeny |
|
Incentive
Plan |
|
n/a |
|
|
|
|
|
0 |
|
|
|
316,667 |
|
|
633,333 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GoalSharing Plan |
|
n/a |
|
|
|
|
|
0 |
|
|
|
25,000 |
|
|
50,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units |
|
2/4/15 |
|
2/4/15 |
|
|
|
0 |
|
|
|
630,000 |
|
|
945,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time-Based |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards |
|
7/15/15 |
|
7/15/15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
6,558 |
|
|
|
|
|
|
|
|
19.06 |
|
|
124,995 |
(4) |
|
|
|
Time-Based |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted
Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units |
|
3/31/15 |
|
2/4/15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
11,574 |
|
|
|
|
|
|
|
|
22.68 |
|
|
262,498 |
(2) |
|
|
|
Stock Options |
|
3/31/15 |
|
2/4/15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,787 |
|
|
22.68 |
|
22.68 |
|
|
50,282 |
(3) |
|
|
|
Stock
Options |
|
4/30/15 |
|
2/4/15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,271 |
|
|
20.93 |
|
20.93 |
|
|
48,130 |
(3) |
|
|
|
Stock Options |
|
5/29/15 |
|
2/4/15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,274 |
|
|
20.92 |
|
20.92 |
|
|
48,130 |
(3) |
|
James P. |
|
Performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Clappin |
|
Incentive
Plan |
|
n/a |
|
|
|
|
|
0 |
|
|
|
510,000 |
|
|
1,020,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GoalSharing Plan |
|
n/a |
|
|
|
|
|
0 |
|
|
|
34,000 |
|
|
68,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units |
|
2/4/15 |
|
2/4/15 |
|
|
|
0 |
|
|
|
1,260,000 |
|
|
1,890,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time-Based |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units |
|
3/31/15 |
|
2/4/15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
23,148 |
|
|
|
|
|
|
|
|
22.68 |
|
|
524,997 |
(2) |
|
|
|
Stock
Options |
|
3/31/15 |
|
2/4/15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,574 |
|
|
22.68 |
|
22.68 |
|
|
100,563 |
(3) |
|
|
|
Stock Options |
|
4/30/15 |
|
2/4/15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,542 |
|
|
20.93 |
|
20.93 |
|
|
96,260 |
(3) |
|
|
|
Stock Options |
|
5/29/15 |
|
2/4/15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,548 |
|
|
20.92 |
|
20.92 |
|
|
96,260 |
(3) |
|
52 CORNING
INCORPORATED - 2016 Proxy Statement
Table of Contents
Compensation Discussion &
Analysis
|
|
|
|
|
|
|
|
Estimated Future Payouts
Under Non-Equity Incentive Plan Awards |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
|
|
(b) |
|
(c) |
|
(d)(1) |
|
(e)(1) |
|
(f)(1) |
|
(g) |
|
(h) |
|
(i) |
|
(j) |
|
(k) |
|
Named
Executive Officer |
|
Award |
|
Grant Date |
|
Date
of Committee Action |
|
Threshold |
|
Target |
|
Maximum |
|
All
Other Stock Awards: Number of Shares of Stock
or Units |
|
All Other Option Awards: Number
of Securities Underlying Options |
|
Exercise or
Base Price of Option Awards |
|
Closing Market Price
on Date of Grant |
|
Grant Date Fair Value of Stock and
Option Awards |
|
Lawrence
D. |
|
Performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
McRae |
|
Incentive Plan |
|
n/a |
|
|
|
|
|
0 |
|
|
$ |
558,854 |
|
$ |
1,117,708 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GoalSharing
Plan |
|
n/a |
|
|
|
|
|
0 |
|
|
|
36,250 |
|
|
72,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units |
|
2/4/15 |
|
2/4/15 |
|
|
|
0 |
|
|
|
1,290,000 |
|
|
1,935,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time-Based |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted
Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards |
|
7/15/15 |
|
7/15/15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
2,623 |
|
|
|
|
|
|
|
|
19.06 |
|
|
49,994 |
(4) |
|
|
|
Time-Based |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units |
|
3/31/15 |
|
2/4/15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
23,699 |
|
|
|
|
|
|
|
|
22.68 |
|
|
537,493 |
(2) |
|
|
|
Stock
Options |
|
3/31/15 |
|
2/4/15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,850 |
|
|
22.68 |
|
22.68 |
|
|
102,961 |
(3) |
|
|
|
Stock Options |
|
4/30/15 |
|
2/4/15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,840 |
|
|
20.93 |
|
20.93 |
|
|
98,547 |
(3) |
|
|
|
Stock Options |
|
5/29/15 |
|
2/4/15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,847 |
|
|
20.92 |
|
20.92 |
|
|
98,554 |
(3) |
|
Kirk P.
Gregg |
|
Performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive Plan |
|
n/a |
|
|
|
|
|
0 |
|
|
$ |
525,000 |
|
$ |
1,050,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GoalSharing
Plan |
|
n/a |
|
|
|
|
|
0 |
|
|
|
35,000 |
|
|
70,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units |
|
2/4/15 |
|
2/4/15 |
|
|
|
0 |
|
|
|
1,200,000 |
|
|
1,800,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time-Based |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted
Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units |
|
3/31/15 |
|
2/4/15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
22,046 |
|
|
|
|
|
|
|
|
22.68 |
|
|
500,003 |
(2) |
|
|
|
Stock Options |
|
3/31/15 |
|
2/4/15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,023 |
|
|
22.68 |
|
22.68 |
|
|
95,776 |
(3) |
|
|
|
Stock
Options |
|
4/30/15 |
|
2/4/15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,945 |
|
|
20.93 |
|
20.93 |
|
|
91,678 |
(3) |
|
|
|
Stock Options |
|
5/29/15 |
|
2/4/15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,950 |
|
|
20.92 |
|
20.92 |
|
|
91,673 |
(3) |
|
(1) |
The amounts shown in columns (d), (e) and (f) reflect the award
amounts under (i) the Companys 2015 Performance Incentive Plan (PIP) (ii)
2015 GoalSharing Plan and (iii) the Cash Performance Units granted in 2015
as long-term incentives. Awards under these plans are paid in cash. If the
threshold level of performance is not met the payout will be 0%. If the
target level of performance is met, the payout is 100% of the target
award. If the maximum level of performance is met for GoalSharing and PIP
the payout is 200% of the target award, and 150% for CPUs. PIP and
GoalSharing are based on the individuals 2015 bonus target, year-end base
salary, and actual performance results. Actual awards earned for CPUs are
based on average performance over three performance years (2015, 2016,
2017) and will be payable in February 2018. |
(2) |
This amount reflects the total grant date fair value computed in
accordance with FASB ASC Topic 718 of stock awards granted in 2015 as
long-term incentives, and, after considering footnote (4) below,
corresponds to the amounts set forth in column (e) for 2015 of the Summary
Compensation Table. Stock awards vest 100% three years after grant
date. |
(3) |
These amounts reflect the total grant date fair value computed in
accordance with FASB ASC Topic 718 of stock options granted in 2015 as
long-term incentives, and corresponds to the amounts set forth in column
(f) for 2015 of the Summary Compensation Table. Stock options vest 100%
three years after grant date. |
(4) |
Mr. Tripeny and Mr. McRae each received a special grant of
restricted stock on July 15, 2015 to recognize their promotions to Chief
Financial Officer and Vice Chairman, respectively, which will vest 100%
three years after grant date. |
CORNING INCORPORATED - 2016 Proxy
Statement 53
Table of Contents
Compensation Discussion &
Analysis
Outstanding
Equity Awards at 2015 Fiscal Year-End |
The following table shows stock option
awards classified as exercisable and unexercisable as of December 31, 2015. The
table also shows unvested restricted stock and restricted stock unit awards
assuming a market value of $18.28 a share (the NYSE closing price of the
Companys stock on December 31, 2015).
|
Option Awards |
|
Stock Awards |
|
|
(a) |
|
|
|
|
|
|
(b) |
|
(c) |
|
(d) |
|
(e) |
|
(f)(2) |
|
(g)(3)
|
|
|
Named Executive Officer |
|
|
Grant Date |
|
Vesting Code(1) |
|
Number of Securities
Underlying Unexercised Options Exercisable |
|
Number of Securities
Underlying Unexercised Options Unexercisable |
|
Option Exercise
Price |
|
Option Expiration Date |
|
Number of Shares or
Units of Stock That Have Not Vested |
|
Market Value of Shares or
Units of Stock That Have Not Vested |
|
|
Wendell P.
Weeks |
|
|
02/01/06 |
|
C |
|
|
80,750 |
|
|
|
0 |
|
|
|
24.72 |
|
|
1/31/2016 |
|
|
294,279 |
|
|
|
$ |
5,379,420 |
|
|
|
|
|
|
12/06/06 |
|
A |
|
|
136,500 |
|
|
|
0 |
|
|
|
21.89 |
|
|
12/5/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01/02/07 |
|
B |
|
|
68,250 |
|
|
|
0 |
|
|
|
18.85 |
|
|
1/1/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/01/07 |
|
C |
|
|
68,250 |
|
|
|
0 |
|
|
|
20.86 |
|
|
1/31/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/05/07 |
|
A |
|
|
153,500 |
|
|
|
0 |
|
|
|
24.92 |
|
|
12/4/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01/02/08 |
|
B |
|
|
76,750 |
|
|
|
0 |
|
|
|
23.37 |
|
|
1/1/2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/01/08 |
|
C |
|
|
76,750 |
|
|
|
0 |
|
|
|
24.61 |
|
|
1/31/2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/02/09 |
|
D |
|
|
65,333 |
|
|
|
0 |
|
|
|
17.82 |
|
|
12/2/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01/04/10 |
|
D |
|
|
65,333 |
|
|
|
0 |
|
|
|
19.56 |
|
|
1/4/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/01/10 |
|
D |
|
|
65,334 |
|
|
|
0 |
|
|
|
18.16 |
|
|
2/1/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01/03/11 |
|
D |
|
|
67,551 |
|
|
|
0 |
|
|
|
19.19 |
|
|
1/3/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/01/11 |
|
D |
|
|
57,131 |
|
|
|
0 |
|
|
|
22.69 |
|
|
2/1/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
03/01/11 |
|
D |
|
|
58,842 |
|
|
|
0 |
|
|
|
22.03 |
|
|
3/1/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01/03/12 |
|
C |
|
|
111,835 |
|
|
|
0 |
|
|
|
13.04 |
|
|
1/3/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/01/12 |
|
C |
|
|
113,049 |
|
|
|
0 |
|
|
|
12.90 |
|
|
2/1/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
03/01/12 |
|
C |
|
|
112,439 |
|
|
|
0 |
|
|
|
12.97 |
|
|
3/1/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
03/28/13 |
|
C |
|
|
0 |
|
|
|
125,031 |
|
|
|
13.33 |
|
|
3/28/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
04/30/13 |
|
C |
|
|
0 |
|
|
|
114,943 |
|
|
|
14.50 |
|
|
4/30/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
05/31/13 |
|
C |
|
|
0 |
|
|
|
108,436 |
|
|
|
15.37 |
|
|
5/31/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
03/31/14 |
|
C |
|
|
0 |
|
|
|
42,027 |
|
|
|
20.82 |
|
|
3/31/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
04/30/14 |
|
C |
|
|
0 |
|
|
|
41,846 |
|
|
|
20.91 |
|
|
4/30/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
05/30/14 |
|
C |
|
|
0 |
|
|
|
41,080 |
|
|
|
21.30 |
|
|
5/30/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
03/31/15 |
|
C |
|
|
0 |
|
|
|
44,092 |
|
|
|
22.68 |
|
|
3/31/2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
04/30/15 |
|
C |
|
|
0 |
|
|
|
47,778 |
|
|
|
20.93 |
|
|
4/30/2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
05/29/15 |
|
C |
|
|
0 |
|
|
|
47,801 |
|
|
|
20.92 |
|
|
5/29/2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
1,377,597 |
|
|
|
613,034 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54 CORNING
INCORPORATED - 2016 Proxy Statement
Table of Contents
Compensation Discussion &
Analysis
|
Option Awards |
|
Stock Awards |
|
|
(a) |
|
|
|
|
|
|
(b) |
|
(c) |
|
(d) |
|
(e) |
|
(f)(2) |
|
(g)(3)
|
|
|
Named Executive Officer |
|
|
Grant Date |
|
Vesting Code(1) |
|
Number of Securities
Underlying Unexercised Options Exercisable |
|
Number of Securities
Underlying Unexercised Options Unexercisable |
|
Option Exercise
Price |
|
Option Expiration Date |
|
Number of Shares or
Units of Stock That Have Not Vested |
|
Market Value of Shares or
Units of Stock That Have Not Vested |
|
|
James B.
Flaws |
|
|
02/01/06 |
|
C |
|
|
38,500 |
|
|
|
0 |
|
|
|
24.72 |
|
|
1/31/2016 |
|
|
0 |
(4) |
|
|
$ |
0 |
|
|
|
|
|
|
12/05/07 |
|
A |
|
|
72,000 |
|
|
|
0 |
|
|
|
24.92 |
|
|
12/4/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01/02/08 |
|
B |
|
|
36,000 |
|
|
|
0 |
|
|
|
23.37 |
|
|
1/1/2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/01/08 |
|
C |
|
|
36,000 |
|
|
|
0 |
|
|
|
24.61 |
|
|
1/31/2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01/03/11 |
|
D |
|
|
30,880 |
|
|
|
0 |
|
|
|
19.19 |
|
|
1/3/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/01/11 |
|
D |
|
|
26,117 |
|
|
|
0 |
|
|
|
22.69 |
|
|
2/1/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
03/01/11 |
|
D |
|
|
26,899 |
|
|
|
0 |
|
|
|
22.03 |
|
|
3/1/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
03/01/12 |
|
C |
|
|
56,219 |
|
|
|
0 |
|
|
|
12.97 |
|
|
3/1/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
03/28/13 |
|
C |
|
|
0 |
|
|
|
62,516 |
|
|
|
13.33 |
|
|
3/28/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
04/30/13 |
|
C |
|
|
0 |
|
|
|
57,471 |
|
|
|
14.50 |
|
|
4/30/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
05/31/13 |
|
C |
|
|
0 |
|
|
|
54,218 |
|
|
|
15.37 |
|
|
5/31/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
03/31/14 |
|
C |
|
|
0 |
|
|
|
21,013 |
|
|
|
20.82 |
|
|
3/31/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
04/30/14 |
|
C |
|
|
0 |
|
|
|
20,923 |
|
|
|
20.91 |
|
|
4/30/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
05/30/14 |
|
C |
|
|
0 |
|
|
|
20,540 |
|
|
|
21.30 |
|
|
5/30/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
03/31/15 |
|
C |
|
|
0 |
|
|
|
19,290 |
|
|
|
22.68 |
|
|
3/31/2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
04/30/15 |
|
C |
|
|
0 |
|
|
|
20,903 |
|
|
|
20.93 |
|
|
4/30/2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
05/29/15 |
|
C |
|
|
0 |
|
|
|
20,913 |
|
|
|
20.92 |
|
|
5/29/2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
322,615 |
|
|
|
297,787 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CORNING INCORPORATED - 2016 Proxy
Statement 55
Table of Contents
Compensation Discussion &
Analysis
|
Option Awards |
|
Stock Awards |
|
|
(a) |
|
|
|
|
|
|
(b) |
|
(c) |
|
(d) |
|
(e) |
|
(f)(2) |
|
(g)(3)
|
|
|
Named Executive Officer |
|
|
Grant Date |
|
Vesting Code(1) |
|
Number of Securities
Underlying Unexercised Options Exercisable |
|
Number of Securities
Underlying Unexercised Options Unexercisable |
|
Option Exercise
Price |
|
Option Expiration Date |
|
Number of Shares or
Units of Stock That Have Not Vested |
|
Market Value of Shares
or Units of Stock That Have Not Vested |
|
|
R. Tony
Tripeny |
|
|
02/01/06 |
|
C |
|
|
8,000 |
|
|
|
0 |
|
|
|
24.72 |
|
|
1/31/2016 |
|
|
45,640 |
|
|
|
$ |
834,299 |
|
|
|
|
|
|
12/06/06 |
|
A |
|
|
15,000 |
|
|
|
0 |
|
|
|
21.89 |
|
|
12/5/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01/02/07 |
|
B |
|
|
7,500 |
|
|
|
0 |
|
|
|
18.85 |
|
|
1/1/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/01/07 |
|
C |
|
|
7,500 |
|
|
|
0 |
|
|
|
20.86 |
|
|
1/31/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/05/07 |
|
A |
|
|
16,500 |
|
|
|
0 |
|
|
|
24.92 |
|
|
12/4/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01/02/08 |
|
B |
|
|
8,250 |
|
|
|
0 |
|
|
|
23.37 |
|
|
1/1/2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/01/08 |
|
C |
|
|
8,250 |
|
|
|
0 |
|
|
|
24.61 |
|
|
1/31/2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/03/08 |
|
D |
|
|
32,666 |
|
|
|
0 |
|
|
|
8.67 |
|
|
12/2/2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01/02/09 |
|
D |
|
|
32,667 |
|
|
|
0 |
|
|
|
10.05 |
|
|
1/1/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/02/09 |
|
D |
|
|
32,667 |
|
|
|
0 |
|
|
|
10.25 |
|
|
2/1/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12/02/09 |
|
D |
|
|
8,333 |
|
|
|
0 |
|
|
|
17.82 |
|
|
12/2/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01/04/10 |
|
D |
|
|
8,333 |
|
|
|
0 |
|
|
|
19.56 |
|
|
1/4/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/01/10 |
|
D |
|
|
8,334 |
|
|
|
0 |
|
|
|
18.16 |
|
|
2/1/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01/03/11 |
|
D |
|
|
7,720 |
|
|
|
0 |
|
|
|
19.19 |
|
|
1/3/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/01/11 |
|
D |
|
|
6,529 |
|
|
|
0 |
|
|
|
22.69 |
|
|
2/1/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
03/01/11 |
|
D |
|
|
6,725 |
|
|
|
0 |
|
|
|
22.03 |
|
|
3/1/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
01/03/12 |
|
C |
|
|
14,379 |
|
|
|
0 |
|
|
|
13.04 |
|
|
1/3/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/01/12 |
|
C |
|
|
14,535 |
|
|
|
0 |
|
|
|
12.90 |
|
|
2/1/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
03/01/12 |
|
C |
|
|
14,456 |
|
|
|
0 |
|
|
|
12.97 |
|
|
3/1/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
03/28/13 |
|
C |
|
|
0 |
|
|
|
16,075 |
|
|
|
13.33 |
|
|
3/28/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
04/30/13 |
|
C |
|
|
0 |
|
|
|
14,778 |
|
|
|
14.50 |
|
|
4/30/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
05/31/13 |
|
C |
|
|
0 |
|
|
|
13,942 |
|
|
|
15.37 |
|
|
5/31/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
03/31/14 |
|
C |
|
|
0 |
|
|
|
6,004 |
|
|
|
20.82 |
|
|
3/31/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
04/30/14 |
|
C |
|
|
0 |
|
|
|
5,978 |
|
|
|
20.91 |
|
|
4/30/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
05/30/14 |
|
C |
|
|
0 |
|
|
|
5,869 |
|
|
|
21.30 |
|
|
5/30/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
03/31/15 |
|
C |
|
|
0 |
|
|
|
5,787 |
|
|
|
22.68 |
|
|
3/31/2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
04/30/15 |
|
C |
|
|
0 |
|
|
|
6,271 |
|
|
|
20.93 |
|
|
4/30/2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
05/29/15 |
|
C |
|
|
0 |
|
|
|
6,274 |
|
|
|
20.92 |
|
|
5/29/2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
258,344 |
|
|
|
80,978 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
56 CORNING
INCORPORATED - 2016 Proxy Statement
Table of Contents
Compensation Discussion &
Analysis
|
Option
Awards |
|
Stock
Awards |
|
|
(a) |
|
|
|
|
|
(b) |
|
(c) |
|
(d) |
|
(e) |
|
(f)(2) |
|
(g)(3) |
|
|
Named Executive Officer |
|
Grant Date |
|
Vesting Code(1) |
|
Number
of Securities Underlying Unexercised Options
Exercisable |
|
Number
of Securities Underlying Unexercised
Options Unexercisable |
|
Option Exercise Price ($) |
|
Option Expiration Date |
|
Number of Shares or Units of Stock That Have Not
Vested |
|
Market Value of Shares
or Units of Stock That Have Not Vested |
|
|
James P.
Clappin |
|
02/01/06 |
|
C |
|
|
16,250 |
|
|
|
0 |
|
|
|
24.72 |
|
|
1/31/2016 |
|
82,751 |
|
|
$ |
1,512,688 |
|
|
|
|
|
12/06/06 |
|
A |
|
|
30,000 |
|
|
|
0 |
|
|
|
21.89 |
|
|
12/5/2016 |
|
|
|
|
|
|
|
|
|
|
|
01/02/07 |
|
B |
|
|
15,000 |
|
|
|
0 |
|
|
|
18.85 |
|
|
1/1/2017 |
|
|
|
|
|
|
|
|
|
|
|
02/01/07 |
|
C |
|
|
15,000 |
|
|
|
0 |
|
|
|
20.86 |
|
|
1/31/2017 |
|
|
|
|
|
|
|
|
|
|
|
07/18/07 |
|
A |
|
|
500 |
|
|
|
0 |
|
|
|
26.73 |
|
|
7/17/2017 |
|
|
|
|
|
|
|
|
|
|
|
12/05/07 |
|
A |
|
|
32,000 |
|
|
|
0 |
|
|
|
24.92 |
|
|
12/4/2017 |
|
|
|
|
|
|
|
|
|
|
|
01/02/08 |
|
B |
|
|
16,000 |
|
|
|
0 |
|
|
|
23.37 |
|
|
1/1/2018 |
|
|
|
|
|
|
|
|
|
|
|
02/01/08 |
|
C |
|
|
16,000 |
|
|
|
0 |
|
|
|
24.61 |
|
|
1/31/2018 |
|
|
|
|
|
|
|
|
|
|
|
12/02/09 |
|
D |
|
|
14,666 |
|
|
|
0 |
|
|
|
17.82 |
|
|
12/2/2019 |
|
|
|
|
|
|
|
|
|
|
|
01/04/10 |
|
D |
|
|
14,667 |
|
|
|
0 |
|
|
|
19.56 |
|
|
1/4/2020 |
|
|
|
|
|
|
|
|
|
|
|
02/01/10 |
|
D |
|
|
14,667 |
|
|
|
0 |
|
|
|
18.16 |
|
|
2/1/2020 |
|
|
|
|
|
|
|
|
|
|
|
01/03/11 |
|
D |
|
|
15,440 |
|
|
|
0 |
|
|
|
19.19 |
|
|
1/3/2021 |
|
|
|
|
|
|
|
|
|
|
|
02/01/11 |
|
D |
|
|
13,058 |
|
|
|
0 |
|
|
|
22.69 |
|
|
2/1/2021 |
|
|
|
|
|
|
|
|
|
|
|
03/01/11 |
|
D |
|
|
13,450 |
|
|
|
0 |
|
|
|
22.03 |
|
|
3/1/2021 |
|
|
|
|
|
|
|
|
|
|
|
01/03/12 |
|
C |
|
|
25,562 |
|
|
|
0 |
|
|
|
13.04 |
|
|
1/3/2022 |
|
|
|
|
|
|
|
|
|
|
|
02/01/12 |
|
C |
|
|
25,840 |
|
|
|
0 |
|
|
|
12.90 |
|
|
2/1/2022 |
|
|
|
|
|
|
|
|
|
|
|
03/01/12 |
|
C |
|
|
25,700 |
|
|
|
0 |
|
|
|
12.97 |
|
|
3/1/2022 |
|
|
|
|
|
|
|
|
|
|
|
03/28/13 |
|
C |
|
|
0 |
|
|
|
28,579 |
|
|
|
13.33 |
|
|
3/28/2023 |
|
|
|
|
|
|
|
|
|
|
|
04/30/13 |
|
C |
|
|
0 |
|
|
|
26,273 |
|
|
|
14.50 |
|
|
4/30/2023 |
|
|
|
|
|
|
|
|
|
|
|
05/31/13 |
|
C |
|
|
0 |
|
|
|
24,785 |
|
|
|
15.37 |
|
|
5/31/2023 |
|
|
|
|
|
|
|
|
|
|
|
03/31/14 |
|
C |
|
|
0 |
|
|
|
12,008 |
|
|
|
20.82 |
|
|
3/31/2024 |
|
|
|
|
|
|
|
|
|
|
|
04/30/14 |
|
C |
|
|
0 |
|
|
|
11,956 |
|
|
|
20.91 |
|
|
4/30/2024 |
|
|
|
|
|
|
|
|
|
|
|
05/30/14 |
|
C |
|
|
0 |
|
|
|
11,737 |
|
|
|
21.30 |
|
|
5/30/2024 |
|
|
|
|
|
|
|
|
|
|
|
3/31/2015 |
|
C |
|
|
0 |
|
|
|
11,574 |
|
|
|
22.68 |
|
|
3/31/2025 |
|
|
|
|
|
|
|
|
|
|
|
4/30/2015 |
|
C |
|
|
0 |
|
|
|
12,542 |
|
|
|
20.93 |
|
|
4/30/2025 |
|
|
|
|
|
|
|
|
|
|
|
5/29/2015 |
|
C |
|
|
0 |
|
|
|
12,548 |
|
|
|
20.92 |
|
|
5/29/2025 |
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
303,800 |
|
|
|
152,002 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CORNING INCORPORATED - 2016 Proxy
Statement 57
Table of Contents
Compensation Discussion &
Analysis
|
Option Awards |
|
Stock Awards |
|
|
(a) |
|
|
|
|
|
(b) |
|
(c) |
|
(d) |
|
(e) |
|
(f)(2) |
|
(g)(3) |
|
|
Named Executive Officer |
|
Grant Date |
|
Vesting Code(1) |
|
Number of Securities
Underlying Unexercised Options Exercisable |
|
Number of Securities
Underlying Unexercised
Options Unexercisable |
|
Option Exercise Price ($) |
|
Option Expiration Date |
|
Number of Shares or
Units of Stock That Have Not Vested |
|
Market Value of Shares or
Units of Stock That Have Not Vested |
|
|
Lawrence D.
McRae |
|
01/02/06 |
|
B |
|
|
11,250 |
|
|
|
0 |
|
|
|
19.68 |
|
|
1/1/2016 |
|
108,933 |
|
|
$ |
1,991,295 |
|
|
|
|
|
02/01/06 |
|
C |
|
|
11,250 |
|
|
|
0 |
|
|
|
24.72 |
|
|
1/31/2016 |
|
|
|
|
|
|
|
|
|
|
|
12/06/06 |
|
A |
|
|
21,000 |
|
|
|
0 |
|
|
|
21.89 |
|
|
12/5/2016 |
|
|
|
|
|
|
|
|
|
|
|
01/02/07 |
|
B |
|
|
10,500 |
|
|
|
0 |
|
|
|
18.85 |
|
|
1/1/2017 |
|
|
|
|
|
|
|
|
|
|
|
02/01/07 |
|
C |
|
|
10,500 |
|
|
|
0 |
|
|
|
20.86 |
|
|
1/31/2017 |
|
|
|
|
|
|
|
|
|
|
|
12/05/07 |
|
A |
|
|
25,000 |
|
|
|
0 |
|
|
|
24.92 |
|
|
12/4/2017 |
|
|
|
|
|
|
|
|
|
|
|
01/02/08 |
|
B |
|
|
12,500 |
|
|
|
0 |
|
|
|
23.37 |
|
|
1/1/2018 |
|
|
|
|
|
|
|
|
|
|
|
02/01/08 |
|
C |
|
|
12,500 |
|
|
|
0 |
|
|
|
24.61 |
|
|
1/31/2018 |
|
|
|
|
|
|
|
|
|
|
|
02/02/09 |
|
D |
|
|
34,000 |
|
|
|
0 |
|
|
|
10.25 |
|
|
2/1/2019 |
|
|
|
|
|
|
|
|
|
|
|
12/02/09 |
|
D |
|
|
15,333 |
|
|
|
0 |
|
|
|
17.82 |
|
|
12/2/2019 |
|
|
|
|
|
|
|
|
|
|
|
01/04/10 |
|
D |
|
|
15,333 |
|
|
|
0 |
|
|
|
19.56 |
|
|
1/4/2020 |
|
|
|
|
|
|
|
|
|
|
|
02/01/10 |
|
D |
|
|
15,334 |
|
|
|
0 |
|
|
|
18.16 |
|
|
2/1/2020 |
|
|
|
|
|
|
|
|
|
|
|
01/03/11 |
|
D |
|
|
16,888 |
|
|
|
0 |
|
|
|
19.19 |
|
|
1/3/2021 |
|
|
|
|
|
|
|
|
|
|
|
02/01/11 |
|
D |
|
|
14,283 |
|
|
|
0 |
|
|
|
22.69 |
|
|
2/1/2021 |
|
|
|
|
|
|
|
|
|
|
|
03/01/11 |
|
D |
|
|
14,711 |
|
|
|
0 |
|
|
|
22.03 |
|
|
3/1/2021 |
|
|
|
|
|
|
|
|
|
|
|
01/03/12 |
|
C |
|
|
31,953 |
|
|
|
0 |
|
|
|
13.04 |
|
|
1/3/2022 |
|
|
|
|
|
|
|
|
|
|
|
02/01/12 |
|
C |
|
|
32,300 |
|
|
|
0 |
|
|
|
12.90 |
|
|
2/1/2022 |
|
|
|
|
|
|
|
|
|
|
|
03/01/12 |
|
C |
|
|
32,125 |
|
|
|
0 |
|
|
|
12.97 |
|
|
3/1/2022 |
|
|
|
|
|
|
|
|
|
|
|
03/28/13 |
|
C |
|
|
0 |
|
|
|
35,723 |
|
|
|
13.33 |
|
|
3/28/2023 |
|
|
|
|
|
|
|
|
|
|
|
04/30/13 |
|
C |
|
|
0 |
|
|
|
32,841 |
|
|
|
14.50 |
|
|
4/30/2023 |
|
|
|
|
|
|
|
|
|
|
|
05/31/13 |
|
C |
|
|
0 |
|
|
|
30,982 |
|
|
|
15.37 |
|
|
5/31/2023 |
|
|
|
|
|
|
|
|
|
|
|
03/31/14 |
|
C |
|
|
0 |
|
|
|
12,008 |
|
|
|
20.82 |
|
|
3/31/2024 |
|
|
|
|
|
|
|
|
|
|
|
04/30/14 |
|
C |
|
|
0 |
|
|
|
11,956 |
|
|
|
20.91 |
|
|
4/30/2024 |
|
|
|
|
|
|
|
|
|
|
|
05/30/14 |
|
C |
|
|
0 |
|
|
|
11,737 |
|
|
|
21.30 |
|
|
5/30/2024 |
|
|
|
|
|
|
|
|
|
|
|
3/31/2015 |
|
C |
|
|
0 |
|
|
|
11,850 |
|
|
|
22.68 |
|
|
3/31/2025 |
|
|
|
|
|
|
|
|
|
|
|
4/30/2015 |
|
C |
|
|
0 |
|
|
|
12,840 |
|
|
|
20.93 |
|
|
4/30/2025 |
|
|
|
|
|
|
|
|
|
|
|
5/29/2015 |
|
C |
|
|
0 |
|
|
|
12,847 |
|
|
|
20.92 |
|
|
5/29/2025 |
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
336,760 |
|
|
|
172,784 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
58 CORNING INCORPORATED
-
2016 Proxy Statement
Table of Contents
Compensation Discussion &
Analysis
|
Option Awards |
|
Stock Awards |
|
|
(a) |
|
|
|
|
|
(b) |
|
(c) |
|
(d) |
|
(e) |
|
(f)(2) |
|
(g)(3) |
|
|
Named Executive Officer |
|
Grant Date |
|
Vesting Code(1) |
|
Number of Securities
Underlying Unexercised Options Exercisable |
|
Number of Securities
Underlying Unexercised
Options Unexercisable |
|
Option Exercise Price ($) |
|
Option Expiration Date |
|
Number of Shares or
Units of Stock That Have Not Vested |
|
Market Value of Shares or
Units of Stock That Have Not Vested |
|
|
Kirk P. Gregg |
|
02/01/06 |
|
C |
|
|
29,250 |
|
|
|
0 |
|
|
|
24.72 |
|
|
1/31/2016 |
|
80,697 |
|
|
$ |
1,475,141 |
|
|
|
|
|
12/06/06 |
|
A |
|
|
48,000 |
|
|
|
0 |
|
|
|
21.89 |
|
|
12/5/2016 |
|
|
|
|
|
|
|
|
|
|
|
01/02/07 |
|
B |
|
|
24,000 |
|
|
|
0 |
|
|
|
18.85 |
|
|
1/1/2017 |
|
|
|
|
|
|
|
|
|
|
|
02/01/07 |
|
C |
|
|
24,000 |
|
|
|
0 |
|
|
|
20.86 |
|
|
1/31/2017 |
|
|
|
|
|
|
|
|
|
|
|
12/05/07 |
|
A |
|
|
51,000 |
|
|
|
0 |
|
|
|
24.92 |
|
|
12/4/2017 |
|
|
|
|
|
|
|
|
|
|
|
01/02/08 |
|
B |
|
|
25,500 |
|
|
|
0 |
|
|
|
23.37 |
|
|
1/1/2018 |
|
|
|
|
|
|
|
|
|
|
|
02/01/08 |
|
C |
|
|
25,500 |
|
|
|
0 |
|
|
|
24.61 |
|
|
1/31/2018 |
|
|
|
|
|
|
|
|
|
|
|
12/02/09 |
|
D |
|
|
21,666 |
|
|
|
0 |
|
|
|
17.82 |
|
|
12/2/2019 |
|
|
|
|
|
|
|
|
|
|
|
01/04/10 |
|
D |
|
|
21,667 |
|
|
|
0 |
|
|
|
19.56 |
|
|
1/4/2020 |
|
|
|
|
|
|
|
|
|
|
|
02/01/10 |
|
D |
|
|
21,667 |
|
|
|
0 |
|
|
|
18.16 |
|
|
2/1/2020 |
|
|
|
|
|
|
|
|
|
|
|
01/03/11 |
|
D |
|
|
19,300 |
|
|
|
0 |
|
|
|
19.19 |
|
|
1/3/2021 |
|
|
|
|
|
|
|
|
|
|
|
02/01/11 |
|
D |
|
|
16,323 |
|
|
|
0 |
|
|
|
22.69 |
|
|
2/1/2021 |
|
|
|
|
|
|
|
|
|
|
|
03/01/11 |
|
D |
|
|
16,812 |
|
|
|
0 |
|
|
|
22.03 |
|
|
3/1/2021 |
|
|
|
|
|
|
|
|
|
|
|
03/01/12 |
|
C |
|
|
32,125 |
|
|
|
0 |
|
|
|
12.97 |
|
|
3/1/2022 |
|
|
|
|
|
|
|
|
|
|
|
03/28/13 |
|
C |
|
|
0 |
|
|
|
35,723 |
|
|
|
13.33 |
|
|
3/28/2023 |
|
|
|
|
|
|
|
|
|
|
|
04/30/13 |
|
C |
|
|
0 |
|
|
|
32,841 |
|
|
|
14.50 |
|
|
4/30/2023 |
|
|
|
|
|
|
|
|
|
|
|
05/31/13 |
|
C |
|
|
0 |
|
|
|
30,982 |
|
|
|
15.37 |
|
|
5/31/2023 |
|
|
|
|
|
|
|
|
|
|
|
3/31/2014 |
|
C |
|
|
0 |
|
|
|
12,008 |
|
|
|
20.82 |
|
|
3/31/2024 |
|
|
|
|
|
|
|
|
|
|
|
4/30/2014 |
|
C |
|
|
0 |
|
|
|
11,956 |
|
|
|
20.91 |
|
|
4/30/2024 |
|
|
|
|
|
|
|
|
|
|
|
5/30/2014 |
|
C |
|
|
0 |
|
|
|
11,737 |
|
|
|
21.30 |
|
|
5/30/2024 |
|
|
|
|
|
|
|
|
|
|
|
3/31/2015 |
|
C |
|
|
0 |
|
|
|
11,023 |
|
|
|
22.68 |
|
|
3/31/2025 |
|
|
|
|
|
|
|
|
|
|
|
4/30/2015 |
|
C |
|
|
0 |
|
|
|
11,945 |
|
|
|
20.93 |
|
|
4/30/2025 |
|
|
|
|
|
|
|
|
|
|
|
5/29/2015 |
|
C |
|
|
0 |
|
|
|
11,950 |
|
|
|
20.92 |
|
|
5/29/2025 |
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
376,810 |
|
|
|
170,165 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The Company uses the following vesting
codes |
|
|
A |
|
100% vesting one year after grant
date |
|
|
B |
|
100% vesting two years after grant
date |
|
|
C |
|
100% vesting three years after grant
date |
|
|
D |
|
1/3 vesting one year after grant date,
1/3 vesting two years after grant date and 1/3 vesting three years after
grant Date |
(2) |
|
Amounts include: |
|
|
i. |
|
125,207; 16,249; 28,414; and 35,739 restricted share units granted
to Messrs. Weeks, Tripeny, Clappin, and McRae, respectively, on March 28,
2013, which vest on April 18, 2016; and 35,773 restricted share units
granted to Mr. Gregg on March 28, 2013 which vest on January 1, 2016 as a
result of his retirement on December 31, 2015. |
|
|
ii. |
|
80,889; 11,259; 23,189; and 22,872 restricted share units granted
to Messrs. Weeks, Tripeny, Clappin, and McRae, respectively, on March 31,
2014, which vest on April 17, 2017; and 22,878 restricted share units
granted to Mr. Gregg on March 31, 2014 which vest on January 1, 2016 as a
result of his retirement on December 31, 2015. Also included are 8,000 and
24,000 unvested restricted shares granted to Mr. Clappin and Mr. McRae,
respectively, on February 5, 2014, which will partially vest on February
5, 2016, and fully vest on February 5, 2017. |
|
|
iii. |
|
88,183; 11,574; 23,148; and 23,699 restricted share units granted
to Messrs. Weeks, Tripeny, Clappin, and McRae, respectively, on March 31,
2015, which vest on April 16, 2018; and 22,046 restricted share units
granted to Mr. Gregg on March 31, 2015 which will vest on January 1, 2016
as a result of his retirement. Mr. McRae was granted 2,623 restricted
shares of our common stock on July 15, 2015, which will vest on July 15,
2018 as a result of his promotion to Vice Chairman. Mr. Tripeny was
granted 6,558 restricted shares of our common stock on July 15, 2015,
which will vest on July 15, 2018 as a result of his promotion to Chief
Financial Officer. |
(3) |
|
Year-end market price is based on the
December 31, 2015 NYSE closing price of $18.28. |
(4) |
|
Mr. Flaws retired on November 30, 2015.
Per the terms of the respective RSU and restricted share agreements,
unvested stock units granted prior to 2015 vested on December 1, 2015;
RSUs granted in 2015 vested on December 1, 2015 on a prorated
basis. |
|
CORNING INCORPORATED - 2016 Proxy
Statement 59
Table of Contents
Compensation Discussion &
Analysis
Option Exercises and Shares
Vested in 2015 |
The following table sets forth certain
information regarding options exercised and restricted stock that vested during
2015 for the NEOs.
|
|
|
Option Awards |
|
Stock Awards |
|
|
Named Executive Officer |
|
Number of Shares Acquired
on Exercise |
|
Value Realized on
Exercise |
|
Number of Shares Acquired
on Vesting |
|
Value Realized on
Vesting |
|
|
Wendell P.
Weeks |
|
|
242,250 |
|
|
|
$ |
797,424 |
|
|
|
131,154 |
|
|
|
$ |
3,221,356 |
|
|
|
James B. Flaws |
|
|
451,943 |
|
|
|
|
2,829,709 |
|
|
|
204,479 |
|
|
|
|
4,226,651 |
|
|
|
R. Tony
Tripeny |
|
|
24,000 |
|
|
|
|
84,424 |
|
|
|
17,360 |
|
|
|
|
425,865 |
|
|
|
James P. Clappin |
|
|
48,750 |
|
|
|
|
181,804 |
|
|
|
33,852 |
|
|
|
|
830,966 |
|
|
|
Lawrence D.
McRae |
|
|
17,000 |
|
|
|
|
242,903 |
|
|
|
49,627 |
|
|
|
|
1,217,567 |
|
|
|
Kirk P. Gregg |
|
|
152,003 |
|
|
|
|
1,012,661 |
|
|
|
37,706 |
|
|
|
|
925,760 |
|
|
Retirement Plans
Corning maintains a qualified defined
benefit pension plan to provide retirement income to Cornings U.S.-based
employees which was amended effective July 1, 2000, to include a cash balance
component. All salaried and non-union hourly employees as of July 1, 2000, were
given a choice to prospectively accrue benefits under the previously existing
career average earnings formula or a cash balance formula, if so elected.
Employees hired subsequent to July 1, 2000, earn benefits solely under the cash
balance formula.
Benefits earned under the career
average earnings formula are equal to 1.5% of plan compensation plus 0.5% of
plan compensation on which employee contributions have been made. Under the
career average earnings formula, participants may retire as early as age 55 with
5 years of service. Unreduced benefits are available when a participant attains
the earlier of age 60 with 5 years of service or age 55 with 30 years of
service. Otherwise, benefits are reduced 4% for each year by which retirement
precedes the attainment of age 60. Pension benefits earned under the career
average earnings formula are distributed in the form of a lifetime annuity with
six years of payments guaranteed.
Benefits earned under the cash balance
formula are expressed in the form of a hypothetical account balance. Each month
a participants cash balance account is increased by (1) pay credits based on
the participants plan compensation for that month and (2) interest credits
based on the participants hypothetical account balance at the end of the prior
month. Pay credits vary between 3% and 8% based on the participants age plus
service at the end of the year. Interest credits are based on 10-year Treasury
bond yields, subject to a minimum credit of 3.80%. Pension benefits under the
cash balance formula may be distributed as either a lump sum of the
participants hypothetical account balance or an actuarial equivalent life
annuity.
Mr. Weeks, Mr. McRae and Mr. Clappin
are earning benefits under the career average earnings formula. Mr. Flaws earned
benefits under the career average earnings formula through November 30, 2015.
Mr. Gregg earned benefits under the career average earnings formula up to
December 31, 2000, and earned benefits under the cash balance formula from
January 1, 2001 through December 31, 2015. Mr. Tripeny is earning benefits under
the cash balance formula. All of the active NEOs are currently eligible to
retire under the plan.
Supplemental Pension Plan and
Executive Supplemental Pension Plan |
Since 1986, Corning has maintained
nonqualified pension plans to attract and retain its executive workforce by
providing eligible employees with retirement benefits in excess of those
permitted under the qualified plans. The benefits provided under the
Supplemental Pension Plan (SPP) are equal to the difference between the benefits
provided under the Corning Incorporated Pension Plan and benefits that would
have been provided thereunder if not for the limitations of the Employee
Retirement Income Security Act of 1974, as amended, and the Internal Revenue
Code of 1986, as amended (the Code).
Each NEO participates in the Corning
Incorporated Executive Supplemental Pension Plan (ESPP). Participants in the
ESPP receive no benefits from the SPP, other than earned SPP benefits under the
cash balance formula prior to their participation in the ESPP. Executives fully
vest in their ESPP benefit upon attainment of age 50 with 10 years of service.
All NEOs are fully vested in the ESPP.
Under the ESPP, participants earn
benefits based on the highest 60 consecutive months of average plan compensation
over the last 120 months immediately preceding the date of termination of
employment.
A change in the benefits provided under
the ESPP formula was approved in December 2006. Subsequent to the change, gross
benefits determined under this plan are equal to one of two benefit formulas:
Formula A: 2.0% of average plan compensation multiplied by years of service up
to 25 years.
Formula B: 1.5% of average plan
compensation multiplied by years of service.
60 CORNING INCORPORATED - 2016 Proxy
Statement
Table of Contents
Compensation Discussion &
Analysis
Benefits are determined under Formula B
for Mr. Flaws and Formula A for all other NEOs.
Benefits earned under the Corning
Incorporated Pension Plan and the cash balance formula of the SPP prior to ESPP
participation will offset benefits earned under the ESPP.
Participants may retire as early as age
55 with 10 years of service. Unreduced benefits under Formulas A and B are
available when a participant attains the earlier of age 60 with 10 years of
service or age 55 with 25 years of service, provided their accrued benefit is
less than four times the annual compensation limitation under Section 401(a)(17)
of the Code ($1,060,000 in 2015). Participants with accrued benefits in excess
of four times the annual compensation limitation under Section 401(a)(17) of the
Code must be age 57 with 25 years of service to receive an unreduced benefit
under the SPP. Otherwise, benefits are reduced 4% for each year by which
retirement precedes the attainment of age 60. Benefit reductions of 1% per year
by which retirement precedes age 57 apply if the
four-times-annual-compensation-limit rule noted above is in effect for the
participant.
Benefits earned under the ESPP are
distributed in the form of a lifetime annuity, with six years of payments
guaranteed except for benefits earned under the cash balance formula of the SPP
prior to becoming a participant in the ESPP, which is distributed as a lump sum
of the participants hypothetical account balance.
Under Mr. Flaws written agreement,
Corning will purchase a life annuity from an insurance company to pay benefits
due under this plan. All of the active NEOs are currently eligible to retire
under the plan.
The table below shows the actuarial
present value of accumulated benefits payable to each of the NEOs, including the
number of years of service credited to each such NEO, under the qualified
pension plan and the ESPP. These amounts were determined using interest rate and
mortality rate assumptions consistent with those used in the Companys financial
statements with the exception of the assumed retirement age and the assumed
probabilities of leaving employment prior to retirement. Retirement was assumed
to occur at the earliest possible unreduced retirement age for each plan in
which the executive participates. For purposes of determining the earliest
unreduced retirement age, service was assumed to be granted until the actual
date of retirement. For example, an executive under the ESPP formula who is age
50 with 20 years of service would be assumed to retire at age 55 due to
eligibility of unreduced benefits at 25 years of service or age 57, if the four
times annual compensation limit rule noted previously applies. No termination,
disability or death was assumed to occur prior to retirement. Otherwise, the
assumptions used are described in Note 13 to our Financial Statements for the
year ended December 31, 2015, of our Annual Report on Form 10-K filed with the
SEC on February 12, 2016. Information regarding the qualified pension plan can
be found under the heading Qualified Pension Plan.
|
Named Executive Officer |
|
Plan Name |
|
Number of
Years Credited Service |
|
Present Value of Accumulated
Benefit |
|
Payments During Last Fiscal
Year |
|
|
Wendell P.
Weeks |
|
Qualified Pension Plan |
|
|
33 |
|
|
|
|
$ |
1,853,401 |
|
|
|
|
$ |
0 |
|
|
|
|
|
ESPP |
|
|
25 |
(1) |
|
|
|
|
22,025,505 |
(4) |
|
|
|
|
0 |
|
|
|
James B.
Flaws |
|
Qualified Pension Plan |
|
|
42 |
|
|
|
|
|
2,243,802 |
|
|
|
|
|
0 |
|
|
|
|
|
ESPP |
|
|
42 |
(2) |
|
|
|
|
16,581,172 |
(4) |
|
|
|
|
0 |
|
|
|
R. Tony
Tripeny |
|
Qualified Pension Plan |
|
|
30 |
|
|
|
|
|
252,421 |
|
|
|
|
|
0 |
|
|
|
|
|
ESPP |
|
|
25 |
(1) |
|
|
|
|
4,864,469 |
|
|
|
|
|
0 |
|
|
|
James P.
Clappin |
|
Qualified Pension Plan |
|
|
36 |
|
|
|
|
|
1,336,967 |
|
|
|
|
|
0 |
|
|
|
|
|
ESPP |
|
|
25 |
(1) |
|
|
|
|
7,353,097 |
|
|
|
|
|
0 |
|
|
|
Lawrence D.
McRae |
|
Qualified Pension Plan |
|
|
30 |
|
|
|
|
|
1,529,665 |
|
|
|
|
|
0 |
|
|
|
|
|
ESPP |
|
|
25 |
(1) |
|
|
|
|
7,862,753 |
|
|
|
|
|
0 |
|
|
|
Kirk P.
Gregg |
|
Qualified Pension Plan |
|
|
22 |
|
|
|
|
|
1,026,083 |
|
|
|
|
|
0 |
|
|
|
|
|
ESPP |
|
|
25 |
(3) |
|
|
|
|
9,637,163 |
|
|
|
|
|
0 |
|
|
(1) |
|
Under Formula A, years of service are
capped at 25 years, in determining benefits under the ESPP. |
(2) |
|
Under Formula B, years of service are
uncapped with a formula of 1.5% per year in determining benefits under the
ESPP. |
(3) |
|
Mr. Greggs 1993 employment letter,
as amended in 2002, provides for nine extra years of benefit service under
the ESPP for retirement on or after age 55. Because of the 25-year cap on
service under Formula A, implemented after Mr. Gregg was hired, Mr. Gregg
will receive only three additional years of service credit, worth
approximately $995,000. Additional years of service credit have not been
provided to senior executives since this adjustment in 2002. |
(4) |
|
Both Mr. Weeks and Mr. Flaws
accrued benefit exceeds four times the annual compensation limitation
under Section 401(a)(17) of the Code (currently $1,060,000). As a result,
Mr. Weeks must be age 57 to receive an unreduced pension benefit. Mr.
Flaws is eligible to receive an unreduced pension
benefit. |
CORNING INCORPORATED - 2016 Proxy
Statement 61
Table of Contents
Compensation Discussion &
Analysis
The compensation covered by the
qualified pension plan and the ESPP for the NEOs is the Salary plus the
GoalSharing and PIP cash bonuses set forth in the Summary Compensation Table.
Bonuses are included as compensation in the calendar year paid. Long-term cash
or equity incentives are not (and have never been) considered as eligible
earnings for determining retirement benefits under these plans. For the 2015
calendar year, the NEOs eligible earnings and final average compensation were as
follows:
|
|
As of December 31,
2015 |
|
|
Named Executive Officer |
Eligible
Pension Earnings |
|
Final
Average Earnings |
|
|
Wendell P. Weeks |
|
$ |
3,650,814 |
|
|
$ |
3,004,453 |
|
|
James B.
Flaws |
|
|
2,074,672 |
|
|
|
1,909,896 |
|
|
R. Tony Tripeny |
|
|
723,860 |
|
|
|
658,409 |
|
|
James P.
Clappin |
|
|
1,348,400 |
|
|
|
1,110,770 |
|
|
Lawrence D. McRae |
|
|
1,366,573 |
|
|
|
1,175,372 |
|
|
Kirk P. Gregg |
|
|
1,387,422 |
|
|
|
1,299,870 |
|
Nonqualified Deferred
Compensation
The table below shows the
contributions, earnings and account balances for the NEOs in the Supplemental
Investment Plan. Pursuant to the Companys Supplemental Investment Plan, the
NEOs may choose to defer up to 75% of annual base salary and up to 75% of
GoalSharing and PIP cash bonuses. The participant chooses from the same funds
available under our Company Investment Plan (401(k)) in which to invest the
deferred amounts. No cash is actually invested in the unfunded accounts under
the Supplemental Investment Plan. Deferred amounts incur gains and losses based
on the performance of the individual participants investment fund selections.
Participants may change their elections among these fund options. All of our
current NEOs have more than three years with the Company, so all of the
Companys matching contributions are fully vested. Participants cannot withdraw
any amounts from their deferred compensation balances until retirement from the
Company at or after age 55 with 5 years of service. Participants may elect to
receive distributions as a lump sum payment or two to five annual installments.
If an NEO leaves the Company prior to retirement, the account balance is
distributed in a lump sum six-months following the executives
departure.
No NEO withdrawals or distributions
were made in 2015.
|
Named Executive Officer |
|
Aggregate Balance at
January 1, 2015 |
|
Executive Contributions in 2015(1) |
|
Company Contributions in
2015(2) |
|
Aggregate Earnings in 2015(3) |
|
Aggregate Withdrawals/ Distributions in
2015 |
|
Aggregate Balance as
of December 31, 2015 |
|
|
Wendell P. Weeks |
|
|
$ |
4,692,344 |
|
|
|
$ |
71,586 |
|
|
|
|
$ |
73,674 |
|
|
|
$ |
-86,115 |
|
|
|
$ |
0 |
|
|
|
$ |
4,751,488 |
|
|
|
James B.
Flaws |
|
|
|
5,027,794 |
|
|
|
|
204,765 |
|
|
|
|
|
113,055 |
|
|
|
|
-49,356 |
|
|
|
|
0 |
|
|
|
|
5,296,258 |
|
|
|
R. Tony Tripeny |
|
|
|
1,468,553 |
|
|
|
|
120,772 |
|
|
|
|
|
24,154 |
|
|
|
|
-10,056 |
|
|
|
|
0 |
|
|
|
|
1,603,423 |
|
|
|
James P.
Clappin |
|
|
|
2,811,712 |
|
|
|
|
311,020 |
|
|
|
|
|
75,854 |
|
|
|
|
-20,927 |
|
|
|
|
0 |
|
|
|
|
3,177,658 |
|
|
|
Lawrence D. McRae |
|
|
|
0 |
|
|
|
|
0 |
|
|
|
|
|
0 |
|
|
|
|
0 |
|
|
|
|
0 |
|
|
|
|
0 |
|
|
|
Kirk P. Gregg |
|
|
|
2,428,171 |
|
|
|
|
40,333 |
|
|
|
|
|
26,888 |
|
|
|
|
10,534 |
|
|
|
|
0 |
|
|
|
|
2,505,925 |
|
|
(1) |
|
Reflects participation in the Supplemental Investment
Plan by Messrs. Weeks, Flaws, Tripeny, Clappin and Gregg in the deferral
of a portion of their 2015 base salaries and participation by Messrs.
Weeks, Flaws, Tripeny, Clappin, and Gregg in the deferral of a portion of
the bonus received in 2015 for prior year performance. The NEOs
contributions are included in the Summary Compensation Table, as a part of
Salary and/or Non-Equity Incentive Plan Compensation. |
(2) |
|
Reflects the Company match on the Supplemental
Investment Plan which was credited to the account of the NEOs in 2015. All
of these amounts are included in the All Other Compensation column of the
Summary Compensation Table (and are also detailed in footnote (4) to that
Table). |
(3) |
|
Reflects aggregate earnings on each type of deferred
compensation listed above. The earnings on deferred base salary and bonus
payments are calculated based on the actual returns from the same fund
choices that Company employees have in the qualified 401(k) plan.
Currently, employees have 14 fund choices that they may select from. As
nonqualified plans, these plans are unfunded which means that no actual
dollars are invested in these funds. The Company does not provide any
above market interest rates or other special terms for any deferred
amounts. These amounts are not included in the Change in Pension Value
column of the Summary Compensation
Table. |
62 CORNING INCORPORATED - 2016 Proxy
Statement
Table of Contents
Compensation Discussion &
Analysis
Arrangements with Named Executive
Officers
We have entered into severance
agreements with each of our NEOs. Effective for all new executive severance
agreements and executive change-in-control agreements entered into after July
2004, the Compensation Committee and Board of Directors approved a policy to
limit benefits that may be provided to an executive under any new agreement to
2.99 times the executives annual compensation of base salary plus target
incentive payments. Messrs. Weeks, Clappin and McRae have agreements which were
in effect prior to July 2004. Mr. Tripeny has a severance agreement dated as of
January 1, 2015. The agreements of Mr. Flaws and Mr. Gregg became null and void
as of their retirement dates, November 30, 2015 and December 31, 2015,
respectively.
Severance AgreementsMr.
Weeks |
Under Mr. Weeks severance agreement,
if he is terminated involuntarily, and without cause, or as a result of
disability, he is entitled to the following:
● |
Base salary,
reimbursable expenses and annual bonus accrued and owing as of the date of
termination (lump sum payment); |
● |
A severance amount equal to 2.99 times his then-base
salary plus an annual bonus amount (calculated at 100% of target that
would have been paid for the fiscal year in
which the termination occurs) (lump sum payment); |
● |
Continued participation in the Companys benefit plans
for up to three years; and |
● |
In the calendar year following the year in which the
termination occurs (subject to a six-month waiting period), the purchase
of his principal residence by the Company
upon request. |
If however, Mr. Weeks is terminated for
cause or he resigns, he would (1) be entitled to accrued, but unpaid salary
(lump sum payment) and any reimbursable expenses accrued or owing to him and (2)
forfeit any outstanding stock awards.
Severance AgreementsOther
Named Executive Officers |
Under the severance agreements, an NEO
is entitled to severance payments if he is terminated involuntarily other than
for cause.
Generally, under the severance agreements, an NEO (other than Mr.
Weeks) is entitled to receive the following:
● |
Accrued but unpaid base
salary, reimbursable expenses, vacation pay and the executives target
percentage for the annual bonus plans multiplied by the executives salary, pro-rated to the last day of the
month closest to the termination date (lump sum payment); |
● |
A severance amount equal to two times the executives
then base salary plus an annual bonus amount (an amount equal to
executives salary multiplied by the
executives target percentage in effect on the termination date under the
Companys Performance Incentive Plan and 5% target under the GoalSharing Plan) (lump sum payment); |
● |
Continued medical, dental and hospitalization benefits
for 24 months; |
● |
In the calendar year following the year in which the
termination occurs (subject to a six-month waiting period), the purchase
of his principal residence by the Company
upon request; and |
● |
Outplacement benefits up to a maximum amount of
$50,000. |
CORNING INCORPORATED - 2016 Proxy Statement
63
Table of Contents
Compensation Discussion &
Analysis
The following table reflects the
amounts that would be payable under the various arrangements assuming
termination occurred at December 31, 2015.
|
Termination Scenarios (Including Severance, if
eligible) |
|
|
Named Executive Officer |
|
|
|
Voluntary(1) |
|
For Cause |
|
Death |
|
Disability(1) |
|
Without Cause |
|
|
Wendell P.
Weeks |
|
Severance Amount |
|
$ |
n/a |
|
$ |
n/a |
|
$ |
n/a |
|
$ |
n/a |
|
$ |
10,102,463 |
|
|
|
|
|
Value of Benefits Continuation |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
68,019 |
(2) |
|
|
|
|
Value of Outplacement
Services |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
|
|
|
|
|
|
Purchase of Principal Residence |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
250,000 to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000,000 |
(3) |
|
|
|
|
Pension Non-Qualified
Annuity |
|
|
1,382,275 |
|
|
0 |
|
|
1,185,882 |
|
|
1,389,222 |
|
|
1,382,275 |
|
|
|
|
|
Pension - Non-Qualified Lump Sum |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
|
|
|
Pension-Qualified Annuity |
|
|
113,399 |
|
|
113,399 |
|
|
56,700 |
|
|
113,399 |
|
|
113,399 |
|
|
|
James B.
Flaws(4) |
|
Severance Amount |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
|
|
|
Value of Benefits
Continuation |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
|
|
|
Value of Outplacement Services |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
|
|
|
Purchase of Principal
Residence |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
|
|
|
Pension Non-Qualified Annuity |
|
|
799,353 |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
|
|
|
Pension - Non-Qualified
Lump Sum |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
|
|
|
Pension-Qualified Annuity |
|
|
136,329 |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
|
R. Tony
Tripeny |
|
Severance Amount |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
1,750,000 |
|
|
|
|
|
Value of Benefits Continuation |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
45,346 |
(2) |
|
|
|
|
Value of Outplacement
Services |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
50,000 |
|
|
|
|
|
Purchase of Principal Residence |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
250,000 to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
600,000 |
(3) |
|
|
|
|
Pension Non-Qualified
Annuity |
|
|
299,654 |
|
|
0 |
|
|
251,332 |
|
|
299,654 |
|
|
299,654 |
|
|
|
|
|
Pension - Non-Qualified Lump Sum |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
|
|
|
Pension-Qualified Lump Sum |
|
|
257,217 |
|
|
257,217 |
|
|
257,217 |
|
|
257,217 |
|
|
257,217 |
|
|
|
James P.
Clappin |
|
Severance Amount |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
2,448,000 |
|
|
|
|
|
Value of Benefits
Continuation |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
27,146 |
(2) |
|
|
|
|
Value of Outplacement Services |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
50,000 |
|
|
|
|
|
Purchase of Principal
Residence |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
0 |
(3) |
|
|
|
|
Pension Non-Qualified Annuity |
|
|
470,228 |
|
|
0 |
|
|
382,469 |
|
|
470,228 |
|
|
470,228 |
|
|
|
|
|
Pension - Non-Qualified
Lump Sum |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
|
|
|
Pension-Qualified Annuity |
|
|
85,404 |
|
|
85,404 |
|
|
42,702 |
|
|
85,404 |
|
|
85,404 |
|
|
|
Lawrence D. McRae |
|
Severance Amount |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
2,682,500 |
|
|
|
|
|
Value of Benefits Continuation |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
45,346 |
(2) |
|
|
|
|
Value of Outplacement
Services |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
50,000 |
|
|
|
|
|
Purchase of Principal Residence |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
250,000 to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000,000 |
(3) |
|
|
|
|
Pension Non-Qualified
Annuity |
|
|
490,715 |
|
|
0 |
|
|
418,968 |
|
|
490,715 |
|
|
490,715 |
|
|
|
|
|
Pension - Non-Qualified Lump Sum |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
|
|
|
Pension-Qualified Annuity |
|
|
95,357 |
|
|
95,357 |
|
|
47,679 |
|
|
95,357 |
|
|
95,357 |
|
|
|
Kirk P. Gregg(4) |
|
Severance Amount |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
|
|
|
Value of Benefits
Continuation |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
|
|
|
Value of Outplacement Services |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
|
|
|
Purchase of Principal
Residence |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
|
|
|
Pension Non-Qualified Annuity |
|
|
535,357 |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
|
|
|
Pension - Non-Qualified
Lump Sum |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
|
|
|
Pension-Qualified Annuity |
|
|
37,866 |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
|
|
|
Pension-Qualified Lump Sum |
|
|
323,504 |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
(1) |
|
Nonqualified pension plan benefits
shown for all NEOs are payable from the Executive Supplemental Pension
Plan (ESPP). The timing and form of the benefits payable in the table
above for a voluntary termination are as follows: Messrs. Weeks, McRae,
Clappin and Greggs ESPP benefits are payable as a life annuity beginning
at age 55. Mr. Flaws benefit is payable as an immediate life annuity with
six years guaranteed. |
(2) |
|
The value of welfare benefits
continuation is estimated at $22,673 per year for family coverage for
Messrs. Weeks, McRae and Tripeny (three years of benefits continuation for
Mr. Weeks and two years of benefits continuation for Mr. McRae and Mr.
Tripeny). Mr. Clappins benefits continuation is estimated at $13,573 per
year for two years. |
(3) |
|
The NEOs may also request that
Corning purchase their principal residence in the Corning, New York area.
Corning is unable to accurately and precisely estimate the value that may
be delivered under this provision as it requires an independent appraisal
of the executives residence and, for all NEOs except Mr. Tripeny, a
calculation of the executives purchase price of the residence plus a
percentage of documented improvements made
to the property. These values are not
maintained by Corning in its normal course of business. They are required
only if an executive is terminated. Such purchase must be finalized in the
calendar year following the year in which the executives termination
occurred (subject to a six-month waiting period). Mr. Clappin does not
currently have a principal residence in the Corning, NY area. |
64 CORNING
INCORPORATED - 2016 Proxy Statement
Table of Contents
Compensation Discussion &
Analysis
(4) |
|
Neither Mr. Flaws nor
Mr. Gregg would be eligible for severance benefits due to their respective
retirements on November 30, 2015 and December 31, 2015. The voluntary
column shows amounts they will receive from the retirement
plans. |
Change-in-Control
Agreements |
We have entered into change-in-control
agreements with each of the NEOs. These agreements are intended to provide for
continuity of management if there is a change in control of the Company. These
agreements will be effective until the executive leaves the employ of Corning or
until the executive ceases to be an officer of Corning.
If during the term of the agreement a
change in control occurs, the restrictions on all restricted stock and
restricted stock units held by the NEO lapse, and any stock options vest and
become immediately exercisable.
The NEOs are also entitled to severance
and other benefits upon certain terminations of employment following or in
connection with a change in control.
● |
For Mr. Weeks, benefits are
payable if he (i) is terminated without cause, (ii) resigns for good
reason, or (iii) resigns or is terminated for any reason, each during a
potential change in control period or within four years following a
change in control. |
● |
For the other NEOs (other than
Mr. Weeks), benefits are payable if their employment is terminated (other
than for cause, by reason of death or disability, or by the executive for
any reason) during a potential change in control period, or within two
years following a change in control. |
The benefits payable are as
follows:
● |
Accrued but unpaid base salary,
reimbursable expenses, vacation pay and the executives target percentage
for the annual bonus plans multiplied by the executives salary, pro-rated
to the last day of the month closest to the termination date (lump sum
payment); |
● |
A severance amount equal to 2.99
times (for Mr. Weeks and Mr. Flaws) and two times (for Messrs. McRae,
Clappin, Tripeny and Gregg) the NEOs then base salary plus an annual
bonus amount (lump sum payment); |
● |
Continued participation in the
Companys benefit plans for 3 years; |
● |
Upon request, purchase of the
NEOs principal residence in the Corning, NY area; and |
● |
Outplacement benefits (equal to
20% of base salary) (excluding Mr. Weeks). |
If an NEOs (other than Mr. Weeks)
employment is terminated for cause or he resigns for other than good reason, or
the NEOs employment terminates by reason of death or disability, the NEO is
entitled to accrued but unpaid base salary, reimbursable expenses, vacation pay
and the executives target percentage for the annual bonus plans multiplied by
the executives salary, pro-rated to the last day of the month closest to the
termination date (lump sum payment). In addition, each NEO except Mr. Tripeny is
generally entitled to receive a gross-up payment in an amount sufficient to make
him whole for any federal excise tax on excess parachute payments imposed under
Section 280G and 4999 of the Code. However, if the federal excise tax can be
avoided by reducing the related payments by a present value of $45,000 or less,
then the payment will be reduced to the extent necessary to avoid the excise tax
and no gross up payment will be made to the NEO.
The following table reflects the
amounts that would be payable under the various arrangements assuming that a
change in control occurred on December 31, 2015
|
|
|
Cash-based |
|
Long-Term
Incentives(1) |
|
|
|
|
|
Named Executive Officer |
|
Cash Severance |
|
Interrupted Perf.
Cycles |
|
ESPP |
|
Misc. Benefits |
|
Interrupted Perf.
Cycles |
|
Share-based Awards |
|
Total Benefits(2) |
|
|
Wendell P. Weeks |
|
$ |
10,868,154 |
|
|
|
$0 |
|
|
$ |
24,940,188 |
|
$ |
118,019 |
|
$ |
4,698,000 |
|
$ |
11,344,358 |
|
$ |
51,968,719 |
|
|
James B.
Flaws(3) |
|
|
n/a |
|
|
|
n/a |
|
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
R. Tony Tripeny |
|
|
1,750,000 |
|
|
|
0 |
|
|
|
0 |
|
|
95,346 |
|
|
634,000 |
|
|
1,648,303 |
|
|
4,127,649 |
|
|
James P.
Clappin |
|
|
2,448,000 |
|
|
|
0 |
|
|
|
8,031,716 |
|
|
77,146 |
|
|
1,268,000 |
|
|
3,101,591 |
|
|
14,926,453 |
|
|
Lawrence D. McRae |
|
|
2,610,000 |
|
|
|
0 |
|
|
|
8,383,314 |
|
|
95,346 |
|
|
1,288,000 |
|
|
3,688,421 |
|
|
16,045,081 |
|
|
Kirk P. Gregg(3) |
|
|
n/a |
|
|
|
n/a |
|
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
(1) |
|
Long-term incentives include a
combination of equity (stock options and restricted stock units) and cash
(cash performance units) which vest upon a change of control. |
(2) |
|
In accordance with IRS rules, the
calculation of excise tax gross-up is a complex calculation that can vary
dramatically from year to year depending on the facts and variables
applicable at the time of a change in control. For calculations performed
at December 31, 2015, none of the NEOs were subject to the excise tax, so
as a result, no excise tax gross-up was applicable. |
(3) |
|
Mr. Flaws retired on November 30,
2015 and Mr. Gregg retired on December 31, 2015. Neither of these NEOs
remain eligible for change in control benefits. |
In addition to the above, the NEOs may
also request that Corning purchase their principal residence. Corning is unable
to accurately and precisely estimate the value as it requires an independent
appraisal of the executives residence and, for all NEOs except Mr. Tripeny, a
calculation of the executives purchase price of such residence and any
documented improvements made to the property. This is data that Corning does not
maintain in its normal course of business. See footnote (3) to the Termination
Scenarios on page 64.
CORNING INCORPORATED - 2016 Proxy
Statement 65
Table of Contents
Frequently Asked
Questions
About the Meeting and
Voting
Why Did You Send Me
This Proxy Statement?
We sent this proxy statement and the
enclosed proxy card to you because our Board of Directors is soliciting your
proxy to vote at the Annual Meeting. This proxy statement summarizes information
concerning the matters to be presented at the meeting and related information
that will help you make an informed vote. This proxy statement and the
accompanying proxy card are first being distributed or made available to
shareholders on or about March 15, 2016.
When and Where is the
Annual Meeting?
The Annual Meeting will be held on
Thursday, April 28, 2016, at 11 a.m. Eastern Time, at The Corning Museum of
Glass Auditorium, One Museum Way, Corning, New York 14830.
Who May Attend the
Annual Meeting?
The Annual Meeting is open to holders
of our common shares who held such shares as of the meetings record date,
February 29, 2016. To attend the meeting, you will need to register upon
arrival. We may check for your name on our shareholders list and ask you to
produce valid photo ID. If your shares are held in street name by your broker or
bank, you should bring your most recent brokerage account statement or other
evidence of your share ownership. If we cannot verify that you own Corning
shares, it is possible that you will not be admitted to the meeting.
What Am I Voting
On?
At the Annual Meeting, you will be
voting:
● |
To elect 13 directors for a
one-year term; |
● |
To ratify the appointment of
PricewaterhouseCoopers LLP as our independent registered public accounting
firm for the fiscal year ending December 31, 2016; |
● |
To approve the Companys
executive compensation; and |
● |
Any other matter, if any, as may
properly come before the meeting and any adjournment or postponement of
the Annual Meeting. |
How Do You Recommend
That I Vote on These Items?
The Board of Directors recommends that
you vote your shares:
● |
FOR all of the
director nominees (Proposal 1); |
● |
FOR ratification
of the Boards appointment of PricewaterhouseCoopers LLP as our
independent registered public accounting firm for the fiscal year ending
December 31, 2016 (Proposal 2); and |
● |
FOR the advisory
approval of the compensation of the Companys NEOs, as such information is
disclosed in the Compensation Discussion and Analysis, the compensation
tables and the accompanying disclosure (commonly referred to as Say on
Pay) (Proposal 3). |
Who is Entitled to
Vote?
You may vote if you owned our common
shares as of the close of business on February 29, 2016, the record date for the
Annual Meeting.
How Many Votes Do
I Have?
You are entitled to one vote for each
common share you own. As of the close of business on February 29, 2016, we had
1,099,743,400 common shares outstanding. The shares held in our treasury are not
considered outstanding and will not be voted or considered present at the
meeting.
66 CORNING
INCORPORATED - 2016 Proxy Statement
Table of Contents
Frequently Asked Questions About the
Meeting and Voting
How Do I Vote By Proxy
Before the Annual Meeting?
Before the meeting, registered
shareholders may vote shares in one of the following three ways:
● |
By Internet at www.investorvote.com/glw; |
● |
By telephone (from the United
States and Canada only) at 1-(800)-652-VOTE (8683);
and |
● |
By mail by completing, signing,
dating and returning the enclosed proxy card in the postage paid envelope
provided (see instructions on proxy card). |
Please refer to the proxy card for
further instructions on voting by Internet or telephone.
Please use only one of
the three ways to vote.
If you hold shares in the account of or
name of a broker, your ability to vote those shares by Internet and telephone
depends on the voting procedures used by your broker, as explained below
under How Do I Vote If My Broker Holds My
Shares In Street Name?
May I Vote My Shares in
Person At the Annual Meeting?
Yes. You may vote your shares at the
meeting if you attend in person, even if you previously submitted a proxy card
or voted by Internet or telephone. Whether or not you plan to attend the
meeting, however, we strongly encourage you to vote your shares by proxy before
the meeting.
May I Change My Mind
After I Vote?
Yes. You may change your vote or revoke
your proxy at any time before the polls close at the meeting. You may change
your vote by:
● |
signing another proxy card with a
later date and returning it to Cornings Corporate Secretary at One
Riverfront Plaza, Corning, NY 14831, prior to the
meeting; |
● |
voting again by Internet or
telephone prior to the meeting; or |
● |
voting again at the
meeting. |
You also may revoke your proxy prior to
the meeting without submitting any new vote by sending a written notice that you
are withdrawing your vote to our Corporate Secretary at the address listed
above.
What Shares Are
Included on My Proxy Card?
Your proxy card includes shares held in
your own name and shares held in any Corning plan. You may vote these shares by
Internet, telephone or mail, as described on the enclosed proxy card. Your proxy
card does not include any shares held in a brokerage account in the name of your
bank or broker (such shares are said to be held in street name).
How Do I Vote if I
Participate in the Corning Investment Plan?
If you hold shares in the Corning
Investment Plan, which includes shares held in the Corning Stock Fund in the
Companys 401(k) plan, these shares have been added to your other holdings on
your proxy card. Your completed proxy card serves as voting instructions to the
trustee of the plan. You may direct the trustee to vote your plan shares by
submitting your proxy vote for those shares, along with the rest of your shares,
by Internet, telephone or mail, all as described on the enclosed proxy card. If
you do not instruct the trustee to vote, your plan shares will be voted by the
trustee in the same proportion that it votes shares in other plan accounts for
which it did receive timely voting instructions.
How Do I Vote if My
Broker Holds My Shares in Street Name?
If your shares are held in a brokerage
account in the name of your bank or broker (this is called street name), those
shares are not included in the total number of shares listed as owned by you on
the enclosed proxy card. Instead, your bank or broker will send you directions
on how to vote those shares.
Will My Shares Held in
Street Name be Voted if I Do Not Provide My Proxy?
Under the New York Stock Exchange
rules, if you own shares in street name through a broker and do not vote, your
broker may not vote your shares on proposals determined to be non-routine. In
such cases, the absence of voting instructions results in a broker non-vote.
Broker non-voted shares count toward achieving a quorum requirement for the
Annual Meeting, but they do not affect the determination of whether the
non-routine matter is approved or rejected. The proposal to ratify the
appointment of PricewaterhouseCoopers LLP as our independent registered public
accounting firm is the only matter in this proxy statement considered to be a
routine matter for which brokers will be permitted to vote on behalf of their
clients, if no voting instructions are furnished. Since Proposals 1 and 3 are
non-routine matters, broker non-voted shares will not count as votes cast to
affect the determination of whether those proposals are approved or rejected.
Therefore, it is important that you provide voting instructions to your
broker.
CORNING INCORPORATED - 2016 Proxy
Statement 67
Table of Contents
Frequently Asked Questions About the
Meeting and Voting
What if I Return My
Proxy Card or Vote by Internet or Telephone but Do Not Specify How I Want to
Vote?
If you sign and return your proxy card
or complete the Internet or telephone voting procedures, but do not specify how
you want to vote your shares, we will vote them as follows:
● |
FOR all of the
director nominees (Proposal 1); |
● |
FOR ratification
of the Boards appointment of PricewaterhouseCoopers LLP as our
independent registered public accounting firm for the fiscal year ending
December 31, 2016 (Proposal 2); and |
● |
FOR the advisory
vote to approve the compensation of the Companys NEOs, as such
information is disclosed in the Compensation Discussion and Analysis, the
compensation tables and the accompanying disclosure (commonly referred to
as Say on Pay) (Proposal 3). |
If you participate in the Corning
Investment Plan and do not submit timely voting instructions, the trustee of the
plan will vote the shares in your plan account in the same proportion that it
votes shares in other plan accounts for which it did receive timely voting
instructions, as explained above under the question How Do I Vote If I
Participate In The Corning Investment Plan?
What Does it Mean if I
Receive More Than One Proxy Card?
If you received more than one proxy
card, you have multiple accounts with your brokers or our transfer agent. Please
vote all of these shares. We recommend that you contact your broker or our
transfer agent to consolidate as many accounts as possible under the same name
and address. You may contact our transfer agent, Computershare Trust Company,
N.A., at 1-(800)-255-0461.
May Shareholders Ask
Questions at the Annual Meeting?
Yes. Our representatives will answer
your questions of general interest to shareholders at the end of the meeting. In
order to give a greater number of shareholders the opportunity to ask questions,
we may impose certain procedural requirements, such as limiting repetitive or
follow-up questions, or those of a personal nature.
How Many Shares Must be
Present to Hold the Meeting?
In order for us to conduct our meeting,
a majority of our outstanding common shares as of February 29, 2016, the record
date for the meeting, must be present in person or by proxy at the meeting. This
is called a quorum. Your shares are counted as present at the meeting if you
attend the meeting and vote in person or if you properly return a proxy by
Internet, telephone or mail.
What is the Vote
Required for Each Proposal?
|
|
|
Affirmative Vote Required |
|
Broker Discretionary Voting Allowed |
|
|
Election of 13 directors |
|
Majority of votes cast at the meeting in person or by
proxy |
|
No |
|
|
Ratification of the
appointment of independent registered public accounting
firm for fiscal year 2016 |
|
Majority of votes cast at
the meeting in person or by proxy |
|
Yes |
|
|
Advisory vote to approve the compensation of
the Companys NEOs |
|
Majority of votes cast at the meeting in
person or by proxy |
|
No |
|
With respect to each Proposal, you may
vote FOR, AGAINST or ABSTAIN. If you ABSTAIN from voting on any of these
Proposals, the abstention will not constitute a vote cast.
How Will Voting on Any
Other Business be Conducted?
We have not received proper notice of,
and are not aware of, any business to be transacted at the meeting other than as
indicated in this proxy statement. If any other item or proposal properly comes
before the meeting, the proxies received will be voted on those matters in
accordance with the discretion of the proxy holders.
Who Pays for the
Solicitation of Proxies?
Our Board of Directors is making this
solicitation of proxies on behalf of the Company. The Company will pay the costs
of the solicitation, including the costs for preparing, printing and mailing
this proxy statement. We have hired Georgeson Inc. to assist us in soliciting
proxies. It may do so by telephone, in person or by other electronic
communications. We anticipate paying Georgeson a fee of $21,000 plus expenses
for these services. We also will reimburse brokers, nominees and fiduciaries for
their costs in sending proxies and proxy materials to our shareholders so that
you may vote your shares. Our directors, officers and regular employees may
supplement Georgesons proxy solicitation efforts by contacting you by telephone
or electronic communication or in person. We will not pay directors, officers or
other regular employees any additional compensation for their proxy solicitation
efforts.
68 CORNING
INCORPORATED - 2016 Proxy Statement
Table of Contents
Frequently Asked Questions About the
Meeting and Voting
How Can I Find the
Voting Results of the Annual Meeting?
Following the conclusion of the Annual
Meeting, we will include the voting results in a Form 8-K, which we expect to
file with the Securities and Exchange Commission (the SEC) on or before May 4,
2016.
How Do I Submit a
Shareholder Proposal For, or Nominate a Director For Election at, Next Years Annual Meeting?
Proposals for
Inclusion in Next Years Proxy Statement
SEC rules permit shareholders to submit
proposals for inclusion in our proxy statement if the shareholder and the
proposal meet the requirements specified in SEC Rule 14a-8.
When to send
these proposals: Any shareholder
proposals submitted in accordance with SEC Rule 14a-8 must be received at our
principal executive offices no later than the close of business on November 15,
2016.
Where to send
these proposals: Proposals should be
addressed to Corporate Secretary, Corning Incorporated, One Riverfront Plaza,
Corning, New York 14831.
What to include:
Proposals must conform to and include
the information required by SEC Rule 14a-8.
Director
Nominees for Inclusion in Next Years Proxy Statement
In 2015, we amended our by-laws to
permit a group of shareholders (up to 20) who have owned a significant amount of
Cornings common stock (at least 3%) for a significant amount of time (at least
3 years) the ability to submit director nominees (the greater of two directors
or 20% of our Board) for inclusion in our proxy statement if the shareholder(s)
and the nominee(s) satisfy the requirements specified in our by-laws.
When to send
these proposals: Notice of director
nominees submitted under these by-law provisions must be received no earlier
than October 16, 2016 and no later than November 15, 2016.
Where to send
these proposals: Proposals should be
addressed to Corporate Secretary, Corning Incorporated, One Riverfront Plaza,
Corning, New York 14831.
What to include:
Notice must include the information
required by our by-laws, which are available on Cornings website.
Other Proposals
or Nominees for Presentation at Next Years Annual Meeting
Our by-laws require that any
shareholder proposal, including director nominations, that is not submitted for
inclusion in next years proxy statement (either under SEC Rule 14a-8 or our
proxy access by-laws), but is instead sought to be presented directly at the
2017 annual meeting, must be received at our principal executive offices no
earlier than the 120th day and no later than the close of business on
the 90th day prior to the first anniversary of the preceding years
annual meeting.
When to send
these proposals: Shareholder
proposals, including director nominations, submitted under these by-law
provisions must be received no earlier than December 29, 2016 and no later than
January 28, 2017.
Where to send
these proposals: Proposals should be
addressed to Corporate Secretary, Corning Incorporated, One Riverfront Plaza,
Corning, New York 14831.
What to include:
Proposals must include the information
required by our by-laws, which are available on Cornings website.
Why Havent I Received
a Printed Copy of the Proxy Statement or Annual Report?
We are furnishing proxy materials to
you online, as permitted by SEC rules, to expedite your receipt of materials
while lowering costs and reducing the environmental impact of printing and
mailing full sets of annual meeting materials. If you received by mail a notice
of the electronic availability of these materials, you will not receive a
printed copy unless you specifically request it. Such notice contains
instructions on how to request a paper copy of the materials.
Is the Proxy Statement
Available on the Internet?
Yes. Most shareholders will receive the
proxy statement and other annual meeting materials online. If you received a
paper copy, you can also view these documents online by accessing our website at
www.corning.com/2016-proxy. You can elect to receive future proxy statements and
annual reports by Internet instead of receiving paper copies by mail by
following the instructions for making such election when you electronically vote
your shares.
CORNING INCORPORATED - 2016 Proxy Statement
69
Table of Contents
Frequently Asked Questions About the
Meeting and Voting
Are You Householding
For Shareholders Sharing the Same Address?
Yes. The SECs rules regarding the
delivery to shareholders of proxy statements, annual reports, prospectuses and
information statements permit us to deliver a single copy of these documents to
an address shared by two or more of our shareholders. This method of delivery is
referred to as householding, and can significantly reduce our printing and
mailing costs. It also reduces the volume of mail you receive. This year, we are
delivering only one proxy statement and 2015 Annual Report to multiple
registered shareholders sharing an address, unless we receive instructions to
the contrary from one or more of the shareholders. We will still be required,
however, to send you and each other shareholder at your address an individual
proxy voting card. If you would like to receive more than one copy of this proxy
statement and our 2015 Annual Report, we will promptly send you additional
copies upon written or oral request directed to our transfer agent,
Computershare Trust Company, N.A., toll free at 1-(800)-255-0461. The same phone
number may be used to notify us that you wish to receive a separate proxy
statement or Annual Report in the future, or to request delivery of a single
copy of a proxy statement or Annual Report if you are receiving multiple
copies.
Code of
Ethics
Our Board of Directors has adopted the
Code of Ethics for the Chief Executive Officer and Financial Executives and the
Code of Conduct for Directors and Executive Officers, which supplements the Code
of Conduct governing all employees and directors. A copy of the Code of Ethics
is available on our website at
http://www.corning.com/worldwide/en/about-us/investor-relations/board-download-library.html.
We will disclose any amendments to, or waivers from, the Code of Ethics on our
website within four business days of such determination. During 2015, no
amendments to or waivers of the provisions of the Code of Ethics were made with
respect to any of our directors or executive officers.
Incorporation by
Reference
The Compensation Committee Report on
page 48 and the Report of Audit Committee of the Board of Directors on page 32,
are not deemed filed with the SEC and shall not be deemed incorporated by
reference into any prior or future filings made by Corning under the Securities
Act or the Exchange Act, except to the extent that Corning specifically
incorporates such information by reference. In addition, this proxy statement
includes several website addresses. These website addresses are intended to
provide inactive, textual references only. The information on these websites is
not part of this proxy statement.
Additional
Information
This Proxy Statement, our 2015 Annual
Report, our Annual Report on Form 10-K, and all other filings with the SEC, each
of the Board Committee Charters and the Corporate Governance Guidelines may be
accessed via the Investor Relations page on Cornings web site at
www.corning.com. These documents are also available without charge upon a
shareholders written or oral request to Investor Relations, Corning
Incorporated, One Riverfront Plaza, Corning, NY, 14831, telephone number
1-(607)-974-9000.
Cornings core net sales, core
earnings per share (EPS), and adjusted operating cash flow for compensation
purposes (adjusted operating cash flow) are non-GAAP financial measures within
the meaning of Regulation G of the Securities and Exchange Commission. Non-GAAP
financial measures are not in accordance with, or an alternative to, generally
accepted accounting principles (GAAP). The Company believes presenting these
non-GAAP measures is helpful to analyze financial performance without the impact
of unusual items that may obscure trends in the Companys underlying
performance. Detailed reconciliations are provided below outlining the
differences between these non-GAAP measures and the most directly comparable
GAAP measures.
70 CORNING INCORPORATED
- 2016
Proxy Statement
Table of Contents
Appendix A
CORNING INCORPORATED AND SUBSIDIARY COMPANIES RECONCILIATION
OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL MEASURE
Year Ended December 31, 2015
(Unaudited; amounts in millions,
except per share amounts)
|
|
Per Share |
|
Net Income |
|
|
Adjusted earnings per share (EPS) and net income |
$ |
1.40 |
|
|
|
$ |
1,882 |
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
Pension mark-to-market
adjustment(a) |
|
(0.08 |
) |
|
|
|
(105 |
) |
|
|
|
Constant currency adjustments (JPY @ ¥99,
KRW @ 1,100) and impact of foreign currency hedges related to |
|
|
|
|
|
|
|
|
|
|
|
translated
earnings(b) |
|
(0.26 |
) |
|
|
|
(356 |
) |
|
|
|
Equity earnings in
affiliated companies(c) |
|
0.02 |
|
|
|
|
33 |
|
|
|
|
Restructuring, impairment and other
charges(d) |
|
(0.03 |
) |
|
|
|
(42 |
) |
|
|
|
Other(e) |
|
0.00 |
|
|
|
|
(1 |
) |
|
|
|
Discrete tax items and other tax-related
adjustments(f) |
|
(0.03 |
) |
|
|
|
(36 |
) |
|
|
|
Acquisition-related costs(g) |
|
(0.03 |
) |
|
|
|
(36 |
) |
|
|
|
GAAP EPS and net income |
$ |
1.00 |
|
|
|
$ |
1,339 |
|
|
|
(a) |
|
Represents pension mark-to-market
gains and losses arising from changes in actuarial assumptions and the
difference between actual and expected returns on plan assets and discount
rates. |
(b) |
|
Represents constant currency
adjustments to our US GAAP results to reflect after-tax performance
applying a ¥99 JPY and 1,100 KRW FX rate. Hedge Contracts: Represents the
mark-to-market and realized net gain related to translated earnings
contracts. |
(c) |
|
These adjustments relate to items
which do not reflect expected on-going operating results of our affiliated
companies, such as asset impairments, significant liability reserve
reversals and other charges and settlements under take-or-pay
contracts. |
(d) |
|
Represents restructuring,
impairment and other charges, including goodwill impairment charges and
other expenses and disposal costs not classified as restructuring
expense. |
(e) |
|
Includes amounts related to the
Pittsburgh Corning Corporation (PCC) asbestos litigation, impacts from the
acquisition of Samsung Corning Precision Materials and post combination
expenses related to an acquisition in the first quarter of
2015. |
(f) |
|
Represents the removal of
discrete adjustments attributable to changes in tax law and changes in
judgment about the realizability of certain deferred tax assets, as well
as other non-operational tax-related adjustments, including the tax effect
of transfer pricing out-of-period adjustment. |
(g) |
|
Includes intangible amortization,
inventory valuation adjustments and external acquisition-related deal
costs. |
CORNING INCORPORATED - 2016 Proxy Statement
71
Table of Contents
Appendix A
CORNING INCORPORATED AND SUBSIDIARY
COMPANIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL
MEASURE
Year Ended December 31,
2014
(Unaudited; amounts in millions,
except per share amounts)
|
|
Per Share |
|
Net Income |
|
|
Adjusted earnings per share (EPS) and net
income |
$ |
1.53 |
|
|
|
$ |
2,185 |
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
Mark-to-market
adjustments (pension & hedge contracts) & realized hedge
gains(a) |
|
0.62 |
|
|
|
|
892 |
|
|
|
|
Constant
currency adjustments (JPY @ ¥93, KRW @ 1,100)(b) |
|
(0.23 |
) |
|
|
|
(332 |
) |
|
|
|
Equity earnings
in affiliated companies(c) |
|
(0.03 |
) |
|
|
|
(38 |
) |
|
|
|
Restructuring,
impairment and other charges(d) |
|
(0.05 |
) |
|
|
|
(66 |
) |
|
|
|
Other(e) |
|
0.00 |
|
|
|
|
5 |
|
|
|
|
Discrete tax
items and other tax-related adjustments(f) |
|
(0.17 |
) |
|
|
|
(240 |
) |
|
|
|
Acquisition-related
costs(g) |
|
0.05 |
|
|
|
|
66 |
|
|
|
|
GAAP EPS and net income |
$ |
1.73 |
|
|
|
$ |
2,472 |
|
|
|
(a) |
|
Represents pension mark-to-market
gains and losses arising from changes in actuarial assumptions and the
difference between actual and expected returns on plan assets and discount
rates. Hedge Contracts: Represents the mark-to-market and realized net
gain related to translated earnings contracts. |
(b) |
|
Represents constant currency
adjustments to our US GAAP results to reflect after-tax performance
applying a ¥93 JPY and 1,100 KRW FX rate. |
(c) |
|
These adjustments relate to items
which do not reflect expected on-going operating results of our affiliated
companies, such as asset impairments, significant liability reserve
reversals and other charges and settlements under take-or-pay
contracts. |
(d) |
|
Represents restructuring,
impairment and other charges, including goodwill impairment charges and
other expenses and disposal costs not classified as restructuring
expense. |
(e) |
|
Includes amounts related to the
Pittsburgh Corning Corporation (PCC) asbestos litigation, adjustments to
our estimated liability for environmental-related items and the
settlement of litigation related to a small acquisition as well as the
partial impact of non-restructuring related items due to the decision to
liquidate a consolidated subsidiary. |
(f) |
|
Represents the removal of
discrete adjustments attributable to changes in tax law and changes in
judgment about the realizability of certain deferred tax assets, as well
as other non-operational tax-related adjustments, including the tax effect
of transfer pricing out-of-period adjustment. |
(g) |
|
Includes intangible amortization,
inventory valuation adjustments and external acquisition-related deal
costs. |
72 CORNING INCORPORATED - 2016 Proxy
Statement
Table of Contents
Appendix A
CORNING INCORPORATED AND SUBSIDIARY
COMPANIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL
MEASURE
Year Ended December 31,
2013
(Unaudited; amounts in millions,
except per share amounts)
|
|
|
EPS |
|
Net Income |
|
|
Adjusted earnings per share (EPS) and net income |
|
$ |
1.19 |
|
|
|
$ |
1,740 |
|
|
|
Adjustments
to GAAP Net Income and EPS: |
|
|
|
|
|
|
|
|
|
|
|
Mark-to-market
adjustments (pension & hedge contracts)(a) |
|
|
0.15 |
|
|
|
|
214 |
|
|
|
Impact to plan of 2013
pension accounting change(b) |
|
|
0.04 |
|
|
|
|
62 |
|
|
|
DCC-Hemlock operating results
variance-to-plan(c) |
|
|
0.04 |
|
|
|
|
56 |
|
|
|
DCC-Silicones
non-operating gains/losses(d) |
|
|
0.01 |
|
|
|
|
21 |
|
|
|
Fluctuations in FX rates for Japanese yen outside specified
range(e) |
|
|
0.01 |
|
|
|
|
18 |
|
|
|
Gain on change in control
of equity investment(f) |
|
|
0.01 |
|
|
|
|
12 |
|
|
|
Tax expense adjustments
(valuation allowances/law changes)(g) |
|
|
0.00 |
|
|
|
|
3 |
|
|
|
Pittsburgh Corning
settlement charges(h) |
|
|
(0.01 |
) |
|
|
|
(13 |
) |
|
|
Impact of
acquisition-related costs(i) |
|
|
(0.03 |
) |
|
|
|
(40 |
) |
|
|
Restructuring
Charges(j) |
|
|
(0.08 |
) |
|
|
|
(112 |
) |
|
|
GAAP EPS and net
income |
|
$ |
1.34 |
|
|
|
$ |
1,961 |
|
|
(a) |
Represents pension mark-to-market gains and losses arising from
changes in actuarial assumptions and the difference between actual and
expected returns on plan assets and discount rates. Hedge Contracts:
Mark-to-market gains are recorded on our purchased collars and average
rate forwards related to translated earnings contracts. |
(b) |
Our 2013 budget assumed no change in pension accounting. For
compensation purposes, we are excluding the favorable impact to plan that
relates to the adoption of our current pension accounting reporting
convention. |
(c) |
2013 core earnings excludes earnings generated from DCCs
consolidated subsidiary, Hemlock Semiconductor (Hemlock). For compensation
purposes, we are excluding the favorable impact to plan that was generated
by the Hemlock business. |
(d) |
These adjustments relate to items which do not reflect expected
on-going operating results of our affiliated companies, such as
restructuring, impairment and other charges and settlements under
take-or-pay contracts. |
(e) |
The adjustment after-tax in 2013 for foreign exchange fluctuations
for the Japanese yen. |
(f) |
Adjustment of the gain as a result of certain changes to the
shareholder agreement of an equity company occurring in the second quarter
of 2013, resulting in Corning having a controlling interest that requires
consolidation of this investment. |
(g) |
Provision for income taxes: this represents the removal of discrete
adjustments attributable to changes in tax law and changes in judgment
about the realizability of certain deferred tax assets. This item also
includes the income tax effects of adjusting from a GAAP tax rate to a
core earnings tax rate. |
(h) |
These adjustments relate to the Pittsburgh Corning Corporation
(PCC) asbestos litigation. |
(i) |
These expenses include intangible amortization, inventory valuation
adjustments and external acquisition-related deal costs. |
(j) |
Restructuring, impairments, and other
charges. |
CORNING INCORPORATED - 2016 Proxy
Statement 73
Table of Contents
Appendix A
CORNING INCORPORATED AND SUBSIDIARY
COMPANIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL
MEASURE
Year Ended December 31,
2015
(Unaudited; amounts in millions,
except per share amounts)
Adjusted Operating Cash Flow
for Compensation Purposes of Corning Incorporated for the Year Ended
December 31, 2015 |
|
Adjusted operating cash flow for compensation
purposes |
$ |
3,219 |
|
|
|
Adjustments from GAAP
Operating Cash Flow: |
|
|
|
|
|
Translation losses on
cash balances(a) |
|
278 |
|
|
|
Restructuring
cash(b) |
|
(35 |
) |
|
|
Realized gain
on foreign currency hedges related to translated
earnings(c) |
|
(653 |
) |
|
|
Net cash provided by operating activities - GAAP |
$ |
2,809 |
|
|
(a) |
Represents translation losses on Cornings foreign cash
balances. |
(b) |
Represents a budget to actual adjustment to arrive at the metric to
calculate incentive compensation. |
(c) |
Represents the 2015 realized gain on foreign currency hedges
related to translated earnings (Japanese yen, Korean won and
euro). |
74 CORNING
INCORPORATED - 2016 Proxy Statement
Table of Contents
Appendix A
CORNING INCORPORATED AND SUBSIDIARY
COMPANIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL
MEASURE
Year Ended December 31,
2014
(Unaudited; amounts in millions,
except per share amounts)
Adjusted Operating Cash
Flow for Compensation Purposes of Corning Incorporated for the Year Ended
December 31, 2014 |
|
Adjusted operating cash flow for
compensation purposes |
$
|
3,121 |
|
|
|
Adjustments
from GAAP Operating Cash Flow: |
|
|
|
|
|
Translation losses on
cash balances(a) |
|
447 |
|
|
|
Special
dividends(b) |
|
1,529 |
|
|
|
Restructuring
cash(c) |
|
(28 |
) |
|
|
Realized gain on foreign
currency hedges related to translated earnings(d) |
|
(360 |
) |
|
|
Net cash provided by operating
activities - GAAP |
$ |
4,709 |
|
|
(a) |
Represents translation losses on Cornings foreign cash
balances. |
(b) |
One-time dividend from CPM received in Q1 2014 |
(c) |
Represents a budget to actual adjustment to arrive at the metric to
calculate incentive compensation. |
(d) |
Represents the 2014 realized gain on foreign currency hedges
related to translated earnings (Japanese yen and Korean
won). |
CORNING INCORPORATED - 2016 Proxy
Statement 75
Table of Contents
Appendix A
CORNING INCORPORATED AND SUBSIDIARY
COMPANIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL
MEASURE
Year Ended December 31,
2013
(Unaudited; amounts in millions,
except per share amounts)
Adjusted Operating Cash
Flow for Compensation Purposes of Corning Incorporated for the Year Ended
December 31, 2013 |
|
Adjusted operating cash flow for
compensation purposes |
$
|
2,768 |
|
|
|
Adjustments
from GAAP Operating Cash Flow: |
|
|
|
|
|
Translation losses on
cash balances(a) |
|
179 |
|
|
|
Won FX collar
(KRW 1073 vs collar at 1080-1180)(b) |
|
|
|
|
|
Impact on dividends |
|
3 |
|
|
|
Restructuring
cash(c) |
|
(1 |
) |
|
|
Impact of tax liabilities
(JPY adjusted from 79 to 94)(d) |
|
(72 |
) |
|
|
Realized gain on foreign
currency hedges related to translated earnings(e) |
|
(90 |
) |
|
|
Net cash provided by operating
activities |
$ |
2,787 |
|
|
(a) |
Represents translation losses on Cornings foreign cash
balances. |
(b) |
Cash flow adjustments for foreign exchange fluctuations for the
Japanese yen and South Korean won. |
(c) |
Represents a budget to actual adjustment to arrive at the metric to
calculate incentive compensation. |
(d) |
Represents impact on deferred tax expenses as a result of a
budgeted JPY FX adjustment from a rate of 79 to a rate of 94. |
(e) |
Represents the 2013 realized gain on purchased collars and average
rate forward contracts we entered into in 2013 to hedge our exposure to
movements in the Japanese yen and its impact on our net
earnings. |
76 CORNING
INCORPORATED - 2016 Proxy Statement
Table of Contents
Appendix A
CORNING INCORPORATED AND SUBSIDIARY
COMPANIES
(Unaudited)
Core
Earnings per Common Share
The following table sets forth the
computation of core basic and core diluted earnings per common share for the
years ended December 31, 2015, 2014 and 2013 (in millions, except per share
amounts):
|
|
|
Year ended December
31, |
|
|
|
|
2015 |
|
2014 |
|
2013 |
|
|
Core earnings
attributable to Corning Incorporated* |
|
$ |
1,882 |
|
$ |
2,023 |
|
$ |
1,656 |
|
|
Less: Series A convertible preferred stock dividend |
|
|
98 |
|
|
94 |
|
|
|
|
|
Core earnings
available to common stockholders - basic |
|
|
1,784 |
|
|
1,929 |
|
|
1,656 |
|
|
Add: Series A convertible preferred stock dividend |
|
|
98 |
|
|
94 |
|
|
|
|
|
Core earnings available to common stockholders -
diluted |
|
$ |
1,882 |
|
$ |
2,023 |
|
$ |
1,656 |
|
|
|
|
|
Weighted-average
common shares outstanding - basic |
|
|
1,219 |
|
|
1,305 |
|
|
1,452 |
|
|
Effect of dilutive
securities: |
|
|
|
|
|
|
|
|
|
|
|
Stock options and
other dilutive securities |
|
|
9 |
|
|
12 |
|
|
10 |
|
|
Series A convertible preferred stock |
|
|
115 |
|
|
110 |
|
|
|
|
|
Weighted-average common shares outstanding -
diluted |
|
|
1,343 |
|
|
1,427 |
|
|
1,462 |
|
|
Core basic earnings per common
share |
|
$ |
1.46 |
|
$ |
1.48 |
|
$ |
1.14 |
|
|
Core diluted earnings per common share |
|
$ |
1.40 |
|
$ |
1.42 |
|
$ |
1.13 |
|
* |
In the first quarter of 2015, we changed the yen-to-dollar
management rate from ¥93 to ¥99 to closely align with the yen-denominated
hedges entered into for the years 2015 through 2017. Prior periods
presented have been recast based on the new
rate. |
CORNING INCORPORATED - 2016 Proxy
Statement 77
Table of Contents
Appendix A
CORNING INCORPORATED AND SUBSIDIARY
COMPANIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL
MEASURE
Year Ended December 31,
2015
(Unaudited; amounts in millions,
except per share amounts)
|
|
|
Year ended December 31,
2015 |
|
|
|
|
Net sales |
|
Equity earnings |
|
Income before income taxes |
|
Net income |
|
Effective tax rate |
|
Earnings per share |
|
|
As reported |
|
$ |
9,111 |
|
$ |
299 |
|
|
$ |
1,486 |
|
|
$ |
1,339 |
|
|
|
9.9 |
% |
|
$ |
1.00 |
|
|
|
Constant-yen(1) |
|
|
687 |
|
|
6 |
|
|
|
567 |
|
|
|
423 |
|
|
|
|
|
|
|
0.31 |
|
|
|
Constant-won(1) |
|
|
2 |
|
|
(2 |
) |
|
|
(25 |
) |
|
|
(19 |
) |
|
|
|
|
|
|
(0.01 |
) |
|
|
Foreign currency
hedges related to translated earnings(2) |
|
|
|
|
|
|
|
|
|
(80 |
) |
|
|
(48 |
) |
|
|
|
|
|
|
(0.04 |
) |
|
|
Acquisition-related costs(3) |
|
|
|
|
|
|
|
|
|
55 |
|
|
|
36 |
|
|
|
|
|
|
|
0.03 |
|
|
|
Discrete tax
items and other tax-related adjustments(4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
36 |
|
|
|
|
|
|
|
0.03 |
|
|
|
Litigation, regulatory and other legal
matters(5) |
|
|
|
|
|
|
|
|
|
5 |
|
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
impairment and other charges(6) |
|
|
|
|
|
|
|
|
|
46 |
|
|
|
42 |
|
|
|
|
|
|
|
0.03 |
|
|
|
Liquidation of subsidiary(7) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in
earnings of affiliated companies(8) |
|
|
|
|
|
(34 |
) |
|
|
(34 |
) |
|
|
(33 |
) |
|
|
|
|
|
|
(0.02 |
) |
|
|
Impacts from the acquisition of Samsung
Corning Precision
Materials(9) |
|
|
|
|
|
|
|
|
|
(20 |
) |
|
|
(18 |
) |
|
|
|
|
|
|
(0.01 |
) |
|
|
Post-combination
expenses(10) |
|
|
|
|
|
|
|
|
|
25 |
|
|
|
16 |
|
|
|
|
|
|
|
0.01 |
|
|
|
Pension mark-to-market
adjustment(11) |
|
|
|
|
|
|
|
|
|
165 |
|
|
|
105 |
|
|
|
|
|
|
|
0.08 |
|
|
|
Core performance
measures |
|
$ |
9,800 |
|
$ |
269 |
|
|
$ |
2,190 |
|
|
$ |
1,882 |
|
|
|
14.1 |
% |
|
$ |
1.40 |
|
|
See Corning
Incorporated and Subsidiary Companies: Use of Non-GAAP Financial Measures,
Items which we exclude from GAAP measures to arrive at core performance
measures on page 86 for the descriptions of the footnoted reconciling
items.
78 CORNING
INCORPORATED - 2016 Proxy Statement
Table of Contents
Appendix A
CORNING INCORPORATED AND SUBSIDIARY
COMPANIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL
MEASURE
Year Ended December 31,
2014
(Unaudited; amounts in millions,
except per share amounts)
|
|
|
Year ended December 31,
2014 |
|
|
|
|
Net sales |
|
Equity earnings |
|
Income before income taxes |
|
Net income |
|
Effective tax rate |
|
Earnings per share |
|
|
As reported |
|
$ |
9,715 |
|
$ |
266 |
|
$ |
3,568 |
|
|
$ |
2,472 |
|
|
30.7% |
|
$ |
1.73 |
|
|
|
Constant-yen(1)* |
|
|
240 |
|
|
1 |
|
|
197 |
|
|
|
144 |
|
|
|
|
|
0.10 |
|
|
|
Constant-won(1) |
|
|
|
|
|
|
|
|
37 |
|
|
|
26 |
|
|
|
|
|
0.02 |
|
|
|
Foreign currency
hedges related to translated earnings(2) |
|
|
|
|
|
|
|
|
(1,369 |
) |
|
|
(916 |
) |
|
|
|
|
(0.64 |
) |
|
|
Acquisition-related costs(3) |
|
|
|
|
|
|
|
|
74 |
|
|
|
57 |
|
|
|
|
|
0.04 |
|
|
|
Discrete tax
items and other tax-related adjustments(4) |
|
|
|
|
|
|
|
|
|
|
|
|
240 |
|
|
|
|
|
0.17 |
|
|
|
Litigation, regulatory and other legal
matters(5) |
|
|
|
|
|
|
|
|
(1 |
) |
|
|
(2 |
) |
|
|
|
|
|
|
|
|
Restructuring,
impairment and other charges(6) |
|
|
|
|
|
|
|
|
86 |
|
|
|
66 |
|
|
|
|
|
0.05 |
|
|
|
Liquidation of subsidiary(7) |
|
|
|
|
|
|
|
|
|
|
|
|
(3 |
) |
|
|
|
|
|
|
|
|
Equity in
earnings of affiliated companies(8) |
|
|
|
|
|
43 |
|
|
43 |
|
|
|
38 |
|
|
|
|
|
0.03 |
|
|
|
Gain on previously held equity investment(9) |
|
|
|
|
|
|
|
|
(394 |
) |
|
|
(292 |
) |
|
|
|
|
(0.20 |
) |
|
|
Settlement of
pre-existing contract(9) |
|
|
|
|
|
|
|
|
320 |
|
|
|
320 |
|
|
|
|
|
0.22 |
|
|
|
Contingent consideration fair value
adjustment(9) |
|
|
|
|
|
|
|
|
(249 |
) |
|
|
(194 |
) |
|
|
|
|
(0.14 |
) |
|
|
Post-combination
expenses(9) |
|
|
|
|
|
|
|
|
72 |
|
|
|
55 |
|
|
|
|
|
0.04 |
|
|
|
Impacts from the acquisition of Samsung
Corning Precision
Materials(9) |
|
|
|
|
|
|
|
|
(9 |
) |
|
|
(12 |
) |
|
|
|
|
(0.01 |
) |
|
|
Pension mark-to-market
adjustment(11) |
|
|
|
|
|
|
|
|
29 |
|
|
|
24 |
|
|
|
|
|
0.02 |
|
|
|
Core performance
measures |
|
$ |
9,955 |
|
$ |
310 |
|
$ |
2,404 |
|
|
$ |
2,023 |
|
|
15.8% |
|
$ |
1.42 |
|
|
* |
In the first quarter of 2015, we changed the yen-to-dollar
management rate from ¥93 to ¥99 to closely align with the yen-denominated
hedges entered into for the years 2015 through 2017. Prior periods
presented have been recast based on the new
rate. |
See Corning Incorporated and
Subsidiary Companies: Use of Non-GAAP Financial Measures, Items which we
exclude from GAAP measures to arrive at core performance measures on page 86
for the descriptions of the footnoted reconciling items.
CORNING INCORPORATED - 2016 Proxy
Statement 79
Table of Contents
Appendix A
CORNING INCORPORATED AND SUBSIDIARY
COMPANIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL
MEASURE
Year Ended December 31,
2013
(Unaudited; amounts in millions,
except per share amounts)
|
|
|
Year ended December 31,
2013 |
|
|
|
|
Net sales |
|
Equity earnings |
|
Income before income taxes |
|
Net income |
|
Effective tax rate |
|
Per share |
|
|
As reported |
|
$ |
7,819 |
|
|
$ |
547 |
|
|
$ |
2,473 |
|
|
$ |
1,961 |
|
|
20.7% |
|
$
|
1.34 |
|
|
|
Constant-yen(1)* |
|
|
(39 |
) |
|
|
(28 |
) |
|
|
(53 |
) |
|
|
(45 |
) |
|
|
|
|
(0.03 |
) |
|
|
Purchased collars and average rate forwards(2) |
|
|
|
|
|
|
|
|
|
|
(435 |
) |
|
|
(287 |
) |
|
|
|
|
(0.20 |
) |
|
|
Other
yen-related transactions(2) |
|
|
|
|
|
|
|
|
|
|
(99 |
) |
|
|
(69 |
) |
|
|
|
|
(0.05 |
) |
|
|
Acquisition-related costs(3) |
|
|
|
|
|
|
|
|
|
|
54 |
|
|
|
40 |
|
|
|
|
|
0.03 |
|
|
|
Discrete tax
items and other tax-related adjustments(4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9 |
|
|
|
|
|
0.01 |
|
|
|
Litigation, regulatory and other legal
matters(5) |
|
|
|
|
|
|
|
|
|
|
19 |
|
|
|
13 |
|
|
|
|
|
0.01 |
|
|
|
Restructuring,
impairment and other charges(6) |
|
|
|
|
|
|
|
|
|
|
67 |
|
|
|
46 |
|
|
|
|
|
0.03 |
|
|
|
Equity in earnings of affiliated companies(8) |
|
|
|
|
|
|
42 |
|
|
|
42 |
|
|
|
44 |
|
|
|
|
|
0.02 |
|
|
|
Hemlock
Semiconductor operating results(8) |
|
|
|
|
|
|
(31 |
) |
|
|
(31 |
) |
|
|
(30 |
) |
|
|
|
|
(0.02 |
) |
|
|
Hemlock Semiconductor non-operating results(8) |
|
|
|
|
|
|
1 |
|
|
|
1 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
Pension
mark-to-market adjustment(11) |
|
|
|
|
|
|
|
|
|
|
(30 |
) |
|
|
(17 |
) |
|
|
|
|
(0.01 |
) |
|
|
Gain on change in control of equity
investment(12) |
|
|
|
|
|
|
|
|
|
|
(17 |
) |
|
|
(12 |
) |
|
|
|
|
(0.01 |
) |
|
|
Other |
|
|
|
|
|
|
|
|
|
|
4 |
|
|
|
2 |
|
|
|
|
|
|
|
|
|
Core performance
measures |
|
$ |
7,780 |
|
|
$ |
531 |
|
|
$ |
1,995 |
|
|
$ |
1,656 |
|
|
17.0% |
|
$ |
1.13 |
|
|
* |
In the first quarter of 2015, we changed the yen-to-dollar
management rate from ¥93 to ¥99 to closely align with the yen-denominated
hedges entered into for the years 2015 through 2017. Prior periods
presented have been recast based on the new
rate. |
See Corning Incorporated and Subsidiary
Companies: Use of Non-GAAP Financial Measures, Items which we exclude from GAAP
measures to arrive at core performance measures on page 86 for the descriptions
of the footnoted reconciling items.
80 CORNING
INCORPORATED - 2016 Proxy Statement
Table of Contents
Appendix A
CORNING INCORPORATED AND SUBSIDIARY
COMPANIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL
MEASURE
Display Technologies
Segment
Years Ended December 31, 2015,
2014, and 2013
(Unaudited; amounts in
millions)
|
|
|
Year ended December 31,
2015 |
|
Year ended December 31,
2014 |
|
Year ended December 31,
2013 |
|
|
|
|
Sales |
|
Net income |
|
Sales |
|
Net income |
|
Sales |
|
Net income |
|
|
As reported |
|
$ |
3,086 |
|
$ |
1,095 |
|
|
$ |
3,851 |
|
$ |
1,396 |
|
|
$ |
2,545 |
|
|
$ |
1,293 |
|
|
|
Constant-yen(1)* |
|
|
686 |
|
|
419 |
|
|
|
240 |
|
|
142 |
|
|
|
(38 |
) |
|
|
(47 |
) |
|
|
Constant-won(1) |
|
|
2 |
|
|
(17 |
) |
|
|
|
|
|
27 |
|
|
|
|
|
|
|
|
|
|
|
Foreign currency hedges related to
translated earnings(2) |
|
|
|
|
|
(416 |
) |
|
|
|
|
|
(290 |
) |
|
|
|
|
|
|
(90 |
) |
|
|
Other yen-related
transactions(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(67 |
) |
|
|
Acquisition-related
costs(3) |
|
|
|
|
|
|
|
|
|
|
|
|
37 |
|
|
|
|
|
|
|
8 |
|
|
|
Discrete tax items and
other tax-related adjustments(4) |
|
|
|
|
|
|
|
|
|
|
|
|
4 |
|
|
|
|
|
|
|
10 |
|
|
|
Restructuring, impairment, and other
charges(6) |
|
|
|
|
|
|
|
|
|
|
|
|
40 |
|
|
|
|
|
|
|
6 |
|
|
|
Equity in earnings of
affiliated companies(8) |
|
|
|
|
|
|
|
|
|
|
|
|
6 |
|
|
|
|
|
|
|
28 |
|
|
|
Other items related to the acquisition of
Samsung Corning |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Precision
Materials(9) |
|
|
|
|
|
(10 |
) |
|
|
1 |
|
|
(121 |
) |
|
|
|
|
|
|
|
|
|
|
Pension mark-to-market(11) |
|
|
|
|
|
4 |
|
|
|
|
|
|
2 |
|
|
|
|
|
|
|
(8 |
) |
|
|
Core performance |
|
$ |
3,774 |
|
$ |
1,075 |
|
|
$ |
4,092 |
|
$ |
1,243 |
|
|
$ |
2,507 |
|
|
$ |
1,133 |
|
|
* |
In the first quarter of 2015, we
changed the yen-to-dollar management rate from ¥93 to
¥99 to closely align with the yen-denominated hedges entered
into for the years 2015 through 2017. Prior periods presented have been
recast based on the new rate. |
See Corning
Incorporated and Subsidiary Companies: Use of Non-GAAP Financial Measures,
Items which we exclude from GAAP measures to arrive at core performance
measures on page 86 for the descriptions of the footnoted reconciling
items.
CORNING INCORPORATED - 2016 Proxy
Statement 81
Table of Contents
Appendix A
CORNING INCORPORATED AND SUBSIDIARY
COMPANIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL
MEASURE
Optical Communications
Segment
Years Ended December 31, 2015,
2014 and 2013
(Unaudited; amounts in
millions)
|
|
|
Year ended December 31,
2015 |
|
Year ended December 31,
2014 |
|
Year ended December 31,
2013 |
|
|
|
|
Sales |
|
Net income |
|
Sales |
|
Net income |
|
Sales |
|
Net income |
|
|
As reported |
|
$ |
2,980 |
|
$ |
237 |
|
|
$ |
2,652 |
|
$ |
194 |
|
|
$ |
2,326 |
|
$ |
189 |
|
|
|
Acquisition-related
costs(3) |
|
|
|
|
|
16 |
|
|
|
|
|
|
(2 |
) |
|
|
|
|
|
9 |
|
|
|
Litigation, regulatory and
other legal matters(5) |
|
|
|
|
|
13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring, impairment, and other
charges(6) |
|
|
|
|
|
(1 |
) |
|
|
|
|
|
17 |
|
|
|
|
|
|
8 |
|
|
|
Liquidation of
subsidiary(7) |
|
|
|
|
|
|
|
|
|
|
|
|
(2 |
) |
|
|
|
|
|
|
|
|
|
Post combination
expenses(10) |
|
|
|
|
|
16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension
mark-to-market(11) |
|
|
|
|
|
|
|
|
|
|
|
|
13 |
|
|
|
|
|
|
(9 |
) |
|
|
Gain on change in control(12) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(11 |
) |
|
|
Core performance |
|
$ |
2,980 |
|
$ |
281 |
|
|
$ |
2,652 |
|
$ |
220 |
|
|
$ |
2,326 |
|
$ |
186 |
|
|
See Corning Incorporated and
Subsidiary Companies: Use of Non-GAAP Financial Measures, Items which we
exclude from GAAP measures to arrive at core performance measures on page 86
for the descriptions of the footnoted reconciling items.
82 CORNING
INCORPORATED - 2016 Proxy Statement
Table of Contents
Appendix A
CORNING INCORPORATED AND SUBSIDIARY
COMPANIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL
MEASURE
Environmental Technologies
Segment
Years Ended December 31, 2015, 2014 and 2013
(Unaudited; amounts in millions)
|
|
|
Year ended December 31,
2015 |
|
Year ended December 31,
2014 |
|
Year ended December 31,
2013 |
|
|
|
|
Sales |
|
Net income |
|
Sales |
|
Net income |
|
Sales |
|
Net income |
|
|
As reported |
|
$ |
1,053 |
|
$ |
161 |
|
$ |
1,092 |
|
$ |
178 |
|
$ |
919 |
|
$ |
127 |
|
|
|
Restructuring, impairment, and other
charges(6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
|
|
|
Pension mark-to-market(11) |
|
|
|
|
|
|
|
|
|
|
|
5 |
|
|
|
|
|
(3 |
) |
|
|
Core performance |
|
$ |
1,053 |
|
$ |
161 |
|
$ |
1,092 |
|
$ |
183 |
|
$ |
919 |
|
$ |
125 |
|
|
See Corning Incorporated and
Subsidiary Companies: Use of Non-GAAP Financial Measures, Items which we
exclude from GAAP measures to arrive at core performance measures on page 86
for the descriptions of the footnoted reconciling items.
CORNING INCORPORATED - 2016 Proxy
Statement 83
Table of Contents
Appendix A
CORNING INCORPORATED AND SUBSIDIARY
COMPANIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL
MEASURE
Specialty Materials
Segment
Years Ended December 31, 2015,
2014 and 2013
(Unaudited; amounts in millions)
|
|
|
Year ended December 31,
2015 |
|
Year ended December 31,
2014 |
|
Year ended December 31,
2013 |
|
|
|
|
Sales |
|
Net income |
|
Sales |
|
Net income |
|
Sales |
|
Net income |
|
|
As reported |
|
$ |
1,107 |
|
$ |
167 |
|
|
$ |
1,205 |
|
$ |
138 |
|
|
$ |
1,170 |
|
$ |
181 |
|
|
|
Constant-yen(1)* |
|
|
|
|
|
(6 |
) |
|
|
|
|
|
(3 |
) |
|
|
|
|
|
2 |
|
|
|
Constant-won(1) |
|
|
|
|
|
(2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency hedges related to
translated earnings(2) |
|
|
|
|
|
5 |
|
|
|
|
|
|
14 |
|
|
|
|
|
|
|
|
|
|
Acquisition-related
costs(3) |
|
|
|
|
|
|
|
|
|
|
|
|
(1 |
) |
|
|
|
|
|
1 |
|
|
|
Restructuring, impairment, and other
charges(6) |
|
|
|
|
|
14 |
|
|
|
|
|
|
12 |
|
|
|
|
|
|
12 |
|
|
|
Pension mark-to-market(11) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2 |
) |
|
|
Core performance |
|
$ |
1,107 |
|
$ |
178 |
|
|
$ |
1,205 |
|
$ |
160 |
|
|
$ |
1,170 |
|
$ |
194 |
|
|
* |
In the first quarter of 2015, we
changed the yen-to-dollar management rate from ¥93 to ¥99 to closely align
with the yen-denominated hedges entered into for the years 2015 through
2017. Prior periods presented have been recast based on the new
rate. |
See Corning Incorporated and Subsidiary
Companies: Use of Non-GAAP Financial Measures, Items which we exclude from GAAP
measures to arrive at core performance measures on page 86 for the descriptions
of the footnoted reconciling items.
84 CORNING
INCORPORATED - 2016 Proxy Statement
Table of Contents
Appendix A
CORNING INCORPORATED AND SUBSIDIARY
COMPANIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURE TO GAAP FINANCIAL
MEASURE
Life Sciences
Segment
Years Ended December 31, 2015,
2014 and 2013
(Unaudited; amounts in
millions)
|
|
|
Year ended December 31,
2015 |
|
Year ended December 31,
2014 |
|
Year ended December 31,
2013 |
|
|
|
|
Sales |
|
Net income |
|
Sales |
|
Net income |
|
Sales |
|
Net income |
|
|
As reported |
|
$ |
821 |
|
$ |
61 |
|
$ |
862 |
|
$ |
67 |
|
$ |
851 |
|
$ |
68 |
|
|
|
Acquisition-related
costs(3) |
|
|
|
|
|
12 |
|
|
|
|
|
14 |
|
|
|
|
|
21 |
|
|
|
Restructuring, impairment,
and other charges(6) |
|
|
|
|
|
|
|
|
|
|
|
2 |
|
|
|
|
|
3 |
|
|
|
Pension
mark-to-market(11) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3 |
) |
|
|
Core performance |
|
$ |
821 |
|
$ |
73 |
|
$ |
862 |
|
$ |
83 |
|
$ |
851 |
|
$ |
89 |
|
|
See Corning Incorporated and Subsidiary
Companies: Use of Non-GAAP Financial Measures, Items which we exclude from GAAP
measures to arrive at core performance measures on page 86 for the descriptions
of the footnoted reconciling items.
CORNING INCORPORATED - 2016 Proxy
Statement 85
Table of Contents
Appendix A
CORNING INCORPORATED AND
SUBSIDIARY COMPANIES: Use of Non-GAAP Financial Measures
In managing the Company and assessing
our financial performance, we supplement certain measures provided by our
consolidated financial statements with measures adjusted to exclude certain
items, to arrive at core performance measures. We believe reporting core
performance measures provides investors greater transparency to the information
used by our management team to make financial and operational decisions. Net
sales, equity in earnings of affiliated companies, and net income are adjusted
to exclude the impacts of changes in the Japanese yen and Korean won, the impact
of the purchased and zero cost collars, average forward contracts and other
yen-related transactions, acquisition-related costs, the 2013 results of the
polysilicon business of our equity affiliate Dow Corning Corporation, discrete
tax items, restructuring and restructuring-related charges, certain litigation
and regulatory expenses, pension mark-to-market adjustments, and other items
which do not reflect on-going operating results of the Company or our equity
affiliates. These measures are not prepared in accordance with U.S. Generally
Accepted Accounting Principles (GAAP). We believe investors should consider
these non-GAAP measures in evaluating our results as they are more indicative of
our core operating performance and how management evaluates our operational
results and trends. These measures are not, and should not be viewed as a
substitute for U.S. GAAP reporting measures.
The following is an explanation of each
adjustment that management excluded as part of these non-GAAP financial measures
as well as reasons for excluding each item:
ITEMS WHICH WE EXCLUDE FROM GAAP
MEASURES TO ARRIVE AT CORE PERFORMANCE MEASURES
Items which we exclude from GAAP
measures to arrive at Core performance measures are as follows:
(1) |
Constant-currency
adjustments:
Constant-yen: Because a significant portion of Display Technologies
segment revenues and manufacturing costs are denominated in Japanese yen,
management believes it is important to understand the impact on core
earnings of translating yen into dollars. Presenting results on a
constant-yen basis mitigates the translation impact of the Japanese yen,
and allows management to evaluate performance period over period, analyze
underlying trends in our businesses, and establish operational goals and
forecasts. As of January 1, 2015, we used an internally derived management
rate of ¥99, which is closely aligned to our current yen portfolio of
foreign currency hedges, and have recast all periods presented based on
this rate in order to effectively remove the impact of changes in the
Japanese yen.
Constant-won: Following the acquisition of Samsung Corning
Precision Materials and because a significant portion of Corning Precision
Materials costs are denominated in Korean won, management believes it is
important to understand the impact on core earnings from translating won
into dollars. Presenting results on a constant-won basis mitigates the
translation impact of the Korean won, and allows management to evaluate
performance period over period, analyze underlying trends in our
businesses, and establish operational goals and forecasts without the
variability caused by the fluctuations caused by changes in the rate of
this currency. We use an internally derived management rate of 1,100,
which is consistent with historical prior period averages of the
won. |
|
|
(2) |
Foreign currency hedges related to translated earnings: We have
excluded the impact of the gains and losses of our foreign currency hedges
related to translated earnings for each period presented. |
|
|
(3) |
Acquisition-related costs: These
expenses include intangible amortization, inventory valuation adjustments
and external acquisition-related deal costs. |
|
|
(4) |
Discrete tax items and other
tax-related adjustments: This represents the removal of discrete
adjustments attributable to changes in tax law and changes in judgment
about the realizability of certain deferred tax assets, as well as other
non-operational tax-related adjustments, including the tax effect of
transfer pricing out-of-period adjustments in 2014 and 2015.
|
|
|
(5) |
Litigation, regulatory and other
legal matters: Includes amounts related to the Pittsburgh Corning
Corporation (PCC) asbestos litigation, adjustments to our estimated
liability for environmental-related items and other legal
matters. |
|
|
(6) |
Restructuring, impairment and
other charges: This amount includes restructuring, impairment and other
charges, including goodwill impairment charges and other expenses and
disposal costs not classified as restructuring expense. |
|
|
(7) |
Liquidation of subsidiary: The
partial impact of non-restructuring related items due to the decision to
liquidate a consolidated subsidiary that is not
significant. |
|
|
(8) |
Equity in earnings of affiliated
companies: These adjustments relate to items which do not reflect expected
on-going operating results of our affiliated companies, such as
restructuring, impairment and other charges and settlements under
take-or-pay contracts. In 2013, we excluded the operating results of Dow
Cornings consolidated subsidiary Hemlock Semiconductor, a producer of
polycrystalline silicon, to remove the impact of the severe
unpredictability and instability in the polysilicon market.
|
|
|
(9) |
Impacts from the acquisition of
Samsung Corning Precision Materials: Pre-acquisition gains and losses on
previously held equity investment and other gains and losses related to
the acquisition, including post-combination expenses, fair value
adjustments to the indemnity asset related to contingent consideration and
the impact of the withholding tax on a dividend from Samsung Corning
Precision Materials. |
|
|
(10) |
Post-combination expenses:
Post-combination expenses incurred as a result of an acquisition in the
first quarter of 2015. |
|
|
(11) |
Pension mark-to-market
adjustment: Mark-to-market pension gains and losses, which arise from
changes in actuarial assumptions and the difference between actual and
expected returns on plan assets and discount rates. |
|
|
(12) |
Gain on change in control of
equity investment: Gain as a result of certain changes to the shareholder
agreement of an equity company, resulting in Corning having a controlling
interest that requires consolidation of this
investment. |
86 CORNING
INCORPORATED - 2016 Proxy Statement
Table of Contents
Table of Contents
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![](http://www.sec.gov/Archives/edgar/data/24741/000120677416004903/corning_def14a11x8x1.jpg) |
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Throughout our history, Cornings strong, visionary leadership
has been guided by an enduring set of Values that define our
relationships with employees, customers, and the communities in which
we operate around the world.
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IMPORTANT ANNUAL
MEETING
INFORMATION |
Electronic
Voting Instructions
You can
vote by Internet or telephone!
Available 24 hours a day, 7 days a
week!
Instead of
mailing your proxy, you may choose one of the two voting methods outlined below
to vote your proxy.
VALIDATION
DETAILS ARE LOCATED BELOW IN THE TITLE BAR.
Proxies
submitted by the Internet or telephone must be received by 8:00 a.m., Eastern
Time, on April 28, 2016.
Vote by
Internet |
● |
Go to www.investorvote.com/glw |
● |
Or scan the QR code with your
smartphone |
● |
Follow the steps outlined on the
secure website |
Vote by
telephone
● |
Call toll free 1-800-652-VOTE (8683)
within the USA, US territories & Canada
on a touch tone telephone. There is NO
CHARGE to you for the
call. |
● |
Follow the instructions provided by
the recorded message |
Using a black
ink pen, mark your votes with an X as shown in this example.
Please do not write outside the designated areas. |
|
![](http://www.sec.gov/Archives/edgar/data/24741/000120677416004903/corning_proxyx1x2.jpg) |
Annual Meeting Proxy Card |
![](http://www.sec.gov/Archives/edgar/data/24741/000120677416004903/corning_proxyx1x3.jpg)
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IF YOU HAVE NOT
VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE
PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED
ENVELOPE.
A |
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Election of
Directors The Board of Directors recommends a vote
FOR the listed
nominees. |
1.
Nominees: |
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For |
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Against |
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Abstain |
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For |
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Against |
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Abstain |
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For |
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Against |
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Abstain |
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![](http://www.sec.gov/Archives/edgar/data/24741/000120677416004903/corning_proxyx1x4.jpg) |
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01 - Donald W. Blair |
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☐ |
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☐ |
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☐ |
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02 - Stephanie A. Burns |
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☐ |
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☐ |
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☐ |
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03 - John A. Canning, Jr. |
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☐ |
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☐ |
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☐ |
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04 - Richard T. Clark |
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☐ |
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☐ |
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☐ |
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05 - Robert F. Cummings, Jr. |
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☐ |
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☐ |
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☐ |
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06 - Deborah A. Henretta |
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☐ |
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☐ |
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☐ |
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07 - Daniel P. Huttenlocher |
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☐ |
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☐ |
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☐ |
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08 - Kurt M. Landgraf |
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☐ |
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☐ |
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☐ |
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09 - Kevin J. Martin |
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☐ |
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☐ |
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☐ |
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10 - Deborah D. Rieman |
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☐ |
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☐ |
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☐ |
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11 - Hansel E. Tookes II |
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☐ |
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☐ |
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☐ |
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12 - Wendell P. Weeks |
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☐ |
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☐ |
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☐ |
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13 - Mark S. Wrighton |
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☐ |
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☐ |
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☐ |
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B |
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Managements Proposals The Board of Directors
recommends a vote |
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FOR
Proposals 2 and 3. |
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For |
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Against |
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Abstain |
2. Ratify the appointment of
PricewaterhouseCoopers LLP as Cornings independent registered public
accounting firm for the fiscal year ending December 31, 2016. |
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☐ |
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☐ |
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☐ |
3. Advisory vote to approve the
Companys executive compensation. |
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☐ |
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☐ |
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☐ |
C |
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Authorized
Signatures This section must be completed for your vote to be counted.
Date and Sign Below |
NOTE: Please sign your name(s) EXACTLY as
your name(s) appear(s) on this proxy. All joint holders must sign. When
signing as attorney, trustee, executor, administrator, guardian or
corporate officer, please provide your FULL
title. |
Date (mm/dd/yyyy) Please print date
below. |
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Signature 1 Please keep signature within
the box. |
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Signature 2 Please keep signature within
the box. |
![](http://www.sec.gov/Archives/edgar/data/24741/000120677416004903/corning_proxyx1x5.jpg) |
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IF YOU HAVE NOT VOTED VIA THE
INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE
BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
Proxy Corning
Incorporated |
|
![](http://www.sec.gov/Archives/edgar/data/24741/000120677416004903/corning_proxyx1x4.jpg) |
PROXY SOLICITED
ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE 2016 MEETING OF
SHAREHOLDERS
APRIL 28, 2016
The undersigned hereby appoints Lawrence
D. McRae and Wendell P. Weeks and each of them, proxies with full power of
substitution, to vote as designated on the reverse side, on behalf of the
undersigned all shares of Stock which the undersigned may be entitled to vote at
the Meeting of Shareholders of Corning Incorporated on April 28, 2016, and any
adjournments thereof, with all powers that the undersigned would possess if
personally present. In their discretion, the proxies are hereby authorized to
vote upon such other business as may properly come before the meeting and any
adjournments or postponements thereof.
If you are a current or former employee of
Corning Incorporated and own shares of Corning common stock through a Corning
Incorporated benefit plan, your share ownership as of February 29, 2016 is shown
on this proxy card. Your vote will provide voting instructions to the trustees
of the plans. If no instructions are given, the trustees will vote your shares
as described in the proxy statement.
THIS PROXY WILL BE VOTED IN ACCORDANCE
WITH SPECIFICATIONS MADE. IF NO CHOICES ARE INDICATED, THIS PROXY WILL BE VOTED
FOR ALL LISTED NOMINEES AND IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD
OF DIRECTORS ON THE OTHER MATTERS REFERRED TO ON THE REVERSE SIDE
HEREOF.
Important Notice Regarding the
Availability of Proxy Materials for the Shareholder Meeting April 28, 2016. The
proxy statement and annual report to security holders are available at
www.corning.com/2016-proxy.
Change of
Address
Please print your new address below. |
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Discontinue
Duplicates Reports |
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|
Meeting
Attendance |
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Mark the box to the right if you wish
to discontinue receiving duplicate Annual Reports. |
|
☐ |
|
Mark the box to the right if you plan
to attend the Annual Meeting. |
|
☐ |
![](http://www.sec.gov/Archives/edgar/data/24741/000120677416004903/corning_proxyx1x6.jpg) |
IF VOTING BY MAIL,
YOU MUST COMPLETE SECTIONS A - D
ON BOTH SIDES OF THIS CARD. |
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*** Exercise
Your Right
to Vote ***
Important Notice Regarding the Availability of Proxy Materials for
the
Shareholder Meeting to Be Held on April 28, 2016.
|
Meeting
Information |
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Meeting Type: |
Annual
Meeting |
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For
holders as of: |
February 29,
2016 |
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Date: April 28,
2016 |
Time: 11:00
a.m. Eastern Time |
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Location: |
Corning Museum of Glass |
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One Museum Way |
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Corning, NY 14830 |
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You are receiving this communication
because you hold shares in the company named above.
This is not a ballot. You cannot use
this notice to vote these shares. This communication presents only an overview
of the more complete proxy materials that are available to you on the Internet.
You may view the proxy materials online at www.proxyvote.com or easily request a
paper copy (see reverse side).
We encourage you to access and review
all of the important information contained in the proxy materials before
voting.
See the reverse side of this notice to obtain proxy
materials and voting
instructions. |
Before You Vote
How to Access the Proxy Materials
Proxy
Materials Available to VIEW or RECEIVE:
NOTICE AND
PROXY
STATEMENT ANNUAL
REPORT FORM
10-K
How to View
Online:
Have the information that is
printed in the box marked by the arrow ➔XXXX XXXX XXXX XXXX (located on
the following page) and visit: www.proxyvote.com.
How to Request and Receive a PAPER or E-MAIL
Copy:
If you want to receive a paper or
e-mail copy of these documents, you must request one. There is NO charge for a
copy. Please choose one of the following methods to make your
request:
|
1) |
BY
INTERNET: |
www.proxyvote.com |
|
2) |
BY
TELEPHONE: |
1-800-579-1639 |
|
3) |
BY
E-MAIL*: |
sendmaterial@proxyvote.com |
* If
requesting materials by e-mail, please send a blank e-mail with the information
that is printed in the box marked by the arrow ➔XXXX XXXX XXXX XXXX (located on
the following page) in the subject line.
Requests, instructions and other inquiries sent to this e-mail address
will NOT be forwarded to your investment advisor. Please make the request as
instructed above on or before April 14, 2016 to facilitate timely
delivery.
How To Vote
Please Choose One of the Following Voting
Methods
Vote In Person: If you choose to vote these shares in person at the meeting,
you must request a "legal
proxy." To do so, please follow the
instructions at www.proxyvote.com or request a paper
copy of the materials, which will contain the appropriate instructions. Many
shareholder meetings have attendance requirements including, but not limited to,
the possession of an attendance ticket issued by the entity holding the meeting.
Please check the meeting materials for any special requirements for meeting
attendance.
Vote By Internet: To vote now by Internet, go to www.proxyvote.com. Have the
information that is printed in the box marked by the arrow ➔XXXX XXXX XXXX XXXX (located on
the following page) available and follow the instructions.
Vote By Mail: You can vote by mail by
requesting a paper copy of the materials, which will include a voting
instruction form.
![](http://www.sec.gov/Archives/edgar/data/24741/000120677416004903/corning_proxy3.jpg)
The Board of Directors
recommends you vote FOR the following proposals: |
|
1. |
|
Election of
Directors |
|
|
Nominees: |
|
|
1a. |
|
Donald W. Blair |
|
|
1b. |
|
Stephanie A. Burns |
|
|
1c. |
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John A. Canning, Jr. |
|
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1d. |
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Richard T. Clark |
|
|
1e. |
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Robert F. Cummings, Jr. |
|
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1f. |
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Deborah A. Henretta |
|
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1g. |
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Daniel P. Huttenlocher |
|
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1h. |
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Kurt M. Landgraf |
|
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1i. |
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Kevin J. Martin |
|
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1j. |
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Deborah D. Rieman |
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1k. |
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Hansel E. Tookes II |
|
|
1l. |
|
Wendell P. Weeks |
|
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1m. |
|
Mark S.
Wrighton |
2. |
|
Ratify the appointment of
PricewaterhouseCoopers LLP as Cornings independent registered public
accounting firm for the fiscal year ending December 31, 2016. |
|
3. |
|
Advisory vote to approve the
Companys executive compensation. |
|
NOTE:
Such
other business as may properly come before the meeting or any adjournment
thereof. |
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