Table of Contents
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange
Act of 1934 (Amendment No. )
Filed by the Registrant
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the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy
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Definitive Additional
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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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2015
Proxy Statement and Notice of Annual Meeting of
Shareholders |
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Thursday, April 30,
2015
The Corning Museum of
Glass One Museum Way Corning, NY
14830 |
Table of Contents
Dear Fellow
Shareholder:
I hope you
will join Corning Incorporateds Board of Directors, senior leadership, and
other stakeholders at our 2015 Annual Meeting in Corning, New York, on April 30
at 11 a.m. Eastern Time. The Annual Meeting is your chance to hear directly from
leadership about Cornings 2014 performance and our expectations for 2015. More
importantly, it is your opportunity to ensure that your voice is heard.
Shareholders will vote on the annual election of directors and the ratification
of the appointment of Cornings independent registered public accounting firm
for 2015, in addition to providing an advisory vote on the 2014 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 30 so that your shares will be represented and voted at
the meeting.
Maintaining
the trust of our stakeholders is vital to Cornings success. We regularly engage
directly with investors to ensure we understand their views on our corporate
governance and executive compensation structures. Last year, we implemented
several changes to our compensation program in response to prior feedback, and
the response was extremely positive. We remain committed to keeping the
communication channels open with our shareholders, and disclosing information
clearly in our proxy statement and related documents.
As part of
our commitment to strong corporate governance, we also welcomed two new
independent directors to our Board: Donald W. Blair, executive vice president
and chief financial officer for NIKE, Inc., and Daniel P. Huttenlocher, vice
provost and dean at Cornell University. Mr. Blair brings extensive financial
expertise and management experience at the international, operational, and
corporate levels. Dr. Huttenlocher brings expertise in technology innovation and
commercialization, and experience developing next-generation products and
services. You can find a full list of our directors and their qualifications
beginning on page 20.
Of course,
the primary way we earn your trust will always be our performance. Im pleased
to report that Corning had an outstanding year in 2014. We grew sales and
profits. We exceeded our expectations for synergies from the integration of
Corning Precision Materials. We launched new products, and we honored our
commitment to return cash to shareholders. Thanks to outstanding execution by
our global employees, we have entered 2015 as a bigger, stronger, and more agile
company.
I look forward to sharing more details
at the Annual Meeting. Meanwhile, I encourage you to submit your vote.
Thank you
for your investment in Corning and your participation in our governance
process.
Sincerely,
Wendell P.
Weeks
Chairman of the Board, Chief
Executive Officer and President
CORNING INCORPORATED - 2015 Proxy
Statement 3
Table of Contents
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Notice of
2015 Annual Meeting of Shareholders |
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Thursday, April 30, 2015
11:00 a.m. Eastern Time
Corning Museum of Glass, located at
One Museum Way, Corning, New York 14830
TO OUR
SHAREHOLDERS
You are invited to attend Corning
Incorporateds 2015 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 30, 2015 at 11:00 a.m. Eastern Time.
Items of
Business
1. |
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Election of all 14 directors named in our proxy
statement 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; |
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A shareholder proposal, if properly presented at
meeting; 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 2015 Annual Meeting if you were a shareholder of record at the close
of business on March 2, 2015.
Your vote
is important to us. Please exercise your shareholder right to vote.
Important Notice Regarding the
Availability of Proxy Materials for the Annual Meeting to be held on April 30,
2015: our Proxy Statement, 2014 Annual Report and other materials are available
on our website at www.corning.com/2015_proxy.
Sincerely,
Linda E. Jolly
Vice President and Corporate Secretary
March 17, 2015
4 CORNING INCORPORATED
- 2015
Proxy Statement
Table of Contents
Welcome to the Corning Incorporated
2015 Annual Shareholders
Meeting
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/2015_proxy |
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Review and download this Proxy
Statement and our Annual Report. |
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Sign up for electronic delivery of
future Annual Meeting materials to reduce Cornings impact on the
environment. |
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Corning is providing these proxy
materials in connection with our Annual Meeting. This proxy statement, the
accompanying proxy card and Cornings 2014 Annual Report were first mailed to
shareholders on or about March 17, 2015. 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 - 2015 Proxy
Statement 5
Table of Contents
Table of Contents
6 CORNING INCORPORATED - 2015 Proxy
Statement
Table of Contents
CORNING INCORPORATED - 2015 Proxy
Statement 7
Table of Contents
PROXY
STATEMENT SUMMARY
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.
Corning Incorporated 2015 Annual Meeting of
Shareholders
Time and
Date |
11:00 a.m. ET on Thursday, April
30, 2015 |
Place |
The Corning Museum of Glass, One
Museum Way, Corning, New York 14830 |
Record
Date |
March 2, 2015 |
Voting |
Shareholders as of the record
date are entitled to one vote per share on each matter to be voted upon at
the 2015 Annual Meeting of Shareholders (the Annual
Meeting). |
Attendance |
If you plan to attend the Annual
Meeting, you must be a shareholder of record on the record date and be
prepared to show proof of ownership as described on page 62 of this proxy
statement. |
Proposals that Require Your
Vote
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Board Vote Recommendation |
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More Information |
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Proposal 1 |
Election of directors |
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FOR all of the director
nominees |
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18 |
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Proposal 2 |
Ratification of appointment of independent
registered public accounting firm |
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FOR |
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30 |
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Proposal 3 |
Advisory vote to approve the Companys
executive compensation |
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FOR |
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32 |
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Proposal
4 |
Shareholder proposal |
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AGAINST |
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61 |
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Your vote is
important to us. Please exercise your right to vote.
2014 Performance Highlights
2014 was one
of the strongest years in Cornings history. Our core net sales exceeded $10
billion for the first time in the Companys history, with 29% core sales growth,
and 22% core earnings improvement from a year ago. We have now produced two full
years of quarterly year-over-year earnings growth. Our 2014 performance
highlights include:
● |
Core net sales were $10.2
billion*, a 29% increase from $7.9
billion in 2013, marking a record year in sales performance for the
company. GAAP sales were $9.7 billion. |
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Core earnings per share were
$1.53*, a 24% year-over-year
improvement compared with last years core EPS of $1.23*. GAAP earnings
per share were $1.73. |
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Successful integration of
Corning Precision Materials Co., Ltd.
resulted in pre-tax synergies of more than $100 million, which exceeded
the Companys original expectations. |
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Increased shareholder
distributions. In December, we
announced a 20% increase in the Companys dividend and a new $1.5 billion
share repurchase program. |
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Over the last four years, Corning
has returned approximately $7.4 billion to our shareholders through share
repurchases and dividends. |
*These are
non-GAAP financial measures. Appendix A to this proxy statement contains a
reconciliation of these non-GAAP measures to our audited GAAP financial
statements.
8 CORNING
INCORPORATED - 2015 Proxy Statement
Table of Contents
Proxy Statement
Summary
Governance Highlights
Corning is
committed to maintaining good corporate governance as a critical component of
our success in driving sustained shareholder value. The Board of Directors
continually monitors emerging best practices in governance to best serve the
interests of the Companys shareholders. Our practices include:
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Annual election of all
directors |
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Majority vote standard in
uncontested elections |
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Each director must be elected by
a majority of votes cast |
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Active shareholder
engagement |
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Corning regularly engages with
its shareholders to better understand their perspectives |
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Independent Lead
Director |
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Independent Board
Committees |
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Each of the Audit, Compensation,
Nominating and Corporate Governance, and Corporate Relations committees is
made up of entirely independent directors |
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Executive sessions of
independent directors held at each regularly scheduled
meeting |
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Stock ownership guidelines for
directors and named executive officers |
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Significant requirements strongly
link the interests of management and the Board with those of
shareholders |
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Prohibition on pledging and
hedging for directors and executives |
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Company policies prohibit our
directors and executives from pledging or hedging or trading in
derivatives of the Companys stock |
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Clawback
policy |
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Executives incentives are
subject to a clawback that applies in the event of certain financial
restatements |
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Proposal 1
Election of Directors
The following 14 directors are being
nominated for election to a one-year term:
Name |
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Age |
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Director Since |
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Occupation |
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Other Public Company
Boards |
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Committee Memberships* |
Donald W.
Blair Independent
Director |
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57 |
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2014 |
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Executive Vice President and Chief Financial Officer, NIKE, Inc. |
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None |
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Audit |
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Finance |
Stephanie A. Burns Independent Director |
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60 |
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2012 |
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Retired Chairman and Chief Executive Officer, Dow Corning Corporation |
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GlaxoSmithKline plc. |
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Audit |
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Kellogg Company |
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Chair,
Corporate |
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Relations |
John A. Canning,
Jr. Independent
Director |
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70 |
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2010 |
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Chairman, Madison Dearborn Partners, LLC |
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Exelon Corporation |
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Executive |
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Finance |
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Nominating |
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and Corporate |
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Governance |
Richard T. Clark Lead Independent Director |
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69 |
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2011 |
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Retired Chairman, President and Chief Executive Officer, Merck
& Co., Inc. |
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ADP,
LLC |
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Compensation |
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Executive |
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Nominating |
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and
Corporate |
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Governance |
CORNING INCORPORATED - 2015 Proxy
Statement 9
Table of Contents
Proxy Statement
Summary
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Name |
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Age |
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Director Since |
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Occupation |
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Other Public Company
Boards |
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Committee Memberships* |
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Robert F. Cummings,
Jr. Independent
Director |
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65 |
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2006 |
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Vice Chairman of Investment Banking, JPMorgan Chase & Co |
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●Viasystems Group, Inc. |
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Executive |
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●W. R. Grace & Co. |
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Chair, Finance |
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Nominating |
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and Corporate |
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Governance |
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James B. Flaws |
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66 |
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2000 |
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Vice Chairman and Chief Financial Officer, Corning Incorporated |
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●None |
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Executive |
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Finance |
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Deborah A.
Henretta Independent
Director |
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53 |
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2013 |
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Group President of E-Business, Procter & Gamble Company |
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●None |
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Audit |
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Corporate Relations
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Daniel P. Huttenlocher Independent Director |
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55 |
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2015 |
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Dean and Vice Provost, Cornell
Universitys New York City Tech
Campus |
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●None |
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Audit |
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Finance |
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Kurt M.
Landgraf Independent
Director |
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68 |
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2007 |
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Retired President and Chief Executive Officer, Educational
Testing Service |
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●Louisiana-Pacific |
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Chair, Audit |
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Corporation |
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Compensation |
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Executive |
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Kevin J. Martin Independent Director |
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48 |
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2013 |
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Counsel, Squire Patton Boggs
LLP |
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●None |
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Corporate
Relations |
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Nominating |
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and
Corporate |
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Governance |
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Deborah D.
Rieman Independent
Director |
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65 |
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1999 |
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Executive Chairman, MetaMarkets Group |
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●None |
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Audit |
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Chair, |
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Compensation |
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Hansel E. Tookes II Independent Director |
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67 |
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2001 |
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Retired Chairman and Chief Executive Officer, Raytheon Aircraft Company |
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●Ryder Systems, Inc. |
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Compensation |
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●NextEra Energy, Inc. |
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Executive |
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●Harris Corporation |
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Chair,
Nominating |
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and
Corporate |
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Governance |
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Wendell P. Weeks |
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55 |
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2000 |
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Chairman, Chief Executive Officer and President, Corning
Incorporated |
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●Merck & Co., Inc. |
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Executive |
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Mark S. Wrighton Independent Director |
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65 |
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2009 |
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Chancellor and Professor of Chemistry, Washington
University in St. Louis |
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●Cabot Corporation |
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Audit |
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●Brooks Automation, Inc. |
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Finance |
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*Committee
memberships as of February 5, 2015.
Our Board unanimously
recommends that shareholders vote FOR all of our director nominees.
Proposal
2 |
Ratification of Appointment of Independent
Registered Public Accounting
Firm |
As a matter of good corporate
governance, we are asking our shareholders to ratify the appointment of
PricewaterhouseCoopers LLP as our independent public accounting firm for
2015.
Our Board unanimously
recommends a vote FOR the ratification of the appointment of
PricewaterhouseCoopers LLP as our independent registered public accounting firm
for the year ending December 31, 2015.
10 CORNING INCORPORATED - 2015 Proxy
Statement
Table of Contents
Proxy Statement
Summary
Proposal 3 Advisory Approval of Executive
Compensation
We solicit
an annual advisory vote on our executive compensation. Our Board of Directors
requests that shareholders approve the compensation of our Named Executive
Officers (NEOs), as disclosed in this proxy statement. This includes the
Compensation Discussion and Analysis, the Summary Compensation Table and the
supporting tabular and narrative disclosure on executive
compensation.
Our key
compensation principles are as follows:
Provide a Competitive Base Salary:
Base salaries provide a form of fixed compensation and are
reviewed annually by the Compensation Committee using salary surveys, internal
equity and performance as discussed in the Compensation Peer Group
section.
Pay for Performance:
Executive compensation should be tied to performance and contribution to
both short-term and long-term corporate financial performance and shareholder
value.
Team-Based Management Approach:
Corning uses a team-based management approach, so 100% of
incentives awarded to NEOs are contingent on achieving a common set of goals for
Cornings consolidated financial performance or the performance of Corning
stock. Internal equity within our NEO group is also important.
Incentive Compensation Should be a Greater Part of Total
Compensation for More Senior Positions:
As employees assume more responsibility and have greater opportunity to
affect Company performance and shareholder value, an increasing share of their
total compensation package is derived from variable incentive compensation. More
than 80% of our NEOs total compensation is variable.
The Interests of our Executive Group Should Align with
Shareholders:
Through the use of stock
options and restricted stock units, and robust stock ownership guidelines, we
align the long-term interests of our NEOs with those of our long-term
shareholders.
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 2014 Company performance, focusing on the
compensation of our NEOs. We believe that we have created a compensation program
deserving of shareholder support. Accordingly, we are asking for shareholder
approval of the compensation of our NEOs as disclosed in this proxy statement.
See Proposal 3 Advisory Approval of Executive Compensation and Compensation
Discussion and Analysis for more information.
Our Board unanimously
recommends a vote FOR the resolution approving the compensation of our Named
Executive Officers.
Proposal 4
Holy Land Principles Shareholder Proposal
A
shareholder proposal was submitted by the Holy Land Principles, Inc. regarding
employment matters in Israel. The Board has considered the proposal, and
believes adopting the shareholder proposal is unnecessary in light of the
Companys demonstrated commitment to equal employment opportunity without regard
to age, race, color, gender, national origin, religion, sexual orientation,
gender identity or expression, disability, veteran status or any other protected
status.
Our Board unanimously
recommends a vote AGAINST the resolution adopting the shareholder
proposal.
CORNING INCORPORATED - 2015 Proxy
Statement 11
Table of
Contents
General Information About 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 |
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More Information |
BOARD COMPOSITION AND
ACCOUNTABILITY |
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Independence |
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A majority of our directors must be
independent. Currently, 86% of our directors are independent, and each of
our Audit, Compensation, Nominating and Corporate Governance, and
Corporate Relations committees consist entirely of independent
directors. |
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p. 15 |
Skills and Qualifications
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The composition of our Board
represents broad perspectives, skills, experiences, and knowledge relevant
to our business. |
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18 |
Lead Independent
Director |
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Our Corporate Governance Guidelines
require a Lead Independent Director position with specific
responsibilities to ensure independent oversight of management whenever
our CEO is also the Chair of the Board. |
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13 |
Annual Management
Succession Planning Review |
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Our Board conducts an annual review
of management development and succession planning. |
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13 |
Director Tenure Policies |
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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. |
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19 |
Director Overboarding
Policy |
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We have a policy to help provide
confidence that our directors are not overextended. Our director
overboarding policy requires a director to submit an offer of resignation
for consideration by the Board if the director becomes overboarded. Any
director who is not serving as CEO of a public company is expected to
serve on no more than four public company boards (including our Board),
and any director serving as a CEO of a public company (including our CEO)
is expected to serve on no more than two public company boards (which
includes our Board). |
|
|
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. |
|
|
Director Resignation
Policy |
|
An incumbent director who is not
re-elected 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 - 2015 Proxy Statement
Table of
Contents
General Information About Corporate
Governance and the Board of Directors
Board
Leadership Structure
We do not
have an express 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 a
Lead Independent Director 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 2015, as part of our 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 Lead Independent
Director assumes certain responsibilities on behalf of the independent directors
remains the optimal board leadership structure for the Company and our
shareholders.
As recently announced, Richard T. Clark
was re-elected effective February 5, 2015, to the role of Lead Independent
Director of the Board by the independent directors.
Lead
Independent Director
Our Lead
Independent Director is elected annually by the independent, non-management
directors.
The Lead
Independent Directors regular duties include:
● |
approving Board meeting agendas; |
● |
in
consultation with the Chair and the independent directors, approving Board
meeting schedules to ensure there is sufficient time for discussion of all
agenda items; |
● |
approving the type of information to be provided to directors for
Board meetings; |
● |
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; |
● |
serving as liaison between the Chair and the independent directors;
|
● |
making himself available for consultation and direct communication
with the Companys shareholders; |
● |
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 Lead Independent Director, Richard T. Clark, performs the
following additional duties:
● |
regularly meets with the CEO after regularly scheduled
Board meetings to provide feedback on the independent directors
deliberations; and |
● |
regularly speaks 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. On an annual basis, the Board conducts a 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.
Risk
Oversight
Corning has
a comprehensive risk management program that engages the Companys management
and Board. The Company uses an Enterprise Risk Management program (ERM) modeled
on the COSO II framework. (The Committee of Sponsoring Organizations (COSO) provides
thought leadership and guidance on internal controls, enterprise risk management
and fraud deterrence. The COSO II internal control framework was released in May
2013). The 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.
CORNING INCORPORATED - 2015 Proxy
Statement 13
Table of
Contents
General Information About Corporate
Governance and the Board of Directors
Additionally, the full Board provides risk oversight through its review
of: potential risks which could negatively impact the proposed budget and plan;
the Companys strategic 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. 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. You can
review our Committee Charters on our website at http://www.corning.com/investor_relations/corporate_governance/board_committees_charters.aspx.
Committees
The Board has the following Committees
and Committee composition as of the date of this proxy statement.
Committee |
|
Primary
Responsibilities |
|
Number of Meetings in
2014 |
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; |
|
10 |
|
|
● |
Approves the appointment of Cornings independent registered public
accounting firm; |
|
|
|
|
● |
Reviews the effectiveness of Cornings internal control over
financial reporting, including disclosure controls; |
|
|
|
|
● |
Reviews the quarterly and annual financial statements; |
|
|
|
|
● |
Discusses company policies with respect to risk assessment and risk
management; |
|
|
|
|
● |
Oversees the independent registered public accounting firms
qualifications, independence and performance; |
|
|
|
|
● |
Reviews the results of Cornings
annual audit; and |
|
|
|
|
● |
Determines the appropriateness of fees
for the independent registered public accounting firm. |
|
|
Compensation(2) |
|
● |
Reviews
Cornings goals and objectives with respect to executive
compensation; |
|
7 |
|
|
● |
Evaluates the
CEOs performance in light of Cornings goals and objectives; |
|
|
|
|
● |
Determines
and approves compensation for the CEO and other officers of
Corning; |
|
|
|
|
● |
Reviews and
approves employment, severance and change in control agreements for the
CEO and other officers of Corning; |
|
|
|
|
● |
Recommends to
the Board the compensation arrangements with respect to non-management
directors; |
|
|
|
|
● |
Oversees
Cornings equity compensation plans; and |
|
|
|
|
● |
Makes
recommendations to the Board regarding non-equity incentive and equity
incentive plans. |
|
|
Corporate Relations |
|
● |
Focuses on the areas of employment policy, public policy, external
communications and community relations in the context of the business
strategy of Corning. |
|
5 |
Executive |
|
● |
Serves
primarily as a means of taking action requiring Board approval between
regularly scheduled meetings of the Board. The Executive Committee is
authorized to act for the full Board on matters other than those
specifically reserved by New York law to the Board. |
|
5 |
Finance |
|
● |
Monitors present and future
capital requirements of Corning; |
|
6 |
|
|
● |
Reviews all potential material
transactions, including mergers, acquisitions, divestitures and
investments in third parties; |
|
|
|
|
● |
Reviews capital expenditure plans
and capital projects; |
|
|
|
|
● |
Monitors Cornings cash
management plans and activities; |
|
|
|
|
● |
Reviews Cornings tax position
and strategy; |
|
|
|
|
● |
Reviews and recommends for
approval by the Board Cornings dividend policy, declaration of dividends,
stock repurchases, and short and long term financing
transactions; |
|
|
|
|
● |
Reviews strategies for managing
financial, economic and hazard risks including hedging strategies,
insurance programs and other risk management processes; |
|
|
|
|
● |
Reviews and monitors Cornings
credit rating; |
|
|
|
|
● |
Reviews funding actions for
Cornings pension programs; and |
|
|
|
|
● |
Reviews Cornings financial plans
and other financial information that Corning uses in its analysis of
internal decisions. |
|
|
14 CORNING INCORPORATED - 2015 Proxy
Statement
Table of
Contents
General Information About Corporate
Governance and the Board of Directors
Committee |
|
Primary
Responsibilities |
|
Number of Meetings in
2014 |
Nominating and Corporate Governance |
|
● |
Identifies individuals qualified
to become Board members and reviews candidates recommended by
shareholders, and recommends to the Board director nominees to be proposed
for election at the annual meeting of shareholders; |
|
5 |
|
● |
Determines the criteria for
selecting director nominees; |
|
|
● |
Monitors significant developments
in the regulation and practice of corporate governance; |
|
|
● |
Develops and recommends to the
Board corporate governance guidelines; |
|
|
● |
Assists the Board in assessing
the independence of directors; |
|
|
● |
Identifies Board members to be assigned to the various
committees; |
|
|
● |
Oversees and assists the Board in the review of the Boards
performance; |
|
|
● |
Reviews transactions between Corning and related persons that are
required to be disclosed in our filings with the SEC; and |
|
|
● |
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 seven times
during 2014. Each incumbent director attended at least 75% of the meetings of
the Board and standing Committees on which the director served during 2014, with
the exception of Mr. Clark, whose attendance fell slightly below the 75%
threshold as a result of meetings missed due to the illness and death of a
family member. Despite his unavoidable absence, Mr. Clark continued to perform
the lead independent director responsibilities, while another independent
director chaired the executive sessions of independent directors.
All of our
then-serving directors attended our 2014 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 14
directors, 86% are independent. Mr. Flaws and Mr. Weeks are not independent
because they are executive officers of Corning. Previously, the Board concluded
that under the NYSE listing requirements, Dr. Burns could not be considered
independent until three years following her retirement as an executive officer
of Dow Corning Corporation, an independently managed company in which Corning
holds an equity interest but is not controlled by Corning, nor consolidated in
our financial statements. Dow Corning is not a subsidiary of Corning. Dr. Burns
retired from Dow Corning in December 2011, and has had no ongoing professional
relationship with the company. In its February 2015 review, the Board determined
that Dr. Burns qualifies as independent under the NYSE listing requirements,
applicable SEC rules, and the Companys director qualification
standards.
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; |
● |
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; |
CORNING INCORPORATED - 2015 Proxy
Statement 15
Table of
Contents
General Information About Corporate
Governance and the Board of Directors
● |
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 each must satisfy standards
established by the SEC which provide that to qualify as independent for
purposes of committee membership, audit committee 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 2012 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:
● |
Mr. Cummings is an employee of JPMorgan Chase & Co.
(JPM). He is not a JPM Section 16 executive under the SEC rules. JPM and
its affiliates provide various investment banking services including
underwriting, commercial lending, banking, and other financial advisory
services, including provision of credit facilities to Corning and its
affiliates. Corning has had a relationship with JPM for many years prior
to both Mr. Cummings service as a director to the Company and his
employment with JPM. Mr. Cummings is precluded from participating in the
services provided by JPM to Corning or the fees Corning pays to JPM. He
has no involvement in Cornings decision as to what services JPM provides
to the Company. Mr. Cummings has no personal interest in, nor does 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. Additionally,
Mr. Cummings is a non-management director of W.R. Grace & Co. (WRG).
WRG conducts business in the ordinary course as a supplier or purchaser of
goods or services with Corning and Dow Corning Corporation. During the
previous three years, payments 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. |
● |
Each of Mr. Canning, Mr.
Clark, Mr. Martin, Mr. Tookes, Ms. Henretta and Drs. Burns, Huttenlocher
and Wrighton is or was, during the previous three years, a non-management
director or employee of a company or organization that did business with
Corning at some time during those years. The business relationships were
ordinary course 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. |
In determining that each of the relationships set forth above are 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 transactions;
that such director had no role or financial interest in any decisions about any
of these transactions; and that such a relationship would 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
2014.
16 CORNING
INCORPORATED - 2015 Proxy Statement
Table of
Contents
General Information About Corporate
Governance and the Board of Directors
Compensation Committee Interlocks
and Insider Participation
No member
of the Compensation Committee is now, or was during 2014, 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 2014 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 2014 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 companys philanthropic activities are
done both directly and indirectly through its philanthropic arm The Corning
Incorporated Foundation (the Foundation).
Corning
makes annual contributions to the Foundation. We believe in being an active
corporate citizen and the Foundation directs its efforts toward the communities
where Corning Incorporated operates, promoting educational and social progress
that improves the quality of life for all. Grant activity is aimed at five
areas: education, culture, community, health and human services and disaster
relief. In 2014, Corning donated $6 million to the Foundation. During the year,
the Foundation disbursed approximately $5.6 million of which over 60% was
directed toward public education 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), James B. Flaws (vice chairman and CFO), 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 2014, Corning
provided cash and non-cash contributions of services to CMoG of approximately
$32 million. Corning has provided approximately $109 million for expansion and
improvement of facilities used by CMoG and owned by Corning. The expansion and
construction is expected to be completed in early 2015.
Corning has
provided 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, since its formation in 2004. Currently,
children of Corning employees represent approximately 50% of its enrollment. In
2014, 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 will likely make additional contributions to ASMS in the
future. Corning also provides financial support for educational institutions
internationally. In 2014, Corning Precision Materials donated approximately $5
million to support a local K-12 school in Asan, South Korea.
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 2014.
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 - 2015 Proxy
Statement 17
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, higher education, 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 characteristics of our business and experiences of
our Board.
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Key Competencies |
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Leadership |
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Industry Experience |
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Financial, Investment,
and/or Banking Experience |
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International Experience |
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Board Committees* |
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C
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Corporate Relations |
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Nominating and Corporate
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* Committee membership as of February 5, 2015;
C denotes the Chair of the committee.
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 major 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 posess 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.
18
CORNING INCORPORATED - 2015 Proxy Statement
Table of
Contents
Proposal 1 Election of Directors
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.
In addition, 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 |
Number of Director
Nominees |
More than 10
years |
4 |
5 to 10 years |
3 |
Less than 5 years |
7 |
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 Nominating and Corporate Governance 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. We believe that our diverse mix of directors allows the Board
to engage in candid and challenging discussions, in service of the best
decisions for the Company and its shareholders. The Nominating and Corporate
Governance Committee also considers diversity of race, gender and national
origin of potential director candidates.
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:
Tenure
Policies |
Mandatory Retirement |
|
Directors must retire at
the annual meeting of shareholders following the directors 74th
birthday |
Change in Principal Employment |
|
Directors must offer to resign upon any significant
change in principal employment or
responsibilities |
We had the following changes in our
Board since our 2014 Annual Meeting:
Departures |
|
Additions |
● |
John Seely Brown - Resigned in April 2014 due to meeting the
mandatory retirement age |
|
● |
Donald W. Blair - Appointed in July 2014; identified by
independent search firm; brings substantial financial and
international expertise |
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● |
Daniel P. Huttenlocher
-
Appointed in February 2015; identified by independent search firm; brings
extensive experience in technology innovation and
commercialization |
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
65.
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.
CORNING INCORPORATED - 2015 Proxy
Statement 19
Table of
Contents
Proposal 1 Election of Directors
2015
Nominees for Director
After
considering the recommendations of the Nominating and Corporate Governance
Committee, the Board has set the number of directors at 14 and nominated the
persons described below to stand for election. Each of Messrs. Canning, Clark,
Cummings, Flaws, Landgraf, Martin, Tookes and Weeks, Drs. Burns, Rieman and
Wrighton, and Ms. Henretta were elected by Cornings shareholders at the 2014
Annual Meeting. Mr. Blair and Dr. Huttenlocher were appointed by Cornings Board
of Directors on July 15, 2014 and February 3, 2015, respectively. 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 14 director nominees will serve for a one-year term
expiring at our 2016 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, 2015, and has been confirmed by each of our director
nominees for inclusion in our proxy statement.
Donald W.
Blair |
|
|
Age: 57 Director Since: 2014
Executive Vice
President and
Chief Financial
Officer, NIKE, Inc. |
|
Skills and
Qualifications:
●
Expertise in finance and management
●
Executive leadership experience
●
Experience in international business and finance |
|
Committees:
●
Audit
●
Finance
Current Public Company Directorships:
●
None
Public Company
Directorships Held During the Past 5 Years:
●
None |
|
Mr. Blair was elected executive vice president and chief financial officer of NIKE, Inc. in 1999. 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 International’s Asia Division (based in Hong Kong). He began his career in 1981 as an accountant with Deloitte Haskins & Sells.
Mr. Blair brings 34 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. Blair’s financial expertise and audit experience are valuable assets to our Finance and Audit committees. |
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Stephanie A.
Burns |
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Age: 60 Director
Since: 2012 Retired Chairman
and Chief Executive Officer Dow Corning Corporation |
|
Skills and
Qualifications:
●
Global innovation and business leadership
experience
●
Significant expertise in scientific research,
issues management, science and technology leadership and business
management |
|
Committees:
●
Audit
●
Corporate Relations
Current Public Company Directorships:
●
GlaxoSmithKline plc.
●
Kellogg Company
Public Company
Directorships Held During the Past 5 Years:
●
None |
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Dr.
Burns has nearly 32 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
through 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. |
20 CORNING
INCORPORATED - 2015 Proxy Statement
Table of
Contents
Proposal 1 Election of Directors
John A. Canning,
Jr. |
|
|
Age: 70 Director
Since: 2010 Chairman Madison
Dearborn Partners, LLC |
|
Skills and
Qualifications:
●
Experience in private equity investing, including
reviewing financial statements and audit results and making investment and
acquisition decisions
●
Has insight into economic trends important to our
business
●
Law degree
●
Experience in banking and managing
investments |
|
Committees:
●
Executive
●
Finance
●
Nominating and Corporate Governance
Current Public Company Directorships:
●
Exelon Corporation
Public Company
Directorships Held During the Past 5 Years:
●
None |
|
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 34 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. Canning’s experience in banking and managing investments make him a valued member of our Finance Committee. |
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Richard T.
Clark |
|
|
Age: 69 Director
Since: 2011 Retired
Chairman, President and Chief Executive Officer Merck & Co.,
Inc. |
|
Skills and
Qualifications:
●
Broad managerial expertise, operational expertise
and deep business knowledge
●
Extensive experience in the issues facing public
companies and multinational businesses |
|
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. |
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Mr. Clark 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. (formerly known as Merck & Co., Inc.) 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. |
|
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Robert F. Cummings,
Jr. |
|
|
Age: 65 Director
Since: 2006 Vice Chairman
of Investment Banking JPMorgan Chase & Co. |
|
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
●
Nominating and Corporate Governance
Current Public Company Directorships:
●
Viasystems Group, Inc.
●
W. R. Grace & Co.
Public Company
Directorships Held During the Past 5 Years:
●
None |
|
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|
Mr.
Cummings was appointed vice chairman of Investment Banking at JPMorgan
Chase & Co. in December 2010, where he advises 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 30 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 - 2015 Proxy
Statement 21
Table of
Contents
Proposal 1 Election of Directors
James B.
Flaws |
|
|
Age:
66 Director Since: 2000 Vice Chairman and
Chief Financial Officer Corning Incorporated |
|
Skills and
Qualifications:
●
Managerial experience in control, financial,
treasury and business development functions
●
Broad experience in financial, investor relations
and supervisory roles
●
Deep experience with and understanding of
Cornings business |
|
Committees:
●
Executive
●
Finance
Current Public Company Directorships:
●
None
Public Company
Directorships Held During the Past 5 Years:
●
None |
|
Mr.
Flaws joined Corning in 1973 and served in a variety of controller and
business management positions. He was elected assistant treasurer of
Corning in 1993; vice president and controller in 1997 and vice president
of finance and treasurer in May 1997; senior vice president and chief
financial officer in December 1997; executive vice president and chief
financial officer in 1999; and to his current position in 2002. Mr. Flaws
is a director of Dow Corning Corporation.
Since joining in 1973, Mr. Flaws
has held a wide range of management positions across Cornings control,
financial, treasury, and business development functions in specific line
business units, as well as at corporate-wide levels. As a result of his
diverse responsibilities over more than 40 years, he has very broad
experience in many financial, investor relations, and supervisory roles
within the company, including leading the spinoff of Cornings health care
businesses into two separate publicly traded companies in 1996 and
overseeing many mergers and acquisitions by the company. Mr. Flaws played
an important role in Cornings recovery from the impact of the telecom
industry collapse in 2002. Mr. Flaws led the process for Cornings
acquisition of Samsung Corning Precision Materials in
2013. |
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|
Deborah A.
Henretta |
|
|
Age: 53 Director Since:
2013 Group President of Global E-Business, Procter &
Gamble |
|
Skills and
Qualifications:
●
Significant experience in business leadership and
operations, P&L responsibility
●
Skilled in brand building, marketing and emerging
market management |
|
Committees:
●
Audit
●
Corporate Relations
Current Public Company Directorships:
●
None
Public Company
Directorships Held During the Past 5 Years:
●
None |
|
|
|
|
|
|
|
Ms.
Henretta has 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 and group president of
P&G Global Beauty Sector in June 2013. In February 2015, she was
appointed group president of P&G E-Business.
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. Ms. Henretta currently serves on the Board of Trustees for
Cincinnati Childrens Medical Center as well as on a number of university
advisory committees, including those for her alma maters St. Bonaventure
University School of Journalism and Syracuse Universitys Newhouse School
of Public Communications. |
22
CORNING INCORPORATED - 2015 Proxy
Statement
Table of
Contents
Proposal 1 Election of Directors
Daniel P.
Huttenlocher |
|
|
Age: 55 Director Since: 2015 Dean and Vice
Provost, Cornell Universitys New York City Tech
Campus |
|
Skills and Qualifications:
●
Experience in technology innovation and
commercialization
●
Extensive experience as an international computer
science researcher
●
Leadership experience
●
Investment experience |
|
Committees:
●
Audit
●
Finance
Current Public Company
Directorships:
●
None
Public Company Directorships Held During the
Past 5 Years:
●
None |
|
Dr.
Huttenlocher has served as the dean and vice provost at Cornell
Universitys New York City Tech Campus since 2012. From 2001 to 2012, he
held a variety of academic positions at Cornell, including dean of the
Computing and Information Science Department and professor of Computer
Science and Technology Management. Prior to joining Cornell, Dr.
Huttenlocher served as chief technology officer at Intelligent Markets,
Inc., and as a principal scientist at Xerox Palo Alto Research Center. He
currently serves as a director on the board of trustees of the John D. and
Catherine T. MacArthur Foundation where he is chair of the investment
committee and is also a member of the budget and compensation committee
and the nominating committee.
Dr. Huttenlocher holds a Ph.D. in
computer science and a Master of Science degree in Electrical Engineering
from the Massachusetts Institute of Technology and a Bachelor of Arts
degree in Computer Science and Psychology from the University of Michigan.
Dr. Huttenlocher brings to the board extensive experience in technology
innovation and commercialization, and expertise in developing
next-generation products and services. |
|
|
|
|
|
|
|
Kurt M.
Landgraf |
|
|
Age: 68 Director Since:
2007 Retired President and Chief Executive
Officer Educational Testing Service |
|
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 |
|
Committees:
●
Audit
●
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, on December 31, 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. |
CORNING INCORPORATED - 2015 Proxy
Statement 23
Table of
Contents
Proposal 1 Election of Directors
Kevin J.
Martin |
|
|
Age:
48 Director Since: 2013 Counsel Squire
Patton Boggs LLP |
|
Skills and
Qualifications:
●
Extensive knowledge of regulatory
environment
●
Legal skills and expertise
●
Specialized knowledge of telecommunications and
information technology industries
●
Experience in private equity
investing |
|
Committees:
●
Corporate Relations
●
Nominating and Corporate Governance
Current Public Company
Directorships:
●
None
Public Company Directorships Held During the
Past 5 Years:
●
None |
|
Mr. Martin is counsel at
Squire Patton Boggs LLP in the Washington law firms Technology and
Communications practice.
Mr. Martin has nearly two
decades experience as a lawyer and policymaker in the telecommunications
field, including his tenure as chairman of the Federal Communications
Commission (FCC) from March 2005 to January 2009. 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
also served as the official U.S. government representative to the G-8s
Digital Opportunity Task Force. In 2013, he was elected to the Board of
Directors of Electronic Recyclers International, a private electronics
recycler.
Mr. Martin brings deep experience
to the board in the telecommunications, economics, governmental and legal
arenas. |
|
Deborah D.
Rieman |
|
|
Age: 65 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
Current Public Company
Directorships:
●
None
Public Company Directorships Held During the
Past 5 Years:
●
Keynote Systems |
|
Dr. Rieman has more than 27
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 is a former director of
Keynote Systems, Tumbleweed Communications Corp and Kintera
Inc.
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 |
|
|
Age: 67 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
Current Public Company
Directorships:
●
Ryder Systems Inc.
●
NextEra Energy, Inc.
●
Harris Corporation
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. |
24 CORNING
INCORPORATED - 2015 Proxy Statement
Table of
Contents
Proposal 1 Election of Directors
Wendell P.
Weeks |
|
|
Age:
55 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
Current Public Company
Directorships:
●
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 31 years of
Corning experience including financial management, business development,
commercial leadership, and general management. His experiences in many of
Cornings businesses and technologies, and 10 years as chief executive
officer, have given him a unique understanding of Cornings diverse
business operations and innovations. |
|
Mark S.
Wrighton |
|
|
Age: 65 Director Since:
2009 Chancellor and Professor
of Chemistry, Washington University in St. Louis |
|
Skills and Qualifications:
●
Expertise in materials and research interests in
the areas of transition metal catalysis, photochemistry, surface
chemistry, molecular electronics, and photoprocesses at
electrodes
●
Executive leadership experience |
|
Committees:
●
Audit
●
Finance
Current Public Company
Directorships:
●
Cabot Corporation
●
Brooks Automation, Inc.
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,
and chaired that Boards audit and oversight committee during that time.
He also is a past chair of the Association of American Universities, The
Business Higher Education Forum and the Consortium on Financing Higher
Education, and continues as a member of these organizations. 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 Chancellor 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. |
CORNING INCORPORATED - 2015 Proxy
Statement 25
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, 2014, six
directors had elected to defer compensation.
2014 Director
Compensation |
Annual Retainer |
|
$60,000 |
Lead
Independent Director Retainer |
|
Lead Independent Director receives an additional retainer of
$25,000 per year. |
Committee Chair Retainer |
|
Committee Chairs receive an
additional retainer of $15,000 per year. Beginning in 2015, the annual
retainer for the Audit Committee Chair will be $20,000. |
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 Compensation Committee.
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 his/her
pro-rata award shortly after joining the Board. |
|
|
|
|
|
In
2014, Corning issued 7,692 shares of restricted stock (with a grant date
value of approximately $135,000) to each non-employee director under the
2010 Equity Plan for Non-Employee Directors. These restricted shares are
subject to forfeiture and are not available for transfer or exercise until
six months after the date of a directors retirement or
resignation. |
In 2014, the directors below performed
these roles:
Name |
Role During 2014 |
Dr. Burns |
Corporate Relations
Chair |
Mr. Clark |
Lead Independent Director |
Mr.
Cummings
|
Finance Chair |
Mr. Landgraf |
Audit Chair |
Dr. Rieman |
Compensation
Chair |
Mr.
Tookes |
Nominating and Corporate Governance
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 certain other activities related to their role,
including 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 2014, we paid a total of $18,627 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 2014, Messrs.
Cummings, Flaws, Landgraf, Tookes and Weeks and Drs. Brown, 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 in any calendar year.
Corning also pays premiums on
directors and officers liability insurance policies covering
directors.
26 CORNING
INCORPORATED - 2015 Proxy Statement
Table of
Contents
Director Compensation
2014
Director Compensation Table |
Name(1) |
Fees Earned or Paid in
Cash(2) |
|
Stock Awards(3) |
|
All
Other Compensation(4) |
|
Total |
Donald W. Blair |
|
$ |
69,500 |
|
|
|
$ |
61,882 |
|
|
$ |
7,500 |
|
|
$ |
138,882
|
John Seely
Brown |
|
|
46,250 |
|
|
|
|
44,998 |
|
|
|
0 |
|
|
|
91,248 |
Stephanie A. Burns |
|
|
127,500 |
|
|
|
|
134,995 |
|
|
|
0 |
|
|
|
262,495
|
John A. Canning,
Jr. |
|
|
130,000 |
|
|
|
|
134,995 |
|
|
|
7,500 |
|
|
|
272,495 |
Richard T. Clark |
|
|
135,750 |
|
|
|
|
134,995 |
|
|
|
7,500 |
|
|
|
278,245
|
Robert F. Cummings,
Jr. |
|
|
146,750 |
|
|
|
|
134,995 |
|
|
|
0 |
|
|
|
281,745 |
Deborah A. Henretta |
|
|
130,000 |
|
|
|
|
134,995 |
|
|
|
0 |
|
|
|
264,995
|
Kurt M.
Landgraf |
|
|
157,250 |
|
|
|
|
134,995 |
|
|
|
1,000 |
|
|
|
293,245 |
Kevin J. Martin |
|
|
124,750 |
|
|
|
|
134,995 |
|
|
|
0 |
|
|
|
259,745
|
Deborah D.
Rieman |
|
|
146,750 |
|
|
|
|
134,995 |
|
|
|
0 |
|
|
|
281,745 |
Hansel E. Tookes |
|
|
148,500 |
|
|
|
|
134,995 |
|
|
|
0 |
|
|
|
283,495
|
Mark S. Wrighton |
|
|
130,000 |
|
|
|
|
134,995 |
|
|
|
7,500 |
|
|
|
272,495 |
(1) |
Mr. Blair joined the Board
in July 2014. Dr. Brown retired from the Board in April 2014. |
(2) |
Includes all fees and retainers paid or deferred
pursuant to the Corning Incorporated Non-Employee Directors Deferred
Compensation Plan. |
(3) |
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, 2014 included in the
Companys Annual Report on Form 10-K filed with the SEC on February 13,
2015. 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, 2014 is shown in the table below. Total
stock holdings for directors as of December 31, 2014 are shown in the
Beneficial Ownership of Directors and Officers table. |
(4) |
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 each Director had as of December 31, 2014:
Name |
|
Award
Shares Outstanding at December 31, 2014 |
|
Options Outstanding at December 31, 2014(1) |
Donald W. Blair |
|
|
2,836 |
|
|
|
0 |
|
John Seely
Brown |
|
|
0 |
|
|
|
0 |
|
Stephanie A. Burns |
|
|
26,127 |
|
|
|
0 |
|
John A. Canning,
Jr. |
|
|
34,743 |
|
|
|
1,323 |
|
Richard T. Clark |
|
|
27,555 |
|
|
|
0 |
|
Robert F. Cummings,
Jr. |
|
|
50,279 |
|
|
|
11,872 |
|
Deborah A. Henretta |
|
|
11,558 |
|
|
|
0 |
|
Kurt M.
Landgraf |
|
|
48,550 |
|
|
|
9,868 |
|
Kevin J. Martin |
|
|
17,099 |
|
|
|
0 |
|
Deborah D.
Rieman |
|
|
85,206 |
|
|
|
14,888 |
|
Hansel E. Tookes |
|
|
72,456 |
|
|
|
14,888 |
|
Mark S. Wrighton |
|
|
43,906 |
|
|
|
6,775 |
|
(1) |
No options were granted to non-employee directors in
2014. |
CORNING INCORPORATED - 2015 Proxy
Statement 27
Table of
Contents
Stock Ownership
Information
Stock Ownership
Guidelines
Stock ownership disclosed in this proxy
statement includes shares directly or indirectly owned, and shares issuable or
options exercisable that the person has the right to acquire within 60 days. We
believe our stock ownership guidelines for our directors and executive officers
are aligned with shareholders interests because the guidelines reflect equity
that has economic exposure to both upside and downside risk.
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 or
appointment. All directors and NEOs who have been such 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, 2014, 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 |
|
|
2,863 |
|
|
|
0 |
|
|
|
0 |
|
|
|
2,863 |
|
|
|
|
Stephanie
A. Burns |
|
|
26,127 |
|
|
|
0 |
|
|
|
2,363 |
|
|
|
28,490 |
|
|
|
|
John A.
Canning, Jr. |
|
|
94,743 |
|
|
|
1,323 |
|
|
|
0 |
|
|
|
96,066 |
|
|
|
|
Richard T.
Clark |
|
|
27,555 |
|
|
|
0 |
|
|
|
0 |
|
|
|
27,555 |
|
|
|
|
Robert F.
Cummings, Jr. |
|
|
130,279 |
|
|
|
11,872 |
|
|
|
0 |
|
|
|
142,151 |
|
|
|
|
Deborah A.
Henretta |
|
|
11,558 |
|
|
|
0 |
|
|
|
0 |
|
|
|
11,558 |
|
|
|
|
Kurt M.
Landgraf |
|
|
48,550 |
|
|
|
9,868 |
|
|
|
0 |
|
|
|
58,418 |
|
|
|
|
Kevin J.
Martin |
|
|
17,099 |
|
|
|
0 |
|
|
|
0 |
|
|
|
17,099 |
|
|
|
|
Deborah D.
Rieman |
|
|
120,456 |
|
|
|
14,888 |
|
|
|
0 |
|
|
|
135,344 |
|
|
|
|
Hansel E.
Tookes II |
|
|
82,456 |
|
|
|
14,888 |
|
|
|
0 |
|
|
|
97,344 |
|
|
|
|
Mark S.
Wrighton |
|
|
44,906 |
|
|
|
6,775 |
|
|
|
0 |
|
|
|
51,681 |
|
|
|
|
|
NAMED EXECUTIVE OFFICERS |
|
Wendell P.
Weeks |
|
|
715,640 |
(4) |
|
|
1,619,847 |
|
|
|
127,989 |
|
|
|
2,463,476 |
|
|
|
|
James B.
Flaws |
|
|
275,074 |
|
|
|
774,558 |
|
|
|
64,199 |
|
|
|
1,113,831 |
|
|
|
|
James P.
Clappin |
|
|
38,106 |
|
|
|
352,550 |
|
|
|
29,026 |
|
|
|
419,682 |
|
|
|
|
Lawrence
D. McRae |
|
|
88,627 |
|
|
|
376,260 |
|
|
|
36,484 |
|
|
|
501,371 |
|
|
|
|
Kirk P.
Gregg |
|
|
158,429 |
|
|
|
528,813 |
|
|
|
36,569 |
|
|
|
723,811 |
|
|
|
|
|
ALL DIRECTORS, SECTION 16 OFFICERS AND
NEOS |
|
As a group (23
persons) |
|
|
2,733,135 |
(5)(6) |
|
|
5,066,680 |
|
|
|
418,954 |
|
|
|
7,612,177 |
|
|
0.61% |
|
(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. |
28 CORNING
INCORPORATED - 2015 Proxy Statement
Table of
Contents
Stock Ownership
Information
(3) |
Includes shares of common
stock held by JPMorgan Chase & Co. 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,
McRae, Clappin and Gregg all executive officers as a group the equivalent
of 11,471; 0; 6,148; 2,109; 0; and 22,487 shares of common stock,
respectively. It also holds for the benefit of all employees who
participate in the plans the equivalent of 16,715,539 shares of common
stock (being 1.33% of the class). |
(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, 2014, 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, 2014. 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(1) |
The Vanguard Group |
69,111,582(2) |
|
5.39% |
100 Malvern Blvd. |
|
|
|
Malvern, PA 19355 |
|
|
|
(1) |
Reflects shares
beneficially owned by The Vanguard Group (Vanguard), according to a
Schedule 13G filed by Vanguard with the SEC on February 11, 2015,
reflecting ownership of shares as of December 31,2014. Vanguard has sole
voting power with respect to 2,220,113 shares and sole dispositive power
with respect to 67,202,718 shares and shared dispositive power with
respect to 2,090,864 shares. According to the Schedule 13G, Vanguard
beneficially owned 5.39% of our common stock as of December 31,
2014. |
BlackRock, Inc. |
67,721,286(1) |
|
5.3% |
55 East 52nd Street |
|
|
|
New York, NY 10022 |
|
|
|
(1) |
Reflects shares beneficially owned by BlackRock, Inc.
(BlackRock), according to a Schedule 13G filed by BlackRock with the SEC
on February 3, 2015, reflecting ownership of shares as of December
31,2014. BlackRock has sole voting power and sole dispositive power with
respect to 67,660,468 shares and shared voting power and shared
dispositive power with respect to 60,818 shares. According to the Schedule
13G, BlackRock beneficially owned 5.3% of our common stock as of December
31, 2014. |
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, 2014, all Section 16(a)
filing requirements were met.
CORNING INCORPORATED - 2015 Proxy
Statement 29
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 2015. 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 2013 and 2014 were
pre-approved by the Audit Committee in accordance with the policy.
In conjunction with the mandated
rotation of the PwC's lead engagement partner, the Audit Committee and its
chairperson are directly involved in the selection of PwC's 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
a providing any significant benefit. The members of the Audit Committee and the
Board believe that the continued retention of PwC to serve as the Company's
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
PricewaterhouseCoopers LLP 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, 2015.
Fees Paid to Independent Registered
Public Accounting Firm
Aggregate fees for professional
services rendered by PwC in 2013 and 2014:
|
2013 |
|
2014 |
|
Audit Fees |
$ |
7,207,000 |
|
$ |
9,353,000 |
|
Audit Related
Fees |
|
439,000 |
|
|
1,487,000 |
|
Tax Fees |
|
1,223,000 |
|
|
1,606,000 |
|
All Other Fees |
|
33,000 |
|
|
358,000 |
|
Total Fees |
$ |
8,901,000 |
|
$ |
12,805,000 |
|
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, the acquisition of an
equity company, procedures to translate certain financial statements for foreign
subsidiaries, employee benefit plan audits, agreed-upon procedures and the
implementation of a new accounting policy.
Tax Fees. These fees are composed of statutory tax
compliance, preparation and assistance for Cornings foreign jurisdiction
subsidiaries, expatriate tax return compliance, other tax compliance projects
and assistance in preparing a tax advance pricing agreement.
All Other Fees. These fees are composed of an information technology security
assessment and 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.
30 CORNING INCORPORATED
- 2015
Proxy Statement
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 2014, 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, 2014, 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, 2014 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 to be
discussed by SAS 114, The Auditors Communication with Those Charged with
Governance, and Public Company Accounting Oversight Board Auditing Standard No.
5, An Audit of Internal Control Over Financial Reporting That is Integrated
with an Audit of Financial Statements. 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, 2014.
The Audit Committee:
Kurt M. Landgraf, Chair
Donald W. Blair
Deborah A. Henretta
Daniel P.
Huttenlocher (recused from approval, as new Committee member)
Deborah D.
Rieman
Mark S. Wrighton
CORNING INCORPORATED - 2015 Proxy
Statement 31
Table of
Contents
Proposal 3 Advisory Approval of
Executive
Compensation
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 the opinions that shareholders
express in their voting and will consider the outcome of the vote in determining
our executive compensation programs.
Say on Pay Proposal
Our management team and the Board
strive to balance near-term results with long-term shareholder value through
thoughtful investments in research and development. Accordingly, we maintain a
pay for performance philosophy that forms the foundation for all decisions
regarding executive compensation made by the Compensation Committee. In
addition, our compensation programs are designed to facilitate strong corporate
governance.
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 2014 Company performance, focusing on the
compensation of our NEOs. 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, CFO and three other most highly compensated executives), as
disclosed in the proxy statement for the 2015 Annual Meeting of Shareholders
pursuant to Section 14A of the Securities Exchange Act of 1934, including the
Compensation Discussion and Analysis 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.
32 CORNING
INCORPORATED - 2015 Proxy Statement
Table of
Contents
Compensation Discussion &
Analysis
This Compensation Discussion and
Analysis (CD&A) focuses on the 2014 compensation of our Named Executive
Officers (NEOs) and how this compensation aligns with our pay for performance
philosophy.
Our NEOs in fiscal year 2014
were:
Named Executive Officer |
|
Role |
|
Tenure in role |
|
Total years of service |
Wendell P.
Weeks |
|
Chairman, Chief Executive
Officer (CEO) and President |
|
10 Years as CEO |
|
32 Years |
|
|
|
|
(8 years as CEO/Chairman) |
|
|
James B. Flaws |
|
Vice Chairman and Chief Financial
Officer |
|
17 Years as CFO |
|
42 Years |
James P.
Clappin |
|
President, Corning Glass
Technologies |
|
9
Years |
|
35 Years |
Lawrence D. McRae |
|
Executive Vice President, Strategy
and Corporate Development |
|
15 Years |
|
29 Years |
Kirk P. Gregg |
|
Executive Vice President and Chief
Administrative Officer |
|
17 Years |
|
22 Years |
CD&A Table of
Contents
To assist shareholders in finding
important information, we call your attention to the following sections of the
CD&A:
Executive Summary |
34 |
Company Performance
Highlights |
34 |
Executive
Compensation Program: Structure and Highlights |
36 |
Shareholder Engagement and Program
Updates in 2014 |
39 |
Robust Compensation
Program Governance |
40 |
Compensation Peer Group |
42 |
2014 Financial
Performance Peer Group |
43 |
Compensation Tables |
46 |
CORNING INCORPORATED - 2015 Proxy
Statement 33
Table of Contents
Compensation Discussion &
Analysis
Executive Summary
Executive Compensation
Philosophy |
At Corning, we believe the commitment
and contributions of our employees determine our success. 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, thereby
aligning their goals with those of long-term shareholders and ensuring that we
create sustainable growth in profitability, sales and cash flow. Our leaders
must possess deep technical understanding in our core technologies as well as
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 measurable financial metrics that support the
creation of long-term value for our shareholders.
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, optical physics and
process engineering to develop products that have transformed peoples lives.
Today, Cornings products enable diverse industries such as consumer
electronics, telecommunications, transportation, and life sciences. With a
culture that prizes innovation, Corning competes in a global environment in
which we drive industry leading technologies across each of our business
segments:
Business Segment |
|
% of 2014 Core Net
Sales |
|
Primary Products |
|
Primary Competitors |
Display Technologies |
|
43 |
% |
|
Glass substrates for LCD flat panel televisions, computer
monitors, laptops, and other consumer electronics, advanced optics and
specialty glass solutions for a number of industries |
|
Asahi Glass Co. Ltd. Nippon Electric Glass Co.
Ltd. |
Optical
Communications |
|
26 |
% |
|
Optical fiber, cable, and hardware
and equipment for telephone and Internet communication networks |
|
Prysmian Group TE
Connectivity Ltd. |
Specialty Materials |
|
12 |
% |
|
Cover glass for consumer electronics, advanced optics, and
specialty glass solutions for a number of industries |
|
Asahi Glass Co. Ltd. Nippon Electric Glass Co.
Ltd. |
Environmental
Technologies |
|
11 |
% |
|
Ceramic substrates and diesel filters
for emission control systems |
|
Ibiden Co., Ltd. NGK
Insulators Ltd. |
Life Sciences |
|
8 |
% |
|
Glass and plastic labware, as well as
label-free technology, media, and reagents for cell culture, genomics, and
bioprocessing applications |
|
Thermo Fisher Scientific,
Inc. |
In addition to the business segments
outlined above, we also have a number of equity investments, which contribute
significantly to the Companys overall performance. We became the 100% owner of
Samsung Corning Precision Materials Co., Ltd. (SCP), on January 15, 2014 and
beginning with the first quarter of 2014 we began to consolidate SCP (now known
as Corning Precision Materials Co., Ltd., or CPM) fully into our results. The
largest of the remaining equity investments is Dow Corning Corporation (DCC), an
independently managed company that was formed in partnership with Dow Chemical
in 1943. Our 2014 reported core net sales do not include Cornings share of
DCCs $6.2 billion in sales, which was over $3 billion. Senior management of
Corning supports stewardship of these companies, and the size, complexity and
contribution of these equity investments are significant for Corning and its
shareholders.
Company Performance
Highlights
Note Regarding Core Performance
Measures |
Throughout this CD&A we refer to
our core net sales, core EPS and 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 other special items that do not reflect the ongoing
operations of the Company. Please see the section titled Program Updates in
2014 Shift to Core Performance Measures on page 39 of this CD&A and the
section titled Core Performance Measures on page 37 of our 2014 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.
34 CORNING INCORPORATED - 2015 Proxy
Statement
Table of Contents
Compensation Discussion &
Analysis
2014 Business Environment and
Company Performance |
2014 was an excellent year for Corning.
In the fourth quarter, we delivered our ninth consecutive quarter of
year-over-year core EPS growth, along with the highest core net sales in
Cornings history. For the full year 2014, core EPS increased approximately 24%
over 2013 as the Company advanced a number of strategic initiatives, including:
(1) continuation of the positive momentum in Display Technologies, (2)
integration of Corning Precision Materials (formerly SCP) and capture of the
related synergies, (3) growth of core net sales and profits in our non-Display
segments, and (4) returning cash to shareholders.
Total
Shareholder Return (TSR)
● |
Total Shareholder Returns: Corning delivered total
shareholder return (TSR), of 31.2%, more than double the S&P 500 index
total returns, consisting of stock price appreciation plus reinvestment of
dividends paid throughout the year. This performance placed us in the top
quartile of the S&P 500 Index and in the top decile of our
compensation peers for the year. |
Key
Operational Measures
● |
Core net sales
growth: Core net sales increased by
29% year-over-year |
● |
Core EPS growth: Core earnings per share increased by 24%
year-over-year, capping 9 consecutive quarters of core EPS
growth |
● |
Adjusted Operating Cash
Flow: Increased by 13%
year-over-year |
CORNING INCORPORATED - 2015 Proxy
Statement 35
Table of Contents
Compensation Discussion &
Analysis
Return of Capital to Shareholders
Returning Value to
Shareholders: In 2014, Corning repurchased
$2.6 billion of outstanding common shares. Additionally, in December 2014, we
announced a 20% increase in our common stock dividend, beginning in the first
quarter 2015, and a new $1.5 billion share repurchase program. Since 2011, when
we announced expectations of increased free cash flow, we have increased the
dividend 140% (from $0.05 per share per quarter to $0.12) and repurchased 18% of
our outstanding common shares.
Executive
Compensation Program: Structure and Highlights
In order to ensure compensation is aligned to 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 driving long-term
shareholder value. Given the strategic importance of growing sales in our
non-Display 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 goals.
The following
is an overview of the components of the 2014 program.
Summary of Cornings Executive Compensation Program
Key
Pay Elements |
|
Short-Term/Annual
Incentives |
|
Long-Term
Incentives |
|
|
|
|
|
|
|
|
|
Form
of Compensation Delivered |
|
Performance Incentive Plan (Cash) |
|
Goal
Sharing (Company-Wide Unit Plan; Paid in Cash) |
|
Cash
Performance Units (CPUs) |
|
Equity
Incentives: Restricted Stock Units
(RSUs) & 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 |
|
40% of LTI
Target: ● 25% RSUs ● 15% Stock
Options |
36 CORNING INCORPORATED - 2015 Proxy
Statement
Table of Contents
Compensation Discussion &
Analysis
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.
Performance
targets are set using core performance measures. Beginning in 2013, we reduced
our economic risk to a weaker Japanese yen and Korean won by executing hedges
that protected us from the impact of exchange rates rising above 93 Japanese yen
and 1100 Korean won to the U.S. dollar, and moved to provide core performance
measures in addition to GAAP financial measures to provide a clearer view of the
Companys core operating results to our investors. Our core performance results
are stated at a constant yen-to-U.S. dollar exchange rate of 93 and a constant
won-to-U.S. dollar exchange rate of 1100 to remove the volatility from 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. This element 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*:
|
|
|
|
|
2014 PIP Measures (Short
Term Incentive) |
|
2014 CPU
Measures (Year One of Three-Year
Average Plan) (Long Term Incentive) |
|
|
|
|
|
Core Net Sales
Goal (Weighted 25%) |
|
Core EPS Goal (Weighted
75%) |
|
Core Net Sales
Goal (Weighted 30%) |
|
Adjusted Operating Cash Flow
Goal (Weighted 70%) |
|
|
Achievement
% |
|
Core Net Sales (in
$M) |
|
% of 2013 Core
Net Sales |
|
Core
Adjusted EPS (in
$M) |
|
% of
2014 Plan |
|
Core Net Sales (in $M)
|
|
% of 2013 |
|
Adjusted Operating
Cash Flow (in $M) |
|
% of
2014 Plan |
|
|
200 |
% |
|
|
$ |
10,303 |
|
|
115 |
% |
|
|
$ |
1.71 |
|
|
112 |
% |
|
Capped at 150% |
|
|
150 |
% |
|
|
$ |
9,855 |
|
|
110 |
% |
|
|
$ |
1.68 |
|
|
110 |
% |
|
|
$ |
10,303 |
|
|
115 |
% |
|
|
$ |
3,373 |
|
|
112 |
% |
|
|
125 |
% |
|
|
$ |
9,407 |
|
|
105 |
% |
|
|
$ |
1.65 |
|
|
108 |
% |
|
|
$ |
9,855 |
|
|
110 |
% |
|
|
$ |
3,253 |
|
|
108 |
% |
TARGET |
|
100 |
% |
|
|
$ |
9,317 |
|
|
104 |
% |
|
|
$ |
1.53 |
|
|
100 |
% |
|
|
$ |
9,317 |
|
|
104 |
% |
|
|
$ |
3,012 |
|
|
100 |
% |
|
|
75 |
% |
|
|
$ |
9,228 |
|
|
103 |
% |
|
|
$ |
1.37 |
|
|
90 |
% |
|
|
$ |
9,228 |
|
|
103 |
% |
|
|
$ |
2,771 |
|
|
92 |
% |
|
|
50 |
% |
|
|
$ |
8,959 |
|
|
100 |
% |
|
|
$ |
1.22 |
|
|
80 |
% |
|
|
$ |
8,959 |
|
|
100 |
% |
|
|
$ |
2,530 |
|
|
88 |
% |
|
|
0 |
% |
|
|
$ |
8,601 |
|
|
96 |
% |
|
|
$ |
1.14 |
|
|
75 |
% |
|
|
$ |
8,601 |
|
|
96 |
% |
|
|
$ |
2,410 |
|
|
80 |
% |
|
|
* |
2014 core net sales goal and
comparison to 2013 include 50% of Corning Precision Materials sales, to
represent Cornings share of sales prior to the acquisition of SCP in
January 2014. |
Substantial variable and at risk
compensation: Approximately 87% of the CEOs target total compensation* and 80% 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 |
CORNING INCORPORATED - 2015 Proxy
Statement 37
Table of Contents
Compensation Discussion &
Analysis
● |
Structural alignment with
long-term shareholders: Each of our
NEOs is subject to robust stock ownership guidelines that require them to
accumulate and hold a significant number of Company shares as long as they
remain employed with us. |
Chief Executive Officer |
6X Base
Salary |
NEOs other than the CEO |
3X Base
Salary |
Performance Results Against
Targets |
The following tables compare the
targeted goals of each performance plan with 2014 actual results, compared with
the prior years, and the percentage of target opportunity earned under each
plan.
|
|
2014 |
|
2013 |
|
Measure |
|
Actual %
increase vs. 13 Actual |
|
Target %
increase vs. 13 Actual |
|
Actual |
|
Target |
|
Core
EPS |
|
$ |
1.53 |
|
|
$ |
1.53 |
|
|
$ |
1.23 |
** |
|
$ |
1.15 |
|
|
|
+24.4 |
% |
|
|
+24.4 |
% |
|
|
|
|
|
|
|
|
Core Net
Sales (millions) |
|
$ |
10,217 |
|
|
$ |
9,317 |
* |
|
$ |
7,948 |
|
|
|
N/A |
|
|
|
+28.6 |
% |
|
|
+17.2 |
% |
|
|
|
|
|
|
|
|
Adjusted Operating Cash Flow (millions) |
|
$ |
3,121 |
|
|
$ |
3,012 |
|
|
$ |
2,768 |
|
|
$ |
2,677 |
|
|
|
+12.8 |
% |
|
|
+8.8 |
% |
|
|
|
|
|
|
|
|
* |
Revenue target for 2014 was
established including 50% of Corning Precision Materials |
** |
Core EPS was not used as a metric
for compensation plan purposes in 2013. For comparison purposes only, the
comparable result would have been $1.19 with an adjustment to exclude an
unbudgeted gain resulting from a change in pension
accounting. |
Compensation Element |
|
Performance Target |
|
Actual
Results |
|
Target Opportunity |
|
Earned
Award |
|
|
|
|
|
|
|
|
|
Annual Cash Bonus Plans |
|
Performance Incentive Plan
(PIP)
●Core EPS
(75%)
●Core Net Sales
(25%)
GoalSharing |
|
$1.526 $9,317
million Average of 99
unit plans |
|
$1.531 $10,217
million 6.75%
|
|
CEO: 140%* Other
NEOs: 75%-90%* 5%* |
|
123% of target
6.75% |
|
|
|
|
|
|
|
|
|
|
|
Long-Term Incentives
Year 1 of 3
Years |
|
Cash Performance Units
(CPUs)
●Adjusted
Operating Cash Flow (70%)
●Core Net Sales
(30%) |
|
Year One of
Three: $3,012 million $9,317 million
|
|
$3,121
million $10,217 million
|
|
CEO: $4.2 million Other
NEOs: $1.2 million - $2.1 million |
|
Year 1: 121% Year 2:
TBD Year 3: TBD 3 Yr
average: TBD |
* |
As a percentage of year-end base
salary |
38 CORNING INCORPORATED - 2015 Proxy
Statement
Table of Contents
Compensation Discussion &
Analysis
Key Operational Accomplishments Leading to Strong Performance
Results: |
2014 Goals |
|
2014 Achievements |
Continue the positive momentum in
Display Technologies |
|
LCD
glass volume was higher than expected driven by TV sales and larger
average screen size
Price
declines moderated throughout the year
We advanced new glasses for
growing high-performance display market |
Integrate
Corning Precision Materials and execute on our synergy plan |
|
The integration of Corning
Precision Materials has resulted in core pre-tax synergies in 2014 well in
excess of our $90 million target and enabled $350 million in capital
spending to be avoided |
Grow sales and profits of our
other segments |
|
Our
non-Display segments grew sales and NPAT approximately 10% year-over-year
Optical Communications and Environmental Technologies both realized
increased sales - up 14% and 19%, respectively, compared with
2013
Significant manufacturing
efficiencies realized and strong spending controls in staff
groups |
Return Cash to
Shareholders |
|
We
announced a 20% increase in the quarterly dividend in December 2014,
effective in 2015
We completed the $2 billion share
repurchase program announced in late 2013 and announced a new $1.5 billion
repurchase program |
Shareholder Engagement and Program Updates in
2014 |
Strong Say on Pay Results. At our 2014
annual meeting of shareholders, our Say on Pay proposal received support from
nearly 96% of votes cast, a significant improvement over 2013.
Though encouraged by the strong show of
shareholder support for our compensation program, we nevertheless continued to
engage extensively with our shareholders in 2014 in order to ensure we fully
understand the factors shareholders consider to be the most important when
evaluating our executive compensation program.
At our 2014 annual meeting of
shareholders, our Say on Pay proposal received support from nearly 96% of votes
cast, a significant improvement over 2013.
Ongoing Shareholder Engagement. Before
our 2014 annual meeting and continuing into the fall of 2014, we engaged with
more than 70% of our top 50 institutional shareholders, including meetings with
more than 30 institutional shareholders that collectively represented more than
40% of our outstanding shares. We learned through these meetings that our
shareholders were generally supportive of our executive compensation program but
did offer ideas to refine and improve the program. Major shareholders were not
prescriptive about plan design. Instead, they were more interested to see that
the results and outcomes delivered by the plans were aligned appropriately with
performance. Investors appreciated the new caps we instituted in our short-term
incentive program. Additionally, although investors supported our shift to a
multi-year performance approach in the long-term incentive plan, they also
encouraged us to continue to look at metrics covering a longer time horizon,
which we will continue to evaluate over time.
Program Updates in
2014
● |
Shift to Core
Performance Measures: Beginning in
2014, we refined the metrics used for annual bonus plan and long-term
incentive plan performance targets by adopting the use of core
performance metrics, rather than adjusted GAAP metrics. As a reminder,
Corning began reporting core performance measures to investors early in
2013, and most investors are now using these measures to assess our
operating performance. At the time we began using core performance measures, incentive
targets for 2013 had already been set. Rather than resetting the 2013
targets, we moved to core performance measures for our incentive
compensation program beginning in 2014. With this move, the metrics for
our annual bonus plan and long-term incentive plan performance targets are
based on core performance measures, which are aligned with what we share
with investors, rather than the adjusted GAAP metrics used previously.
|
|
These core performance measures
remove the impact of changes in the Japanese yen and Korean won exchange
rates with the US dollar, as well as other special items that do not
reflect the ongoing operations of the Company. Since a substantial portion
of Cornings operations are denominated in Japanese yen and Korean won,
fluctuations in the exchange rate between the US dollar and these
currencies can significantly impact the Companys financial results. Core
performance measures present our results using constant currency rates to
eliminate these fluctuations. Additionally, Corning has hedged a
significant portion of its exposure to these currencies, and changes in
value of the derivative positions are excluded since they can create large
quarterly swings in our GAAP results based on foreign exchange
fluctuations that are outside of the control of management. Other items
excluded from core performance measures are either deemed to be outside of
managements control or are non-recurring (and often non-cash) changes
that could create unintended or unbudgeted windfalls or penalties if they
were included. |
● |
The Committee decided in advance
that the following additional items would be excluded from operating cash
flow results for compensation plan purposes: special one-time dividends
from equity ventures, cash proceeds or outflows from realized balance
sheet hedges, currency fluctuations (other than Japanese yen) outside of
budget, non-operating gains/losses from discontinued operations and
restructuring/impairment charges. Details of these adjustments may be
found in Appendix A. This approach allows our employees and executives to
focus on improving operational performance, while taking special actions
in a timely manner, as appropriate, to benefit the Company and its
shareholders. |
CORNING INCORPORATED - 2015 Proxy
Statement 39
Table of Contents
Compensation Discussion &
Analysis
● |
Updated
Performance Measures in the Short- and Long-term Plans: In 2014, our annual cash bonus plan (PIP) measures were
core EPS (weighted at 75%) and core net sales (weighted at 25%) due to the
importance of focusing on both profit and revenue growth. Measures for
Cash Performance Units (CPUs) in the long-term incentive plan were
modified in 2014 to include the average of three one-year performance
periods with 2014 performance measures being adjusted operating cash flow
(weighted at 70%), and core net sales (weighted at 30%). The use of these
performance measures (improving profitability, sales and cash flow)
focuses attention on the key drivers for sustaining and/or creating
long-term shareholder value. |
● |
Increased the
Percentage of Performance-based Compensation: We increased the weighting of the CPUs for 2014 long-term grants
from 50 percent to 60 percent of the total long-term incentive opportunity
to increase the amount of performance-based compensation in the long-term
incentive plan. |
● |
Extended the
Performance Horizon for the Long-term Incentive Plan: We increased the performance period for CPUs in the
long-term incentive plan from a one-year performance period followed by an
additional two years of vesting to a three-year performance period based
on the average of three one-year performance periods, which are set
annually in the multi-year cycle. |
● |
Capped the
Short-term Incentive Plan: Beginning in
2014, we introduced caps to our PIP, which will come into play if the core
EPS profitability goal is budgeted to be lower than the prior years
actual core EPS. We will cap PIP at 150% of target (versus our normal
maximum of 200% of target) if Cornings TSR for that year is positive. If
Cornings TSR is negative for such year, the bonus opportunity will be
capped at 100% of target. |
Robust Compensation Program
Governance |
Corning has
rigorous and robust program governance with respect to its executive
compensation plan:
✓ |
Compensation program that 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 80% of total compensation for NEOs is at
risk) |
✓ |
CEO total compensation is
targeted within a competitive range of the Compensation Peer Group
median |
✓ |
Significant NEO share ownership
requirements (6x salary for CEO, 3x salary for other
NEOs) |
✓ |
New caps on payout levels for
annual incentives in a budgeted down-cycle year |
✓ |
History of demonstrated
responsiveness to shareholder concerns and feedback, and ongoing
commitment to shareholder engagement |
✓ |
Anti-hedging and pledging
policies |
✓ |
Robust 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 |
✓ |
Independent compensation
consultant |
Executive
Compensation Program Details
Our key compensation principles are as
follows:
● |
Provide a
Competitive Base Salary: 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. Market benchmarks are
used as a reference point, but internal equity within our NEO group is
also important. Salary increases for all NEOs except Mr. Clappin averaged
3.2%, in line with increases for US based salaried employees. Mr. Clappin
received a 5.4% increase recognizing the increased scope of his role
following the Corning Precision Materials acquisition. |
● |
Pay for
Performance: Executive compensation
should be tied to performance and contribution to both short-term and
long-term corporate financial performance and shareholder
value. |
● |
Team-Based
Management Approach: Corning uses a
team-based management approach, so 100% of incentives awarded to NEOs are
contingent on achieving a common set of goals for Cornings consolidated
financial performance or the performance of Corning stock.
|
● |
Incentive
Compensation Should be a Greater Part of Total Compensation for More
Senior Positions: As employees assume
more responsibility and have greater opportunity to affect Company
performance and shareholder value, an increasing share of their total
compensation package is derived from variable incentive compensation. More
than 80% of NEOs total compensation is variable. |
● |
Interests of Our
Executive Group Should be Aligned with Shareholders: Through the use of stock options and restricted stock
units, and robust stock ownership guidelines, we align the long-term
interests of our NEOs with those of our
shareholders. |
40 CORNING INCORPORATED - 2015 Proxy
Statement
Table of Contents
Compensation Discussion &
Analysis
We believe
it is important to deliver a portion of compensation in equity to align NEOs
with shareholders and create a tie to the future market performance of Corning
stock. Corning provides two forms of long-term equity awards: RSUs which
represent 25% of the annual long-term incentive target value, and stock options
which represent 15% of the target value. Target value amounts are established by
the Committee for each NEO with the number of RSUs determined based on the stock
price on the date of grant and the number of stock options determined using a
Black-Scholes valuation. RSUs are granted at the end of March and cliff vest
three years from the grant date. 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.
Mr. McRae
and Mr. Clappin each received a grant of 36,000 and 12,000 shares of restricted
stock, respectively, in February 2014, in recognition of their leadership of the
successful completion of the SCP acquisition, which added approximately $2
billion in annual sales, $350 million in incremental profit before special
items, and approximately $500 million in additional cash flow to
Corning.
No other discretionary programs or
arrangements are currently in effect with respect of any other
NEOs.
Employee Benefits and
Perquisites |
Employee Benefits: Our NEOs are
eligible for the same employee benefit 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 plans with the same general features and benefits as our
qualified retirement 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.
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.
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.
Other Executive Perquisites: In 2014,
we provided the NEOs with home security and modest, capped personal aircraft
usage. Each NEO is responsible for all taxes on any imputed income resulting
from this program.
The
Committee believes that a well-managed program of limited personal aircraft use,
given the limited commercial flight options available in the Corning, New York
area, provides an extremely important benefit at a reasonable cost to the
Company. We closely monitor business and personal usage on 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 well below these caps. For additional details,
refer to footnotes relating to All Other Compensation included with the
Summary Compensation Table.
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. During fiscal 2014, Mr. Clappin continued
his leadership of the Display 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 (iv) to the Summary
Compensation Table.
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.
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 have a double trigger
severance provision (i.e., the executives employment must be terminated
following a change in control) to receive any benefits. Additional details about
the specific agreements can be found under Arrangements with Named Executive
Officers.
CORNING INCORPORATED - 2015 Proxy
Statement 41
Table of Contents
Compensation Discussion &
Analysis
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. The current NEOs have grandfathered agreements that
were entered into prior to July 2004.
Our peer
group for compensation purposes is different from the group of companies that
our businesses compete with and that should be considered for financial
performance comparison purposes.
The Company
currently participates in and uses three general executive compensation surveys
for NEO positions: Mercer Executive Survey, Towers Watson Executive Survey, and Equilar Top 25
Survey.
With
respect to the three general surveys, the identity of the individual companies
comprising the survey data is not considered by the Compensation Committee in
its 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).
Corning is
a diversified technology company with five reportable business
segments.
The majority of our businesses do not
have identifiable U.S. peers. 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).
Cornings reported core net sales of
$10.2 billion are median for revenues of our Compensation Peer Group. However,
Cornings number of employees and market capitalization are above the median,
and its net income and total assets approach or are in the top quartile
depending on the measure.
Percent Rank, Corning versus
Compensation Peer Group
Corning uses the Compensation Peer
Group solely as a reference point, in combination with broader executive
compensation surveys, to assess the NEOs target total direct compensation (i.e.
salary, target bonus, plus 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. 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.
2014 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. |
|
Median target
total direct CEO compensation among in the Compensation Peer Group was
determined to be $9.8 million and 75th percentile total direct CEO compensation
was $12.0 million, compared with Corning total direct CEO compensation, at
target, of $10.1 million.
42 CORNING INCORPORATED
- 2015
Proxy Statement
Table of Contents
Compensation Discussion &
Analysis
2014 Financial Performance Peer
Group |
Our largest
competitors and most relevant financial performance peers are not U.S.
companies. Therefore, the relevant companies for financial performance
comparison purposes are not the same as those in the Compensation Peer Group we
use for compensation benchmarking.
The
following table contains certain financial performance data of Corning and each
of our business segments, compared with our largest competitors who publicly
disclose their financial results in each of those segments, including sales and
net profit after taxes compound annual growth rates (CAGR). Overall, we
performed well in 2014 in virtually all of our business segments.
|
Display Technologies Segment
|
|
Sales
(CAGR) |
|
NPAT (CAGR) |
|
TSR @ 12/31/14
(annualized) |
|
|
|
|
1 Yr |
|
|
3 Yr |
|
|
1 Yr |
|
|
3 Yr |
|
|
1 Yr |
|
|
3 Yr |
|
|
Corning Incorporated |
|
29 |
% |
|
11 |
% |
|
22 |
% |
|
-2 |
% |
|
31 |
% |
|
24 |
% |
|
Display Technologies Segment |
|
63 |
% |
|
17 |
% |
|
11 |
% |
|
-10 |
% |
|
|
|
|
|
|
|
|
|
Asahi Glass Co.
Ltd. |
|
2 |
% |
|
4 |
% |
|
-1 |
% |
|
-45 |
% |
|
-7 |
% |
|
0 |
% |
|
Nippon Electric Glass Co.
Ltd. |
|
1 |
% |
|
-10 |
% |
|
-42 |
% |
|
-40 |
% |
|
2 |
% |
|
-8 |
% |
|
|
|
Environmental Tech
Segment |
|
Sales
(CAGR) |
|
NPAT (CAGR) |
|
TSR @ 12/31/14
(annualized) |
|
|
|
|
1 Yr |
|
|
3 Yr |
|
|
1 Yr |
|
|
3 Yr |
|
|
1 Yr |
|
|
3 Yr |
|
|
Corning Incorporated |
|
29 |
% |
|
11 |
% |
|
22 |
% |
|
-2 |
% |
|
31 |
% |
|
24 |
% |
|
Environmental Segment |
|
19 |
% |
|
3 |
% |
|
44 |
% |
|
16 |
% |
|
|
|
|
|
|
|
|
|
Ibiden Co.,
Ltd. |
|
2 |
% |
|
2 |
% |
|
3 |
% |
|
23 |
% |
|
-8 |
% |
|
7 |
% |
|
NGK Insulators Ltd. |
|
25 |
% |
|
13 |
% |
|
69 |
% |
|
N/A |
|
26 |
% |
|
42 |
% |
|
|
|
Optical Communications
Segment |
|
Sales
(CAGR) |
|
NPAT (CAGR) |
|
TSR @ 12/31/14
(annualized) |
|
|
|
|
1 Yr |
|
|
3 Yr |
|
|
1 Yr |
|
|
3 Yr |
|
|
1 Yr |
|
|
3 Yr |
|
|
Corning Incorporated |
|
29 |
% |
|
11 |
% |
|
22 |
% |
|
-2 |
% |
|
31 |
% |
|
24 |
% |
|
Optical Communications Segment |
|
14 |
% |
|
9 |
% |
|
18 |
% |
|
11 |
% |
|
|
|
|
|
|
|
|
|
Prysmian
Group |
|
-2 |
% |
|
-3 |
% |
|
-25 |
% |
|
N/A |
|
-17 |
% |
|
19 |
% |
|
TE Connectivity
Ltd.(1) |
|
4 |
% |
|
-1 |
% |
|
41 |
% |
|
16 |
% |
|
17 |
% |
|
30 |
% |
|
|
|
Life Sciences Segment |
|
Sales
(CAGR) |
|
NPAT (CAGR)
|
|
TSR @ 12/31/14
(annualized) |
|
|
|
|
1 Yr |
|
|
3 Yr |
|
|
1 Yr |
|
|
3 Yr |
|
|
1 Yr |
|
|
3 Yr |
|
|
Corning Incorporated |
|
29 |
% |
|
11 |
% |
|
22 |
% |
|
-2 |
% |
|
31 |
% |
|
24 |
% |
|
Life Sciences Segment |
|
1 |
% |
|
13 |
% |
|
-5 |
% |
|
13 |
% |
|
|
|
|
|
|
|
|
|
Thermo Fisher Scientific,
Inc.(2) |
|
29 |
% |
|
13 |
% |
|
48 |
% |
|
23 |
% |
|
13 |
% |
|
42 |
% |
|
|
|
Specialty Materials
Segment |
|
Sales
(CAGR) |
|
NPAT (CAGR) |
|
TSR @ 12/31/14
(annualized) |
|
|
|
|
1 Yr |
|
|
3 Yr |
|
|
1 Yr |
|
|
3 Yr |
|
|
1 Yr |
|
|
3 Yr |
|
|
Corning Incorporated |
|
29 |
% |
|
11 |
% |
|
22 |
% |
|
-2 |
% |
|
31 |
% |
|
24 |
% |
|
Specialty Materials Segment |
|
3 |
% |
|
4 |
% |
|
-17 |
% |
|
30 |
% |
|
|
|
|
|
|
|
|
|
Asahi Glass Co.
Ltd. |
|
2 |
% |
|
4 |
% |
|
-1 |
% |
|
-45 |
% |
|
-7 |
% |
|
0 |
% |
|
Nippon Electric Glass Co.
Ltd. |
|
1 |
% |
|
-10 |
% |
|
-42 |
% |
|
-40 |
% |
|
2 |
% |
|
-8 |
% |
Data Source: Capital IQ / Bloomberg / Company reports
Corning Incorporated data is based on core performance measures, which
are non-GAAP measures. The reconciliation between GAAP and these non-GAAP
measures can be found in Appendix A.
NPAT for all competitors defined by Capital IQ Net income excl. extra
items.
All data and calculations are in local currency.
N/A indicates CAGR is not applicable due to loss in prior comparison
period.
(1) TE Connectivitys comparable Network Solutions Segment Results: Sales
(CAGR) 1Yr = -4%, 3Yr = -9% Operating Income (CAGR) 1Yr = 22%, 3Yr =
-20%
(2) Thermo Fisher Scientific, Inc.s results include its 2014 acquisition
of Life Technologies Corporation.
CORNING INCORPORATED
- 2015
Proxy Statement 43
Table of Contents
Compensation Discussion &
Analysis
Compensation
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.
During 2014, the Committee directly retained an executive compensation expert
from Frederic W. Cook & Co., Inc. (FWC) as its independent consultant, after
its previous consultant of more than 10 years retired.
In 2014,
FWC attended all Committee meetings. FWC advises the Committee on all matters
related to NEO and director compensation and assists the Committee in
interpreting the consultants data as well as data and recommendations received
from the Company.
The Company
has 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), Global Compensation and Benefits, working closely
with other members of Cornings Human Resources, Legal and Finance departments,
is 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 each element of the targeted total compensation recommendations for
all of the NEOs 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 not discussed or reviewed with
the CEO prior to the Committees review and the CEO is not present when the SVP,
Global Compensation and Benefits, 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 CEO,
Chief Administrative Officer and SVP, Human Resources, are invited to attend
Committee meetings. The CFO historically has attended the annual Committee
meeting to review the CD&A and the portion of the February meeting when
performance metrics are reviewed.
Compensation Risk Analysis |
In February
2015, our Compensation 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. Our Compensation 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 our 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; |
44 CORNING INCORPORATED - 2015 Proxy
Statement
Table of Contents
Compensation Discussion &
Analysis
● |
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 Compensation Committee
approval on all officer compensation
proposals. |
Our Compensation 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 Compensation 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 member of the executive group or any 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 member of the executive group or any director from
holding Corning stock in a margin account or pledging Company securities as
collateral for a loan.
Tax Deductibility of
Compensation |
In general,
the Company intends to structure its 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 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.
CORNING INCORPORATED - 2015 Proxy
Statement 45
Table of Contents
Compensation Discussion &
Analysis
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, 2014.
The
Compensation Committee:
Deborah D.
Rieman, Chair
Richard T. Clark
Kurt M. Landgraf
Hansel E. Tookes
II
Compensation
Tables
Summary Compensation
Table |
The following tables, narrative and
footnotes discuss the 2014 compensation of the Chairman, Chief Executive Officer
and President, the Chief Financial Officer and the other three most highly
compensated executive officers, who collectively are referred to as the
NEOs.
|
(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 |
|
2014 |
|
$ |
1,261,923 |
|
$ |
0 |
|
|
$ |
1,750,004 |
|
$ |
1,037,315 |
|
|
$ |
3,991,718 |
|
|
|
$ |
4,346,119 |
|
|
|
$ |
647,382 |
|
|
$ |
13,034,461 |
|
|
Chairman, Chief |
|
2013 |
|
|
1,223,615 |
|
|
0 |
|
|
|
1,750,002 |
|
|
1,747,499 |
|
|
|
5,717,784 |
|
|
|
|
0 |
|
|
|
$ |
774,963 |
|
|
|
11,213,864 |
|
|
Executive Officer and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President |
|
2012 |
|
|
1,197,308 |
|
|
0 |
|
|
|
1,749,994 |
|
|
1,668,623 |
|
|
|
6,265,910 |
|
|
|
|
1,193,672 |
|
|
|
$ |
572,297 |
|
|
|
12,647,804 |
|
|
James B.
Flaws |
|
2014 |
|
|
948,923 |
|
|
1,500,000 |
(6) |
|
|
875,002 |
|
|
518,653 |
|
|
|
1,979,218 |
|
|
|
|
1,648,692 |
|
|
|
|
222,899 |
|
|
|
7,693,385 |
|
|
Vice Chairman and |
|
2013 |
|
|
921,462 |
|
|
1,500,000 |
(6) |
|
|
874,995 |
|
|
873,749 |
|
|
|
2,848,929 |
|
|
|
|
0 |
|
|
|
|
233,943 |
|
|
|
7,253,077 |
|
|
Chief Financial Officer |
|
2012 |
|
|
901,731 |
|
|
1,500,000 |
(6) |
|
|
874,997 |
|
|
834,314 |
|
|
|
3,118,847 |
|
|
|
|
1,970,034 |
|
|
|
|
174,533 |
|
|
|
9,374,456 |
|
|
James P.
Clappin |
|
2014 |
|
|
641,692 |
|
|
0 |
|
|
|
710,592 |
|
|
296,377 |
|
|
|
1,137,400 |
|
|
|
|
1,423,940 |
|
|
|
|
1,848,935 |
|
|
|
6,058,936 |
|
|
President, Corning |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Glass Technologies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lawrence D.
McRae |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Vice President, |
|
2014 |
|
|
647,615 |
|
|
0 |
|
|
|
1,131,792 |
|
|
296,377 |
|
|
|
1,137,400 |
|
|
|
|
1,901,017 |
|
|
|
|
64,591 |
|
|
|
5,178,793 |
|
|
Strategy and Corporate |
|
2013 |
|
|
626,769 |
|
|
0 |
|
|
|
499,995 |
|
|
499,287 |
|
|
|
1,630,367 |
|
|
|
|
0 |
|
|
|
|
75,261 |
|
|
|
3,331,679 |
|
|
Development |
|
2012 |
|
|
612,885 |
|
|
0 |
|
|
|
500,006 |
|
|
476,749 |
|
|
|
1,783,427 |
|
|
|
|
1,237,468 |
|
|
|
|
62,315 |
|
|
|
4,672,849 |
|
|
Kirk P.
Gregg |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Vice President |
|
2014 |
|
|
668,231 |
|
|
0 |
|
|
|
499,992 |
|
|
296,377 |
|
|
|
1,156,210 |
|
|
|
|
1,480,993 |
|
|
|
|
130,274 |
|
|
|
4,232,077 |
|
|
and Chief Administrative |
|
2013 |
|
|
648,769 |
|
|
0 |
|
|
|
499,995 |
|
|
499,287 |
|
|
|
1,649,030 |
|
|
|
|
0 |
|
|
|
|
118,071 |
|
|
|
3,415,151 |
|
|
Officer |
|
2012 |
|
|
634,885 |
|
|
0 |
|
|
|
500,006 |
|
|
476,749 |
|
|
|
1,805,264 |
|
|
|
|
1,747,802 |
|
|
|
|
133,278 |
|
|
|
5,297,985 |
|
(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
Corporate Performance Plan. In addition to restricted stock units granted
under the Corporate Performance Plan, Messrs. McRae and Clappin received a
special grant of restricted stock of 36,000 and 12,000 shares respectively
on February 5, 2014 to recognize their significant contributions in the
acquisition of Corning Precision Materials beyond their normal
responsibilities. 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, 2014 included in the Companys Annual
Report on Form 10-K filed with the SEC on February 13, 2015. This same
method was used for the fiscal years ended December 31, 2013 and 2012.
There can be no assurance that the grant date fair value amounts will ever
be realized. |
46 CORNING INCORPORATED - 2015 Proxy
Statement
Table of Contents
Compensation Discussion &
Analysis
(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 Corporate Performance 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, 2014 included in the Companys Annual Report on Form 10-K filed with
the SEC on February 13, 2015. There can be no assurance that the grant
date fair value amounts will ever be realized. |
(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. Awards earned under the 2014 GoalSharing plan were 6.75%
of each Named Executive Officers year-end base salary and paid in
February 2015. Awards earned under the 2014 Performance Incentive Plan
were based on actual corporate performance compared to the core EPS and
core net sales goals established for the plans in February 2014. Based on
actual performance, each of the NEOs earned PIP awards equal to 123% of
their annual target bonus opportunities (established as a percentage of
year-end base salary). Cash awards earned under the PIP for 2014 will be
paid in March 2015. 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 |
|
2014 PIP
Target |
|
Actual 2014
PIP Performance Results (% Tgt.) |
|
2014 PIP $
Award |
|
Actual
2014 GoalSharing Performance |
|
2014 GoalSharing Award |
|
|
|
Wendell P. Weeks |
|
|
$ |
1,284,000 |
|
|
|
140 |
% |
|
|
|
123 |
% |
|
|
|
$ |
2,211,048 |
|
|
|
6.75 |
% |
|
|
|
$ |
86,670 |
|
|
|
|
James B.
Flaws |
|
|
|
964,000 |
|
|
|
90 |
% |
|
|
|
123 |
% |
|
|
|
|
1,067,148 |
|
|
|
6.75 |
% |
|
|
|
|
65,070 |
|
|
|
|
James P. Clappin |
|
|
|
660,000 |
|
|
|
75 |
% |
|
|
|
123 |
% |
|
|
|
|
608,850 |
|
|
|
6.75 |
% |
|
|
|
|
44,550 |
|
|
|
|
Lawrence D.
McRae |
|
|
|
660,000 |
|
|
|
75 |
% |
|
|
|
123 |
% |
|
|
|
|
608,850 |
|
|
|
6.75 |
% |
|
|
|
|
44,550 |
|
|
|
|
Kirk P. Gregg |
|
|
|
679,000 |
|
|
|
75 |
% |
|
|
|
123 |
% |
|
|
|
|
626,378 |
|
|
|
6.75 |
% |
|
|
|
|
45,833 |
|
|
|
CPU Awards under the 2014 CPP are
based on actual corporate performance compared to the established
performance goals averaged over three years (2014, 2015 and 2016). The
goals for 2014 were adjusted operating cash flow (70%) and core net sales
(30%). Goals for 2015 were established in February 2015 and goals for 2016
are yet to be established. While the final award amount is unknown, as it
is based on the average of the three years, the table below reflects the
target amount of CPUs and the prorated awards earned on the basis of the
2014 metrics which are reflected in column (g)
above: |
|
|
Named Executive Officer |
|
2014 CPU Target
Award |
|
2014 CPU Performance Results |
|
Prorated Earned CPU
Award Based on 2014 Performance (Year One of
Three) |
|
Prorated Earned CPU Award Based on 2015
Performance (Year Two of Three) |
|
Prorated Earned CPU Award Based on 2016
Performance (Year Three of Three) |
|
|
|
Wendell P. Weeks |
|
$ |
4,200,000 |
|
|
121 |
% |
|
|
|
$ |
1,694,000 |
|
|
TBD |
|
TBD |
|
|
|
James B.
Flaws |
|
|
2,100,000 |
|
|
121 |
% |
|
|
|
|
847,000 |
|
|
TBD |
|
TBD |
|
|
|
James P. Clappin |
|
|
1,200,000 |
|
|
121 |
% |
|
|
|
|
484,000 |
|
|
TBD |
|
TBD |
|
|
|
Lawrence D.
McRae |
|
|
1,200,000 |
|
|
121 |
% |
|
|
|
|
484,000 |
|
|
TBD |
|
TBD |
|
|
|
Kirk P. Gregg |
|
|
1,200,000 |
|
|
121 |
% |
|
|
|
|
484,000 |
|
|
TBD |
|
TBD |
|
(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 2014, the discount
rate used to value the actuarial liability decreased 75 basis points from
4.75% to 4.00% and mortality assumptions were updated. Together these
changes in actuarial assumptions resulted in an increase in present value
of pension benefits without any material change to the underlying benefit
programs. 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 |
|
2014 Present Value
in Pension Benefits |
|
2013 Present Value
in Pension Benefits |
|
2012 Present Value
in Pension Benefits |
|
2011 Present Value
in Pension Benefits |
|
|
|
Wendell P. Weeks |
|
$ |
22,572,362 |
|
|
$ |
18,226,243 |
|
|
$ |
19,866,606 |
|
|
$ |
18,672,934 |
|
|
|
|
James B.
Flaws |
|
|
20,833,513 |
|
|
|
19,184,821 |
|
|
|
21,303,404 |
|
|
|
19,333,370 |
|
|
|
|
James P. Clappin |
|
|
8,633,886 |
|
|
---------------------------Not an
NEO---------------------------- |
|
|
|
Lawrence D.
McRae |
|
|
9,501,949 |
|
|
|
7,600,932 |
|
|
|
8,018,800 |
|
|
|
6,773,332 |
|
|
|
|
Kirk P. Gregg |
|
|
11,266,446 |
|
|
|
9,785,453 |
|
|
|
10,666,897 |
|
|
|
8,919,095 |
|
|
|
|
Valuation Discount Rate |
|
|
4.00 |
% |
|
|
4.75 |
% |
|
|
3.75 |
% |
|
|
4.75 |
% |
|
CORNING INCORPORATED - 2015 Proxy
Statement 47
Table of Contents
Compensation Discussion &
Analysis
(5) |
The following table shows All Other Compensation
amounts provided to the NEOs. Capped personal aircraft usage and home
security are the only perquisites offered to the NEOs. The value of the
personal aircraft rights in the table below 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 |
|
Expatriate Benefits |
|
Other(ii) |
|
TOTALS |
|
|
|
Wendell P.
Weeks |
|
2014 |
|
|
$ |
9,468 |
|
|
|
$ |
185,953 |
|
|
$ |
62,221 |
|
$ |
384,422 |
(iii) |
|
$ |
0 |
|
|
$ |
5,319 |
|
$ |
647,382 |
|
|
|
|
|
2013 |
|
|
|
9,468 |
|
|
|
|
200,144 |
|
|
|
56,143 |
|
|
502,938 |
(iii) |
|
|
0 |
|
|
|
6,270 |
|
|
774,963 |
|
|
|
|
|
2012 |
|
|
|
9,262 |
|
|
|
|
78,446 |
|
|
|
87,356 |
|
|
391,865 |
(iii) |
|
|
0 |
|
|
|
5,368 |
|
|
572,297 |
|
|
|
James B.
Flaws |
|
2014 |
|
|
|
14,203 |
|
|
|
|
102,527 |
|
|
|
86,877 |
|
|
11,472 |
|
|
|
0 |
|
|
|
7,819 |
|
|
222,817 |
|
|
|
|
|
2013 |
|
|
|
14,203 |
|
|
|
|
108,853 |
|
|
|
91,592 |
|
|
11,472 |
|
|
|
0 |
|
|
|
7,822 |
|
|
233,942 |
|
|
|
|
|
2012 |
|
|
|
13,894 |
|
|
|
|
49,440 |
|
|
|
81,414 |
|
|
23,378 |
|
|
|
0 |
|
|
|
6,407 |
|
|
174,533 |
|
|
|
James P. Clappin |
|
2014 |
|
|
|
7,101 |
|
|
|
|
60,889 |
|
|
|
43,097 |
|
|
0 |
|
|
|
1,720,103 |
(iv) |
|
|
17,745 |
|
|
1,848,935 |
|
|
|
Lawrence D.
McRae |
|
2014 |
|
|
|
16,055 |
|
|
|
|
0 |
|
|
|
36,745 |
|
|
11,472 |
|
|
|
0 |
|
|
|
319 |
|
|
64,591 |
|
|
|
|
|
2013 |
|
|
|
15,746 |
|
|
|
|
0 |
|
|
|
47,719 |
|
|
11,472 |
|
|
|
0 |
|
|
|
324 |
|
|
75,261 |
|
|
|
|
|
2012 |
|
|
|
15,437 |
|
|
|
|
0 |
|
|
|
23,154 |
|
|
23,355 |
|
|
|
0 |
|
|
|
368 |
|
|
62,315 |
|
|
|
Kirk P.
Gregg |
|
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 |
|
|
|
|
|
2012 |
|
|
|
10,000 |
|
|
|
|
18,513 |
|
|
|
78,272 |
|
|
23,355 |
|
|
|
0 |
|
|
|
3,139 |
|
|
133,278 |
|
|
(i) |
This program is tracked on
a December 1 to November 30 year. |
|
(ii) |
These amounts include cost attributable to executive
physicals, including associated travel costs, an annual Board gift, and
contributions made under the Corning Foundation Matching Gift
Program. |
|
(iii) |
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 have declined from the
levels of recent years, and are expected to decline further in 2015. 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, there are reported as perquisites in this column. |
|
(iv) |
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 include
standard expatriate benefits related to housing related costs ($212,193),
cost of living related allowances ($111,054), home leave ($9,279), as well
as tax equalization and host country tax payments ($1,387,477). 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
2012, 2013 and 2014 for his agreement to stay at the company past his
anticipated retirement date to allow for staggered NEO retirements and
successions. The payment made in April 2014 represents the final payment
to Mr. Flaws from this retention arrangement approved by the Committee in
July 2012, and no further retention arrangements are in place or
planned. |
48 CORNING INCORPORATED - 2015 Proxy
Statement
Table of Contents
Compensation Discussion &
Analysis
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 |
|
|
$ |
1,797,600 |
|
|
$ |
3,595,200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GoalSharing Plan |
|
n/a |
|
|
|
|
|
0 |
|
|
|
64,200 |
|
|
|
128,400 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units |
|
2/5/14 |
|
2/5/14 |
|
|
|
0 |
|
|
|
4,200,000 |
(2) |
|
|
6,300,000 |
(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time-Based |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units |
|
3/31/14 |
|
2/5/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
84,054 |
|
|
|
|
|
|
|
|
|
|
|
|
20.82 |
|
|
|
1,750,004 |
(4) |
|
|
|
|
Stock Options |
|
3/31/14 |
|
2/5/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42,027 |
|
|
|
20.82 |
|
|
|
20.82 |
|
|
$ |
342,388 |
(5) |
|
|
|
|
Stock Options |
|
4/30/14 |
|
2/5/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
41,846 |
|
|
|
20.91 |
|
|
|
20.91 |
|
|
$ |
347,462 |
(5) |
|
|
|
|
Stock Options |
|
5/30/14 |
|
2/5/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
41,080 |
|
|
|
21.30 |
|
|
|
21.30 |
|
|
$ |
347,464 |
(5) |
|
|
James B. |
|
Performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Flaws |
|
Incentive Plan |
|
n/a |
|
|
|
|
|
0 |
|
|
|
867,600 |
|
|
|
1,735,200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GoalSharing Plan |
|
n/a |
|
|
|
|
|
0 |
|
|
|
48,200 |
|
|
|
96,400 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units |
|
2/5/14 |
|
2/5/14 |
|
|
|
0 |
|
|
|
2,100,000 |
(2) |
|
|
3,150,000 |
(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time-Based |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units |
|
3/31/14 |
|
2/5/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42,027 |
|
|
|
|
|
|
|
|
|
|
|
|
20.82 |
|
|
|
875,002 |
(4) |
|
|
|
|
Stock Options |
|
3/31/14 |
|
2/5/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,013 |
|
|
|
20.82 |
|
|
|
20.82 |
|
|
$ |
171,190 |
(5) |
|
|
|
|
Stock Options |
|
4/30/14 |
|
2/5/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,923 |
|
|
|
20.91 |
|
|
|
20.91 |
|
|
$ |
173,731 |
(5) |
|
|
|
|
Stock Options |
|
5/30/14 |
|
2/5/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,540 |
|
|
|
21.30 |
|
|
|
21.30 |
|
|
$ |
173,732 |
(5) |
|
|
James P. |
|
Performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Clappin |
|
Incentive Plan |
|
n/a |
|
|
|
|
|
0 |
|
|
|
495,000 |
|
|
|
990,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GoalSharing Plan |
|
n/a |
|
|
|
|
|
0 |
|
|
|
33,000 |
|
|
|
66,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units |
|
2/5/14 |
|
2/5/14 |
|
|
|
0 |
|
|
|
1,200,000 |
(2) |
|
|
1,800,000 |
(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time-Based |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards |
|
2/5/14 |
|
2/5/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,000 |
(6) |
|
|
|
|
|
|
|
|
|
|
|
17.55 |
|
|
|
210,600 |
|
|
|
|
|
Time-Based |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units |
|
3/31/14 |
|
2/5/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,015 |
|
|
|
|
|
|
|
|
|
|
|
|
20.82 |
|
|
|
499,992 |
(4) |
|
|
|
|
Stock Options |
|
3/31/14 |
|
2/5/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,008 |
|
|
|
20.82 |
|
|
|
20.82 |
|
|
$ |
97,828 |
(5) |
|
|
|
|
Stock Options |
|
4/30/14 |
|
2/5/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,956 |
|
|
|
20.91 |
|
|
|
20.91 |
|
|
$ |
99,275 |
(5) |
|
|
|
|
Stock Options |
|
5/30/14 |
|
2/5/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,737 |
|
|
|
21.30 |
|
|
|
21.30 |
|
|
$ |
99,274 |
(5) |
|
|
Lawrence
D. |
|
Performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
McRae |
|
Incentive Plan |
|
n/a |
|
|
|
|
|
0 |
|
|
|
495,000 |
|
|
|
990,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GoalSharing Plan |
|
n/a |
|
|
|
|
|
0 |
|
|
|
33,000 |
|
|
|
66,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units |
|
2/5/14 |
|
2/5/14 |
|
|
|
0 |
|
|
|
1,200,000 |
(2) |
|
|
1,800,000 |
(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time-Based |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards |
|
2/5/14 |
|
2/5/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36,000 |
(6) |
|
|
|
|
|
|
|
|
|
|
|
17.55 |
|
|
|
631,800 |
|
|
|
|
|
Time-Based |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units |
|
3/31/14 |
|
2/5/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,015 |
|
|
|
|
|
|
|
|
|
|
|
|
20.82 |
|
|
|
499,992 |
(4) |
|
|
|
|
Stock Options |
|
3/31/14 |
|
2/5/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,008 |
|
|
|
20.82 |
|
|
|
20.82 |
|
|
$ |
97,828 |
(5) |
|
|
|
|
Stock Options |
|
4/30/14 |
|
2/5/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,956 |
|
|
|
20.91 |
|
|
|
20.91 |
|
|
$ |
99,275 |
(5) |
|
|
|
|
Stock Options |
|
5/30/14 |
|
2/5/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,737 |
|
|
|
21.30 |
|
|
|
21.30 |
|
|
$ |
99,274 |
(5) |
|
CORNING INCORPORATED - 2015 Proxy
Statement 49
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 |
|
|
Kirk P.
Gregg |
|
Performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive Plan |
|
n/a |
|
|
|
0 |
|
$ |
509,250 |
|
|
$ |
1,018,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GoalSharing Plan |
|
n/a |
|
|
|
0 |
|
|
33,950 |
|
|
|
67,900 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Performance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units |
|
2/5/14 |
|
2/5/14 |
|
0 |
|
|
1,200,000 |
(2) |
|
|
1,800,000 |
(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time-Based |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units |
|
3/31/14 |
|
2/5/14 |
|
|
|
|
|
|
|
|
|
|
|
24,015 |
|
|
|
|
|
20.82 |
|
|
499,992 |
(4) |
|
|
|
|
Stock Options |
|
3/31/14 |
|
2/5/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
12,008 |
|
20.82 |
|
20.82 |
|
$ |
97,828 |
(5) |
|
|
|
|
Stock Options |
|
4/30/14 |
|
2/5/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
11,956 |
|
20.91 |
|
20.91 |
|
$ |
99,275 |
(5) |
|
|
|
|
Stock Options |
|
5/30/14 |
|
2/5/14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
11,737 |
|
21.30 |
|
21.30 |
|
$ |
99,274 |
(5) |
|
(1) |
The amounts shown in
columns (d), (e) and (f) reflect the award amounts under (i) the Companys
2014 PIP (ii) 2014 GoalSharing Plan and (iii) the CPUs under the 2014
Corporate Performance Plan. 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 amount of performance is met for GoalSharing and PIP, 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. PIP
and GoalSharing are based on the individuals 2014 year-end base salary
and bonus target. |
(2) |
This amount reflects the target value of CPUs that were
approved for such NEO on February 5, 2014 under the 2014 Corporate
Performance Plan. Actual awards earned for these cash units may range from
0-150% of the target award, based on average performance over three
performance years (2014, 2015, 2016) and will be payable in February
2017. |
(3) |
This amount reflects maximum (150% of target) amount of
CPUs that were approved for such NEO on February 5, 2014 under the 2014
Corporate Performance Plan. Actual awards earned for these cash units may
range from 0-150% of the target award, based on average performance over
three performance years (2014, 2015, 2016) and will be payable in February
2017. |
(4) |
This amount reflects the total grant date fair value
computed in accordance with FASB ASC Topic 718 of stock awards granted in
calendar year 2014 pursuant to the 2014 Corporate Performance Plan, and,
after considering footnote (5) below, corresponds to the amounts set forth
in column (e) for 2014 of the Summary Compensation Table. Stock awards
vest 100% three years after grant date. |
(5) |
These amounts reflect the total grant date fair value
computed in accordance with FASB ASC Topic 718 of stock options granted in
calendar year 2014 pursuant to the 2014 Corporate Performance Plan, and
corresponds to the amounts set forth in column (f) for 2014 of the Summary
Compensation Table. Stock options vest 100% three years after grant
date. |
(6) |
Mr. McRae and Mr.
Clappin each received a special grant of restricted stock on February 5,
2014 to recognize their significant contributions in the acquisition of
Corning Precision Materials beyond their normal responsibilities. These
grants are reflected in column (e) of the Summary Compensation
Table. |
50 CORNING INCORPORATED - 2015 Proxy
Statement
Table of Contents
Compensation Discussion &
Analysis
Outstanding Equity Awards at
Fiscal Year-End |
The following table shows stock option
awards classified as exercisable and unexercisable as of December 31, 2014. The
table also shows unvested restricted stock awards assuming a market value of
$22.93 a share (the NYSE closing price of the Companys stock on December 31,
2014).
|
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 |
|
12/07/05 |
|
A |
|
|
161,500 |
|
|
|
0 |
|
|
$ |
21.08 |
|
12/6/2015 |
|
|
337,250 |
|
|
|
$ |
7,733,143 |
|
|
|
|
|
01/02/06 |
|
B |
|
|
80,750 |
|
|
|
0 |
|
|
|
19.68 |
|
1/1/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
02/01/06 |
|
C |
|
|
80,750 |
|
|
|
0 |
|
|
|
24.72 |
|
1/31/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
0 |
|
|
|
111,835 |
|
|
|
13.04 |
|
1/3/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
02/01/12 |
|
C |
|
|
0 |
|
|
|
113,049 |
|
|
|
12.90 |
|
2/1/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
03/01/12 |
|
C |
|
|
0 |
|
|
|
112,439 |
|
|
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
1,282,524 |
|
|
|
810,686 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James B.
Flaws |
|
12/07/05 |
|
A |
|
|
77,000 |
|
|
|
0 |
|
|
$ |
21.08 |
|
12/6/2015 |
|
|
169,114 |
|
|
|
$ |
3,877,784 |
|
|
|
|
|
01/02/06 |
|
B |
|
|
38,500 |
|
|
|
0 |
|
|
|
19.68 |
|
1/1/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
02/01/06 |
|
C |
|
|
38,500 |
|
|
|
0 |
|
|
|
24.72 |
|
1/31/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
12/06/06 |
|
A |
|
|
66,000 |
|
|
|
0 |
|
|
|
21.89 |
|
12/5/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
01/02/07 |
|
B |
|
|
33,000 |
|
|
|
0 |
|
|
|
18.85 |
|
1/1/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
02/01/07 |
|
C |
|
|
33,000 |
|
|
|
0 |
|
|
|
20.86 |
|
1/31/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
12/02/09 |
|
D |
|
|
30,666 |
|
|
|
0 |
|
|
|
17.82 |
|
12/2/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
01/04/10 |
|
D |
|
|
30,667 |
|
|
|
0 |
|
|
|
19.56 |
|
1/4/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
02/01/10 |
|
D |
|
|
30,667 |
|
|
|
0 |
|
|
|
18.16 |
|
2/1/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
01/03/12 |
|
C |
|
|
0 |
|
|
|
55,918 |
|
|
|
13.04 |
|
1/3/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
02/01/12 |
|
C |
|
|
0 |
|
|
|
56,525 |
|
|
|
12.90 |
|
2/1/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
03/01/12 |
|
C |
|
|
0 |
|
|
|
56,219 |
|
|
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
605,896 |
|
|
|
405,343 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CORNING INCORPORATED - 2015 Proxy
Statement 51
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 |
|
12/07/05 |
|
A |
|
|
32,500 |
|
|
|
0 |
|
|
$ |
21.08 |
|
12/6/2015 |
|
|
93,455 |
|
|
|
$ |
2,142,923 |
|
|
|
|
|
01/02/06 |
|
B |
|
|
16,250 |
|
|
|
0 |
|
|
|
19.68 |
|
1/1/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
02/01/06 |
|
C |
|
|
16,250 |
|
|
|
0 |
|
|
|
24.72 |
|
1/31/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
0 |
|
|
|
25,562 |
|
|
|
13.04 |
|
1/3/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
02/01/12 |
|
C |
|
|
0 |
|
|
|
25,840 |
|
|
|
12.90 |
|
2/1/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
03/01/12 |
|
C |
|
|
0 |
|
|
|
25,700 |
|
|
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
275,448 |
|
|
|
192,440 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lawrence D.
McRae |
|
12/07/05 |
|
A |
|
|
22,500 |
|
|
|
0 |
|
|
$ |
21.08 |
|
12/6/2015 |
|
|
132,238 |
|
|
|
$ |
3,032,217 |
|
|
|
|
|
01/02/06 |
|
B |
|
|
11,250 |
|
|
|
0 |
|
|
|
19.68 |
|
1/1/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
01/02/09 |
|
D |
|
|
17,000 |
|
|
|
0 |
|
|
|
10.05 |
|
1/1/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
0 |
|
|
|
31,953 |
|
|
|
13.04 |
|
1/3/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
02/01/12 |
|
C |
|
|
0 |
|
|
|
32,300 |
|
|
|
12.90 |
|
2/1/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
03/01/12 |
|
C |
|
|
0 |
|
|
|
32,125 |
|
|
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
279,882 |
|
|
|
231,625 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
52 CORNING INCORPORATED - 2015 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 |
|
12/07/05 |
|
A |
|
|
58,500 |
|
|
|
0 |
|
|
$ |
21.08 |
|
12/6/2015 |
|
|
96,357 |
|
|
|
$ |
2,209,466 |
|
|
|
|
|
01/02/06 |
|
B |
|
|
29,250 |
|
|
|
0 |
|
|
|
19.68 |
|
1/1/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
02/01/06 |
|
C |
|
|
29,250 |
|
|
|
0 |
|
|
|
24.72 |
|
1/31/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
01/03/12 |
|
C |
|
|
0 |
|
|
|
31,953 |
|
|
|
13.04 |
|
1/3/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
02/01/12 |
|
C |
|
|
0 |
|
|
|
32,300 |
|
|
|
12.90 |
|
2/1/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
03/01/12 |
|
C |
|
|
0 |
|
|
|
32,125 |
|
|
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
|
432,435 |
|
|
|
231,625 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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. |
127,989; 64,199; 36,484; 29,026; and
36,569 restricted share units granted to Messrs. Weeks, Flaws, McRae,
Clappin and Gregg respectively, on January 3, 2012, which vest on February
16, 2015. |
|
ii. |
125,207; 62,888; 35,739; 28,414; and
35,773 restricted share units granted to Messrs. Weeks, Flaws, McRae,
Clappin, and Gregg respectively, on March 28, 2013, which vest on April
18, 2016. |
|
iii. |
84,054; 42,027; 24,015; 24,015; and
24,015 restricted share units granted to Messrs. Weeks, Flaws, McRae,
Clappin and Gregg respectively, on March 28, 2013, which vest on April 17,
2017. Mr. McRae and Mr. Clappin were granted 36,000 and 12,000 restricted
shares of our common stock, respectively, on February 5, 2014, which will
vest on 1/3 on February 5, 2015, 1/3 on February 5, 2016, and 1/3 on
February 5, 2017. |
(3) |
Year-end
market price is based on the December 31, 2014 NYSE closing price of
$22.93. |
CORNING INCORPORATED - 2015 Proxy
Statement 53
Table of Contents
Compensation Discussion &
Analysis
Option Exercises and Shares
Vested |
The following table sets forth certain
information regarding options exercised and restricted stock that vested during
2014 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 |
|
|
433,334 |
|
|
|
$ |
4,044,375 |
|
|
|
103,482 |
|
|
|
$ |
2,010,107 |
|
|
|
James B.
Flaws |
|
|
130,335 |
|
|
|
|
1,140,696 |
|
|
|
43,122 |
|
|
|
|
820,372 |
|
|
|
James P. Clappin |
|
|
0 |
|
|
|
|
0 |
|
|
|
21,983 |
|
|
|
|
417,959 |
|
|
|
Lawrence D.
McRae |
|
|
0 |
|
|
|
|
0 |
|
|
|
23,461 |
|
|
|
|
445,968 |
|
|
|
Kirk P. Gregg |
|
|
186,000 |
|
|
|
|
1,914,417 |
|
|
|
29,566 |
|
|
|
|
570,729 |
|
|
|
There were no deferrals of
amounts received pursuant to these awards. |
|
Retirement Plans
Corning sponsors a qualified defined
benefit pension plan to provide retirement income to Cornings U.S.-based
employees. Corning amended its pension plan 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. Flaws, Mr. McRae and
Mr. Clappin are earning benefits under the career average earnings formula. Mr.
Gregg is earning benefits under the career average earnings formula up to
December 31, 2000, and subsequently is earning benefits under the cash balance
formula. All of the 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 a highly motivated 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).
Certain employees, including each of
the NEOs, participate 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. Participants terminating prior to
fully vesting in their ESPP benefit, but with 5 years of service will be
entitled to SPP benefits earned under that plans formula.
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.
Benefits are determined under Formula
B for Mr. Flaws and Formula A for all other NEOs.
54 CORNING INCORPORATED
- 2015
Proxy Statement
Table of Contents
Compensation Discussion &
Analysis
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 preceding
formulas.
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 ($1,040,000 in 2014). 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 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 each of 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, 2014, of our Annual Report on Form
10-K filed with the SEC on February 13, 2015. 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 |
|
|
32 |
|
|
|
|
$ |
1,857,505 |
|
|
|
|
|
$0 |
|
|
|
ESPP |
|
|
25 |
(1) |
|
|
|
|
20,714,857 |
(4) |
|
|
|
|
0 |
|
James B.
Flaws |
|
Qualified Pension Plan |
|
|
42 |
|
|
|
|
|
2,011,149 |
|
|
|
|
|
0 |
|
|
|
ESPP |
|
|
42 |
(2) |
|
|
|
|
18,822,364 |
(4) |
|
|
|
|
0 |
|
James P.
Clappin |
|
Qualified Pension Plan |
|
|
35 |
|
|
|
|
|
1,322,578 |
|
|
|
|
|
0 |
|
|
|
ESPP |
|
|
25 |
(1) |
|
|
|
|
7,311,308 |
|
|
|
|
|
0 |
|
Lawrence D.
McRae |
|
Qualified Pension Plan |
|
|
29 |
|
|
|
|
|
1,463,474 |
|
|
|
|
|
0 |
|
|
|
ESPP |
|
|
25 |
(1) |
|
|
|
|
8,038,475 |
|
|
|
|
|
0 |
|
Kirk P.
Gregg |
|
Qualified Pension Plan |
|
|
21 |
|
|
|
|
|
604,353 |
|
|
|
|
|
0 |
|
|
|
ESPP |
|
|
25 |
(3) |
|
|
|
|
10,662,093 |
|
|
|
|
|
0 |
|
(1) |
Under Formula A, years of
service are capped at 25 years, in determining benefits under the
SPP. |
(2) |
Under Formula B, years of service are uncapped with a
formula of 1.5% per year in determining benefits under the
SPP. |
(3) |
Mr. Greggs 1993 employment letter, as amended in 2002,
provides for nine extra years of benefit service under the SPP for
retirement on or after age 55. The additional value generated by these
extra nine years of service is currently approximately $1,810,000. Because
of the 25-year cap on service under Formula A, implemented after Mr. Gregg
was hired, some or all of these additional years of benefit service will
not enhance Mr. Greggs total pension benefit, depending on his actual
retirement date. For example, at age 56, Mr. Gregg will have 22 actual
years of service so that only three of the nine additional years of
service will have any impact on his pension. At age 60, Mr. Gregg would
have 26 actual years of service so that those additional years of service
would not provide any incremental pension value. 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 currently eligible to receive an unreduced pension
benefit. |
CORNING INCORPORATED - 2015 Proxy
Statement 55
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 2014
calendar year, the NEOs eligible earnings and final average compensation were as
follows:
|
|
|
As of December 31,
2014 |
|
|
|
|
Eligible
Pension Earnings |
|
Final
Average Earnings |
|
|
Wendell P. Weeks |
|
|
$ |
3,164,707 |
|
|
|
$ |
2,853,124 |
|
|
|
James B.
Flaws |
|
|
|
1,890,352 |
|
|
|
|
1,909,896 |
|
|
|
James P. Clappin |
|
|
|
1,101,051 |
|
|
|
|
1,053,319 |
|
|
|
Lawrence D.
McRae |
|
|
|
1,187,983 |
|
|
|
|
1,114,490 |
|
|
|
Kirk P. Gregg |
|
|
|
1,227,260 |
|
|
|
|
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, certain executives, including 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 2014.
|
Named Executive
Officer |
|
Aggregate
Balance at January 1, 2014 |
|
Executive Contributions in 2014(1) |
|
Company Contributions in 2014(2) |
|
Aggregate Earnings in 2014(3) |
|
Aggregate Withdrawals/ Distributions in 2014 |
|
Aggregate Balance as
of December 31, 2014 |
|
|
Wendell P. Weeks |
|
|
$ |
3,928,659 |
|
|
|
$ |
180,682 |
|
|
|
$ |
185,953 |
|
|
|
$ |
397,049 |
|
|
|
$ |
0 |
|
|
|
$ |
4,692,343 |
|
|
|
James B.
Flaws |
|
|
|
4,591,067 |
|
|
|
|
177,161 |
|
|
|
|
102,527 |
|
|
|
|
157,040 |
|
|
|
|
0 |
|
|
|
|
5,027,794 |
|
|
|
James P. Clappin |
|
|
|
2,379,188 |
|
|
|
|
243,146 |
|
|
|
|
60,889 |
|
|
|
|
128,489 |
|
|
|
|
0 |
|
|
|
|
2,811,712 |
|
|
|
Lawrence D.
McRae |
|
|
|
0 |
|
|
|
|
0 |
|
|
|
|
0 |
|
|
|
|
0 |
|
|
|
|
0 |
|
|
|
|
0 |
|
|
|
Kirk P. Gregg |
|
|
|
2,178,133 |
|
|
|
|
58,302 |
|
|
|
|
38,868 |
|
|
|
|
152,867 |
|
|
|
|
0 |
|
|
|
|
2,428,171 |
|
|
(1) |
Reflects participation in
the Supplemental Investment Plan by Messrs. Weeks, Flaws, Clappin and
Gregg in the deferral of a portion of their 2014 base salaries and
participation by Messrs. Weeks, Flaws, Clappin and Gregg in the deferral
of a portion of the bonus received in 2014 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 2014. 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. |
56 CORNING
INCORPORATED - 2015 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-incontrol 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.
Severance AgreementsMr.
Weeks |
Under Mr. Weeks severance agreement, if he is terminated involuntarily,
and without cause (a conviction for a felony; commission of a fraud, theft or
embezzlement that materially damages the financial condition of Corning; or
gross abdication of duties), 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 (as described above) 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 |
Generally under the severance agreements, an NEO is entitled to severance
payments if he is terminated involuntarily other than for cause (conviction of
a felony or misdemeanor involving moral turpitude; material breach of Cornings
Code of Conduct; gross abdication of duties; or misappropriation of Company
assets or dishonesty or business conduct that causes material harm to
Corning).
In addition,
involuntary termination of an executive does not include:
● |
Voluntary termination; |
● |
Voluntary retirement at or after age 55; |
● |
Termination as a result of disability or
death; |
● |
Termination of employment as a result of the sale of all
or part of Cornings business and the executive has an opportunity to
continue employment with buyer for
comparable total compensation; and |
● |
Termination as a
result of a change in control of Corning if the executive has a separate
change-in-control agreement. |
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 2.99 times (in the case of
Mr. Flaws) and two times (in the case of Messrs. McRae, Clappin and Gregg)
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; |
● |
In the case of Mr. Flaws, receipt of an additional 2.99
years of service credit under Cornings nonqualified retirement plans;
and |
● |
Outplacement benefits
up to a maximum amount of $50,000. |
CORNING INCORPORATED - 2015 Proxy
Statement 57
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, 2014.
Termination Scenarios (Including
Serverance, 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 |
|
|
$ 9,405,942 |
|
|
|
|
|
Value of Benefits
Continuation |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
65,538 |
(2) |
|
|
|
|
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 |
|
|
$200,000
to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$1,000,000 |
(3) |
|
|
|
|
Pension Non-Qualified Annuity |
|
|
1,298,258 |
|
|
0 |
|
|
1,180,583 |
|
|
1,318,028 |
|
|
1,298,258 |
|
|
|
|
|
Pension -
Non-Qualified Lump Sum |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
|
|
|
Pension-Qualified
Annuity |
|
|
108,692 |
|
|
108,692 |
|
|
54,346 |
|
|
108,692 |
|
|
108,692 |
|
|
|
James B.
Flaws |
|
Severance
Amount |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
$ 5,620,602 |
|
|
|
|
|
Value of Benefits Continuation |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
28,846 |
(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 |
|
|
$200,000 to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$1,000,000 |
(3) |
|
|
|
|
Pension
Non-Qualified Annuity |
|
|
1,061,659 |
|
|
0 |
|
|
900,061 |
|
|
1,061,659 |
|
|
1,148,822 |
|
|
|
|
|
Pension - Non-Qualified Lump Sum |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
|
|
|
Pension-Qualified Annuity |
|
|
148,135 |
|
|
148,135 |
|
|
74,068 |
|
|
148,135 |
|
|
148,135 |
|
|
|
James P.
Clappin |
|
Severance Amount |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
$ 2,376,000 |
|
|
|
|
|
Value of Benefits
Continuation |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
29,982 |
(2) |
|
|
|
|
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 |
|
|
0 |
(3) |
|
|
|
|
Pension Non-Qualified Annuity |
|
|
446,094 |
|
|
0 |
|
|
383,290 |
|
|
446,094 |
|
|
446,094 |
|
|
|
|
|
Pension -
Non-Qualified Lump Sum |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
|
|
|
Pension-Qualified Lump
Sum |
|
|
80,696 |
|
|
80,696 |
|
|
40,348 |
|
|
80,696 |
|
|
80,696 |
|
|
|
Lawrence D.
McRae |
|
Severance
Amount |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
$ 2,376,000 |
|
|
|
|
|
Value of Benefits Continuation |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
43,692 |
(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 |
|
|
$200,000 to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$1,000,000 |
(3) |
|
|
|
|
Pension
Non-Qualified Annuity |
|
|
479,073 |
|
|
0 |
|
|
428,169 |
|
|
479,073 |
|
|
479,073 |
|
|
|
|
|
Pension - Non-Qualified Lump Sum |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
|
|
|
Pension-Qualified Annuity |
|
|
78,261 |
|
|
78,261 |
|
|
39,131 |
|
|
78,261 |
|
|
78,261 |
|
|
|
Kirk P.
Gregg |
|
Severance Amount |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
$ 2,444,400 |
|
|
|
|
|
Value of Benefits
Continuation |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
43,692 |
(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 |
|
|
$200,000
to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$1,000,000 |
(3) |
|
|
|
|
Pension Non-Qualified Annuity |
|
|
622,337 |
|
|
0 |
|
|
566,243 |
|
|
622,337 |
|
|
622,337 |
|
|
|
|
|
Pension -
Non-Qualified Lump Sum |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
|
|
|
Pension-Qualified Annuity |
|
|
19,420 |
|
|
19,420 |
|
|
9,710 |
|
|
19,420 |
|
|
19,420 |
|
|
|
|
|
Pension-Qualified Lump Sum |
|
|
292,321 |
|
|
292,321 |
|
|
292,321 |
|
|
292,321 |
|
|
292,321 |
|
|
(1) |
Nonqualified plan benefits
shown for all NEOs are payable from 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 $21,846 per year for family coverage for Messers. Weeks, McRae and
Gregg (three years of benefits continuation for Mr. Weeks and two years of
benefits continuation for Messrs. McRae, and Gregg). Mr. Flaws and Mr.
Clappins benefits continuation is estimated at $14,990 per year and
$14,423 per year for two years, respectively. |
(3) |
The NEOs may also
request that Corning purchase their principal residence. 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 as well as 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. Under
the terms of the severance agreements, an executive may request that the
Company purchase the executives principal residence in the Corning, New
York area. 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) and shall be made at the greater of (i) the
residences appraised value at the termination date, as determined in
accordance with the Companys relocation policies in effect immediately
prior to the involuntary termination or (ii) The total cost of the
residence plus improvements and tax gross-up as applicable (Protected
Value), as determined in accordance with the Companys Protected Value
policy in effect as of the date of the relevant severance agreement. The
values above represent estimates of how much the Protected Value
calculation may exceed the appraised value of the property and includes an
associated tax gross up. Mr. Clappin does not currently have a principal
residence in the Corning, NY area. |
58 CORNING INCORPORATED - 2015 Proxy
Statement
Table of Contents
Compensation Discussion &
Analysis
Cornings team approach, as applied to
our NEOs compensation, results in similarly situated executives being treated
consistently. Currently, the terms of both the severance and change-in-control
agreements are bifurcated similarly between those NEOs who are Board members and
those who are not (i.e. cash severance payments range from two to 2.99 times the
executives base salary and annual bonus amount). These ranges and periods were
not negotiated individually with the executives, but were put in place by the
Committee, having determined that these terms and multiples were appropriate for
such agreements.
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 Corning. These agreements will be effective until the
executive leaves the employ of Corning or until the executive ceases to be an
officer of Corning.
The
agreements define a change in control as any of the following (so long as the
event is also a change in control within the meaning of Section 409A of the
Code):
● |
Any person acquires 30% or more of Cornings voting
securities (a beneficial owner); |
● |
In the grandfathered agreements of the current NEOs a
beneficial owner increases his ownership from 30% or more to 50% or more
of Cornings voting
securities; |
● |
A majority of Cornings directors are replaced during
the term of the agreement without approval of at least two-thirds of the
existing directors or directors previously
approved by the existing directors; |
● |
Consummation of any merger, consolidation or
reorganization involving Corning, unless the outstanding voting securities
of Corning prior to the transaction
continue to represent at least 50% of the voting securities of Corning or
the new company; |
● |
Corning is liquidated or dissolved; or |
● |
All or substantially
all of Cornings assets are disposed of or
sold. |
If during the term of the agreement, a change in control occurs, the
restrictions on all restricted stock 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 (a conviction for a felony, fraud, theft or
embezzlement against the Company, a gross
abdication of duties), (ii) resigns for good reason (generally, a
material adverse change in the executives title, position or responsibilities, a reduction in the executives base
salary, relocation, a material reduction in the level of employee
benefits, a material breach by the Company
of its obligations under the agreement, or a successor companys failure
to honor the agreement), or (iii) resigns or is terminated for
any reason, each during a potential change in
control period (defined as the period beginning on the date of execution
of an agreement with respect to a
transaction the consummation of which would constitute or result in a
change in control and ending on the date immediately following
the change in control or the date on which such
transaction is abandoned) 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 Messrs.
Weeks and Flaws) and two times (for Mr. Messrs. McRae, Clappin and Gregg)
the NEOs then base salary plus an annual
bonus amount (lump sum payment); |
● |
Continued participation in the Companys benefit plans
for 36 months; |
● |
Upon request, purchase of the NEOs principal residence
in the Corning, NY area; |
● |
In the case of Mr. Flaws, receipt of an additional five
years of service credit under Cornings Executive Supplemental Pension
Plan; and |
● |
Outplacement benefits
(equal to 20% of base salary) (excluding Mr.
Weeks). |
If an NEOs
employment is terminated for cause (for Mr. Weeks, cause is described above;
with respect to the other NEOs, cause means conviction for a felony or
misdemeanor involving a crime of moral turpitude, misappropriation of Company
assets, or gross abdication of duties), or resigns for other than good reason
(described above), or the NEOs employment terminates by reason of death or
disability (a physical or mental infirmity that impairs the executives ability
to substantially perform his duties for 180 consecutive days or 180 days during
any 12 month period), 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 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
Named Executive Officer.
CORNING INCORPORATED - 2015 Proxy
Statement 59
Table of Contents
Compensation Discussion &
Analysis
The
following table reflects the amounts that would be payable under the various
arrangements assuming that a change in control occurred on December 31,
2014.
|
|
Cash-based |
|
Long-Term Incentives |
|
|
Named Executive
Officer |
|
Cash Severance |
|
Interrupted Perf.
Cycles |
|
ESPP |
|
Misc. Benefits |
|
Interrupted Perf.
Cycles |
|
Share-based Awards |
|
Total Benefits |
Wendell P. Weeks |
|
$ |
9,962,541 |
|
|
$0 |
|
|
$ |
24,333,006 |
|
$ |
130,000 |
|
$ |
2,800,000 |
|
$ |
23,773,961 |
|
$ |
60,999,508 |
James B.
Flaws |
|
|
5,911,164 |
|
|
0 |
|
|
|
15,850,948 |
|
|
107,909 |
|
|
1,400,000 |
|
|
11,820,431 |
|
|
35,090,452 |
James P. Clappin |
|
|
2,376,000 |
|
|
0 |
|
|
|
7,374,555 |
|
|
94,622 |
|
|
800,000 |
|
|
5,850,712 |
|
|
16,495,889 |
Lawrence D.
McRae |
|
|
2,473,795 |
|
|
0 |
|
|
|
8,407,480 |
|
|
108,333 |
|
|
800,000 |
|
|
7,575,386 |
|
|
19,364,995 |
Kirk P. Gregg |
|
|
2,552,294 |
|
|
0 |
|
|
|
10,024,778 |
|
|
108,333 |
|
|
800,000 |
|
|
6,792,556 |
|
|
20,277,962 |
(1) |
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, 2014, none of the NEOs were subject to the
excise tax, so as a result, no excise tax gross-up was
applicable. |
(2) |
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. |
In addition to
the above, the NEOs may also request that Corning purchase their principal
residence. The value of such benefit is generally estimated to be in the range
of $200,000 to $1,000,000. Corning is unable to accurately and precisely
estimate the value as it requires an independent appraisal of the executives
residence, as well as 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 58.
60 CORNING INCORPORATED - 2015 Proxy
Statement
Table of Contents
Proposal 4 Holy
Land Principles Shareholder Proposal
The Holy Land Principles, Inc., on
behalf of Mr. James Boyle (14 Stonegate Oval, New Rochelle, NY 10804) who held
more than $2,000 of shares of common stock on May 28, 2014, intends to submit
the following resolution to shareholders for approval at the 2015 annual
meeting.
Resolution
WHEREAS,
Coming Incorporated has operations in Palestine-Israel;
WHEREAS,
achieving a lasting peace in the Holy Land -- with security for Israel and
justice for Palestinians -- encourages us to promote means for establishing
justice and equality;
WHEREAS, fair employment should be the hallmark of any
American company at home or abroad and is a requisite for any just society;
WHEREAS, Holy Land Principles, Inc. has proposed a set of equal opportunity
employment principles to serve as guidelines for corporations in
Palestine-Israel. These are:
|
1. |
Adhere to equal and fair employment practices in hiring,
compensation, training, professional education, advancement and governance
without discrimination based on national, racial, ethnic, or religious
identity. · |
|
2. |
Identify underrepresented employee groups and initiate
active recruitment efforts to increase the number of underrepresented
employees to a level proportional to their representation in
society. |
|
3. |
Make every reasonable effort to ensure that all
employees have the ability to easily, openly and equally travel to and
access corporate facilities. |
|
4. |
Maintain a work environment that is respectful of all
national, racial, ethnic and religious groups. |
|
5. |
Work with governmental and community authorities, and
support local initiatives to eliminate disparities among national, racial,
ethnic and religious groups in government spending on education, training,
access to health care and housing. |
|
6. |
Not make military service a precondition or
qualification for employment for any position, other than those positions
that specifically require such experience, for the fulfillment of an
employees particular responsibilities. |
|
7. |
Not accept subsidies, tax incentives or other benefits
that lead to the direct advantage of one racial, ethnic or religious group
over another. |
|
8. |
Appoint staff to
monitor, oversee, set timetables, and publicly report on their progress in
implementing the Holy Land Principles. |
RESOLVED:
Shareholders request the Board of Directors to: Make all possible lawful efforts
to implement and/or increase activity on each of the eight Holy Land
Principles.
Shareholders Supporting Statement
We believe
that Coming Incorporated benefits by hiring from the widest available talent
pool. An employees ability to do the job should be the primary consideration in
hiring and promotion decisions.
Implementation of the Holy Land Principles-- which are both pro-Jewish
and pro-Palestinian -- will demonstrate Coming Incorporateds concern for human
rights and equality of opportunity in its international operations.
Please vote your proxy FOR these
concerns.
Position
of The Board of Directors
The Board
has carefully considered the proposal and, for the reasons described below,
believes adopting the shareholder proposal is unnecessary in light of the
Companys demonstrated commitment to equal employment opportunity without regard
to age, race, color, gender, national origin, religion, sexual orientation,
gender identity or expression, disability, veteran status or any other protected
status.
Our Equal
Employment Opportunity/Workplace Conduct Policy Statement clearly sets forth the
standards under which Corning Incorporated treats all employees and applicants
for employment. Our Code of Conduct articulates the Companys long-standing
policy of zero tolerance for discrimination or harassment of any kind and can be
found on the Companys website at http://www.corning.com/CodeofConduct. The
Companys subsidiary located in Israel is subject to the same policies as all
other Corning locations. The Board does not believe that implementation of the
proposed resolution is necessary or desirable because the concerns raised by the
proponent, as they pertain to our business, are meaningfully addressed through
our policies and practices currently in place. The Board believes that
implementing this proposal would create confusion and conflict, at unnecessary
cost to the Company, and divert managements attention from operations and
provide no additional benefit to our current robust non-discrimination policies
and processes. For the foregoing reasons, the Board believes that adoption of
the shareholder proposal is not in the best interests of the Company or its
shareholders.
Our Board
unanimously recommends a vote AGAINST the
shareholder proposal.
CORNING INCORPORATED - 2015 Proxy
Statement 61
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 mailed to shareholders on or about March
17, 2015.
When and Where Is The Annual Meeting?
The Annual Meeting will be held on
Tuesday, April 30, 2015, 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. 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 14 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, 2015; |
● |
To approve the Companys executive
compensation; |
● |
On the shareholder proposal, if it is properly presented
at the meeting; 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, 2015 (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). |
● |
AGAINST the
shareholder proposal (Proposal 4). |
Who Is Entitled To Vote?
You may vote if you owned our common
shares as of the close of business on March 2, 2015, 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 March 2, 2015, we had
1,268,798,790 common shares outstanding. The shares held in our treasury are not
considered outstanding and will not be voted or considered present at the
meeting.
62 CORNING INCORPORATED - 2015 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
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 how 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 how 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.
What Is A Broker Non-Vote?
If you own shares through a bank or
broker in street name, you may instruct your bank or broker how to vote your
shares. A broker non-vote occurs when you fail to provide your bank or broker
with voting instructions and the bank or broker does not have the discretionary
authority to vote your shares on a particular proposal because the proposal is
not a routine matter under the New York Stock Exchange rules. As explained under
the question Will My Shares Held In Street Name Be Voted If I Do Not Provide My
Proxy?, Proposals 1, 3 and 4 are not considered routine matters under the
current New York Stock Exchange rules, so your bank or broker will not have
discretionary authority to vote your shares held in street name on those items.
Abstentions and broker non-votes count for quorum purposes, but not for the
voting of these proposals. A broker non-vote may also occur if your broker fails
to vote your shares for any reason. Proposal 2 (ratification of the appointment
of our independent registered public accounting firm) is considered a routine
matter under the New York Stock Exchange rules, so your bank or broker will have
discretionary authority to vote your shares held in street name on that
item.
CORNING INCORPORATED - 2015 Proxy
Statement 63
Table of Contents
Frequently Asked Questions About the
Meeting And Voting
How Will Broker Non-Votes Be Treated?
Except for Proposal 2, broker non-votes
will be treated as shares present for quorum purposes, but not entitled to vote,
so they will have no effect on the outcome of any election or
proposal.
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, 3 and 4 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.
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, 2015
(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). |
● |
AGAINST
the shareholder proposal (Proposal
4). |
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 March 2, 2015, 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.
64 CORNING INCORPORATED - 2015 Proxy
Statement
Table of Contents
Frequently Asked Questions About the
Meeting And Voting
What Is The Vote
Required For Each Proposal?
|
|
|
Affirmative Vote
Required |
|
Broker Discretionary Voting
Allowed |
|
|
Election of 14 directors |
|
Majority of votes cast at the meeting |
|
No |
|
|
|
|
in person or by proxy |
|
|
|
|
Ratification of
the appointment of independent registered public |
|
Majority of votes
cast at the meeting |
|
Yes |
|
|
accounting firm
for fiscal year 2015 |
|
in person or by
proxy |
|
|
|
|
Advisory vote to approve the compensation of the Companys
NEOs |
|
Majority of votes cast at the meeting |
|
No |
|
|
|
|
in person or by proxy |
|
|
|
|
Shareholder
Proposal |
|
Majority of votes
cast at the meeting |
|
No |
|
|
|
|
in person or by proxy |
|
|
|
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 our behalf. We 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.
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 5,
2015.
How Do I Submit a Shareholder Proposal For, Or Nominate a Director
for Election at Next Years Annual Meeting?
If you wish
to submit a proposal to be included in our proxy statement for our 2016 Annual
Meeting of Shareholders, we must receive it at our principal office on or before
November 17, 2015. Please address your proposal to: Corporate Secretary, Corning
Incorporated, One Riverfront Plaza, Corning, NY, 14831.
We will not
be required to include in our proxy statement a shareholder proposal that is
received after that date or that otherwise does not meet the requirements for
shareholder proposals established by the SEC or as set forth in our
By-Laws.
If you miss the deadline for including
a proposal in our printed proxy statement, or would like to nominate a director
or bring other business before the 2016 Annual Meeting of Shareholders, under
our current By-Laws (which are subject to amendment at any time), you must
notify our Corporate Secretary in writing not less than 90 days nor more than
120 days prior to the first anniversary of the preceding years Annual Meeting.
For our 2016 Annual Meeting of Shareholders, we must receive notice on or after
December 30, 2015, and on or before January 29, 2016.
Can I Receive Electronic Delivery of Proxy Materials And Annual
Reports?
Yes. This proxy statement and Cornings
2014 Annual Report are available on Cornings website at www.corning.com.
Instead of receiving paper copies of next years proxy statement and Annual
Report in the mail, shareholders can elect to receive an e-mail message that
will provide a link to these documents on the website. By opting to access your
proxy materials online, you will save us the cost of producing and mailing
documents, reduce the amount of mail you receive, and help preserve
environmental resources. Cornings shareholders who have enrolled in the
electronic proxy delivery service previously will receive their materials online
this year. Shareholders of record may enroll in the electronic proxy statement
and Annual Report access service for future Annual Meetings by registering
online at www.computershare.com. Beneficial or street name shareholders who
wish to enroll in electronic access service may do so at www.icsdelivery.com. We
may, at some point, use the SECs Notice and Access method of proxy
distribution. If we were to utilize the Notice and Access method, you would
receive a notice in the mail about how to access electronic copies of the proxy
materials or how to have paper copies mailed to you.
CORNING INCORPORATED - 2015 Proxy
Statement 65
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 2014 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 2014 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/investor_relations/corporate_governance/board_download_library.aspx.
We will disclose any amendments to, or waivers from, the Code of Ethics on our
website within four business days of such determination. During 2014, 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 46 and the Report of Audit Committee of the Board of Directors on page 31,
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
Our 2014 Annual Report is provided with
this proxy statement. Cornings Proxy Statement, 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 also 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.
66 CORNING INCORPORATED - 2015 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)
Cornings adjusted net income
and earnings per share (EPS) for the year ended December 31, 2014 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 non-GAAP net income and EPS is helpful to analyze financial
performance without the impact of unusual items that may obscure trends in the
companys underlying performance. A detailed reconciliation is provided below
outlining the differences between these non-GAAP measures and the directly
related GAAP measures.
|
|
Per Share |
|
Net Income |
Adjusted earnings per share
(EPS) and net income |
|
|
$ |
1.53 |
|
|
|
|
$ |
2,185 |
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Mark-to-Market
Adjustments (Pension Liability & 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
and other charges(d) |
|
|
|
(0.05 |
) |
|
|
|
|
(66 |
) |
|
Other(e) |
|
|
|
0.00 |
|
|
|
|
|
5 |
|
|
Tax
Expense Adjustments (Valuation Allowances/Law
Changes)(f) |
|
|
|
(0.17 |
) |
|
|
|
|
(240 |
) |
|
Impact
of Acquisition-Related Costs(g) |
|
|
|
0.05 |
|
|
|
|
|
66 |
|
|
GAAP EPS and
net income |
|
|
$ |
1.73 |
|
|
|
|
$ |
2,472 |
|
|
(a) |
Pension: Mark-to-market gains and
losses arise 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
and realized gains on Japanese yen/Korean won NPAT hedges |
(b) |
This represents constant currency
adjustments to our US GAAP results to reflect after-tax performance
applying a ¥93 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) |
Restructuring and other
charges. |
(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) |
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 and tax effect
of a transfer pricing out of period adjustment. |
(g) |
These expenses include intangible
amortization, inventory valuation adjustments and external
acquisition-related deal costs. |
CORNING INCORPORATED - 2015 Proxy
Statement 67
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)
Cornings
adjusted net income and earnings per share (EPS) for the year ended December 31,
2013 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 non-GAAP net income and EPS is helpful
to analyze financial performance without the impact of unusual items that may
obscure trends in the companys underlying performance. A detailed
reconciliation is provided below outlining the differences between these
non-GAAP measures and the directly related GAAP measures.
|
|
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 Liability & 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 |
) |
|
Business
Restructuring Charges(j) |
|
|
|
(0.08 |
) |
|
|
|
|
(112 |
) |
|
GAAP EPS and net
income |
|
|
$ |
1.34 |
|
|
|
|
$ |
1,961 |
|
|
(a) |
Pension: Mark-to-market gains and
losses arise 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. |
68 CORNING INCORPORATED - 2015 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,
2012
(Unaudited; amounts in millions,
except per share amounts)
Cornings
adjusted net income and earnings per share (EPS) for the year ended December 31,
2012, 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 non-GAAP net income and EPS is helpful
to analyze financial performance without the impact of unusual items that may
obscure trends in the companys underlying performance. A detailed
reconciliation is provided below outlining the differences between these
non-GAAP measures and the directly related GAAP measures.
|
|
Per Share |
|
Net Income |
Adjusted earnings per share
(EPS) and net income |
|
|
$ |
1.28 |
|
|
|
|
$ |
1,934 |
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Asbestos
settlement(a) |
|
|
|
(0.01 |
) |
|
|
|
|
(9 |
) |
|
Loss
on repurchase of debt(b) |
|
|
|
(0.01 |
) |
|
|
|
|
(17 |
) |
|
Equity
in earnings of affiliated companies(c) |
|
|
|
(0.05 |
) |
|
|
|
|
(90 |
) |
|
Acquisition-related
costs(d) |
|
|
|
(0.01 |
) |
|
|
|
|
(22 |
) |
|
Restructuring,
impairment and other charges(e) |
|
|
|
(0.06 |
) |
|
|
|
|
(91 |
) |
|
Provision
for income taxes(f) |
|
|
|
(0.03 |
) |
|
|
|
|
(41 |
) |
|
Accumulated
other comprehensive income(g) |
|
|
|
0.03 |
|
|
|
|
|
52 |
|
|
Foreign
exchange rate fluctuations(h) |
|
|
|
0.01 |
|
|
|
|
|
12 |
|
|
Impact
of pension accounting methodology change(i) |
|
|
|
(0.06 |
) |
|
|
|
|
(92 |
) |
|
GAAP EPS and net
income |
|
|
$ |
1.09 |
|
|
|
|
$ |
1 ,636 |
|
|
(a) |
Corning recorded a charge of $9
million after tax to adjust the asbestos liability for the change in value
of the components of the modified PCC plan of reorganization. |
(b) |
Corning recorded a loss of $17
million after tax on the repurchase of $13 million principal amount of our
8.875% senior unsecured notesdue 2021, $11 million of our 8.875% senior
unsecured notes due 2016, and $51 million principal amount of our 6.75%
senior unsecured notes due 2013. |
(c) |
Corning recorded a $18 million
restructuring charge for our share of costs for headcount reductions and
asset write-offs at Samsung Corning Precision Materials Co., Ltd., and an
impairment charge in the amount of $81 million after tax for our share of
a charge for workforce reductions and asset write-offs at DCC; and a $9
million after tax credit for Cornings share of DCCs settlement of a
dispute related to long-term supply agreements. |
(d) |
Includes expenses resulting from the
acquisition of the Discovery Labware business, including amortization of
purchased intangibles, amortization of purchase accounting adjustments to
inventories, and integration and deal costs, in the amount of $22 million
after tax. |
(e) |
Corning recorded a $91 million after
tax charge for asset impairments, workforce reductions and asset
write-offs and disposals. |
(f) |
Corning recorded a $37 million tax
expense resulting from the delay of the passage of the American Taxpayer
Relief Act of 2012 until Jan. 2013 , that will be reversed in Q1, 2013,
and a $4 million net tax provision related to the adjustment of deferred
taxes as a result of tax rate reductions in Japan. |
(g) |
Corning recorded a $52 million
translation capital gain on the liquidation of a foreign
entity. |
(h) |
The adjustment after-tax in 2012 for
foreign exchange fluctuations for the Korean won. |
(i) |
In the first quarter of 2013, Corning
elected to change the method of recognizing actuarial gains and losses for
its defined benefit pension plans. This amount represents the impact of
retrospectively applying this change to 2012. |
CORNING INCORPORATED - 2015 Proxy
Statement 69
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)
Cornings
adjusted operating cash flow for the year ended December 31, 2014 is a non-GAAP
financial measure 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 adjusted operating cash flow is helpful in understanding the
calculation of the metrics used to compute Cornings incentive compensation. A
detailed reconciliation is provided below outlining the differences between
these non-GAAP measures and the directly related GAAP measures.
Adjusted Operating Cash Flow of Corning
Incorporated for the Year Ended December 31, 2014 |
|
|
Cash Flow |
Adjusted operating cash flow |
|
|
$ |
3,121 |
|
|
Adjustments from GAAP
Operating Cash Flow: |
|
|
|
|
|
|
Cash
Proceeds from Realized Balance Sheet Hedges(1) |
|
|
|
447 |
|
|
Special
Dividends(2) |
|
|
|
1,529 |
|
|
Restructuring
Cash(3) |
|
|
|
(28 |
) |
|
Realized
gain on Purchased Collars(4) |
|
|
|
(360 |
) |
|
Net cash provided by operating activities
- GAAP |
|
|
$ |
4,709 |
|
|
(1) |
Represents net cash proceeds from
settlement of balance sheet hedges. |
(2) |
One-time dividend from CPM received
in Q1 2014 |
(3) |
Represents a budget to actual
adjustment to arrive at the metric to calculate incentive
compensation. |
(4) |
Represents the 2014 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. |
70 CORNING INCORPORATED - 2015 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)
Cornings
adjusted operating cash flow for the year ended December 31, 2013 is a non-GAAP
financial measure 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 adjusted operating cash flow is helpful in understanding the
calculation of the metrics used to compute Cornings incentive compensation. A
detailed reconciliation is provided below outlining the differences between
these non-GAAP measures and the directly related GAAP measures.
Adjusted Operating Cash Flow of Corning Incorporated for
the Year Ended December 31, 2013 |
|
|
Cash Flow |
Adjusted operating cash flow |
|
|
$ |
2,768 |
|
|
Adjustments from GAAP
Operating Cash Flow: |
|
|
|
|
|
|
Cash
Proceeds from Realized Balance Sheet Hedges(1) |
|
|
|
179 |
|
|
Won
FX Collar (KRW 1073 vs Collar at 1080-1180)(2) |
|
|
|
|
|
|
Impact
on Dividends |
|
|
|
3 |
|
|
Restructuring
Cash(3) |
|
|
|
(1 |
) |
|
Impact
of Tax Liabilities (JPY Adjusted from 79 to 94)(4) |
|
|
|
(72 |
) |
|
Realized
gain on Purchased Collars(5) |
|
|
|
(90 |
) |
|
Net cash provided by operating
activities |
|
|
$ |
2,787 |
|
|
(1) |
Represents net cash proceeds from
settlement of balance sheet hedges. |
(2) |
Cash flow adjustments for foreign
exchange fluctuations for the Japanese yen and South Korean
won. |
(3) |
Represents a budget to actual
adjustment to arrive at the metric to calculate incentive
compensation. |
(4) |
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. |
(5) |
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. |
CORNING INCORPORATED - 2015 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, 2012
(Unaudited; amounts in millions,
except per share amounts)
Cornings
adjusted operating cash flow for the years ended December 31, 2012 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 adjusted operating cash flow is helpful in understanding the
calculation of the metrics used to compute Cornings incentive compensation. A
detailed reconciliation is provided below outlining the differences between
these non-GAAP measures and the directly related GAAP measures.
Adjusted Operating Cash Flow of Corning Incorporated for the
Year Ended December 31, 2012 |
Adjusted operating cash
flow |
|
|
$ |
3,167 |
|
|
Adjustments: |
|
|
|
|
|
|
Fluctuations
in foreign exchange rates(1) |
|
|
|
(8 |
) |
|
Cash
translation adjustments(2) |
|
|
|
70 |
|
|
Restructuring,
impairment and other credits(3) |
|
|
|
(15 |
) |
|
Impact
of Discovery Labware Acquisition(4) |
|
|
|
(8 |
) |
|
Net cash provided by operating
activities |
|
|
$ |
3,206 |
|
|
(1) |
Represents the cash flow adjustment
for foreign exchange fluctuations for the Korean won of $8
million. |
(2) |
The adjustment represents the impact
of translation of cash balances by non-USD functional entities to
USD. |
(3) |
The restructuring, impairments and
other credits adjustment represents a budget to actual adjustment to
arrive at the metric to calculate incentive compensation. |
(4) |
The cash flow adjustment for amounts
paid related to the acquisition of the majority of the Discovery Labware
business from Becton, Dickinson and Company. |
72 CORNING INCORPORATED - 2015 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 (in
millions, except per share amounts):
|
|
Year ended December
31, |
|
|
2014 |
|
2013 |
|
2012 |
Core earnings
attributable to Corning Incorporated |
|
$ |
2,185 |
|
$ |
1,797 |
|
$ |
1,595 |
Less: Series A convertible preferred stock
dividend |
|
|
94 |
|
|
|
|
|
|
Core earnings
available to common stockholders - basic |
|
|
2,091 |
|
|
1,797 |
|
|
1,595 |
Add: Series A convertible
preferred stock dividend |
|
|
94 |
|
|
|
|
|
|
Core earnings available to common
stockholders - diluted |
|
$ |
2,185 |
|
$ |
1,797 |
|
$ |
1,595 |
|
Weighted-average common shares outstanding -
basic |
|
|
1,305 |
|
|
1,452 |
|
|
1,494 |
Effect of dilutive
securities: |
|
|
|
|
|
|
|
|
|
Stock options
and other dilutive securities |
|
|
12 |
|
|
10 |
|
|
12 |
Series A convertible preferred
stock |
|
|
110 |
|
|
|
|
|
|
Weighted-average common shares outstanding -
diluted |
|
|
1,427 |
|
|
1,462 |
|
|
1,506 |
Core basic earnings per common
share |
|
$ |
1.60 |
|
$ |
1.24 |
|
$ |
1.07 |
Core diluted earnings
per common share |
|
$ |
1.53 |
|
$ |
1.23 |
|
$ |
1.06 |
CORNING INCORPORATED - 2015 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,
2014
(Unaudited; amounts in millions,
except per share amounts)
|
|
Net sales |
|
Equity earnings |
|
Income before income taxes |
|
Net income |
|
Effective tax rate |
|
Per share |
As
reported |
|
$ |
9,715 |
|
|
$ |
266 |
|
|
$ |
3,568 |
|
|
$ |
2,472 |
|
|
|
30.7 |
% |
|
|
$ |
1.73 |
|
Constant-yen(1) |
|
|
502 |
|
|
|
2 |
|
|
|
419 |
|
|
|
306 |
|
|
|
|
|
|
|
|
0.22 |
|
Constant-won(1) |
|
|
|
|
|
|
|
|
|
|
37 |
|
|
|
26 |
|
|
|
|
|
|
|
|
0.02 |
|
Purchased collars and average forward
contracts(2) |
|
|
|
|
|
|
|
|
|
|
(1,369 |
) |
|
|
(916 |
) |
|
|
|
|
|
|
|
(0.64 |
) |
Acquisition-related
costs(4) |
|
|
|
|
|
|
|
|
|
|
74 |
|
|
|
57 |
|
|
|
|
|
|
|
|
0.04 |
|
Discrete tax items and other tax-related
adjustments(5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
240 |
|
|
|
|
|
|
|
|
0.17 |
|
Litigation, regulatory and other legal
matters(6) |
|
|
|
|
|
|
|
|
|
|
(1 |
) |
|
|
(2 |
) |
|
|
|
|
|
|
|
|
|
Restructuring, impairment and other
charges(7) |
|
|
|
|
|
|
|
|
|
|
86 |
|
|
|
66 |
|
|
|
|
|
|
|
|
0.05 |
|
Liquidation of
subsidiary(8) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3 |
) |
|
|
|
|
|
|
|
|
|
Equity in earnings of affiliated
companies(9) |
|
|
|
|
|
|
43 |
|
|
|
43 |
|
|
|
38 |
|
|
|
|
|
|
|
|
0.03 |
|
Gain on previously held equity
investment(10) |
|
|
|
|
|
|
|
|
|
|
(394 |
) |
|
|
(292 |
) |
|
|
|
|
|
|
|
(0.20 |
) |
Settlement of pre-existing
contract(10) |
|
|
|
|
|
|
|
|
|
|
320 |
|
|
|
320 |
|
|
|
|
|
|
|
|
0.22 |
|
Contingent consideration fair value
adjustment(10) |
|
|
|
|
|
|
|
|
|
|
(249 |
) |
|
|
(194 |
) |
|
|
|
|
|
|
|
(0.14 |
) |
Post-combination expenses(10) |
|
|
|
|
|
|
|
|
|
|
72 |
|
|
|
55 |
|
|
|
|
|
|
|
|
0.04 |
|
Other items related to the Acquisition of
Samsung |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corning
Precision Materials(10) |
|
|
|
|
|
|
|
|
|
|
(10 |
) |
|
|
(12 |
) |
|
|
|
|
|
|
|
(0.01 |
) |
Pension
mark-to-market adjustment(11) |
|
|
|
|
|
|
|
|
|
|
29 |
|
|
|
24 |
|
|
|
|
|
|
|
|
0.02 |
|
Core performance
measures |
|
$ |
10,217 |
|
|
$ |
311 |
|
|
$ |
2,625 |
|
|
$ |
2,185 |
|
|
|
16.8 |
% |
|
|
$ |
1.53 |
|
See
Reconciliation of Non-GAAP Financial Measures, Items which we exclude from GAAP
measures to arrive at core performance measures on page 83 for the descriptions
of the footnoted reconciling items.
74 CORNING INCORPORATED - 2015 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)
|
|
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) |
|
|
129 |
|
|
|
36 |
|
|
|
|
122 |
|
|
|
96 |
|
|
|
|
|
|
|
|
0.07 |
|
Purchased collars and
average forward contracts(2) |
|
|
|
|
|
|
|
|
|
|
|
(435 |
) |
|
|
(287 |
) |
|
|
|
|
|
|
|
(0.20 |
) |
Other yen-related
transactions(2) |
|
|
|
|
|
|
|
|
|
|
|
(99 |
) |
|
|
(69 |
) |
|
|
|
|
|
|
|
(0.05 |
) |
Hemlock Semiconductor
operating results(3) |
|
|
|
|
|
|
(31 |
) |
|
|
|
(31 |
) |
|
|
(30 |
) |
|
|
|
|
|
|
|
(0.02 |
) |
Hemlock Semiconductor non-operating
results(3) |
|
|
|
|
|
|
1 |
|
|
|
|
1 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
Acquisition-related
costs(4) |
|
|
|
|
|
|
|
|
|
|
|
54 |
|
|
|
40 |
|
|
|
|
|
|
|
|
0.03 |
|
Discrete tax items and other tax-related
adjustments(5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9 |
|
|
|
|
|
|
|
|
0.01 |
|
Litigation, regulatory
and other legal matters(6) |
|
|
|
|
|
|
|
|
|
|
|
19 |
|
|
|
13 |
|
|
|
|
|
|
|
|
0.01 |
|
Restructuring, impairment and other
charges(7) |
|
|
|
|
|
|
|
|
|
|
|
67 |
|
|
|
46 |
|
|
|
|
|
|
|
|
0.03 |
|
Equity in earnings of
affiliated companies(9) |
|
|
|
|
|
|
42 |
|
|
|
|
42 |
|
|
|
44 |
|
|
|
|
|
|
|
|
0.02 |
|
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 |
|
$ |
7,948 |
|
|
$ |
595 |
|
|
|
$ |
2,170 |
|
|
$ |
1,797 |
|
|
|
17.2 |
% |
|
|
$ |
1.23 |
|
See
Reconciliation of Non-GAAP Financial Measures, Items which we exclude from GAAP
measures to arrive at core performance measures on page 83 for the descriptions
of the footnoted reconciling items.
CORNING INCORPORATED - 2015 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,
2012
(Unaudited; amounts in millions,
except per share amounts)
|
|
Net sales |
|
Equity earnings |
|
Income before income
taxes |
|
Net income |
|
Effective tax
rate |
|
Per share |
As reported |
|
|
$ |
8,012 |
|
|
|
|
$ |
810 |
|
|
|
|
$ |
1,975 |
|
|
|
|
$ |
1,636 |
|
|
|
|
17.2 |
% |
|
|
|
$ |
1.09 |
|
Constant-yen(1) |
|
|
|
(407 |
) |
|
|
|
|
(167 |
) |
|
|
|
|
(434 |
) |
|
|
|
|
(353 |
) |
|
|
|
|
|
|
|
|
|
(0.23 |
) |
Other yen-related
transactions(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(22 |
) |
|
|
|
|
(16 |
) |
|
|
|
|
|
|
|
|
|
(0.01 |
) |
Hemlock Semiconductor operating
results(3) |
|
|
|
|
|
|
|
|
|
(25 |
) |
|
|
|
|
(25 |
) |
|
|
|
|
(23 |
) |
|
|
|
|
|
|
|
|
|
(0.02 |
) |
Hemlock Semiconductor
non-operating results(3) |
|
|
|
|
|
|
|
|
|
77 |
|
|
|
|
|
77 |
|
|
|
|
|
72 |
|
|
|
|
|
|
|
|
|
|
0.05 |
|
Acquisition-related costs(4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24 |
|
|
|
|
|
16 |
|
|
|
|
|
|
|
|
|
|
0.01 |
|
Discrete tax items and
other tax-related adjustments(5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
41 |
|
|
|
|
|
|
|
|
|
|
0.03 |
|
Litigation, regulatory and other legal
matters(6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14 |
|
|
|
|
|
9 |
|
|
|
|
|
|
|
|
|
|
0.01 |
|
Restructuring,
impairment and other charges(7) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
133 |
|
|
|
|
|
91 |
|
|
|
|
|
|
|
|
|
|
0.06 |
|
Equity in earnings of affiliated
companies(9) |
|
|
|
|
|
|
|
|
|
18 |
|
|
|
|
|
18 |
|
|
|
|
|
17 |
|
|
|
|
|
|
|
|
|
|
0.01 |
|
Pension mark-to-market
adjustment(11) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
217 |
|
|
|
|
|
140 |
|
|
|
|
|
|
|
|
|
|
0.09 |
|
Loss on repurchase of debt(13) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26 |
|
|
|
|
|
17 |
|
|
|
|
|
|
|
|
|
|
0.01 |
|
Accumulated other comprehensive income(14) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(52 |
) |
|
|
|
|
(52 |
) |
|
|
|
|
|
|
|
|
|
(0.03 |
) |
Core performance
measures |
|
|
$ |
7,605 |
|
|
|
|
$ |
713 |
|
|
|
|
$ |
1,951 |
|
|
|
|
$ |
1,595 |
|
|
|
|
18.2 |
% |
|
|
|
$ |
1.06 |
|
See
Reconciliation of Non-GAAP Financial Measures, Items which we exclude from GAAP
measures to arrive at core performance measures page 83 for the descriptions of
the footnoted reconciling items.
76 CORNING INCORPORATED - 2015 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,
2011
(Unaudited; amounts in millions,
except per share amounts)
(dollars in
millions) |
|
Net sales |
|
Equity earnings |
|
Income before income
taxes |
|
Net income |
|
Effective tax
rate |
|
Per share |
As reported |
|
|
$ |
7,890 |
|
|
|
|
$ |
1,471 |
|
|
|
|
$ |
3,231 |
|
|
|
|
$ |
2,817 |
|
|
|
|
12.8 |
% |
|
|
|
$ |
1.78 |
|
Constant-yen(1) |
|
|
|
(449 |
) |
|
|
|
|
(200 |
) |
|
|
|
|
(526 |
) |
|
|
|
|
(428 |
) |
|
|
|
|
|
|
|
|
|
(0.27 |
) |
Other yen-related
transactions(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45 |
|
|
|
|
|
33 |
|
|
|
|
|
|
|
|
|
|
0.02 |
|
Hemlock
Semiconductor operating results(3) |
|
|
|
|
|
|
|
|
|
(102 |
) |
|
|
|
|
(102 |
) |
|
|
|
|
(94 |
) |
|
|
|
|
|
|
|
|
|
(0.06 |
) |
Hemlock Semiconductor
non-operating results(3) |
|
|
|
|
|
|
|
|
|
(80 |
) |
|
|
|
|
(80 |
) |
|
|
|
|
(74 |
) |
|
|
|
|
|
|
|
|
|
(0.05 |
) |
Discrete tax items
and other tax related adjustments(5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(13 |
) |
|
|
|
|
|
|
|
|
|
(0.01 |
) |
Litigation, regulatory and
other legal matters(6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24 |
|
|
|
|
|
14 |
|
|
|
|
|
|
|
|
|
|
0.01 |
|
Restructuring,
impairment, and other charges(7) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
130 |
|
|
|
|
|
83 |
|
|
|
|
|
|
|
|
|
|
0.05 |
|
Pension mark-to-market
adjustment(11) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
64 |
|
|
|
|
|
41 |
|
|
|
|
|
|
|
|
|
|
0.03 |
|
Contingent liability
adjustment(15) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(27 |
) |
|
|
|
|
(27 |
) |
|
|
|
|
|
|
|
|
|
(0.02 |
) |
Core
performance measures* |
|
|
$ |
7,441 |
|
|
|
|
$ |
1,089 |
|
|
|
|
$ |
2,759 |
|
|
|
|
$ |
2,352 |
|
|
|
|
14.8 |
% |
|
|
|
$ |
1.49 |
|
See Reconciliation of Non-GAAP
Financial Measures; Items which we exclude from GAAP measures to arrive at core
performance measures on page 83 for the description of the footnoted
reconciling items.
CORNING INCORPORATED - 2015 Proxy
Statement 77
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, 2014,
2013, 2012 and 2011
(Unaudited; amounts in
millions)
|
Year ended December
31, 2014 |
|
Year ended December
31, 2013 |
|
Year ended December
31, 2012 |
|
Year ended December
31, 2011 |
|
Net sales |
|
Net income |
|
Net sales |
|
Net income |
|
Net sales |
|
Net income |
|
Net sales |
|
Net income |
As reported |
$ |
3,851 |
|
$ |
1,369 |
|
|
$ |
2,545 |
|
$ |
1,267 |
|
|
$ |
2,909 |
|
|
$ |
1,589 |
|
|
$ |
3,145 |
|
|
$ |
2,346 |
|
Constant-yen(1) |
|
502 |
|
|
316 |
|
|
|
129 |
|
|
99 |
|
|
|
(408 |
) |
|
|
(380 |
) |
|
|
(450 |
) |
|
|
(454 |
) |
Constant-won(1) |
|
|
|
|
27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchased collars and average
forward contracts(2) |
|
|
|
|
(290 |
) |
|
|
|
|
|
(90 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
yen-related transactions(2) |
|
|
|
|
|
|
|
|
|
|
|
(67 |
) |
|
|
|
|
|
|
(15 |
) |
|
|
|
|
|
|
33 |
|
Acquisition-related
costs(4) |
|
|
|
|
37 |
|
|
|
|
|
|
8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discrete tax
items and other tax-related adjustments(5) |
|
|
|
|
4 |
|
|
|
|
|
|
10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7 |
|
Restructuring, impairment and
other charges(7) |
|
|
|
|
40 |
|
|
|
|
|
|
6 |
|
|
|
|
|
|
|
17 |
|
|
|
|
|
|
|
|
|
Equity in
earnings of affiliated companies(9) |
|
|
|
|
6 |
|
|
|
|
|
|
28 |
|
|
|
|
|
|
|
18 |
|
|
|
|
|
|
|
|
|
Contingent consideration fair
value adjustment(10) |
|
|
|
|
(194 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other items related to the Acquisition of Samsung
Corning |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Precision
Materials(10) |
|
1 |
|
|
73 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension
mark-to-market adjustment(11) |
|
|
|
|
2 |
|
|
|
|
|
|
(8 |
) |
|
|
|
|
|
|
17 |
|
|
|
|
|
|
|
3 |
|
Core performance
measures |
$ |
4,354 |
|
$ |
1,390 |
|
|
$ |
2,674 |
|
$ |
1,253 |
|
|
$ |
2,501 |
|
|
$ |
1,246 |
|
|
$ |
2,695 |
|
|
$ |
1,935 |
|
See
Reconciliation of Non-GAAP Financial Measures, Items which we exclude from GAAP
measures to arrive at core performance measures on page 83 for the descriptions
of the footnoted reconciling items.
78 CORNING
INCORPORATED - 2015 Proxy Statement
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, 2014,
2013, 2012 and 2011
(Unaudited; amounts in
millions)
|
Year ended December 31,
2014 |
|
Year ended December 31,
2013 |
|
Year ended December 31,
2012 |
|
Year ended December 31,
2011 |
|
Net sales |
|
Net income |
|
Net sales |
|
Net income |
|
Net sales |
|
Net income |
|
Net sales |
|
Net income |
As
reported |
$ |
2,652 |
|
$ |
205 |
|
|
$ |
2,326 |
|
$ |
199 |
|
|
$ |
2,130 |
|
$ |
146 |
|
|
$ |
2,072 |
|
$ |
194 |
|
Acquisition-related costs(4) |
|
|
|
|
(2 |
) |
|
|
|
|
|
9 |
|
|
|
|
|
|
1 |
|
|
|
|
|
|
|
|
Restructuring, impairment and other
charges(7) |
|
|
|
|
17 |
|
|
|
|
|
|
8 |
|
|
|
|
|
|
31 |
|
|
|
|
|
|
|
|
Liquidation of subsidiary(8) |
|
|
|
|
(2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension mark-to-market
adjustment(11) |
|
|
|
|
13 |
|
|
|
|
|
|
(9 |
) |
|
|
|
|
|
11 |
|
|
|
|
|
|
1 |
|
Gain on change in control of equity
investment(12) |
|
|
|
|
|
|
|
|
|
|
|
(11 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated other comprehensive
income(14) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(52 |
) |
|
|
|
|
|
|
|
Contingent liability
adjustment(15) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(27 |
) |
Core performance
measures |
$ |
2,652 |
|
$ |
231 |
|
|
$ |
2,326 |
|
$ |
196 |
|
|
$ |
2,130 |
|
$ |
137 |
|
|
$ |
2,072 |
|
$ |
168 |
|
See
Reconciliation of Non-GAAP Financial Measures, Items which we exclude from GAAP
measures to arrive at core performance measures on page 83 for the descriptions
of the footnoted reconciling items.
CORNING INCORPORATED - 2015 Proxy
Statement 79
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, 2014,
2013, 2012 and 2011
(Unaudited; amounts in
millions)
|
Year ended December 31,
2014 |
|
Year ended December
31, 2013 |
|
Year ended December 31,
2012 |
|
Year ended December 31,
2011 |
|
Net sales |
|
Net income |
|
Net sales |
|
Net income |
|
Net sales |
|
Net income |
|
Net sales |
|
Net income |
As reported |
$ |
1,092 |
|
$ |
182 |
|
$ |
919 |
|
$ |
132 |
|
|
$ |
964 |
|
$ |
112 |
|
$ |
998 |
|
$
|
119 |
Restructuring, impairment and other
charges(7) |
|
|
|
|
|
|
|
|
|
|
1 |
|
|
|
|
|
|
2 |
|
|
|
|
|
|
Pension mark-to-market adjustment(11) |
|
|
|
|
5 |
|
|
|
|
|
(3 |
) |
|
|
|
|
|
5 |
|
|
|
|
|
2 |
Core performance
measures |
$ |
1,092 |
|
$ |
187 |
|
$ |
919 |
|
$ |
130 |
|
|
$ |
964 |
|
$ |
119 |
|
$ |
998 |
|
$ |
121 |
See
Reconciliation of Non-GAAP Financial Measures, Items which we exclude from GAAP
measures to arrive at core performance measures on page 83 for the descriptions
of the footnoted reconciling items.
80 CORNING
INCORPORATED - 2015 Proxy Statement
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, 2014,
2013, 2012 and 2011
(Unaudited; amounts in
millions)
|
Year ended December
31, 2014 |
|
Year ended December
31, 2013 |
|
Year ended December 31,
2012 |
|
Year ended December
31, 2011 |
|
Net sales |
|
Net income |
|
Net sales |
|
Net income |
|
Net sales |
|
Net income |
|
Net sales |
|
Net income |
As reported |
$ |
1,205 |
|
$ |
144 |
|
|
$ |
1,170 |
|
$ |
187 |
|
|
$ |
1,346 |
|
$ |
137 |
|
$ |
1,074 |
|
$ |
(36 |
) |
Constant-yen(1) |
|
|
|
|
(7 |
) |
|
|
|
|
|
(2 |
) |
|
|
|
|
|
25 |
|
|
|
|
|
26 |
|
Purchased collars and
average forward contracts(2) |
|
|
|
|
14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related costs(4) |
|
|
|
|
(1 |
) |
|
|
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring, impairment
and other charges(7) |
|
|
|
|
12 |
|
|
|
|
|
|
12 |
|
|
|
|
|
|
33 |
|
|
|
|
|
83 |
|
Pension
mark-to-market adjustment(11) |
|
|
|
|
|
|
|
|
|
|
|
(2 |
) |
|
|
|
|
|
6 |
|
|
|
|
|
1 |
|
Core performance
measures |
$ |
1,205 |
|
$ |
162 |
|
|
$ |
1,170 |
|
$ |
196 |
|
|
$ |
1,346 |
|
$ |
201 |
|
$ |
1,074 |
|
$ |
74 |
|
See
Reconciliation of Non-GAAP Financial Measures, Items which we exclude from GAAP
measures to arrive at core performance measures on page 83 for the descriptions
of the footnoted reconciling items.
CORNING INCORPORATED - 2015 Proxy
Statement 81
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, 2014,
2013, 2012 and 2011
(Unaudited; amounts in
millions)
|
Year ended December 31,
2014 |
|
Year ended December
31, 2013 |
|
Year ended December 31,
2012 |
|
Year ended December 31,
2011 |
|
Net sales |
|
Net income |
|
Net sales |
|
Net income |
|
Net sales |
|
Net income |
|
Net sales |
|
Net income |
As reported |
$ |
862 |
|
$ |
71 |
|
$ |
851 |
|
$ |
71 |
|
|
$ |
657 |
|
$ |
28 |
|
$ |
595 |
|
$ |
60 |
Acquisition-related costs(4) |
|
|
|
|
14 |
|
|
|
|
|
21 |
|
|
|
|
|
|
15 |
|
|
|
|
|
|
Restructuring, impairment
and other charges(7) |
|
|
|
|
2 |
|
|
|
|
|
3 |
|
|
|
|
|
|
1 |
|
|
|
|
|
|
Pension
mark-to-market adjustment(11) |
|
|
|
|
|
|
|
|
|
|
(3 |
) |
|
|
|
|
|
4 |
|
|
|
|
|
1 |
Core performance
measures |
$ |
862 |
|
$ |
87 |
|
$ |
851 |
|
$ |
92 |
|
|
$ |
657 |
|
$ |
48 |
|
$ |
595 |
|
$ |
61 |
See
Reconciliation of Non-GAAP Financial Measures, Items which we exclude from GAAP
measures to arrive at core performance measures on page 83 for the descriptions
of the footnoted reconciling items.
82 CORNING
INCORPORATED - 2015 Proxy Statement
Table
of Contents
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: |
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Constant-yen: Because a significant portion of Cornings LCD glass
business 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 December 31, 2014, we used an internally derived
management rate of ¥93, which is aligned to our yen portfolio of purchased
collars and average rate forwards, and have recast all periods presented
based on this rate in order to effectively remove the impact of changes in
the Japanese yen. |
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Constant-won: Following the Acquisition of Samsung Corning
Precision Materials and because a significant portion of Samsung Corning
Precision Materials (now 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. We have not recast prior
periods presented as the impact is not material to Corning in those
periods. |
(2) |
Purchased and zero cost collars, average forward contracts and
other yen-related transactions: We have excluded the impact of our yen-denominated purchased collars, average forward contracts, and other
yen-related transactions for each period presented. Additionally, we are
also excluding the impact of our portfolio of Korean won-denominated zero
cost collars which we entered into in the second quarter of 2014. By
aligning an internally derived rate with our portfolio of purchased
collars and average forward contracts, and excluding other yen-related
transactions and the constant-currency adjustments, we have materially
mitigated the impact of changes in the Japanese yen and Korean
won. |
(3) |
Results of Dow Cornings consolidated subsidiary, Hemlock
Semiconductor: In 2013, we excluded the results of Dow Cornings
consolidated subsidiary, Hemlock Semiconductor (Hemlock), a producer of
polycrystalline silicon, to remove the operating and non-operating items
and events which have caused severe unpredictability and instability in
earnings beginning in 2012. These events were primarily driven by the
macro-economic environment. Specifically, the negative impact of the
determination by the Chinese Ministry of Commerce, which imposed
provisional anti-dumping duties on solar-grade polysilicon imports from
the United States, and the impact of asset write-offs, offset by the
benefit of large payments required under Hemlocks customers
take-or-pay contracts, are events that are unrelated to Dow Cornings
core operations, and that have, or could have, significant impacts to this
business. Beginning in 2014, due to the stabilization of the
polycrystalline silicon industry, we will no longer exclude the operating
results of Hemlock from core performance measures. |
(4) |
Acquisition-related costs: These expenses include intangible
amortization, inventory valuation adjustments and external
acquisition-related deal costs. |
(5) |
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 a transfer pricing out of period
adjustment in 2014. This item also includes the income tax effects of
adjusting from GAAP earnings to core earnings. |
(6) |
Litigation, regulatory and other legal matters: Includes amounts
related to the Pittsburgh Corning Corporation asbestos litigation,
adjustments to our estimated liability for environmental-related items and
the settlement of litigation related to a small acquisition. |
(7) |
Restructuring, impairment and other charges: This amount includes
restructuring, impairment and other charges, as well as other expenses and
disposal costs not classified as restructuring expense. |
(8) |
Liquidation of subsidiary: The partial impact of non-restructuring
related items due to the decision to liquidate a consolidated subsidiary
that is not significant. |
(9) |
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. |
(10) |
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. |
CORNING INCORPORATED - 2015 Proxy
Statement 83
Table of
Contents
(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. Management believes
that pension actuarial gains and losses are primarily financing activities
that are more reflective of changes in current conditions in global
financial markets, and are not directly related to the underlying
performance of our businesses. |
(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. |
(13) |
Loss on repurchase of debt: In 2012, Corning recorded a loss on the
repurchase of $13 million of our 8.875% senior unsecured notes due 2021,
$11 million of our 8.875% senior unsecured notes due 2016, and $51 million
of our 6.75% senior unsecured notes due 2013. |
(14) |
Accumulated other comprehensive income: In 2012, Corning recorded a
translation capital gain on the liquidation of a foreign
subsidiary. |
(15) |
Contingent liability adjustment: In 2011, Corning recognized a
credit resulting from a reduction to a contingent liability associated
with an acquisition recorded in the first quarter of
2011. |
84 CORNING
INCORPORATED - 2015 Proxy Statement
Table of
Contents
Table of
Contents
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Quality Integrity Performance Leadership Innovation Independence The
Individual |
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Values |
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Throughout our
history, Corning's 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 |
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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 30, 2015. |
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Vote by
Internet
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Go to
www.investorvote.com/glw
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Or scan the QR code with your
smartphone
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Follow the steps outlined on the secure
website |
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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.
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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. |
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Annual Meeting Proxy Card |
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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.▼ |
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A |
Election of Directors
The Board of Directors recommends a vote FOR the listed
nominees. |
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1. |
Nominees: |
For |
Against |
Abstain |
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For |
Against |
Abstain |
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For |
Against |
Abstain |
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01 - Donald W. Blair |
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☐ |
☐ |
☐ |
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02 -
Stephanie A. Burns |
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☐ |
☐ |
☐ |
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03 - John A. Canning, Jr. |
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☐ |
☐ |
☐ |
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04 - Richard T. Clark |
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☐ |
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05 - Robert F. Cummings, Jr. |
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☐ |
☐ |
☐ |
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06 - James B. Flaws |
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☐ |
☐ |
☐ |
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07 - Deborah
A. Henretta |
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☐ |
☐ |
☐ |
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08 - Daniel
P. Huttenlocher |
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09 - Kurt M. Landgraf |
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☐ |
☐ |
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10 -
Kevin J. Martin |
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☐ |
☐ |
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11 - Deborah
D. Rieman |
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☐ |
☐ |
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12 - Hansel E. Tookes
II |
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☐ |
☐ |
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13 -
Wendell P. Weeks |
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☐ |
☐ |
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14 - Mark S.
Wrighton |
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☐ |
☐ |
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B |
Managements Proposals The
Board of Directors recommends a vote FOR Proposals 2 and
3. |
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For |
Against |
Abstain |
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2. |
Ratify the appointment of PricewaterhouseCoopers LLP as
Cornings independent registered public accounting firm for the fiscal
year ending December 31, 2015. |
☐ |
☐ |
☐ |
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3. |
Advisory vote
to approve the Companys executive compensation. |
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C |
Shareholder Proposal
The Board of Directors recommends a vote AGAINST Proposal
4. |
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For |
Against |
Abstain |
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4. |
Holy Land Principles shareholder proposal |
☐ |
☐ |
☐ |
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D |
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. |
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/ |
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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
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PROXY SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
FOR THE 2015 MEETING OF
SHAREHOLDERS
APRIL 30, 2015
The undersigned hereby appoints James
B. Flaws 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 30, 2015, 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 March 2, 2015 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 30, 2015. The
proxy statement and annual report to security holders are available at
www.corning.com/2015_proxy.
E |
Non-Voting Items |
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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. |
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☐ |
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Mark the box to the right if you
plan to attend the Annual Meeting. |
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☐ |
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IF VOTING BY MAIL, YOU
MUST COMPLETE SECTIONS A - E ON BOTH SIDES OF THIS CARD.
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