SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: (Date of earliest event reported) August 5, 2002
CORNING INCORPORATED
(Exact name of registrant as specified in its charter)
New York 1-3247 16-0393470
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
One Riverfront Plaza, Corning, New York 14831
(Address of principal executive offices) (Zip Code)
(607) 974-9000
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Item 5. Other Events and Regulation FD Disclosure.
On August 5, 2002, Corning Incorporated, a New York Corporation (the "Company")
filed a Certificate of Amendment of the Certificate of Incorporation with the
New York State Secretary of State concerning the 7.00% Series C Mandatory
Convertible Preferred Stock ("Series C Preferred Stock"). On August 6, 2002, the
Company entered into Pledge, Assignment and Collateral Agency Agreement (the
"Collateral Agreement") with Citibank, N.A. as holder of a promissory note for
the benefit of holders of the Series C Preferred Stock. Also on August 6, 2002,
the Company entered into a Paying Agency Agreement with Citibank, N.A. as paying
agent in connection with certain annual dividends, payable quarterly, to holders
of the Series C Preferred Stock issued by the Company. The Certificate of
Amendment, the Collateral Agreement, and the Paying Agency Agreement are
attached hereto as Exhibits 99.1, 99.2, and 99.3 to this Current Report.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
99.1 Certificate of Amendment of the Certificate of Incorporation of Corning
Incorporated filed August 5, 2002.
99.2 Pledge, Assignment and Collateral Agency Agreement between Corning
Incorporated and Citibank, N.A. dated August 6, 2002.
99.3 Paying Agency Agreement between Corning Incorporated and Citibank, N.A.
dated August 6, 2002.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CORNING INCORPORATED
Registrant
Date: August 7, 2002 By /s/ DENISE A. HAUSELT
---------------------------------------
Denise A. Hauselt
Assistant General Counsel and Secretary
INDEX TO EXHIBITS
-----------------
(c) Exhibits
99.1 Certificate of Amendment of the Certificate of Incorporation of Corning
Incorporated filed August 5, 2002.
99.2 Pledge, Assignment and Collateral Agency Agreement between Corning
Incorporated and Citibank, N.A. dated August 6, 2002.
99.3 Paying Agency Agreement between Corning Incorporated and Citibank, N.A.
dated August 6, 2002.
Exhibit 99.1
New York State
Department of State
Division of Corporations, State Records
and Uniform Commercial Code
41 State Street
Albany, NY 12231
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION OF
CORNING INCORPORATED
Under Section 805 of the Business Corporation Law
--------------------------------------------------------------------------------
WE, WENDELL P. WEEKS and DENISE A. HAUSELT, being, respectively, the
President and Chief Operating Officer and Secretary of Corning Incorporated, a
corporation organized under the laws of the State of New York, DO HEREBY CERTIFY
as follows:
FIRST: The name of the Corporation is Corning Incorporated. The Corporation
was formed under the name Corning Glass Works.
SECOND: The Certificate of Incorporation of the Corporation (being the
Preliminary Certificate of Consolidation Forming the Corporation) was filed in
the Office of the Secretary of State of the State of New York on December 24,
1936.
THIRD: The said Certificate of Incorporation, as amended and restated, is
hereby amended pursuant to Sections 502(c), 502(d) and 805 of the Business
Corporation Law by the addition of the following provisions, stating the number,
designation, relative rights, preferences and limitations of a series of Series
Preferred Stock, par value $100 per share, as fixed by the Board of Directors of
the Corporation before the issuance of such shares, such provisions so added to
be designated as paragraph 4C of the Restated Certificate of Incorporation of
the Corporation and to read as follows:
4C. 7.00% Series C Mandatory Convertible Preferred Stock
(1) Designation and Amount.
The shares of this series of Preferred Stock shall be designated as "7.00%
Series C Mandatory Convertible Preferred Stock" (the "Series C Preferred Stock")
and the number of shares constituting such series shall be 5,750,000, with a par
value of $100 per share.
(2) Ranking.
The Series C Preferred Stock shall rank, as to payment of dividends and
distribution of assets upon dissolution, liquidation or winding up of the
Corporation, (a) senior to the Common Stock, (b) senior to the Series A
Preferred Stock and (c) junior to the Series B Preferred Stock.
(3) Dividends.
(a) Dividends on the Series C Preferred Stock will be payable quarterly on
each Dividend Payment Date, at the annual rate of $7.00 per share. The initial
dividend on the Series C Preferred Stock for the first Dividend Period,
commencing on the date of first issuance of the Series C Preferred Stock
(assuming a date of first issuance of August 6, 2002), to but excluding November
16, 2002, will be $1.925 per share, and will be payable on November 16, 2002.
Each subsequent quarterly dividend on the Series C Preferred Stock will be
$1.750 per share. Dividends payable on a Dividend Payment Date will be payable
to Record Holders for the applicable Dividend Payment Date.
(b) The amount of dividends payable on each share of Series C Preferred
Stock for each full quarterly period will be computed by dividing the annual
dividend by four. The amount of dividends payable for any other period that is
shorter or longer than a full quarterly dividend period will be computed on the
basis of a 360-day year consisting of twelve 30-day months. Accumulated but
unpaid dividends on the Series C Preferred Stock shall cumulate from the
Dividend Payment Date on which they become payable, but no interest shall accrue
on accumulated but unpaid dividends on the Series C Preferred Stock.
(c) All dividends payable on the Series C Preferred Stock through the
Mandatory Conversion Date will become immediately due and payable, if any of the
following events occurs:
(i) the rating on the Corporation's long-term debt is reduced to "Ca"
or below by Moody's or "CC" or below by Standard & Poor's;
(ii) the Corporation fails to comply with any of the provisions of
this Certificate of Amendment or the Promissory Note; or
(iii) the Corporation or any of the Corporation's principal
subsidiaries pursuant to or under or within the meaning of any Bankruptcy
Law:
(A) commences a voluntary case or proceeding;
(B) consents to the entry of an order for relief against it in an
involuntary case or proceeding or the commencement of any case against
it;
(C) consents to the appointment of a Custodian of it or for any
substantial part of its property;
(D) files a petition in bankruptcy or answer or consent seeking
reorganization or relief; or
(E) consents to the filing of such petition or the appointment of
or taking possession by Custodian; or
(F) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(1) is for relief against the Corporation or any of the
Corporation's principal subsidiaries in an involuntary case or
proceeding, or adjudicates the Corporation or any of the
Corporation's principal subsidiaries insolvent or bankrupt;
(2) appoints a Custodian of the Corporation or any of the
Corporation's principal subsidiaries or for any substantial part
of its property; or
(3) orders the winding up or liquidation of the Corporation
or any of the Corporation's principal subsidiaries;
and the order or decree remains unstayed and in effect for 60 days.
(4) Payment Restrictions.
(a) Unless all accrued and unpaid dividends on the Series C Preferred Stock
for all prior Dividend Periods have been paid, the Corporation may not:
(i) take any of the following actions with respect to any of its
capital stock that ranks junior to the Series C Preferred Stock as to
payment of dividends or distribution of assets upon dissolution,
liquidation or winding up of the Corporation, including any and all shares
of Common Stock and the Series A Preferred Stock issued in the future, if
any:
(A) declare or pay any dividend or make any distribution of
assets on any of the Corporation's capital stock that ranks junior to
the Series C Preferred Stock as to payment of dividends or the
distribution of assets upon dissolution, liquidation or winding up of
the Corporation, other than dividends or distributions in the form of
the Corporation's capital stock that ranks junior to the Series C
Preferred Stock as to payment of dividends and the distribution of
assets upon dissolution, liquidation or winding up of the Corporation;
or
(B) redeem, purchase or otherwise acquire any of the
Corporation's capital stock that ranks junior to the Series C
Preferred Stock as to payment of dividends or the distribution of
assets upon dissolution, liquidation or winding up of the Corporation,
except upon conversion or exchange for the Corporation's capital stock
that ranks junior to the Corporation's Series C Preferred Stock as to
payment of dividends and the distribution of assets upon dissolution,
liquidation or winding up of the Corporation.
(ii) redeem, purchase or otherwise acquire any of the Corporation's
capital stock that ranks pari passu with the Series C Preferred Stock as to
payment of dividends or the distribution of assets upon dissolution,
liquidation or winding up of the Corporation, except for conversion or
exchange for the Corporation's capital stock that ranks junior to the
Series C Preferred Stock as to payment of dividends and the distribution of
assets upon dissolution, liquidation or winding up of the Corporation.
(5) Voting Rights.
(a) Except as otherwise required by law or set forth herein, Holders of the
Series C Preferred Stock are not entitled to any voting rights and their consent
shall not be required for the taking of any corporate action.
(b) So long as any of the Series C Preferred Stock is outstanding, the
Corporation will not, without the approval of the Holders of at least 66?% of
the Series C Preferred Stock then outstanding, given in person or by proxy
either at a regular meeting or at a special meeting called for that purpose, at
which the Holders of the Series C Preferred Stock shall vote separately as a
series, amend any of the provisions of the Corporation's Certificate of
Incorporation, as amended and restated, so as to affect adversely the powers,
preferences, privileges or rights of the Holders of the Series C Preferred
Stock; provided that the amendment of the provisions of the Corporation's
Certificate of Incorporation so as to authorize or create, or increase the
authorized amount of any shares ranking junior or pari passu as to payment of
dividends and distribution of assets upon dissolution, liquidation or winding up
of the Corporation to the Series C Preferred Stock shall not be deemed to affect
aversely the powers, preferences, privileges or rights of the Holders of the
Series C Preferred Stock.
(c) So long as any of the Series C Preferred Stock is outstanding, the
Corporation will not, without the approval of the holders of at least 80% of the
Series C Preferred Stock then outstanding and all shares of any other series of
the Corporation's Series Preferred Stock ranking pari passu as to dividends or
distribution of assets upon dissolution, liquidation or winding up of the
Corporation with the Series C Preferred Stock then outstanding, voting together
as a single class, given in person or by proxy either at a regular meeting or at
a special meeting called for that purpose:
(i) issue, authorize or increase the authorized amount of, or issue or
authorize any obligation or security convertible into or evidencing a right
to purchase, any stock of any class ranking senior to the Series C
Preferred Stock as to dividends or distribution of assets upon dissolution,
liquidation or winding up of the Corporation; or
(ii) reclassify any of the Corporation's authorized stock into any
stock of any class, or any obligation or security convertible into or
evidencing a right to purchase such stock, ranking senior to the Series C
Preferred Stock as to dividends or distribution of assets upon dissolution,
liquidation or winding up of the Corporation,
provided that the Corporation may take any of the actions described in this
Section 5(c) to issue, authorize or increase the authorized amount of, or issue
or authorize any obligation or security convertible into or evidencing a right
to purchase, any stock ranking junior to or pari passu with the Series C
Preferred Stock as to dividends or distribution of assets upon dissolution,
liquidation or winding up of the Corporation without the vote of any Holder of
the Series C Preferred Stock.
(6) Liquidation, Dissolution or Winding Up.
(a) In the event of any voluntary or involuntary liquidation, dissolution
or winding up of the Corporation, the Holders of the Series C Preferred Stock at
the time outstanding will be entitled to receive, out of the net assets of the
Corporation available for distribution to stockholders (subject to the rights of
the holders of any stock of the Corporation then outstanding ranking senior to
or pari passu with the Series C Preferred Stock in respect of distributions upon
liquidation, dissolution or winding up of the Corporation and before any amount
shall be paid or distributed with respect to holders of any stock of the
Corporation then outstanding ranking junior to the Series C Preferred Stock in
respect of distributions upon liquidation, dissolution or winding up of the
Corporation), a liquidating distribution in the amount of $100.00 per share,
plus an amount equal to the sum of all accrued and unpaid dividends, whether or
not earned, for the then-current Dividend Period and all prior Dividend Periods.
After the payment to the Holders of the Series C Preferred Stock of the full
amounts provided in this Section 6(a), the Holders of the Series C Preferred
Stock will have no right or claim to any of the Corporation's remaining assets.
(b) For the purpose of this Section 6, none of the following shall be
deemed a voluntary or involuntary liquidation, dissolution or winding up of the
Corporation:
(i) the sale of all or substantially all of the Corporation's property
or business;
(ii) the merger or consolidation of the Corporation into or with any
other corporation; or
(iii) the merger or consolidation of any other corporation into or
with the Corporation.
(c) If, upon any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, the amounts payable with respect to the Series C
Preferred Stock then outstanding are not paid in full as provided in Section
6(a) hereof, no distribution shall be made on account of any stock ranking pari
passu with the Series C Preferred Stock as to the distribution of assets upon
that liquidation, dissolution or winding up unless a pro rata distribution is
made on the Series C Preferred Stock. The Holders of the Series C Preferred
Stock then outstanding and the holders of any stock of the Corporation ranking
pari passu with the Series C Preferred Stock then outstanding shall share
ratably in any distribution of assets upon such liquidation, dissolution or
winding up. The amount allocable to each series of stock ranking pari passu as
to dividends or distribution of assets upon dissolution, liquidation or winding
up of the Corporation then outstanding will be based on the proportion of their
full respective liquidation preference to the aggregate liquidation preference
of the outstanding shares of each such series. After the payment to the Holders
of the Series C Preferred Stock and all other series of stock ranking pari passu
as to payment of dividends and distribution of assets upon dissolution,
liquidation or winding up of the Corporation of the full amounts provided in
this Section 6(c), the Holders of the Series C Preferred Stock and the holders
of all other series of stock ranking pari passu as to payment of dividends and
distribution of assets upon dissolution, liquidation or winding up of the
Corporation will have no right or claim to any of the Corporation's remaining
assets.
(d) Written notice of any voluntary or involuntary liquidation, dissolution
or winding up of the Corporation, stating the payment date or dates when, and
the place or places where, the amounts distributable to holders of Series C
Preferred Stock in such circumstances shall be payable, shall be given by
first-class mail, postage prepaid, mailed not less than twenty calendar days
prior to any payment date stated therein, to the Holders of Series C Preferred
Stock, at the address shown on the books of the Corporation or the Transfer
Agent; provided, however, that a failure to give notice as provided above or any
defect therein shall not affect the Corporation's ability to consummate a
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation.
(7) Automatic Conversion on the Mandatory Conversion Date.
(a) Each share of Series C Preferred Stock will automatically convert
(unless previously converted at the option of the Holder in accordance with
Section 8 hereof or pursuant to an exercise of a Merger Early Settlement right
pursuant to Section 9 hereof) on the Mandatory Conversion Date, into a number of
newly issued shares of Common Stock equal to the Conversion Rate.
(b) The "Conversion Rate" shall be as follows:
(i) if the "Applicable Market Value" of the Common Stock is equal to
or greater than $1.968 (the "Threshold Appreciation Price"), the Conversion
Rate shall be equal to 50.813 shares of Common Stock per share of Series C
Preferred Stock;
(ii) if the Applicable Market Value of the Common Stock is less than
the Threshold Appreciation Price but greater than $1.60 (the "Initial
Price"), the Conversion Rate shall be equal to $100.00 divided by the
Applicable Market Value of the Common Stock; and
(iii) If the Applicable Market Value of the Common Stock is less than
or equal to the Initial Price, the Conversion Rate shall be equal to 62.500
shares of Common Stock per share of Series C Preferred Stock,
in each case, subject to adjustment in accordance with the provisions of Section
13 hereof.
(8) Conversion at the Option of the Holder.
(a) Shares of the Series C Preferred Stock are convertible, in whole or in
part, at any time prior to the Mandatory Conversion Date, into shares of Common
Stock at the rate of 50.813 shares of Common Stock per share of Series C
Preferred Stock, subject to adjustments as set forth under Section 13 hereof. In
addition, the Corporation shall make a payment to Holders who so convert their
shares of Series C Preferred Stock, in cash, in an amount equal to the Market
Value at that time of the portfolio of U.S. Treasury Securities that, upon
maturity thereof, would be sufficient to pay that portion of amounts then due
and unpaid under the Promissory Note that corresponds to the Corporation's
obligation to pay accrued and unpaid dividends on such Holder's Series C
Preferred Stock being converted that otherwise would be payable, if such shares
of Series C Preferred Stock were not converted early in accordance with this
Section 8, from and after such conversion is effective in accordance with
Section 10(e) hereof through the Mandatory Conversion Date.
(b) Record Holders shall be entitled to receive the dividend payable on
their converted shares of Series C Preferred Stock on the corresponding Dividend
Payment Date notwithstanding the conversion pursuant to this Section 8 of such
shares after the close of business on a Record Date but before the opening of
business on the corresponding Dividend Payment Date. In such event, any cash
amount due and payable by the Corporation to the Holder pursuant to Section 8(a)
will be decreased by an amount equal to the amount of dividend to be paid on
such Dividend Payment Date.
(9) Early Conversion Upon Cash Merger.
(a) In the event of a merger or consolidation of the Corporation of the
type described in Section 13(f) in which the Common Stock outstanding
immediately prior to such merger or consolidation is exchanged for consideration
consisting of at least 30% cash or cash equivalents (any such event, a "Cash
Merger"), then the Corporation (or the successor to the Corporation, as the case
may be) shall be required to offer to the Holders of the Series C Preferred
Stock the right to convert their shares of Series C Preferred Stock prior to the
Mandatory Conversion Date (such right of the Holders to convert their shares
pursuant to this Section 9(a) being the "Merger Early Settlement") as provided
herein.
(b) On or before the fifth Business Day after the consummation of a Cash
Merger, the Corporation or, at the request and expense of the Corporation, the
Transfer Agent, shall give all Holders notice of the occurrence of the Cash
Merger and of the Merger Early Settlement right arising as a result thereof. The
Corporation shall also deliver a copy of such notice to the Transfer Agent. Each
such notice shall contain:
(i) the date, which shall be not less than 20 nor more than 30
calendar days after the date of such notice, on which the Merger Early
Settlement will be effected (such date being the "Merger Early Settlement
Date");
(ii) the date, which shall be on or one Business Day prior to the
Merger Early Settlement Date, by which the Merger Early Settlement right
must be exercised;
(iii) the Conversion Rate in effect on the Trading Day immediately
preceding such Cash Merger (calculated as if the Trading Day immediately
preceding such Cash Merger were the Mandatory Conversion Date) and the kind
and amount of securities, cash and other property receivable per share of
Series C Preferred Stock by the Holder upon conversion of shares of Series
C Preferred Stock pursuant to Section 9(d); and
(iv) the instructions a Holder must follow to exercise the Merger
Early Settlement right.
(c) To exercise a Merger Early Settlement right, a Holder shall deliver to
the Transfer Agent at its Corporate Trust Office by 5:00 p.m., New York City
time on or one Business Day prior to the date by which the Merger Settlement
Right must be exercised as specified in the notice, the certificate(s) (if such
shares are held in certificated form) evidencing the shares of Series C
Preferred Stock with respect to which the Merger Early Settlement right is being
exercised, duly assigned or endorsed for transfer to the Corporation, or
accompanied by duly executed stock powers relating thereto, or in blank, with a
written notice to the Corporation stating the Holder's intention to convert
early in connection with the Cash Merger and providing the Corporation with
payment instructions.
(d) If the Holder exercises its Merger Early Settlement right pursuant to
the terms hereof, on the Merger Early Settlement Date, the Corporation shall
deliver or cause to be delivered the net cash, securities and other property
entitled to be received by such exercising Holder, determined by assuming the
Holder had converted its shares of Series C Preferred Stock immediately before
the Cash Merger at the Conversion Rate calculated in accordance with Section
9(b)(iii) hereof. In the event a Merger Early Settlement right is exercised by a
Holder in accordance with the terms hereof, all references herein to Mandatory
Conversion Date shall be deemed to refer to such Merger Early Settlement Date.
(e) If the Holder does not elect to exercise its Merger Early Settlement
right pursuant to this Section 9, in lieu of shares of Common Stock, the
Corporation shall deliver on the Mandatory Conversion Date, at the Conversion
Rate in effect on that date, the net cash, securities and other property for
which the Common Stock was exchangeable in connection with the Cash Merger.
(f) Upon a Merger Early Settlement, the Transfer Agent shall, in accordance
with the instructions provided by the Holder thereof in the written notice
provided to the Corporation as set forth above, deliver to the Holder such net
cash, securities or other property issuable upon such Merger Early Settlement
together with payment in lieu of any fraction of a share, as provided herein.
(g) In the event that a Merger Early Settlement is effected with respect to
shares of Series C Preferred Stock representing less than all the shares of
Series C Preferred Stock held by a Holder, upon such Merger Early Settlement the
Corporation (or the successor to the Corporation, as the case may be) shall
execute and the Transfer Agent shall, unless otherwise instructed in writing,
authenticate, countersign and deliver to the Holder thereof, at the expense of
the Corporation, a certificate evidencing the shares as to which Merger Early
Settlement was not effected.
(10) Conversion Procedures.
(a) Any Holder of shares of Series C Preferred Stock desiring to convert
such shares into shares of Common Stock shall, if the Series C Preferred Stock
is held in certificated form, surrender the certificate or certificates
representing the shares of Series C Preferred Stock being converted, duly
assigned or endorsed for transfer to the Corporation (or accompanied by duly
executed stock powers relating thereto), at the principal executive office of
the Corporation or at the Corporate Trust Office of the Transfer Agent, or at
such office or offices in the continental United States of an agent for
conversion as may from time to time be designated by notice to the Holders of
the Series C Preferred Stock by the Corporation or the Transfer Agent,
accompanied by written notice of conversion, by 5:00 pm, New York City time, on
any day that is a Business Day in The City of New York.
(b) Such written notice of conversion shall be duly executed by the Holder,
accompanied by a Medallion Signature Guarantee (if required by the Transfer
Agent), and specify:
(i) the number of shares of Series C Preferred Stock to be converted;
(ii) the name(s) in which such Holder desires the shares of Common
Stock issuable upon conversion to be registered and whether such shares of
Common Stock are to be issued in book-entry or certificated form (subject
to compliance with applicable legal requirements if any of such
certificates are to be issued in a name other than the name of the Holder);
(iii) if certificates are to be issued, the address to which such
Holder wishes delivery to be made of such new certificates to be issued
upon such conversion; and
(iv) any other transfer forms, tax forms or other relevant
documentation required and specified by the Transfer Agent, if necessary,
to effect the conversion.
(c) If specified by the Holder in the notice of conversion that shares of
Common Stock issuable upon conversion of the Series C Preferred Stock shall be
issued to a person other than the Holder surrendering the shares of Series C
Preferred Stock being converted, the Holder shall pay or cause to be paid any
transfer or similar taxes payable in connection with the shares of Common Stock
so issued.
(d) Upon receipt by the Transfer Agent of a completed and duly executed
notice of conversion as set forth in Section 10(b) and upon surrender of a
certificate representing share(s) of Series C Preferred Stock to be converted
(if held in certificated form), the Corporation shall, within three Business
Days or as soon as possible thereafter, issue and shall instruct the Transfer
Agent to register the number of shares of Common Stock to which such Holder
shall be entitled upon conversion in the name(s) specified by such Holder in the
notice of conversion. If a Holder elects to hold its shares of Common Stock
issuable upon conversion of the Series C Preferred Stock in certificated form,
the Corporation promptly send or cause to be sent, by hand delivery (with
receipt to be acknowledged) or by first-class mail, postage prepaid, to the
Holder thereof, at the address designated by such Holder in the written notice
of conversion, a certificate or certificates representing the number of shares
of Common Stock to which such Holder shall be entitled upon conversion. In the
event that there shall have been surrendered a certificate or certificates
representing shares of Series C Preferred Stock, only part of which are to be
converted, the Corporation shall issue and deliver to such Holder or such
Holder's designee in the manner provided in the immediately preceding sentence a
new certificate or certificates representing the number of shares of Series C
Preferred Stock that shall not have been converted.
(e) The issuance by the Corporation of shares of Common Stock upon a
conversion of shares of Series C Preferred Stock in accordance with the terms
hereof shall be effective immediately prior to the close of business on the day
of receipt by the Transfer Agent of the notice of conversion and other
documents, if any, set forth in Section 10(b) hereof, compliance with Section
10(c), if applicable, and the surrender by such Holder or such Holder's designee
of the certificate or certificates representing the shares of Series C Preferred
Stock to be converted (if held in certificated form), duly assigned or endorsed
for transfer to the Corporation (or accompanied by duly executed stock powers
relating thereto). The person or persons entitled to receive the Common Stock
issuable upon such conversion shall be treated for all purposes as the record
holder(s) of such shares of Common Stock as of the close of business on the
effective date of the conversion. No allowance or adjustment shall be made in
respect of dividends payable to holders of Common Stock of record as of any date
prior to such effective date. Prior to such effective date, shares of Common
Stock issuable upon conversion of any shares of Series C Preferred Stock shall
not be deemed outstanding for any purpose, and Holders of shares of Series C
Preferred Stock shall have no rights with respect to the Common Stock (including
voting rights, rights to respond to tender offers for the Common Stock and
rights to receive any dividends or other distributions on the Common Stock) by
virtue of holding shares of Series C Preferred Stock.
(f) Shares of Series C Preferred Stock duly converted in accordance with
this Certificate of Amendment, or otherwise reacquired by the Corporation, will
resume the status of authorized and unissued Series Preferred Stock,
undesignated as to series and available for future issuance.
(g) In the event that a holder of shares of Series C Preferred Stock shall
not by written notice designate the name in which shares of Common Stock to be
issued upon conversion of such shares should be registered or to whom payment
upon redemption of shares of Series C Preferred Stock should be made or the
address to which the certificate or certificates representing such shares, or
such payment, should be sent, the Corporation shall be entitled to register such
shares, and make such payment, in the name of the Holder of such Series C
Preferred Stock as shown on the records of the Corporation and to send the
certificate or certificates representing such shares, or such payment, to the
address of such holder shown on the records of the Corporation.
(11) Reservation of Common Stock.
(a) The Corporation shall at all times reserve and keep available out of
its authorized and unissued Common Stock, solely for issuance upon the
conversion of shares of Series C Preferred Stock as herein provided, free from
any preemptive or other similar rights, such number of shares of Common Stock as
shall from time to time be issuable upon the conversion of all the shares of
Series C Preferred Stock then outstanding.
(b) Notwithstanding the foregoing, the Corporation shall be entitled to
deliver upon conversion of shares of Series C Preferred Stock, as herein
provided, shares of Common Stock reacquired and held in the treasury of the
Corporation (in lieu of the issuance of authorized and unissued shares of Common
Stock), so long as any such treasury shares are free and clear of all liens,
charges, security interests or encumbrances.
(c) All shares of Common Stock delivered upon conversion of the Series C
Preferred Stock shall be duly authorized, validly issued, fully paid and
non-assessable, free and clear of all liens, claims, security interests and
other encumbrances.
(d) The Corporation shall prepare and shall use its best efforts to obtain
and keep in force such governmental or regulatory permits or other
authorizations as may be required by law, and shall comply with all applicable
requirements as to registration or qualification of the Common Stock (and all
requirements to list the Common Stock issuable upon conversion of Series C
Preferred Stock that are at the time applicable), in order to enable the
Corporation lawfully to issue and deliver to each holder of record of Series C
Preferred Stock such number of shares of its Common Stock as shall from time to
time be sufficient to effect the conversion of all shares of Series C Preferred
Stock then outstanding and convertible into shares of Common Stock.
(12) Fractional Shares.
(a) No fractional shares of Common Stock will be issued as a result of any
conversion of shares of Series C Preferred Stock.
(b) In lieu of any fractional share otherwise issuable in respect of any
automatic conversion pursuant to Section 7 hereof or a conversion at the option
of the Holder pursuant to Section 8 hereof, the Corporation shall pay an amount
in cash equal to the same fraction of:
(i) in the case of an automatic conversion pursuant to Section 7
hereof, the Current Market Price; or
(ii) in the case of a conversion at the option of the Holder pursuant
to Section 8 hereof, the Closing Price of the Common Stock determined as of
the Trading Day immediately preceding the effective date of conversion.
(13) Anti-Dilution Adjustments to the Conversion Rate.
(a) The formula for determining the Conversion Rate as set forth in Section
7(b) hereof, and the number of shares of Common Stock to be delivered upon any
conversion of shares of Series C Preferred Stock pursuant to Sections 7, 8 or 9
hereof, shall be subject to the following adjustments. Each adjustment to the
Conversion Rate will result in a corresponding adjustment to the number of
shares of the Common Stock issuable upon conversion of the Series C Preferred
Stock.
(i) Stock Dividends and Distributions. In case the Corporation shall
pay or make a dividend or other distribution on the Common Stock in shares
of Common Stock, the Conversion Rate, as in effect at the opening of
business on the day following the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution, shall
be increased by dividing such Conversion Rate by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding at the
close of business on the date fixed for such determination and the
denominator shall be the sum of such number of Shares of Common Stock
outstanding and the total number of shares of Common Stock constituting
such dividend or other distribution, such increase to become effective
immediately after the opening of business on the day following the date
fixed for such determination. For the purposes of this sub-section (i), the
number of shares of Common Stock at the time outstanding shall not include
shares held in the treasury of the Corporation but shall include any shares
issuable in respect of any scrip certificates issued in lieu of fractions
of shares of Common Stock. The Corporation will not pay any dividend or
make any distribution on shares of Common Stock held in the treasury of the
Corporation.
(ii) Subdivisions, Splits and Combinations of the Common Stock. In
case outstanding shares of Common Stock shall be subdivided or split into a
greater number of shares of Common Stock, the Conversion Rate in effect at
the opening of business on the day following the day upon which such
subdivision or split becomes effective shall be proportionately increased,
and, conversely, in case outstanding shares of Common Stock shall each be
combined into a smaller number of shares of Common Stock, the Conversion
Rate in effect at the opening of business on the day following the day upon
which such combination becomes effective shall be proportionately reduced,
such increase or reduction, as the case may be, to become effective
immediately after the opening of business on the day following the day upon
which such subdivision, split or combination becomes effective.
(iii) Issuance of Stock Purchase Rights. In case the Corporation shall
issue rights or warrants to all holders of its Common Stock not being
available on an equivalent basis to Holders of the shares of Series C
Preferred Stock upon conversion (other than rights or warrants issued
pursuant to a dividend reinvestment plan or share purchase plan or other
similar plans), entitling such holders to subscribe for or purchase shares
of Common Stock at a price per share less than the Current Market Price on
the date fixed for the determination of stockholders entitled to receive
such rights or warrants, the Conversion Rate in effect at the opening of
business on the day following the date fixed for such determination shall
be increased by multiplying such Conversion Rate by a fraction, the
numerator of which shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
subscription or purchase and the denominator of which shall be the number
of shares of Common Stock outstanding at the close of business on the date
fixed for such determination plus the number of shares of Common Stock
which the aggregate of the offering price of the total number of shares of
Common Stock so offered for subscription or purchase would purchase at such
Current Market Price, such increase to become effective immediately after
the opening of business on the day following the date fixed for such
determination. For the purposes of this sub-section (iii), the number of
shares of Common Stock at any time outstanding shall not include shares
held in the treasury of the Corporation but shall include any shares
issuable in respect of any scrip certificates issued in lieu of fractions
of shares of Common Stock. The Corporation shall not issue any such rights
or warrants in respect of shares of Common Stock held in the treasury of
the Corporation.
(iv) Debt or Asset Distribution.
(A) In case the Corporation shall, by dividend or otherwise,
distribute to all holders of its Common Stock evidences of its
indebtedness, shares of capital stock, securities, cash or other
assets (excluding any dividend or distribution referred to in Section
13(a)(i) or Section 13(a)(ii) hereof, any rights or warrants referred
to in Section 13(a)(iii) hereof, any dividend or distribution paid
exclusively in cash and any dividend, shares of capital stock of any
class or series, or similar equity interests, of or relating to a
subsidiary or other business unit in the case of a Spin-Off referred
to in Section 13(a)(iv)(B) below), the Conversion Rate shall be
adjusted so that it shall equal the rate determined by multiplying the
Conversion Rate in effect immediately prior to the close of business
on the date fixed for the determination of stockholders entitled to
receive such distribution by a fraction, the numerator of which shall
be the Current Market Price per share of the Common Stock on the date
fixed for such determination and the denominator of which shall be
such Current Market Price per share of the Common Stock less the then
fair market value (as determined by an independent investment banking
or appraisal firm experienced in the valuation of such securities or
property selected in good faith by the Board of Directors of the
Corporation or a committee thereof, or, if no such investment banking
or appraisal firm is, in the good faith judgment of the Board of
Directors of the Corporation or a committee thereof, available to make
such determination within a reasonable time period so as to permit the
Corporation to comply with its obligation to issue and deliver shares
of Common Stock upon conversion of any Series C Preferred Stock
hereunder, as determined in good faith by the Board of Directors,
whose determination shall be conclusive and described in a resolution
of the Board of Directors) of the portion of the assets or evidences
of indebtedness so distributed applicable to one share of Common
Stock, such adjustment to become effective immediately prior to the
opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such distribution.
In any case in which this sub-section (iv)(A) is applicable,
sub-section (iv)(B) of this Section 13(a) shall not be applicable.
(B) In the case of a Spin-Off, the Conversion Rate in effect
immediately before the close of business on the record date fixed for
determination of stockholders entitled to receive that distribution
will be increased by multiplying the Conversion Rate by a fraction,
the numerator of which is the Current Market Price per share of the
Common Stock plus the Fair Market Value of the portion of those shares
of Capital Stock or similar equity interests so distributed applicable
to one share of Common Stock and the denominator of which is the
Current Market Price per share of the Common Stock. Any adjustment to
the Conversion Rate under this sub-section (iv)(B) of this Section
13(a) will occur on the earlier of (A) the 10th Trading Day from, but
excluding, the effective date of the Spin-Off and (B) the date of the
securities being offered in the Initial Public Offering of the
Spin-Off, if that Initial Public Offering is effected simultaneously
with the Spin-Off.
(v) Cash Distributions. In case the Corporation shall:
(A) by dividend or otherwise, distribute to all holders of its
Common Stock cash (excluding any cash that is distributed in a
Reorganization Event to which Section 13(f) hereof applies or as part
of a distribution referred to in sub-section (iv) of this Section
13(a)) in an aggregate amount that, combined together with:
(B) the aggregate amount of any other distributions to all
holders of its Common Stock made exclusively in cash within the 12
months preceding the date of payment of such distribution and in
respect of which no adjustment pursuant to this Section 13(a)(v) or
Section 13(a)(vi) has been made; and
(C) the aggregate of any cash plus the fair market value, as of
the date of the expiration of the tender or exchange offer referred to
below (as determined by an independent investment banking or appraisal
firm experienced in the valuation of such securities or property
selected in good faith by the Board of Directors of the Corporation or
a committee thereof, or, if no such investment banking or appraisal
firm is, in the good faith judgment of the Board of Directors of the
Corporation or a committee thereof, available to make such
determination within a reasonable time period so as to permit the
Corporation to comply with its obligation to issue and deliver shares
of Common Stock upon conversion of any Series C Preferred Stock
hereunder, as determined in good faith by the Board of Directors,
whose determination shall be conclusive and described in a resolution
of the Board of Directors), of the consideration payable in respect of
any tender or exchange offer by the Corporation or any of its
subsidiaries for all or any portion of the Common Stock concluded
within the 12 months preceding the date of payment of the distribution
described in Section 13(a)(v)(A) and in respect of which no adjustment
pursuant to this Section 13(a)(v) or Section 13(a)(vi) below has been
made,
exceeds 10% of the product of the Current Market Price per share of the Common
Stock on the date for the determination of holders of shares of Common Stock
entitled to receive such distribution multiplied by the number of shares of
Common Stock outstanding on such date on a fully diluted basis, then, and in
each such case, immediately after the close of business on such date for
determination, the Conversion Rate shall be increased so that the same shall
equal the rate determined by multiplying the Conversion Rate in effect
immediately prior to the close of business on the date fixed for determination
of the stockholders entitled to receive such distribution by a fraction, (1) the
numerator of which shall be equal to the Current Market Price per share of the
Common Stock on the date fixed for such date for determination and (2) the
denominator of which shall be equal to the Current Market Price per share of the
Common Stock on the date fixed for such determination less an amount equal to
the quotient of (x) the combined amount distributed or payable in the
transactions described in the above clauses (A), (B) and (C) of this Section
13(a)(v) divided by (y) the number of shares of Common Stock outstanding on such
date for determination.
(vi) Tender Offers and Exchange Offers. Tender Offers. In case (1) a
tender or exchange offer made by the Corporation or any subsidiary of the
Corporation for all or any portion of the Common Stock shall expire and
such tender or exchange offer (as amended upon the expiration thereof)
shall require the payment to stockholders (based on the acceptance (up to
any maximum specified in the terms of the tender or exchange offer) of
Purchased Shares (as defined below in this Section)) of an aggregate
consideration having a fair market value (as determined by an independent
investment banking or appraisal firm experienced in the valuation of such
securities or property selected in good faith by the Board of Directors of
the Corporation or a committee thereof, or, if no such investment banking
or appraisal firm is, in the good faith judgment of the Board of Directors
of the Corporation or a committee thereof, available to make such
determination within a reasonable time period so as to permit the
Corporation to comply with its obligation to issue and deliver shares of
Common Stock upon conversion of any Series C Preferred Stock hereunder, as
determined in good faith by the Board of Directors, whose determination
shall be conclusive and described in a resolution of the Board of
Directors) that combined together with (2) the aggregate of the cash plus
the fair market value (as determined by an independent investment banking
or appraisal firm experienced in the valuation of such securities or
property selected in good faith by the Board of Directors of the
Corporation or a committee thereof, or, if no such investment banking or
appraisal firm is, in the good faith judgment of the Board of Directors of
the Corporation or a committee thereof, available to make such
determination within a reasonable time period so as to permit the
Corporation to comply with its obligation to issue and deliver shares of
Common Stock upon conversion of any Series C Preferred Stock hereunder, as
determined in good faith by the Board of Directors, whose determination
shall be conclusive and described in a resolution of the Board of
Directors), as of the expiration of such tender or exchange offer, of
consideration payable in respect of any other tender or exchange offer by
the Corporation or any subsidiary of the Corporation for all or any portion
of the Common Stock expiring within the 12 months preceding the expiration
of such tender or exchange offer and in respect of which no adjustment
pursuant to Section 13(a)(v) hereof or this Section 13(a)(vi) has been made
and (3) the aggregate amount of any distributions to all holders of the
Corporation's Common Stock made exclusively in cash within the 12 months
preceding the expiration of such tender or exchange offer and in respect of
which no adjustment pursuant to Section 13(a)(v) hereof or this Section
13(a)(vi) has been made, exceeds 10% of the product of the Current Market
Price per share of the Common Stock as of the last time (the "Expiration
Time") tenders could have been made pursuant to such tender or exchange
offer (as it may be amended) multiplied by the number of shares of Common
Stock outstanding (including any tendered shares) on the Expiration Time,
then, and in each such case, immediately prior to the opening of business
on the day after the date of the Expiration Time, the Conversion Rate shall
be adjusted so that the same shall equal the rate determined by dividing
the Conversion Rate immediately prior to the close of business on the date
of the Expiration Time by a fraction (A) the numerator of which shall be
equal to (x) the product of (I) the Current Market Price per share of the
Common Stock on the date of the Expiration Time and (II) the number of
shares of Common Stock outstanding (including any tendered shares) on the
Expiration Time less (y) the amount of cash plus the fair market value
(determined as aforesaid) of the aggregate consideration payable to
stockholders based on the transactions described in clauses (1), (2) and
(3) of this Section 13(a)(vi) (assuming in the case of clause (1) the
acceptance, up to any maximum specified in the terms of the tender or
exchange offer, of Purchased Shares), and (B) the denominator of which
shall be equal to the product of (x) the Current Market Price per share of
the Common Stock as of the Expiration Time and (y) the number of shares of
Common Stock outstanding (including any tendered shares) as of the
Expiration Time less the number of all shares validly tendered and not
withdrawn as of the Expiration Time (the shares deemed so accepted, up to
any such maximum, being referred to as the "Purchased Shares").
(b) Reclassification. The reclassification of Common Stock into securities
including securities other than Common Stock (other than any reclassification
upon a Reorganization Event to which Section 13(f) applies) shall be deemed to
involve (1) a distribution of such securities other than Common Stock to all
holders of Common Stock (and the effective date of such reclassification shall
be deemed to be "the date fixed for the determination of stockholders entitled
to receive such distribution" and the "date fixed for such determination" within
the meaning of Section 13(a)(iv)), and (2) a subdivision, split or combination,
as the case may be, of the number of shares of Common Stock outstanding
immediately prior to such reclassification into the number of shares of Common
Stock outstanding immediately thereafter (and the effective date of such
reclassification shall be deemed to be "the day upon which such subdivision or
split becomes effective" or "the day upon which such combination becomes
effective," as the case may be, and "the day upon which such subdivision, split
or combination becomes effective" within the meaning of Section 13(a)(ii)).
(c) Adjustment for Tax Reasons. The Corporation may make such increases the
Conversion Rate, in addition to any other increases required by this Section 13,
if the Board of Directors deems it advisable to avoid or diminish any income tax
to holders of the Common Stock resulting from any dividend or distribution of
shares (or rights to acquire shares) or from any event treated as a dividend or
distribution for income tax purposes or for any other reasons.
(d) All adjustments to the Conversion Rate shall be calculated to the
nearest 1/10,000th of a share (or, if there is not a nearest 1/10,000th of a
share, to the next lower 1/10,000th of a share) of Common Stock. No adjustment
in the Conversion Rate shall be required unless such adjustment would require an
increase or decrease of at least one percent of the Conversion Rate; provided,
that any adjustments that by reason of this sub-section are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. If an adjustment is made to the Conversion Rate pursuant to Section
13(a)(i), 13(a)(ii), 13(a)(iii), 13(a)(iv), 13(a)(v) or 13(a)(vi), an adjustment
shall also be made to the Threshold Appreciation Price and the Initial Price,
solely to determine which of clauses (i), (ii) or (iii) of the definition of
Conversion Rate will apply on the Conversion Date. Such adjustment shall be made
by multiplying each of the Threshold Appreciation Price and the Initial Price by
a fraction, the numerator of which shall be the Conversion Rate immediately
after such adjustment pursuant to Section 13(a)(i), 13(a)(ii), 13(a)(iii),
13(a)(iv), 13(a)(v) or 13(a)(vi) and the denominator of which shall be the
Conversion Rate immediately before such adjustment; provided that if such
adjustment to the Conversion Rate is required to be made pursuant to the
occurrence of any of the events contemplated by Section 13(a)(i), 13(a)(ii),
13(a)(iii), 13(a)(iv), 13(a)(v) or 13(a)(vi) during the period taken into
consideration for determining the Applicable Market Value, appropriate and
customary adjustments shall be made to the Conversion Rate.
(e) Whenever the Conversion Rate is to be adjusted in accordance with
Section 13(a), the Corporation shall: (i) compute the Conversion Rate in
accordance with Section 13(a) and prepare and transmit to the Transfer Agent an
Officer's Certificate setting forth the Conversion Rate, the method of
calculation thereof in reasonable detail, and the facts requiring such
adjustment and upon which such adjustment is based; (ii) as soon as practicable
following the occurrence of an event that requires or permits an adjustment to
the Conversion Rate pursuant to Section 13(a) hereof (or if the Corporation is
not aware of such occurrence, as soon as practicable after becoming so aware),
provide a written notice to the Holders of the Series C Preferred Stock of the
occurrence of such event; and (iii) as soon as practicable following the
determination of the revised Conversion Rate in accordance with Section 13(a)
hereof, a statement setting forth in reasonable detail the method by which the
adjustment to the Conversion Rate was determined and setting forth the revised
Conversion Rate.
(f) In the event of:
(i) any consolidation or merger of the Corporation with or into
another Person (other than a merger or consolidation in which the
Corporation is the continuing corporation and in which the Common Stock
outstanding immediately prior to the merger or consolidation is not
exchanged for cash, securities or other property of the Corporation or
another corporation); or
(ii) any sale, transfer, lease or conveyance to another person of all
or substantially all of the property and assets of the Corporation; or
(iii) any statutory exchange of securities of the Corporation with
another Person (other than in connection with a merger or acquisition) (any
such event specified in this Section 13(f), a "Reorganization Event"),
each share of Series C Preferred Stock immediately prior to such Reorganization
Event shall, after such Reorganization Event, be converted into a right to
receive the kind and amount of securities, cash and other property receivable in
such Reorganization Event (without any interest thereon and without any right to
dividends or distribution thereon which have a record date that is prior to the
conversion date) per share of Series C Preferred Stock by a holder of Common
Stock that (1) is not a person with which the Corporation consolidated or into
which the Corporation merged or which merged into the Corporation or to which
such sale or transfer was made, as the case may be (any such person, a
"Constituent Person"), or an Affiliate of a Constituent Person to the extent
such Reorganization Event provides for different treatment of Common Stock held
by Affiliates of the Corporation and non-Affiliates, and (2) failed to exercise
his rights of election, if any, as to the kind or amount of securities, cash and
other property receivable upon such Reorganization Event (provided that if the
kind or amount of securities, cash and other property receivable upon such
Reorganization Event is not the same for each share of Common Stock held
immediately prior to such Reorganization Event by other than a Constituent
Person or an Affiliate thereof and in respect of which such rights of election
shall not have been exercised ("Non-electing Share"), then, for the purpose of
this Section 13(f) the kind and amount of securities, cash and other property
receivable upon such Reorganization Event by each Non-electing Share shall be
deemed to be the kind and amount so receivable per share by a plurality of the
Non-electing Shares). On the conversion date, the Conversion Rate then in effect
(assuming that such conversion date were the Mandatory Conversion Date) will be
applied to the value on the conversion date of such securities, cash or other
property that a Holder would have received if it had held shares of Common Stock
during a Reorganization Event.
In the event of such a Reorganization Event, the person formed by such
consolidation, merger or exchange or the person which acquires the assets of the
Corporation shall execute and deliver to the Transfer Agent an agreement
providing that the Holder of each share of Series C Preferred Stock shall have
the rights provided by this Section 13(f). Such agreement shall provide for
adjustments that, for events subsequent to the effective date of such agreement,
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Section 13(f). The above provisions of this Section 13(f) shall
similarly apply to successive Reorganization Events.
(14) Replacement Stock Certificates.
(a) If physical certificates are issued, and any of the Series C Preferred
Stock certificates shall be mutilated, lost, stolen or destroyed, the
Corporation shall, at the expense of the Holder, issue, in exchange and in
substitution for and upon cancellation of the mutilated Series C Preferred Stock
certificate, or in lieu of and substitution for the Series C Preferred Stock
certificate lost, stolen or destroyed, a new Series C Preferred Stock
certificate of like tenor and representing an equivalent amount of shares of
Series C Preferred Stock, but only upon receipt of evidence of such loss, theft
or destruction of such Series C Preferred Stock certificate and indemnity, if
requested, satisfactory to the Corporation and the Transfer Agent.
(b) The Corporation is not required to issue any certificates representing
the Series C Preferred Stock on or after the Mandatory Conversion Date. In lieu
of the delivery of a replacement certificate following the Mandatory Conversion
Date, the Transfer Agent, upon delivery of the evidence and indemnity described
above, will deliver the shares of Common Stock issuable pursuant to the terms of
the Series C Preferred Stock evidenced by the certificate.
(15) Miscellaneous.
(a) All notices referred to herein shall be in writing, and, unless
otherwise specified herein, all notices hereunder shall be deemed to have been
given upon the earlier of receipt thereof or three business days after the
mailing thereof if sent by registered or certified mail (unless first-class mail
shall be specifically permitted for such notice under the terms of this
Certificate of Amendment) with postage prepaid, addressed: (i) if to the
Corporation, to its office at One Riverfront Plaza, Corning, New York 14831
(Attention: the Secretary) or to the Transfer Agent at its Corporate Trust
Office, or other agent of the Corporation designated as permitted by this
Certificate of Amendment, or (ii) if to any Holder of the Series C Preferred
Stock or holder of shares of Common Stock, as the case may be, to such Holder at
the address of such Holder as listed in the stock record books of the
Corporation (which may include the records of any transfer agent for the Series
C Preferred Stock or Common Stock, as the case may be), or (iii) to such other
address as the Corporation or any such Holder, as the case may be, shall have
designated by notice similarly given.
(b) The Corporation shall pay any and all stock transfer and documentary
stamp taxes that may be payable in respect of any issuance or delivery of shares
of Series C Preferred Stock or shares of Common Stock or other securities issued
on account of Series C Preferred Stock pursuant hereto or certificates
representing such shares or securities. The Corporation shall not, however, be
required to pay any such tax that may be payable in respect of any transfer
involved in the issuance or delivery of shares of Series C Preferred Stock or
Common Stock or other securities in a name other than that in which the shares
of Series C Preferred Stock with respect to which such shares or other
securities are issued or delivered were registered, or in respect of any payment
to any person or securities other than a payment to the registered holder
thereof, and shall not be required to make any such issuance, delivery or
payment unless and until the person otherwise entitled to such issuance,
delivery or payment has paid to the Corporation the amount of any such tax or
has established, to the satisfaction of the Corporation, that such tax has been
paid or is not payable.
(c) The Corporation may appoint, and from time to time discharge and
appoint, a Transfer Agent for the Series C Preferred Stock. Upon any such
discharge or appointment, the Corporation shall send notice thereof by
first-class mail, postage prepaid, to the Holders of the Series C Preferred
Stock.
(16) Definitions.
Unless otherwise defined herein, capitalized terms used in this Certificate
of Amendment shall have the following meanings:
"Affiliate" shall have the meaning given to that term in Rule 405 of the
Securities Act of 1933, as amended, or any successor rule thereunder.
"Applicable Market Value" means the average of the Closing Prices per share
of the Common Stock on each of the 20 consecutive Trading Days ending on the
third Trading Day immediately preceding the Mandatory Conversion Date.
"Bankruptcy Law" means Title 11, United States Code, or any similar federal
or state law for the relief of debtors.
"Business Day" means any day other than a Saturday or Sunday or any other
day on which banks in The City of New York are authorized or required by law or
executive order to close.
"Cash Merger" shall have the meaning set forth in Section 9(a) hereof.
"Closing Price" means, as of any date of determination, the closing sale
price or, if no closing sale price is reported, the last reported sale price of
the Common Stock on the New York Stock Exchange on that date. If the Common
Stock is not then traded on the New York Stock Exchange on any date of
determination, the Closing Price of the Common Stock on any date of
determination means the closing sale price as reported in the composite
transactions for the principal U.S. securities exchange on which the Common
Stock is so listed or quoted, or if the Common Stock is not so listed or quoted
on a U.S. national or regional securities exchange, as reported by the Nasdaq
stock market, or, if no closing price for the Common Stock is so reported, the
last quoted bid price for the Common Stock in the over-the-counter market as
reported by the National Quotation Bureau or similar organization or, if that
bid price is not available, the market value of the Common Stock on that date as
determined by a nationally recognized independent investment banking firm
retained by us for this purpose.
"Common Stock" as used in this Certificate of Amendment means the
Corporation's Common Stock, par value $0.50 per share, as the same exists at the
date of filing of a Certificate of Amendment to the Certificate of Incorporation
of the Corporation relating to the Series C Preferred Stock, or any other class
of stock resulting from successive changes or reclassifications of such Common
Stock consisting solely of changes in par value, or from par value to no par
value, or from no par value to par value. However, subject to the provisions of
Section 13(a)(vii), shares of Common Stock issuable on conversion of shares of
Series C Preferred Stock shall include only shares of the class designated as
Common Stock of the Corporation at the date of the filing of this instrument
with the State of New York or shares of any class or classes resulting from any
reclassification or reclassifications thereof and which have no preference in
respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation and which
are not subject to redemption by the Corporation; provided that if at any time
there shall be more than one such resulting class, the shares of each such class
then so issuable shall be substantially in the proportion which the total number
of shares of such class resulting from all such reclassifications bears to the
total number of shares of all classes resulting from all such reclassifications.
"Conversion Rate" shall have the meaning set forth in Section 7(b) hereof.
"Corporate Trust Office" means the principal corporate trust office of the
Transfer Agent at which, at any particular time, its corporate trust business
shall be administered.
"Current Market Price" per share of Common Stock on any date means the
average of the daily Closing Prices for the five consecutive Trading Days
preceding the earlier of the day preceding the date in question and the day
before the "ex date" with respect to the issuance or distribution requiring such
computation. For purposes of this paragraph, the term "ex date," when used with
respect to any issuance or distribution, means the first date on which the
Common Stock trades without the right to receive the issuance or distribution.
For the purposes of determining the adjustment to the Conversion Rate for the
purposes of Section 13(a)(iv)(B) hereof in the case of an Initial Public
Offering that is effected simultaneously with a Spin-Off, the "Current Market
Price" per share of Common Stock means the Closing Price of the Common Stock on
the Trading Day on which the Initial Public Offering price of the securities
being distributed in the Spin-Off is determined. For the purposes of determining
the adjustment to the Conversion Rate for the purposes of Section 13(a)(iv)(B)
hereof in the case of an Initial Public Offering that is not effected
simultaneously with a Spin-Off, the Current Market Price per share of Common
Stock means the average of the Closing Prices over the first ten Trading Days
following the effective date of the Spin-Off.
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
"Dividend Payment Date" means the 16th calendar day of February, May,
August and November of each year, or the following Business Day if the 16th is
not a business day.
"Dividend Period" means the period ending on the day before a Dividend
Payment Date and beginning on the preceding Dividend Payment Date or, if there
is no preceding Dividend Payment Date, on the first date of issuance of the
Series C Preferred Stock.
"Fair Market Value" means (a) in the case of any Spin-Off that is effected
simultaneously with an Initial Public Offering of the securities being
distributed in the Spin-Off, the Initial Public Offering price of those
securities, and (b) in the case of any other Spin-Off, the average of the
closing sale prices of those securities over the first 10 Trading Days following
the effective date of such Spin-Off.
"Holder" means the person in whose name the shares of the Series C
Preferred Stock is registered, which may be treated by the Corporation and the
Transfer Agent as the absolute owner of the shares of Series C Preferred Stock
for the purpose of making payment and settling conversions and for all other
purposes.
"Initial Price" shall have the meaning set forth in Section 7(b) hereof.
"Initial Public Offering" means the first time securities of the same class
or type as the securities being distributed in a Spin-Off are offered to the
public for cash.
"Liquidation Preference" means, as to the Series C Preferred Stock, $100
per share.
"Mandatory Conversion Date" means August 16, 2005.
"Market Value" with respect to the portfolio of U.S. Treasury Securities
that secures the Corporation's payment obligations under the Promissory Note
will be as determined by Citibank, N.A., acting as collateral agent, pursuant to
the Pledge, Assignment and Collateral Agency Agreement.
"Medallion Signature Guarantee" means a signature guarantee by an eligible
institution such as a brokerage firm, commercial bank, trust company, national
bank, credit union, etc., that is participating in an approved Medallion Program
such as the Securities Transfer Association Inc. (STA) approved Medallion
Program.
"Merger Early Settlement" shall have the meaning set forth in Section 9(a)
hereof.
"Merger Early Settlement Date" shall have the meaning set forth in Section
9(b) hereof.
"Officer's Certificate" means a certificate of the Corporation, signed by
any duly authorized Officer of the Corporation.
"Pledge, Assignment and Collateral Agency Agreement" means the agreement,
to be dated as of the date of first issuance of the Series C Preferred Stock, by
and between the Corporation and Citibank, N.A., acting as collateral agent
thereunder for the benefit of the Holders and beneficial owners from time to
time of the Series C Preferred Stock.
"Promissory Note" means the note, to be dated as of the date of first
issuance of the Series C Preferred Stock, in favor of Citibank, N.A., as
collateral agent under the Pledge, Assignment and Collateral Agency Agreement,
for the benefit of the Holders of the Series C Preferred Stock.
"Record Date" means the 1st calendar day of the month in which the
applicable Dividend Payment Date falls.
"Record Holder" means the Holder of record of the Series C Preferred Stock
as they appear on the stock books of the Corporation at the close of business on
a Record Date.
"Series A Preferred Stock" means the series of Preferred Stock, par value
$100, of the Corporation designated as "Series A Junior Participating Preferred
Stock."
"Series B Preferred Stock" means the series of Preferred Stock, par value
$100, of the Corporation designated as "Series B Cumulative Convertible
Preferred Stock."
"Spin-Off" means a dividend or other distribution of shares of capital
stock of any class or series, or similar equity interests, of or relating to a
subsidiary or other business unit of the Corporation.
"Threshold Appreciation Price" shall have the meaning set forth in Section
7(b) hereof.
"Trading Day" means a day on which the Common Stock:
(a) is not suspended from trading on any national or regional
securities exchange or association or over-the-counter market at the close
of business; and
(b) has traded at least once on the national or regional securities
exchange or association or over-the-counter market that is the primary
market for the trading of the Common Stock.
"Transfer Agent" means Computershare Investor Services, LLC, acting as
transfer agent and registrar for the Series C Preferred Stock, and its
successors and assigns.
"U.S. Treasury Securities" means the U.S. treasury securities purchased by
the Corporation and pledged to secure payments on the Promissory Note.
FOURTH: The Certificate of Incorporation of the Corporation was authorized
by resolutions duly adopted by the Board of Directors of the Corporation and by
resolutions duly adopted by the holders of a majority of all outstanding shares
entitled to vote thereon at a meeting of shareholders. This Certificate of
Amendment was authorized by resolutions duly adopted by the Board of Directors
of the Corporation, pursuant to authority granted to the Board of Directors
under the Certificate of Incorporation of the Corporation, and in accordance
with Sections 502(c), 502(d) and 805 of the Business Corporation Law of the
State of New York, at a meeting duly called and held on July 19, 2002, at which
a quorum was present and acting throughout.
IN WITNESS WHEREOF, we have signed this Certificate this 5th day of August,
2002.
/s/ Wendell P. Weeks
-------------------------------------
WENDELL P. WEEKS
President and Chief Operating Officer
/s/ Denise A. Hauselt
-------------------------------------
DENISE A. HAUSELT
Secretary
STATE OF NEW YORK )
)
)
COUNTY OF STEUBEN )
WENDELL P. WEEKS and DENISE A. HAUSELT, being severally duly sworn, say,
and each for himself says, that the said Wendell P. Weeks is the President and
Chief Operating Officer and the said Denise A. Hauselt is the Secretary of
Corning Incorporated, which is a corporation organized under the laws of State
of New York and is the corporation described in the foregoing Certificate; that
they have read the said Certificate and know the contents thereof and that the
same is true to their own knowledge.
/s/ Wendell P. Weeks
-------------------------------------
WENDELL P. WEEKS
President and Chief Operating Officer
/s/ Denise A. Hauselt
-------------------------------------
DENISE A. HAUSELT
Secretary
Subscribed and sworn to before me this 5th day of August, 2002.
/s/ Sherry L. Smith
------------------------
Sherry L. Smith
Notary Public, State of New York
Steuben County, No. 5009667
Commission Expires March 15, 2003
[NOTARIAL SEAL]
Exhibit 99.2
PLEDGE, ASSIGNMENT AND COLLATERAL AGENCY AGREEMENT
--------------------------------------------------
PLEDGE, ASSIGNMENT AND COLLATERAL AGENCY AGREEMENT, dated as of August 6,
2002 (the "Agreement"), by and among CORNING INCORPORATED, a corporation
organized and existing under the laws of the State of New York (the "Pledgor"),
and CITIBANK, N.A., a national banking association organized and existing under
the laws of the United States of America, acting in its capacity as (i)
Collateral Agent hereunder (the "Collateral Agent") and (ii) as Securities
Intermediary (the "Securities Intermediary") for the benefit of the Collateral
Agent as holder of the Promissory Note (as defined below) and for the benefit of
the holders and beneficial owners from time to time of the Pledgor's 7.00%
Series C Mandatory Convertible Preferred Stock (the "Preferred Stock", and the
Collateral Agent and the holders and beneficial owners from time to time of the
Preferred Stock collectively, the "Secured Party").
W I T N E S S E T H T H A T:
WHEREAS, pursuant to the terms of the Preferred Stock, the Pledgor is
required to and will deliver or cause to be delivered to the Collateral Agent at
its office located at 111 Wall Street, 14th Floor / Zone 3, New York, New York
10043, (i) a promissory note payable to the Collateral Agent for the benefit of
the Secured Party (the "Promissory Note") and (ii) the securities described in
Exhibit A hereto, in the case of (ii) only, for deposit into the collateral
account, Account No. 795331 (the "Collateral Account"), in the name of the
Pledgor but for the sole benefit of the Secured Party, in each case in
accordance with and subject to the terms of this Agreement; and
WHEREAS, it is a condition to the issuance of the Preferred Stock that the
Pledgor shall have made the pledge and assignment contemplated by this Agreement
in favor of the Collateral Agent.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby irrevocably acknowledged, the Pledgor and the
Collateral Agent hereby agree, for its own benefit in its capacity as Collateral
Agent and the equal and proportionate benefit of all of the holders and
beneficial owners of the Preferred Stock constituting the Secured Party, as
follows:
SECTION 1. Pledge and Assignment. The Pledgor hereby pledges and assigns to
the Collateral Agent, and grants to the Collateral Agent a security interest in,
and express right of setoff against, all of the right, title and interest of the
Pledgor in, to and under the following property, whether now owned or existing
or hereafter from time to time acquired or coming into existence (collectively,
the "Collateral"):
(a) the U.S. Treasury Securities in such amounts and maturities as listed
on the schedule attached as Exhibit A hereto, as amended from time to time to
reflect the release of such U.S. Treasury Securities pursuant to Section 5(b)
hereof, and the inclusion of Substitute U.S. Treasury Securities (as defined
below) (collectively, the "U.S. Treasuries");
(b) the Collateral Account, all funds held therein or credited thereto, all
rights to renew or withdraw the same, and all certificates and instruments, if
any, from time to time representing or evidencing the Collateral Account;
(c) any notes, certificates of deposit, instruments, financial assets
(within the meaning of Article 8 of the Code, as hereinafter defined) or
investment property evidencing or arising out of investment of any funds held in
or credited to the Collateral Account pursuant to this Agreement or otherwise
held in the Collateral Account;
(d) any interest, dividends, cash, instruments and other property from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the then existing Collateral;
(e) any additional cash the Pledgor may transfer to the Collateral Account
from time to time; and
(f) all proceeds of any and all of the Collateral.
SECTION 2. Security for Obligations. This Agreement secures the payment of
all obligations of the Pledgor, now or hereafter existing, under the Promissory
Note and under this Agreement (all such obligations of the Pledgor collectively,
the "Obligations").
SECTION 3. Delivery of the Promissory Note and the Collateral. The Pledgor
shall deliver the Promissory Note to the Collateral Agent. The U.S. Treasuries
and cash, if any, representing or evidencing the Collateral or any portion
thereof shall be delivered to the Collateral Agent and held on behalf of the
Secured Party pursuant hereto and shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to the Collateral
Agent. The Collateral Agent shall have the right, at any time in its discretion
following the occurrence of an Event of Default (as defined in the Promissory
Note) and without notice to the Pledgor, to transfer to or register in the name
of the Collateral Agent or any of its nominees any or all of the Collateral. In
addition, the Collateral Agent shall have the right at any time to exchange
certificates or instruments representing or evidencing Collateral for
certificates or instruments of smaller or larger denominations. In the event the
Collateral Agent receives notice of any discretionary corporate action in
respect of the Collateral, including, without limitation, the solicitation of a
vote in respect of the Collateral, the Collateral Agent shall request written
instructions, signed by a person designated by the Pledgor in an Incumbency
Certificate substantially in the form attached hereto as Exhibit B as authorized
to act on its behalf in respect of this Agreement (each such person, an
"Authorized Person of Pledgor") in respect of such corporate action and shall
use commercially reasonable efforts to act upon such instructions. In the
absence of such instructions, the Collateral Agent shall not be obligated to
take any action in respect of the discretionary corporate action affecting the
Collateral, and does not, and shall not be deemed to, assume any responsibility
or incur any liability for any act or failure to act with respect to any
discretionary corporate action affecting the Collateral. Upon the occurrence of
an Event of Default (as defined in the Promissory Note), the Collateral Agent
will take action in respect of a discretionary corporate action affecting the
Collateral only upon receipt of instructions from the holders and beneficial
owners of a majority of the outstanding Preferred Stock at the time of such
action. The Collateral Agent does not, and shall not be deemed to, assume any
responsibility to monitor any discretionary corporate actions affecting the
Collateral. The Collateral Agent shall have no duty to solicit the delivery of
any property into the Collateral Account.
SECTION 4. Maintaining the Collateral Account. So long as any Obligations
under the Promissory Note are outstanding:
(a) the Pledgor shall cause the Securities Intermediary, and the Securities
Intermediary agrees, to maintain the Collateral Account under the sole control
and dominion of, and the Securities Intermediary will act solely upon the
instruction of, the Collateral Agent for the benefit of Secured Party; and
(b) it shall be a term and condition of the Collateral Account,
notwithstanding any term or condition to the contrary in any other agreement
relating to the Collateral Account and except as otherwise provided by the
provisions of Sections 5 (Income/Distributions), 6 (Taxes), 13 (Remedies upon
Default), 14 (Fees; Expenses), and 18 (Continuing Security Interest;
Assignments) hereof that no amount (including interest on the Collateral
Account) shall be paid or released to or for the account of, or withdrawn by or
for the account of, the Pledgor or any other person or entity from the
Collateral Account.
The parties hereto acknowledge and agree that the Collateral Account is a
securities account as such term is set forth in the Code (as hereinafter
defined).
SECTION 5. Income / Distributions.
(a) Income: Any income, proceeds or payments received by the Collateral
Agent in respect of the Collateral shall be applied in satisfaction of the
Pledgor's Obligations under the Promissory Note or, if such Obligations are not
then due, shall be invested by the Collateral Agent promptly after receipt in
the J.P. Morgan Treasury Fund Premier Class (675), or any other money market
fund(s) investing exclusively in U.S. Government securities at the instruction
of the Pledgor and shall be credited to the Collateral Account. The parties
hereto agree that all property (other than cash) referred to in this Section 5
and held in the Collateral Account shall be treated as financial assets under
Article 8 of the Code. Any income and other proceeds received on such investment
and reinvestment shall become part of the Collateral. The Collateral Agent shall
have the power to sell or liquidate the foregoing investments whenever required
or permitted to make distributions in accordance with the terms of this
Agreement.
If at any time such investment or reinvestment of the Collateral cannot be made
(i.e., on account of the unavailability of the investment vehicle, the late
receipt of funds, etc.), the Collateral shall remain un-invested and the
Collateral Agent shall not incur any liability for interest or income thereon.
The Collateral Agent shall not have any responsibility for any investment losses
resulting from the investment, reinvestment or liquidation of the Collateral.
Any investment described herein may be executed through an affiliated broker or
dealer of the Collateral Agent and such broker or dealer, along with the
Collateral Agent, shall be entitled to its usual and customary fee. It is agreed
and understood that the Collateral Agent may earn fees associated with the
investment(s) outlined above.
(b) Distributions:
(i) Dividends: On each Dividend Payment Date (defined in the
Certificate (as defined in Section 15 hereof) as the 16th calendar day
(or the following business day if the 16th is not a calendar day) of
February, May, August and November of each year), the Pledgor shall
pay to Citibank, N.A. acting in its capacity as paying agent under the
Paying Agency Agreement, dated August 6, 2002 (the "Paying Agent"),
for the Pledgor, the amount payable on such date as set forth in the
Promissory Note. No later than two (2) New York business days prior to
any Dividend Payment Date, the Pledgor shall either (1) certify to the
Collateral Agent that the Pledgor has transferred the amount payable
on such Dividend Payment Date to the Paying Agent in cash from funds
other than from the Collateral or (2) give the Collateral Agent
instructions substantially in the form attached hereto as Exhibit C
and signed by a Authorized Person of Pledgor (x) to apply the proceeds
upon maturity of the U.S. Treasuries or Substitute U.S. Treasuries (as
defined below) related to such Dividend Payment Date (as set forth on
Exhibit A hereto) or, (y) in the case that such related U.S.
Treasuries had been sold prior to their maturity to pay any Prepayment
Amount (as defined in the Promissory Notes) due in connection with an
Optional Conversion (as defined below) that occurred prior to such
Dividend Payment Date, to apply any proceeds remaining in the
Collateral Account from such prior sale of a U.S. Treasury in
connection with any such Optional Conversion, together with any Top-Up
Amount (as defined below) deposited by the Pledgor in the Collateral
Account at the time of such Optional Conversion. Upon receipt of
satisfactory instructions under subsection 5(b)(i)(2) above, the
Collateral Agent shall instruct the Securities Intermediary to take
the requisite actions contemplated therein and to remit the applicable
funds to the Paying Agent.
(ii) Prepayment Amounts upon Optional Conversion: The Pledgor shall
notify the Collateral Agent of any conversion at the option of the
holder before the mandatory conversion date pursuant to Section 8 of
the Certificate (an "Optional Conversion") and upon such Optional
Conversion shall either (1) certify to the Collateral Agent that the
Pledgor has transferred to the Paying Agent in cash from funds other
than from the Collateral the applicable Prepayment Amount (as defined
in the Promissory Note; for purposes of such calculation of the
Prepayment Amount, the definition of "Market Value" is defined in (vi)
below) payable to the holders of Preferred Stock upon such Optional
Conversion or (2) give the Collateral Agent instructions substantially
in the form attached hereto as Exhibit C and signed by a Authorized
Person of Pledgor to sell the number of U.S. Treasuries or Substitute
U.S. Treasuries (as defined below) that upon their respective
maturities would provide funds sufficient to pay all future amounts
payable on the Promissory Note equaling dividends payable on the
converted Preferred Shares on Dividend Payment Dates occurring after
such Optional Conversion (as set forth on Exhibit A hereto); provided,
however, that in the case of any Optional Conversion effective after
the close of business on a record date but before the opening of
business on the corresponding Dividend Payment Date, no such U.S.
Treasuries or Substitute Treasuries that correspond to payments on
such Dividend Payment Date shall be sold, and no proceeds therefrom
under this clause 5(b)(ii) will be due the converting holder. If,
following such sale and payment of the Prepayment Amount there shall
be any excess cash proceeds, the Pledgor shall be required to transfer
into the Collateral Account cash in an amount equal, together with
such excess proceeds, to either (A) the future amounts payable on the
Promissory Note that would have been payable from the proceeds of such
sold U.S. Treasury at its maturity (such additional cash, the "Top Up
Amount") or (B) an amount sufficient to purchase a substitute U.S.
Treasury with the same face amount and maturity as the related sold
U.S. Treasury (a "Substitute U.S. Treasury"); and, in the case of (B),
the Pledgor shall give Pledgor the Collateral Agent a written
instruction signed by an Authorized Person of to purchase such
Substitute U.S. Treasury. In the case that the applicable U.S.
Treasuries had been sold to pay Prepayment Amounts in connection with
an earlier Optional Conversion, in lieu of instructions under (2)
above, the Pledgor may give the Collateral Agent instructions to apply
any proceeds remaining in the Collateral Account from such prior sale
of U.S. Treasuries in connection with any such earlier Optional
Conversion together with any related Top Up Amount, as necessary. Upon
receipt of satisfactory instructions under clause 5(b)(ii)(2) above,
the Collateral Agent shall instruct the Securities Intermediary to
take the requisite actions contemplated therein and to remit the
applicable funds to the Paying Agent.
(iii) In no event shall the Collateral Agent be obligated pursuant to
subsections (i) or (ii) above to make, or cause to be made, any
payment in an amount that exceeds the amount of the Collateral (or its
proceeds) instructed to be applied to such payment.
(iv) The Collateral Agent shall, (1) in the case of dividends paid,
upon receipt of a certificate from the Paying Agent, certifying that
dividends on any Dividend Payment Date have been paid from funds other
than from the Collateral or (2) in the case of Optional Conversion,
upon receipt of a certificate (x) from the Paying Agent that the
applicable Prepayment Amounts have been paid from funds other than
from the Collateral and (y) from Computershare Investor Services, LLC
(the "Transfer Agent") that the applicable shares have been converted,
cause the Securities Intermediary to release to the Pledgor the
applicable Allocable Share (as defined in the Promissory Note) of the
market value of the Collateral to the Pledgor specified in such
instructions.
(v) On the first business day of each calendar month (the "Requisite
Collateral Determination Date"), upon receipt of a certificate by an
Authorized Person of Pledgor certifying that the Collateral in the
Collateral Account exceeds the Requisite Collateral as the of the
first business day of such calendar month, the Collateral Agent shall
release to the Pledgor any Collateral in the Collateral Account in
excess of the Requisite Collateral. For purposes of this clause
5(b)(v), "Requisite Collateral" shall mean that number of U.S.
Treasuries, including Substitute U.S. Treasuries if any, sufficient
upon their respective maturities to pay on each future Dividend
Payment Date all amounts due under the Promissory Note at such dates,
assuming no further Optional Conversions, plus two additional U.S.
treasury strips of $1,000 face amount each per each such Dividend
Payment Date.
(vi) For purposes of this Section 5(b), "Market Value" shall mean, (a)
in respect of any U.S. Treasuries actually sold by the Collateral
Agent pursuant to any instruction of the Pledgor delivered pursuant to
clause 5(b)(ii), the net proceeds to the Collateral Agent from the
sale of such U.S. Treasuries, and (b) in respect of any U.S.
Treasuries not so sold, "Market Value" shall mean the quotation
obtained by the Pledgor for the relevant U.S. Treasuries appearing on
Reuters screen pages Zero1 or 0#USTPO = RR (or such other page that
may replace either of such pages on such service for the purpose of
displaying comparable quotations) as of 11:00 a.m., New York time, on
the applicable determination date; or, if such quotation is
unavailable at the time the Market Value is to be determined, "Market
Value" shall mean (x) the average of three Reference Treasury Dealer
Quotations obtained by the Pledgor on the date for which such
determination is sought, or (y) if the Pledgor is unable to obtain
three such Reference Treasury Dealer Quotations on the date for which
such determination is sought, the average of all such quotations
obtained on such date. "Reference Treasury Dealer Quotations" means
the average of the bid and asked prices for the applicable U.S.
Treasuries (expressed in each case as a percentage of its principal
amount) quoted in writing to the Pledgor by Salomon Smith Barney Inc.,
J.P. Morgan Securities Inc. and Goldman, Sachs & Co. (or any successor
entity to any of the foregoing) on such date.
SECTION 6. Taxes. The Pledgor shall pay or reimburse the Collateral Agent
upon request for any transfer taxes or other taxes relating to the Collateral
incurred in connection herewith and shall indemnify and hold harmless the
Collateral Agent from any amounts that it is obligated to pay in the way of such
taxes. The Collateral Agent shall report the income earned on any of the
Collateral to the US Internal Revenue Service as earned by the Pledgor. The
Pledgor shall provide to the Collateral Agent the appropriate Form W-9
certifying to the Collateral Agent the Depositor's Tax Identification Number.
This Section 6 shall survive notwithstanding termination of this Agreement or
resignation or removal of the Collateral Agent.
SECTION 7. Representations and Warranties. The Pledgor represents and
warrants as follows:
(a) The Pledgor is the legal and beneficial owner of the Collateral free
and clear of any lien, security interest, option or other charge or encumbrance
except for the security interest created by this Agreement.
(b) The pledge and assignment of the Collateral pursuant to this Agreement
creates a valid and perfected first priority security interest in the
Collateral, securing the payment of the Obligations.
(c) No consent of any other person or entity and no authorization,
approval, or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required (i) for the pledge and assignment by
the Pledgor of the Collateral pursuant to this Agreement or for the execution,
delivery or performance of this Agreement by the Pledgor, (ii) for the
perfection or maintenance of the security interest created hereby (including the
first priority nature of such security interest), (iii) for the exercise by the
Collateral Agent of its rights and remedies hereunder, or (iv) for the exercise
by the Secured Party of its rights and remedies hereunder.
(d) There are no conditions precedent to the effectiveness of this
Agreement that have not been satisfied or waived.
(e) The Pledgor is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization.
(f) The execution, delivery and performance by the Pledgor of this
Agreement and the transactions contemplated hereby are within the Pledgor's
corporate powers, have been duly authorized by all necessary corporate action,
and do not (i) contravene the Pledgor's charter or by-laws, (ii) violate any
law, rule, regulation, order, writ, judgment, injunction, decree, determination
or award, or (iii) conflict with or result in the breach of, or constitute a
default under, any material contract binding on or affecting the Pledgor or any
of its properties.
(g) This Agreement is the legal, valid and binding obligation of the
Pledgor, enforceable against the Pledgor in accordance with its terms.
SECTION 8. Further Assurances. The Pledgor agrees that at any time and from
time to time, at the expense of the Pledgor, the Pledgor will promptly execute
and deliver all further instruments and documents, and take all further action,
that may be necessary or desirable, or that the Secured Party may reasonably
request in writing, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable the Secured Party to
exercise and enforce its rights and remedies hereunder with respect to any
Collateral.
SECTION 9. Transfers and Other Liens. The Pledgor agrees that it will not
(a) sell, assign (by operation of law or otherwise), or otherwise dispose of, or
grant any option with respect to, any of the Collateral, or (b) create or permit
to exist any lien, security interest, option or other charge or encumbrance upon
or with respect to any of the Collateral, except for the security interest under
this Agreement.
SECTION 10. Collateral Agent Appointed Attorney-in-Fact. The Pledgor hereby
appoints the Collateral Agent the Pledgor's attorney-in-fact, with full
authority in the place and stead of the Pledgor and in the name of the Pledgor
or otherwise, from time to time in the Collateral Agent's discretion following
an Event of Default to take any action and to execute any instrument which the
Collateral Agent may deem necessary or advisable to accomplish the purposes of
this Agreement, including, without limitation, to receive, indorse and collect
all instruments made payable to the Pledgor representing any interest payment,
dividend or other distribution in respect of the Collateral or any part thereof.
SECTION 11. Secured Party May Perform. If the Pledgor fails to perform any
agreement contained herein, the holders and beneficial owners of the Preferred
Stock (acting by a majority in interest) may themselves perform, or cause
performance of (including, without limitation, through the Collateral Agent),
such agreement, and the expenses of the holders and beneficial owners of the
Preferred Stock incurred in connection therewith shall be payable by the Pledgor
under Section 14 hereof.
SECTION 12. The Collateral Agent's Duties. The powers conferred on the
Collateral Agent hereunder are solely to protect the Collateral Agent's interest
in the Collateral and shall not impose any duty upon it to exercise any such
powers. Except for the safe custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Collateral Agent
shall have no duty as to any Collateral, as to ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relative to any Collateral, whether or not the Collateral Agent has or
is deemed to have knowledge of such matters, or as to the taking of any
necessary steps to preserve rights against any parties or any other rights
pertaining to any Collateral, including but not limited to, the bringing of any
action against the Pledgor on behalf of the Secured Party. The Collateral Agent
shall be deemed to have exercised reasonable care in the custody and
preservation of any Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which the Collateral Agent accords its own
property. Collateral Agent may consult with legal counsel of its own choosing at
the expense of the Pledgor as to any matter relating to this Agreement, and
Collateral Agent shall not incur any liability in acting in good faith in
accordance with any advice from such counsel. Collateral Agent shall not incur
any liability for not performing any act or fulfilling any duty, obligation or
responsibility hereunder by reason of any occurrence beyond the control of
Collateral Agent (including but not limited to any act or provision of any
present or future law or regulation or governmental authority, any act of God or
war, or the unavailability of the Federal Reserve Bank wire or facsimile or
other wire or communication facility). Collateral Agent shall not be liable for
any action taken or omitted or for any loss or injury resulting from its actions
or its performance or lack of performance of its duties hereunder in the absence
of gross negligence or willful misconduct on its part. In no event shall
Collateral Agent be liable (i) for acting in accordance with or relying upon any
instruction, notice, demand, certificate or document from Pledgor or any
Authorized Person of the Pledgor contemplated by this Agreement, and from any
registrar or transfer agent for the Preferred Stock, provided that such
instruction, notice, demand, certificate or document complies in all material
respects with the provisions hereof, (ii) for any indirect, consequential,
punitive or special damages, regardless of the form of action and whether or not
any such damages were foreseeable or contemplated, (iii) for the acts or
omissions of its nominees, correspondents, designees, agents, subagents or
subcustodians, (iv) for the investment or reinvestment of any cash held by it
hereunder, in each case in good faith, in accordance with the terms hereof,
including without limitation any liability for any delays (not resulting from
its gross negligence or willful misconduct) in the investment or reinvestment of
the Collateral, or any loss of interest incident to any such delays, or (v) for
an amount in excess of the value of the Collateral, valued as of the date of
deposit, but only to the extent of direct money damages.
SECTION 13. Remedies upon Default. If any Event of Default (as defined in
the Promissory Note) shall have occurred and be continuing:
(a) Upon delivery of evidence in writing, satisfactory to the Collateral
Agent, of a final order, judgment or decree of a court of competent jurisdiction
lifting any stay with respect to the Collateral, which order, judgment or decree
is not subject to appeal, or a settlement by agreement between the conflicting
parties in each case in favor of the Secured Party, holders and beneficial
owners of a majority of the Preferred Stock then outstanding may instruct the
Collateral Agent to distribute all or any part of the Collateral Account against
the Obligations or any part thereof in accordance with such instructions.
(b) The Collateral Agent may also exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party under the Uniform
Commercial Code in effect in the State of New York at that time (the "Code")
(whether or not the Code applies to the affected Collateral) for the benefit of
the Secured Party.
SECTION 14. Fees; Expenses. The Pledgor will pay to the Collateral Agent
and the Securities Intermediary in accordance with the terms of the Fee Letter
attached hereto as Exhibit D hereto (the "Fee Letter") compensation for all
services rendered by the Collateral Agent and the Securities Intermediary
hereunder. In addition, the Pledgor will upon demand pay to the Collateral Agent
and the Securities Intermediary the amount of any and all reasonable expenses,
including the reasonable fees and expenses of its counsel and of any experts and
agents, which the Collateral Agent and the Securities Intermediary may incur in
connection with (a) the administration of this Agreement, (b) the custody or
preservation of, or the sale of, collection from, or other realization upon, any
of the Collateral, (c) the exercise or enforcement of any of the rights of the
Collateral Agent and Securities Intermediary hereunder or (d) the failure by the
Pledgor to perform or observe any of the provisions hereof. It is understood
that the compensation of the Collateral Agent and the Securities Intermediary
may be adjusted from time to time to conform with their current guidelines
(including, without limitation, fee, expenses and disbursements of counsel). If
any fees, expenses or costs incurred by, or any obligations owed to, the
Collateral Agent and the Securities Intermediary or their counsel hereunder are
not promptly paid when due, the Collateral Agent and the Securities Intermediary
may reimburse themselves therefor from the Collateral and may sell, convey or
otherwise dispose of any Collateral for such purpose. The rights of the
Collateral Agent and Securities Intermediary to payment under this Section 14
shall survive notwithstanding the termination of this Agreement or the
resignation or removal of the Collateral Agent or the Securities Intermediary.
SECTION 15. Amendments, Etc. No amendment or waiver of any provision of
this Agreement, and no consent to any departure by the Pledgor from the terms
hereof, shall in any event be effective, unless the same shall be in writing and
signed by each of the Collateral Agent, the Securities Intermediary and the
Pledgor, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. The Pledgor, the
Securities Intermediary and the Collateral Agent may amend this Agreement
without the consent or approval of any holder or beneficial owner of the
Preferred Stock for the purposes of (a) adding to the securities at any time
held in the Collateral Account, (b) adding to the property at any time
constituting the Collateral, (c) adding to the Pledgor's covenants or
obligations under this Agreement for the benefit of the Securities Intermediary
and the Collateral Agent as holder of the Promissory Note and for the benefit of
the Secured Party, (d) surrendering any right or power conferred upon the
Pledgor by this Agreement, (e) providing for the assumption of the Pledgor's
obligations under this Agreement in the case of a merger, consolidation,
conveyance, transfer or lease, to the extent such assumption is permitted under
the Promissory Note and the Preferred Stock and does not adversely affect the
rights of the Securuties Intermediary or the Collateral Agent under this
Agreement, (f) curing any ambiguity or correcting or supplementing any defective
provision contained in this Agreement; provided that such modification or
amendment does not, in the good faith opinion of the board of directors of the
Pledgor, adversely affect the rights of any holder or beneficial owner of the
Preferred Stock in any respect; and (g) adding or modifying any other provisions
which the Pledgor, the Securities Intermediary and the Collateral Agent may deem
necessary or desirable and which will not adversely affect the interests of any
holder or beneficial owner of the Preferred Stock in any respect.
Notwithstanding anything contained in this agreement or any other document,
instrument or agreement to the contrary, no amendment or waiver of any provision
of this Agreement, and no consent to any departure by the Pledgor from the terms
hereof, which adversely affects or may adversely affect the rights of any holder
or beneficial owner of the Preferred Stock, shall be effective for any purpose
unless consented to or approved by holders and beneficial owners of at least 66
2/3 of the Preferred Stock outstanding at the time of consent or vote of
approval. The Collateral Agent and the Securities Intermediary shall not, and
shall not be obligated, to sign any amendment or waiver of any provision of this
Agreement nor consent to any departure by the Pledgor from the terms hereof
unless it shall have received a satisfactory opinion of counsel and upon which
they may rely stating that (i) the terms of the amendment, waiver or consent
does not and will not adversely affect the rights of any holder or beneficial
owner of the Preferred Stock, or (ii) the terms of the amendment, waiver or
consent has been consented to or approved by holders and beneficial owners of at
least 66 2/3 of the Preferred Stock outstanding at the time of consent or vote
of approval in a manner fully compliant with applicable law and the provisions
of the Certificate of Amendment to the Pledgor's Certificate of Incorporation
(the "Certificate"), setting forth the provisions governing the Preferred Stock.
The Collateral Agent and the Securities Intermediary shall be fully protected in
relying, and shall not incur any liability whatsoever on account of their
reliance, on such opinion of counsel (which may be counsel to the Pledgor). All
costs and expenses of counsel relating to the preparation and review of such
opinion shall be borne by the Pledgor.
SECTION 16. Addresses for Notices. Any notice or other communication
required or permitted under this Agreement shall be deemed to have been duly
given (i) five (5) business days following deposit in the mails if sent by
registered or certified mail, postage prepaid, (ii) when sent, if sent by
facsimile transmission, if receipt thereof is confirmed by successful
transmission, (iii) when delivered, if delivered personally to the intended
recipient and (iv) three (3) business days following deposit with a nationally
recognized overnight courier service, in each case addressed as follows:
if to the Pledgor, to:
Corning Incorporated
One Riverfront Plaza
MP-HQ-E2-10
Corning, New York 14831-0001
Phone: (607) 974-8679
Facsimile: (607) 974-6686
Attention: Corporate Secretary
with a copy (which shall not constitute notice) to:
Corning Incorporated
One Riverfront Plaza
MP-HQ-E2-24
Corning, New York 14831-0001
Phone: (607) 974-8585
Facsimile: (607) 974-4160
Attention: Vice President and Treasurer
If to the Securities Intermediary and/or the Collateral Agent:
Citibank, N.A.
Agency & Trust Escrow Group
111 Wall Street, 14th Floor / Zone 3
New York, NY 10043
Telephone: (212) 657-5810
Facsimile: (212) 657-2762
Attention: Ms. Barbara Bennett
with a copy (which shall not constitute notice) to:
Patterson, Belknap, Webb & Tyler LLP
1133 Avenue of the Americas
New York, NY 10036
Telephone: (212) 336-2301
Facsimile: (212) 336-2222
Attention: Herman H. Raspe, Esq.
or such other address or number as shall be furnished in writing by
any such party.
SECTION 17. Continuing Security Interest; Assignments. This Agreement shall
create a continuing security interest in the Collateral and shall (a) remain in
full force and effect until the payment in full of the Obligations and all other
amounts payable under this Agreement, (b) be binding upon the Pledgor, its
successors and assigns, and (c) inure to the benefit of, and be enforceable by,
the Collateral Agent and its successors, transferees and assigns. Upon the
payment in full of the Obligations and all other amounts payable under this
Agreement, the security interest granted hereby shall terminate and all rights
to the Collateral shall revert to the Pledgor. Upon any such termination, the
Collateral Agent will, upon receipt of (i) an opinion of counsel reasonably
satisfactory to the Collateral Agent on which it may rely and specifying that
all of the Obligations and all other amounts payable hereunder have been paid in
full and (ii) an Officer's Certificate signed by the Vice President and
Treasurer specifying that the all of the Obligations and all other amounts
payable hereunder have been paid in full, cause the Security Intermediary to
return to the Pledgor such of the Collateral as shall not have been sold or
otherwise applied pursuant to the terms hereof, return the Promissory Note to
the Pledgor, and execute and deliver to the Pledgor such documents as the
Pledgor shall reasonably request to evidence such termination.
SECTION 18. Governing Law; Terms. This Agreement shall be governed by and
construed in accordance with the law of the State of New York (without regard
for its conflict of laws principles other than Section 5-1401 of the New York
General Obligations Law). Unless otherwise defined herein, terms defined in
Articles 8 and 9 of the Code are used herein as therein defined. The parties
agree that New York is the "securities intermediary's jurisdiction" for all
purposes hereof and of Articles 8 and 9 of the Code.
SECTION 19. WAIVER OF JURY TRIAL. EACH OF THE PLEDGOR, THE SECURITIES
INTERMEDIARY AND THE COLLATERAL AGENT IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT
OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT.
SECTION 20. Indemnification. Pledgor shall be liable for and shall
reimburse and indemnify each of the Securities Intermediary and the Collateral
Agent and its employees, officers and directors and hold each of the Securities
Intermediary and the Collateral Agent and its employees, officers and directors
harmless from and against any and all claims, losses, actions, liabilities,
costs, damages or expenses (including reasonable attorneys' fees and expenses)
(collectively "Losses") arising from or in connection with its administration of
this Agreement. In addition, when the Collateral Agent acts on any information,
instructions, communications (including, but not limited, communications with
respect to the wire transfer of funds), sent by telex or facsimile, the
Collateral Agent, absent gross negligence, shall not be responsible or liable in
the event such communication is not an authorized or authentic communication of
the Pledgor or is not in the form the Pledgor sent or intended to send (whether
due to fraud, distortion or otherwise). The Pledgor shall indemnify the
Collateral Agent and its employees, officers and directors against any Losses it
may incur with its acting in accordance with any such communication. This
Section 20 shall survive notwithstanding the termination of this Agreement or
the resignation or removal of the Collateral Agent or the Securities
Intermediary.
SECTION 21. Ambiguity; Dispute. (a) In the event of any ambiguity or
uncertainty hereunder or in any notice, instruction or other communication
received by the Collateral Agent hereunder, the Collateral Agent may, in its
sole discretion, refrain from taking any action other than retain possession of
the Collateral, unless the Collateral Agent receives written instructions,
signed by an Authorized Person of Pledgor, or an opinion of counsel reasonably
satisfactory to it which eliminates such ambiguity or uncertainty.
(b) In the event of any dispute between or conflicting claims by or among
the Pledgor and/or the Secured Party and/or any other person or entity with
respect to any Collateral, the Collateral Agent shall be entitled, in its sole
discretion, to refuse to comply with any and all claims, demands or instructions
with respect to such Collateral so long as such dispute or conflict shall
continue, and Collateral Agent shall not be or become liable in any way to the
Pledgor or the Secured Party for failure or refusal to comply with such
conflicting claims, demands or instructions. The Collateral Agent shall be
entitled to refuse to act until, in its sole discretion, either (i) such
conflicting or adverse claims or demands shall have been determined by a final
order, judgment or decree of a court of competent jurisdiction, which order,
judgment or decree is not subject to appeal, or settled by agreement between the
conflicting parties as evidenced in a writing satisfactory to Collateral Agent
or (ii) the Collateral Agent shall have received security or an indemnity
satisfactory to it sufficient to hold it harmless from and against any and all
Losses which it may incur by reason of so acting. Any court order, judgment or
decree shall be accompanied by a legal opinion by counsel for the presenting
party, satisfactory to the Collateral Agent, to the effect that said order,
judgment or decree represents a final adjudication of the rights of the parties
by a court of competent jurisdiction, and that the time for appeal from such
order, judgment or decree has expired without an appeal having been perfected.
The Collateral Agent shall act on such court order and legal opinions without
further question. The Collateral Agent may, in addition, elect, in its sole
discretion, to commence an interpleader action or seek other judicial relief or
orders as it may deem, in its sole discretion, necessary. The costs and expenses
(including reasonable attorneys' fees and expenses) incurred in connection with
such proceeding shall be paid by, and shall be deemed an obligation of the
Pledgor.
SECTION 22. Appointment. The Pledgor hereby designates and appoints
Citibank, N.A. as Collateral Agent and Securities Intermediary, and Citibank,
N.A. hereby accepts such appointment and designation, solely in accordance with
the terms and conditions of this Agreement. By accepting, purchasing and holding
any of the Preferred Stock, any holder or beneficial owner of such Preferred
Stock hereby consents to Citibank, N.A. acting in its capacity as Collateral
Agent and as Securities Intermediary solely in accordance with the terms and
conditions of this Agreement.
SECTION 23. Resignation. (a) Each of the Collateral Agent and the
Securities Intermediary may resign at any time by giving the Pledgor thirty (30)
calendar days' prior written notice thereof.
(b) Within thirty (30) calendar days after receiving the foregoing notice
of resignation from the Collateral Agent or the Securities Intermediary, the
Pledgor shall appoint a successor collateral agent or securities intermediary,
as applicable. If a successor collateral agent and/or securities intermediary
has not accepted such appointment by the end of such 30-day period, the
Collateral Agent and/or the Securities Intermediary may, in its sole discretion,
(i) request a majority in interest of the holders and beneficial owners of the
Preferred Stock to appoint an agent to receive and hold the Collateral and the
Promissory Note and, upon such appointment, transfer the Collateral and the
Promissory Note to such agent, and/or (ii) apply to a court of competent
jurisdiction for the appointment of a successor collateral agent and/or
securities intermediary or for other appropriate relief. The costs and expenses
(including reasonable attorneys' fees and expenses) incurred by the Collateral
Agent and/or the Securities Intermediary in connection with such proceeding
shall be paid by, and be deemed an obligation of the Pledgor. In the event of
any such resignation, the Collateral Agent and/or the Securities Intermediary
shall have no further obligation with respect to the Collateral.
(c) Upon receipt of the identity of the successor collateral agent, the
Collateral Agent shall deliver the Promissory Note to the successor collateral
agent and in the case of the appointment of a successor security intermediary
shall cause the Securities Intermediary to deliver the Collateral then held
hereunder to the successor securities intermediary, less the Collateral Agent's
and the Securities Intermediary's fees, costs and expenses or other obligations
owed to the Collateral Agent and/or the Securities Intermediary, or hold the
Promissory Note and cause the Securities Intermediary to hold such Collateral
(or any portion thereof), pending distribution, until all such fees, costs and
expenses or other obligations are paid, and such successor collateral agent
and/or such successor securities intermediary, without any further act, deed or
conveyance, shall become vested with all rights, powers, duties and obligations
of its predecessor hereunder, with like effect as if originally named as
Collateral Agent and/or Securities Intermediary, as applicable, hereunder.
(d) Upon delivery of the Promissory Note and the Collateral to the
successor collateral agent or successor securities intermediary, the Collateral
Agent and the Securities Intermediary, as applicable, shall have no further
duties, responsibilities or obligations hereunder.
SECTION 24. Appointment of Successor. (a) In case at any time any of the
following shall occur:
(i) the Collateral Agent or the Securities Intermediary shall fail to
comply with the provisions of Section 5 of this Agreement;
(ii) the Collateral Agent or the Securities Intermediary shall become
incapable of acting or shall be adjudged bankrupt or insolvent, or a
receiver or liquidator of the Collateral Agent or the Securities
Intermediary or of its property shall be appointed, or any public
officer shall take charge or control of the Collateral Agent or the
Securities Intermediary or of its properties or affairs for the
purposes of rehabilitation, conservation or liquidation; or
(iii) the Pledgor shall determine that the Collateral Agent or the
Securities Intermediary has failed to perform its obligations under
this Agreement in any material respect,
then, in any such case, the Pledgor may remove the Collateral Agent and/or the
Securities Intermediary and appoint a successor collateral agent or successor
securities intermediary, as applicable, by written instrument, in duplicate,
executed by order of the board of directors of the Pledgor, one copy of which
instrument shall be delivered to the Collateral Agent and/or the Securities
Intermediary so removed and one copy to the successor collateral agent or
successor securities intermediary, as applicable. Any removal of the Collateral
Agent and/or the Securities Intermediary and any appointment of a successor
collateral agent or successor securities intermediary, as applicable, pursuant
to this Section 24 shall become effective upon acceptance of appointment by the
successor collateral agent or successor securities intermediary, as applicable,
as provided in Section 24(b) hereof.
(b) Any successor collateral agent or successor securities intermediary, as
applicable, appointed as provided in Section 24(a) shall execute and deliver to
the Company and to its predecessor Collateral Agent and/or Securities
Intermediary an instrument accepting such appointment hereunder, and thereupon
the resignation or removal of the predecessor Collateral Agent and/or the
Securities Intermediary shall become effective and such successor collateral
agent or successor securities intermediary, as applicable, without any further
act, deed or conveyance, shall become vested with all rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if originally
named as Collateral Agent and/or the Securities Intermediary hereunder.
(c) Upon receipt of the identity of the successor collateral agent and/or
successor securities intermediary, the Collateral Agent shall either deliver the
Promissory Note to the successor collateral agent and, if applicable, cause the
Securities Intermediary to deliver to the successor securities intermediary the
Collateral then held hereunder, less the Collateral Agent's fees, and, if
applicable, the Securities Intermediary's costs and expenses or other
obligations owed to the Collateral Agent and, if applicable, the Securities
Intermediary's, or hold the Promissory Note and, if applicable, cause the
Securities Intermediary to hold such Collateral (or any portion thereof),
pending distribution, until all such fees, costs and expenses or other
obligations are paid.
(d) Upon delivery of the Collateral and the Promissory Note to the
successor securities intermediary and/or successor collateral agent, as
applicable, the Collateral Agent and the Securities Intermediary, as applicable,
shall have no further duties, responsibilities or obligations hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their duly authorized officers as of the date
first written above.
Corning Incorporated
By /s/ JAMES B. FLAWS
-----------------------------------------
James B. Flaws
Vice Chairman and Chief Financial Officer
CITIBANK, N.A., in its capacity as the Collateral Agent
By /s/ CAMILLE TOMAO
-----------------------------------------
Camille Tomao
Vice President
CITIBANK, N.A., in its capacity as the Securities Intermediary
By /s/ CAMILLE TOMAO
-----------------------------------------
Camille Tomao
Vice President
Exhibit A
---------
Securities Delivered by Pledgor as Collateral
CORNING SECURITY TREASURY SECURITIES
CUSIP Type Maturity Ask Yield Offer Price
Date 7/29/02 -------- ------ -------- --------- -----------
Time 4:00 PM 912833FR STRIPS 11/15/02 1.100% $99.6990
Amount $500,000,000 912820BF STRIPS 2/15/03 1.500% 99.2187
912833FS STRIPS 5/15/03 1.140% 99.1235
Coupon 7.00% 912820BG STRIPS 8/15/03 1.550% 98.4300
Payment Convention 30/360 912820DJ STRIPS 11/15/03 1.700% 97.8657
Payment Frequency Quarterly 912820BH STRIPS 2/15/04 1.850% 97.2310
Coupon Days 90 912820BJ STRIPS 5/15/04 2.050% 96.4456
Long 1st Coupon Days 99 912820BK STRIPS 8/15/04 2.200% 95.6663
912803AB STRIPS 11/15/04 2.420% 94.6758
Annual Coupon $35,000,000 912820BM STRIPS 2/15/05 2.500% 93.9197
Quarterly Coupon $8,750,000 912803AD STRIPS 5/15/05 2.700% 92.8292
Long 1st Coupon $9,625,000 912803AG STRIPS 8/15/05 2.950% 91.5228
PURCHASE INSTRUCTIONS CORNING COLLATERAL
Legal Name Corning Inc. Number of Excess Cash
Tax ID 16--0393470 Strips for Early Total
Contact Information Mark Rogus Coupon Amount Strip Purchased Offer Price Settlement Cost
Treasurer -------- ---------- -------- --------- ----------- ---------- -------------
One Riverfront Plaza 11/16/02 $9,625,000 912833FR 9,627 $99.6990 $2,000 $9,598,023.40
Corning, NY 14831 2/16/03 8,750,000 912820BF 8,752 $99.2187 2,000 8,683,621.75
Ref: Mand Pfd Stk 5/16/03 8,750,000 912833FS 8,752 $99.1235 2,000 8,675,287.86
Purchase Date July 31, 2002 8/16/03 8,750,000 912820BG 8,752 $98.4300 2,000 8,614,597.31
11/16/03 8,750,000 912820DJ 8,752 $97.8657 2,000 8,565,204.83
2/16/04 8,750,000 912820BH 8,752 $97.2310 2,000 8,509,659.86
DELIVERY INSTRUCTIONS 5/16/04 8,750,000 912820BJ 8,752 $96.4456 2,000 8,440,917.84
8/16/04 8,750,000 912820BK 8,752 $95.6663 2,000 8,372,717.56
Custodian Name Citibank 11/16/04 8,750,000 912803AB 8,752 $94.6758 2,000 8,286,028.13
Fed Settlement Instructions Citibank/ 2/16/05 8,750,000 912820BM 8,752 $93.9197 2,000 8,219,849.92
Cust/ 5/16/05 8,750,000 912803AD 8,752 $92.8292 2,000 8,124,409.58
795331 8/16/05 8,750,000 912803AG 8,752 $91.5228 2,000 8,010,078.14
Contact Information Catherine Murray
212-657-5570 Treasury Collateral $102,100,396.20
Settlement Date August 6, 2002
Short Term Restricted Funds $35,579,530.33
Long Term Restricted Funds $66,520,865.87
Exhibit B
---------
Incumbency Certificate
(Form of Incumbency Certificate)
CORNING INCORPORATED INCUMBENCY CERTIFICATE
The undersigned certifies that he/she is the ______________ of Corning
Incorporated, a New York corporation (the "Company"), and as such s/he is
authorized to execute this Certificate and further certifies that the following
persons have been elected or appointed, are qualified, and are now acting as
officers of the Company in the capacity or capacities indicated below, and that
the signatures set forth opposite their respective names are their true and
genuine signatures. He/she further certifies that any of the persons listed
below are authorized jointly to sign agreements and give written instructions
with regard to any matters pertaining to the Pledge, Assignment and Collateral
Agency Agreement dated August 6, 2002 and the appointment of Citibank, N.A. as
the Collateral Agent:
------------------------------- ----------------------------------- --------------------------- ---------------------------------
Name Title Phone Signature
------------------------------- ----------------------------------- --------------------------- ---------------------------------
------------------------------- ----------------------------------- --------------------------- ---------------------------------
------------------------------- ----------------------------------- --------------------------- ---------------------------------
------------------------------- ----------------------------------- --------------------------- ---------------------------------
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the corporate seal
of the Company this __ day of August, 2002.
---------------------------
Name:
Title:
Call Back Authorized Individuals:
The below listed persons (must list at least two individuals) have been
designated Call Back Authorized Individuals of the Company and will be notified
by Citibank, N.A. upon the release of Collateral from the collateral account(s)
unless an original "Standing or Predefined Instruction" letter is on file with
the Collateral Agent.
----------------------------------- ---------------------------------
Name Phone
----------------------------------- ---------------------------------
----------------------------------- ---------------------------------
----------------------------------- ---------------------------------
Exhibit C
---------
----------------------------------------------------------
COLLATERAL & PAYING AGENTS DELIVERY INSTRUCTIONS
----------------------------------------------------------
To: Citibank, N.A.,
as Collateral Agent and Paying Agent
Agency & Trust Escrow Group
111 Wall Street, 14th Floor/Zone 3
New York, NY 10043
Facsimile: (212) 657-2762
---------
Fax Confirmation No: (212) 657-5810
-------------------
Attention: Ms. Barbara Bennett
Sequence No.: ____________________________
Re: Corning 7.00% Series C Mandatory Convertible Preferred Stock
Pledge, Assignment and Collateral Agency Agreement dated as
of August 6, 2002 ("Collateral Agreement") and Paying Agency
Agreement, dated as of August 6, 2002 ("Paying Agency
Agreement"), between Citibank, N.A. and Corning Incorporated
------------------------------------------------------------
The undersigned as Authorized Person of Pledgor (under the terms of the
Collateral Agreement) and as Issuer Authorized Person (under the terms of the
Paying Agency Agreement) hereby irrevocably instructs Citibank, N.A., as
Collateral Agent under the terms of the Collateral Agreement and as Paying Agent
under the Paying Agency Agreement, take the actions identified below in
accordance with the following instructions:
--------------------------------------------------------------------------------
PLEASE COMPLETE EACH APPLICABLE BOX BELOW.
--------------------------------------------------------------------------------
Source of Funds to be Delivered to Paying Agent:
--------------------------------------------------------------------------------
(a) (i) Specific Collateral to be liquidated: ----------------------
(Specify Amount)
CUSIP No.
------------------------------------------------------ ----------------------
(ii) Broker or dealer to be used for
liquidation:
------------------------------------------------------ ----------------------
(b) Cash in Collateral Account: $
------------------------------------------------------ ----------------------
(c) Cash to be received from Corning: $
------------------------------------------------------ ----------------------
(d) Total amount to be delivered to
Paying Agent: $
--------------------------------------------------------------------------------
Note: If no broker or dealer is specified in Item (a)(ii) above, any
liquidation of Collateral specified herein may be executed through an
affiliated broker or dealer of the Collateral Agent and such broker or
dealer, along with the Collateral Agent, shall be entitled to its
usual and customary fees. It is agreed and understood that the
Collateral Agent may earn fees associated with the liquidation(s)
specified above.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Delivery of Funds by Paying Agent:
--------------------------------------------------- --------------------------
(a) Purpose of Payment:
--------------------------
--------------------------------------------------- --------------------------
(b) Amount of cash to be delivered by Paying
Agent: $
--------------------------------------------------- --------------------------
(c) Date on which funds are to be delivered by
Paying Agent:
--------------------------------------------------- --------------------------
(d) DTC account to receive funds:
--------------------------------------------------- --------------------------
(e) DTC Participants to receive funds: Acct No.:
$
--------------------------------------------------- --------------------------
--------------------------------------------------------------------------------
Corning Incorporated
By: ---------------------------------
Signature
Name: -------------------------------
Title: ------------------------------
Date: -------------------------------
Telephone No: -----------------------
E-mail Address: ---------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
[In the event of receipt of fax instructions signature verification and call -
back procedures will apply]
Exhibit D
---------
CITIBANK
SCHEDULE OF FEES
FOR SERVICES AS COLLATERAL AGENT, PAYING AGENT
For
Mandatory Convertible Preferred Stock Issue
July 24, 2002
Acceptance Fee - Collateral Agent:
----------------------------------
To cover the acceptance of the appointment under the collateral agreement, the
study of the collateral agreement and the supporting documents submitted in
connection with the execution and delivery thereof, communication with other
members of the working group, attendance at closing in New York:
$5,000 - one time fee, due upon closing
Acceptance Fee - Paying Agent:
------------------------------
To cover the acceptance of the appointment under the collateral agreement, the
study of the collateral agreement and the supporting documents submitted in
connection with the execution and delivery thereof, communication with other
members of the working group, attendance at closing in New York:
$5,000 - one time fee, due upon closing
Annual Administration Fee - Collateral Agency:
----------------------------------------------
To cover the normal administrative functions of the collateral agent under the
documents, our duties include the administration of the USD collateral accounts
under the collateral agreement and the supporting documents, including
generation of monthly reports, daily transaction confirmations, administration
of the accounts under the collateral agreement:
$15,000 per annum, due at the beginning of each year
Annual Administration Fee - Paying Agency:
------------------------------------------
To cover the normal administrative functions of the collateral agent under the
documents, our duties include the administration of the USD collateral accounts
under the collateral agreement and the supporting documents, including
generation of monthly reports, daily transaction confirmations, administration
of the accounts under the collateral agreement:
$15,000 per annum, due at the beginning of each year
Transaction Fees: $15 per wire for settlement of early conversions, as and when
they occur. These transaction fees are waived if funds are invested in an
approved Money Market Mutual Fund. Information regarding various funds can be
provided upon request.
Legal Fees:
-----------
To cover review of legal documents by Citibank's outside counsel on behalf of
Citibank Agency & Trust:
AT COST
Schedule Assumption:
--------------------
.. Subject to internal approval and satisfactory review of the documentation;
.. Documentation under New York law;
.. Fees are net of applicable Stamp and/or VAT tax.
The above schedule of fees does not include charges for out-of-pocket expenses
or for any services of an extraordinary nature that we or our legal counsel may
be called upon from time to time to perform in either an agency or fiduciary
capacity, nor does it include the fees of our legal counsel. Fees are also
subject to satisfactory review of the documentation, and we reserve the right to
modify them should the characteristics of the transaction change. Our
participation in this transaction is subject to internal approval. The
acceptance fee is payable upon execution of this document. Indemnification for
the corporate trust appointment will be provided by the sponsor(s)/parent
company. Should this schedule of fees be accepted and agreed upon and work
commenced on this transaction but subsequently halted, the Acceptance Fee and
legal fees incurred, if any, will still be payable in full. This Fee Schedule is
offered for, and applicable to the program cited on page one only, and is
guaranteed for sixty days from the date on this proposal. After sixty days, this
offer can be extended in writing only.
Signed: Agreed and Accepted:
CITIBANK, N.A.
/s/ Robert Anthony Evans, Jr. /s/ Mark S. Rogus
---------------------------------- --------------------------------
Robert Anthony Evans, Jr. (Signature)
Vice President
Mark S. Rogus
--------------------------------
(Print Name)
Vice President and Treasurer
--------------------------------
(Title)
--------------------------------
Exhibit 99.3
PAYING AGENCY AGREEMENT
-----------------------
THIS PAYING AGENCY AGREEMENT (this Paying Agency Agreement together with
all exhibits and schedules hereto, as each case is amended and supplemented in
accordance with the terms hereof, the "Agreement"), dated as of August 6, 2002,
by and between:
CORNING INCORPORATED, a corporation organized and existing under the laws
of the State of New York (the "Issuer"); and
CITIBANK, N.A., a national banking association organized and existing under
the laws of the United States of America ("Citibank"), solely in its capacity as
Paying Agent (Citibank in such capacity the "Paying Agent" including, unless the
context otherwise requires, any successor Paying Agent appointed in accordance
with the terms hereof);
W I T N E S S E T H T H A T :
-------------------------------
WHEREAS, the Issuer proposes to issue 5,000,000 shares of 7.00% Series C
Mandatory Convertible Preferred Stock (the "Preferred Stock") which will pay
certain annual dividends, and which is convertible and redeemable as set forth
in the Issuer's Prospectus Supplement dated July 31, 2002 to Prospectus dated
March 29, 2002 (the "Prospectus");
WHEREAS, concurrently herewith the Issuer and Citibank have entered into
that certain Pledge, Assignment and Collateral Agency Agreement pursuant to the
terms of which the Issuer has, inter alia, granted the Collateral Agent
thereunder a security interest in the Collateral (as defined therein) to secure
its obligations under a promissory note issued by it in connection with its
obligations to pay all dividends declared on the Preferred Stock;
WHEREAS, the Issuer has appointed Computershare Investor Services, LLC to
act as transfer agent and registrar (the "Registrar and Transfer Agent") for the
Preferred Stock; and
WHEREAS, the Issuer wishes to appoint Citibank, and Citibank is willing
to act as, Paying Agent for the Preferred Stock in each case in accordance with
the terms hereof;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby irrevocably acknowledged, the Issuer and
Citibank agree as follows:
1. Appointment.
The Issuer hereby appoints Citibank, and Citibank hereby agrees to act, as
Paying Agent at its offices specified in Section 11 hereof in connection with
the Preferred Stock solely upon the terms and subject to the conditions set
forth in this Agreement.
2. Receipt and Distribution of Payment Amounts.
(a) Subject to the timely receipt of funds upon the terms specified in
subsection (b) below, the Paying Agent shall make payments of dividends and any
cash amounts due upon redemption or conversion in respect of the Preferred Stock
in accordance with written instructions substantially in the form of Exhibit A
hereto signed by a person designated by the Issuer on an incumbency certificate
substantially in the form of Exhibit B hereto as authorized to act on its behalf
(an "Issuer Authorized Person"), received at least two (2) New York City
business days prior to the Payment Date (as hereinafter defined), specifying the
name and address of the payee or the payee's account with the DTC (as defined
below), the amount to be paid to such payee (the "Payment Amount") and the date
on which such payment is to be made (the "Payment Date").
(b) In order to provide for the payment of the Payment Amount, the Issuer
shall unconditionally deliver or procure to be delivered in United States
Dollars ("Dollars") to the account of the Paying Agent in New York City, as
designated by the Paying Agent from time to time, for value not later than one
(1) New York City business day prior to any Payment Date, an amount sufficient
(together with any funds then held by the Paying Agent which are available for
such purpose) to pay the Payment Amount.
(c) The Issuer shall, on or before 10:00 a.m. in New York City two New York
City business days prior to each Payment Date, send to the Paying Agent a copy
of an irrevocable payment instruction to the bank through which the Issuer is to
make each payment pursuant to this Section 2.
3. Notification in the Event of Non-Payment.
The Paying Agent shall forthwith notify the Issuer if it has not, one (1)
New York City business day prior to each Payment Date, received in the manner
provided in Section 2(b) hereof (together with any funds held by the Paying
Agent which are available for such purpose) the full amount in Dollars of the
Payment Amounts payable on the Payment Date.
4. Paying Agent's Duties in Respect of Payments.
(a) Subject to receipt of funds in the manner set out in Section 2(b)
hereof, the Paying Agent shall act as agent of the Issuer on and after each
Payment Date of the amounts due to be paid with respect to the Preferred Stock
in accordance with the instructions received from an Issuer Authorized Person.
Without prejudice to the obligations of the Issuer to deliver funds in
accordance with the provisions of Section 2(b) hereof, if delivery of the
appropriate amounts mentioned in Section 2(b) shall be made by or on behalf of
the Issuer later than the time, but otherwise in accordance with the provisions,
mentioned therein, the Paying Agent will act as agent of the Issuer in respect
of the Preferred Stock and make or cause to be made payments as mentioned in
this subsection (a) so long as the payment is made prior to 11:00 a.m. (New York
time) on the Payment Date. Notwithstanding the foregoing, if for any reason the
amounts received by the Paying Agent pursuant to Section 2(b) hereof shall be
insufficient (together with any funds held by the Paying Agent which are
available for such purpose) to satisfy all claims for any Payment Amount then
due and payable in respect of the Preferred Stock, the Paying Agent shall not be
bound to pay any such claim until the Paying Agent has received the full Payment
Amount then due and payable in respect of the Preferred Stock or other
arrangements satisfactory to the Paying Agent have been made. All payments to be
made by the Paying Agent hereunder shall be made without charging any commission
or fee to the holders of the Preferred Stock.
(b) (i) Payment of the Payment Amount will be in Dollars (i) in the case of
Preferred Stock held in The Depository Trust Company ("DTC"), by wire transfer
(x) in the case of dividend payments to: "Chase NYC, ABA #021-000-021, for
credit to the A/C of The Depository Trust Co. (Cede & Co.) Dividend Deposit A/C,
A/C #066-026776," and (y) in the case of conversion or redemption payments to:
"Chase NYC, ABA #021-000-021, for credit to the A/C of The Depository Trust Co.
(Cede & Co.) Reorg Deposit A/C, A/C #066-027608," or such other account as DTC
may designate to the Paying Agent, and (ii) in the case of Preferred Stock held
in registered certificated form outside of DTC by check drawn on a bank in New
York City, payable to the order of the person, and mailed to the address,
specified in writing by the Issuer.
(ii) Where any payment pursuant to (i) above is to be made by check, the
Paying Agent shall mail such check on the applicable Payment Date, or if that
date is not a New York City business day on the next succeeding New York City
business day.
(iii) Where any payment pursuant to (i) above is to be made by wire
transfer to a specified account, the Paying Agent shall initiate payment for
value on the applicable Payment Date, or, if that is not a New York City
business day for value on the next succeeding New York City business day.
5. Remuneration and Expenses.
The Issuer will pay to the Paying Agent in accordance with the terms of the
Fee Letter attached hereto as Exhibit C (the "Fee Letter") (i) compensation for
all services rendered by the Paying Agent hereunder, and (ii) all expenses,
disbursements and advances incurred or made by the Paying Agent in connection
with its services performed under this Agreement promptly upon receipt from the
Paying Agent of notification of the amount of such expenses.
The rights of the Paying Agent to payment under this Section 5 shall
survive the resignation or removal of the Paying Agent and the termination of
this Agreement.
6. Funds held by the Paying Agent.
The Paying Agent shall establish a non-interest bearing deposit account to
hold all funds received by the Paying Agent under this Agreement and any and all
funds received and held by the Paying Agent under this Agreement shall be held
in such non-interest bearing deposit account until application thereof in
accordance with the provisions of this Agreement.
7. Duties and Responsibilities of the Paying Agent.
(a) The duties, responsibilities and obligations of the Paying Agent shall
be limited to those expressly set forth herein and no duties, responsibilities
or obligations shall be inferred or implied. The Paying Agent shall have no duty
to solicit any Payment Amount. The Paying Agent shall not be subject to, nor
required to comply with, any other agreement to which the Issuer is a party,
even though reference thereto may be made herein, or to comply with any
direction or instruction (other than those contained herein or delivered in
accordance with this Agreement) from the Issuer or an entity acting on its
behalf. The Paying Agent shall not be required to expend or risk any of its own
funds or otherwise incur any financial or other liability in the performance of
any of its duties hereunder.
(b) (i) If at any time the Paying Agent is served with any judicial or
administrative order, judgment, decree, writ or other form of judicial or
administrative process which in any way affects any Payment Amount (including
but not limited to orders of attachment or garnishment or other forms of levies
or injunctions or stays relating to the transfer of any Payment Amount), the
Paying Agent is authorized to comply therewith in any manner it or legal counsel
of its own choosing deems appropriate. If the Paying Agent complies with any
such judicial or administrative order, judgment, decree, writ or other form of
judicial or administrative process, the Paying Agent shall not be liable to any
person or entity even though such order, judgment, decree, writ or process may
be subsequently modified or vacated or otherwise determined to have been without
legal force or effect.
(ii) In the event of any ambiguity or uncertainty hereunder or in any
notice, instruction or other communication received by the Paying Agent
hereunder, the Paying Agent may, in its sole discretion, refrain from taking any
action other than retaining possession of any Payment Amounts, unless the Paying
Agent receives written instructions, signed by an Issuer Authorized Person,
which eliminates such ambiguity or uncertainty.
(iii) In the event of any dispute between or conflicting claims by or among
the Issuer and/or any other person or entity with respect to a Payment Amount,
the Paying Agent shall be entitled, in its sole discretion, to refuse to comply
with any and all claims, demands or instructions with respect to such Payment
Amount so long as such dispute or conflict shall continue, and the Paying Agent
shall not be or become liable in any way to the Issuer for failure or refusal to
comply with such conflicting claims, demands or instructions. The Paying Agent
shall be entitled to refuse to act until, in its sole discretion, either (x)
such conflicting or adverse claims or demands shall have been determined by a
final order, judgment or decree of a court of competent jurisdiction, which
order, judgment or decree is not subject to appeal, or settled by agreement
between the conflicting parties as evidenced in a writing satisfactory to the
Paying Agent or (y) the Paying Agent shall have received security or an
indemnity satisfactory to it sufficient to hold it harmless from and against any
and all Losses (as hereinafter defined) which it may incur by reason of so
acting. Any court order, judgment or decree shall be accompanied by a legal
opinion by counsel for the presenting party, satisfactory to the Paying Agent,
to the effect that said order, judgment or decree represents a final
adjudication of the rights of the parties by a court of competent jurisdiction,
and that the time for appeal from such order, judgment or decree has expired
without an appeal having been perfected. Any court order, judgment or decree
shall be delivered to the Paying Agent under separate cover by the prevailing
party. The Paying Agent shall act on such court order and legal opinions without
further question. The Paying Agent may, in addition, elect, in its sole
discretion, to commence an interpleader action or seek other judicial relief or
orders as it may deem, in its sole discretion, necessary. The costs and expenses
(including reasonable attorneys' fees and expenses) incurred in connection with
such proceeding shall be paid by and shall be deemed an obligation of the
Issuer.
(c) (i) The Paying Agent shall not be liable for any action taken or
omitted or for any loss or injury resulting from its actions or its performance
or lack of performance of its duties hereunder in the absence of gross
negligence or willful misconduct on its part. In no event shall the Paying Agent
be liable (A) for acting in accordance with or relying upon any instruction,
notice, demand, certificate or document from an Issuer Authorized Person, (B)
for any indirect, consequential, punitive or special damages, regardless of the
form of action and whether or not any such damages were foreseeable or
contemplated, (C) for the acts or omissions of its nominees, correspondents,
designees, agents, subagents or subcustodians, (D) for the investment or
reinvestment of any cash held by it hereunder, in each case in good faith, in
accordance with the terms hereof, including without limitation any liability for
any delays (not resulting from its gross negligence or willful misconduct) in
the investment or reinvestment of the Payment Amounts prior to distribution
thereof pursuant to the terms hereof, or any loss of interest incident to any
such delays, or (E) for an amount in excess of the value of any Payment Amount
valued as of the date of receipt, but only to the extent of direct money
damages.
(ii) The Paying Agent may consult with legal counsel of its own choosing at
the expense of the Issuer as to any matter relating to this Agreement, and the
Paying Agent shall not incur any liability in acting in good faith in accordance
with any advice from such counsel.
(iii) The Paying Agent shall not incur any liability for not performing any
act or fulfilling any duty, obligation or responsibility hereunder by reason of
any occurrence beyond the control of the Paying Agent (including but not limited
to any act or provision of any present or future law or regulation or
governmental authority, any act of God, war or terrorism, or the unavailability
of the Federal Reserve Bank wire or facsimile or other wire or communication
facility).
(d) The Paying Agent shall be entitled to rely upon any order, judgment,
certification, demand, notice, instrument or other writing delivered to it
hereunder without being required to determine the authenticity or the
correctness of any fact stated therein or the propriety or validity or the
service thereof. The Paying Agent may act in reliance upon any instrument or
signature believed by it to be genuine and may assume that any person purporting
to give receipt or advice to make any statement or execute any document in
connection with the provisions hereof has been duly authorized to do so.
(e) The Paying Agent shall provide to the Issuer monthly statements
identifying transactions, transfers or holdings of any Payment Amounts and each
such statement shall be deemed to be correct and final upon receipt thereof by
the Issuer unless the Paying Agent is notified in writing, by the Issuer, to the
contrary within thirty (30) business days of the date of such statement.
(f) The Paying Agent does not have any interest in any of the Payment
Amounts received by it hereunder but is serving as the Paying Agent only in
respect of receiving and distributing such Payment Amounts as provided in
Section 2 hereof. Any payments hereunder shall be subject to withholding
regulations then in force with respect to United States taxes and, if
applicable, to the country in which the Paying Agent is located. The Issuer will
provide the Paying Agent with appropriate W-9 forms for tax I.D. number
certifications or W-8 forms for non-resident alien certifications with respect
to United States taxes. This paragraph shall survive notwithstanding any
termination of this Agreement or the resignation or removal of the Paying Agent.
(g) Except to the extent specifically required to do so pursuant to the
terms of this Agreement, the Paying Agent shall not have any responsibility for
making or verifying the accuracy of any calculations made in respect of the
Preferred Stock.
8. Indemnification.
The Issuer shall be liable for and shall reimburse and indemnify the Paying
Agent (and any predecessor Paying Agent) and hold the Paying Agent harmless from
and against any and all claims, losses, actions, liabilities, costs, damages or
expenses (including reasonable attorneys' fees and expenses) (collectively
"Losses") arising from or in connection with its administration of this
Agreement, provided, however, that nothing contained herein shall require the
Paying Agent to be indemnified for Losses caused by its own gross negligence or
own willful misconduct for which the Paying Agent has assumed liability pursuant
to Section 7(c). In addition, when the Paying Agent acts on any information,
instructions, communications, (including, but not limited to, communications
with respect to the wire transfer of funds) sent by telex or facsimile, the
Paying Agent, absent gross negligence, shall not be responsible or liable in the
event such communication is not an authorized or authentic communication of the
Issuer or is not in the form the Issuer sent or intended to send (whether due to
fraud, distortion or otherwise). The Issuer shall indemnify the Paying Agent
against any loss, liability, claim or expense (including legal fees and
expenses) it may incur with its acting in accordance with any such
communication. This paragraph shall survive the termination of this Agreement or
the resignation or removal of the Paying Agent.
9. Miscellaneous.
(a) The Paying Agent and its officers, directors and employees, may become
the owner of, or acquire any interest in, any Preferred Stock with the same
rights that it or they would have if it were not appointed hereunder, and may
engage or obtain an interest in any financial or other transaction with the
Issuer.
(b) Any corporation into which the Paying Agent may be merged or converted
or any corporation with which the Paying Agent may be consolidated or any
corporation resulting from any merger, conversion or consolidation to which the
Paying Agent shall be party shall, to the extent permitted by applicable law, be
the successor Paying Agent under this Agreement without the execution or filing
of any paper or any further act on the part of any of the parties hereto except
where an instrument of transfer or assignment is required by law to effect such
succession, anything herein to the contrary notwithstanding. Notice of any such
merger, conversion or consolidation shall forthwith be given to the Issuer.
(c) Except as otherwise permitted herein, this Agreement may be modified
only by a written amendment signed by all the parties hereto, and no waiver of
any provision hereof shall be effective unless expressed in a writing signed by
the party to be charged.
(d) The rights and remedies conferred upon the parties hereto shall be
cumulative, and the exercise or waiver of any such right or remedy shall not
preclude or inhibit the exercise of any additional rights or remedies. The
waiver of any right or remedy hereunder shall not preclude the subsequent
exercise of such right or remedy.
(e) The Issuer hereby represents and warrants (i) that this Agreement has
been duly authorized, executed and delivered on its behalf and constitutes its
legal, valid and binding obligation, (ii) that the execution, delivery and
performance of this Agreement by such person does not and will not violate any
applicable law or regulation and (iii) that the persons specified to the Paying
Agent as "Issuer Authorized Person" are authorized to act on behalf of the
Issuer.
(f) The invalidity, illegality or unenforceability of any provision of this
Agreement shall in no way affect the validity, legality or enforceability of any
other provision. If any provision is held to be unenforceable as a matter of
law, the other provisions shall not be affected thereby and shall remain in fall
force and effect.
(g) This Agreement shall constitute the entire agreement of the parties
with respect to the subject matter and supersedes all prior oral or written
agreements in regard thereto.
(h) This Agreement shall terminate upon receipt by the Paying Agent of
notice from the Issuer that all of the Preferred Stock has been redeemed,
converted or otherwise cancelled. The provisions of this Section 9 and Sections
7(c), 8, 11 and 12 shall survive termination of this Agreement and/or the
resignation or removal of the Paying Agent.
(i) No printed or other material in any language, including prospectuses
other than the Prospectus, notices, reports, and promotional material which
mentions "Citibank, N.A." by name or the rights, powers, or duties of the Paying
Agent under this Agreement shall be issued by Issuer, without the prior written
consent (which shall not be unreasonably withheld) of the Paying Agent.
(j) The headings contained in this Agreement are for convenience of
reference only and shall have no effect on the interpretation or operation
hereof.
(k) No party may assign any of its rights or obligations under this
Agreement without the written consent of the other parties and any attempted
assignment in contravention of this provision shall be null and void.
10. Changes in Paying Agent.
(a) The Issuer may terminate the appointment of the Paying Agent at any
time upon thirty (30) calendar days prior notice in writing. The Paying Agent
may resign at any time upon fifteen (15) calendar days' prior written notice
thereof.
(b) If the appointment of the Paying Agent hereunder is terminated or the
Paying Agent resigns its appointment hereunder, upon request of the Issuer, the
Paying Agent shall execute and deliver an instrument transferring to the
successor Paying Agent all of its rights (other than its rights to indemnity and
payment hereunder) and powers and shall duly assign, transfer and deliver to the
successor Paying Agent all property and money held by it in connection with its
appointment as Paying Agent, but shall have no other duties or responsibilities
hereunder.
(c) Within ten (10) calendar days after giving the foregoing notice of
removal to the Paying Agent or receiving the foregoing notice of resignation
from the Paying Agent, the Issuer shall appoint a successor Paying Agent, and
provide written notice of such to the Paying Agent that is being removed or
resigning. If a successor Paying Agent has not accepted such appointment by the
end of such 10-day period, the Paying Agent may apply to a court of competent
jurisdiction for the appointment of a successor Paying Agent or for other
appropriate relief. The costs and expenses (including reasonable attorneys fees
and expenses) incurred by the Paying Agent in connection with such proceeding
shall be paid by the Issuer. In the event of any such resignation or removal,
the Paying Agent shall have no further obligation with respect to this
Agreement.
(d) Upon the acceptance of the appointment of the successor Paying Agent,
if applicable, and delivery of any Payment Amounts held by the predecessor
Paying Agent hereunder, the predecessor Paying Agent shall have no further
duties, responsibilities or obligations hereunder.
(e) If the Paying Agent shall change its specified office, it shall give to
the Issuer not less than 30 days' prior written notice to that effect giving the
address of the new specified office.
11. Notices.
Any notice, demand, request, authorization, consent, election or waiver to
the Issuer or the Paying Agent required or permitted to be given, made or served
for any purposes under this Agreement shall be in writing in the English
language and shall be given, made or served by sending the same by prepaid post
(first class if domestic, first class airmail if overseas) or by telegram or
facsimile or by delivering it by hand as follows:
To the Issuer: Corning Incorporated
One Riverfront Plaza
MP-HQ-E2-10
Corning, New York 14831-0001
Facsimile No.: (607) 974-6686
Telephone No.: (607) 974-8679
Attention: Corporate Secretary
With a copy to: Corning Incorporated
One Riverfront Plaza
MP-HQ-E2-24
Corning, New York 14831-0001
Facsimile No.: (607) 974-4160
Telephone No.: (607) 974-8585
Attention: Vice President and Treasurer
To the Paying Agent: Citibank, N.A.
Agency & Trust Escrow Group
11 Wall Street, 14th Floor/Zone 3
5th Floor
New York, New York 10043
Facsimile No.: (212) 657-5810
Telephone No.: (212) 657-2762
Attention: Ms. Barbara Bennett
With a copy to: Patterson, Belknap, Webb & Tyler LLP
1133 Avenue of the Americas
New York, New York 10036
Facsimile No.: (212) 336-2222
Telephone No.: (212) 336-2000
Attention: Herman H. Raspe, Esq.
or to such other address or person(s) as shall have been notified (in accordance
with this Section 10) to the other parties hereto. Any such communication sent
by post as aforesaid shall be deemed to have been given only upon actual receipt
thereof by an addressee and any such communication sent by facsimile as
aforesaid shall be deemed to have been given, made or served 24 hours after the
time of dispatch and in the case of a communication by facsimile, such notice
shall forthwith be confirmed by mail. The failure of the addressee to receive or
the time of receiving such confirmation shall not invalidate or affect the
relevant communication by telegram or facsimile.
The Paying Agent is authorized to comply with and rely upon any notices,
instructions or other communications believed by it to have been sent or given
by the Issuer or by a person or persons authorized by the Issuer based on the
incumbency certificate dated as of August 6, 2002 delivered by the Issuer
provided in connection with this Agreement. Until the Paying Agent receives a
subsequent incumbency certificate, the Paying Agent shall be entitled to rely on
the last incumbency certificate delivered to the Paying Agent. Whenever under
the terms hereof the time for giving a notice or performing an act falls upon a
Saturday, Sunday, or a banking holiday in New York, such time shall be extended
to the next day on which the Paying Agent is open for business.
12. Governing Law, Jurisdiction and Waiver.
This Agreement shall be interpreted, construed, enforced and administered
in accordance with the internal substantive laws (and not the choice of law
rules) of the State of New York. Each of the Issuer and the Paying Agent hereby
waives the right to trial by jury and to assert counterclaims in any proceedings
relating hereto. To the extent that in any jurisdiction any of the Issuer may be
entitled to claim, for itself or its assets, immunity from suit, execution,
attachment (whether before or after judgment) or other legal process, each
hereby irrevocably agrees not to claim, and hereby waives, such immunity. Issuer
waives personal service of process and consents to service of process by
certified or registered mail, return receipt requested, directed to it at the
address last specified for notices hereunder, and such service shall be deemed
completed ten (10) calendar days after the same is so mailed.
13. Counterparts.
This Agreement may be executed by each of the parties hereto in any number
of counterparts, each of which counterpart, when so executed and delivered,
shall be deemed to be an original and all such counterparts shall together
constitute one and the same agreement.
[Signature Page Follows]
IN WITNESS whereof each of the parties hereto has caused this Agreement to
be executed by its duly authorized officer as of the date first above written.
CORNING INCORPORATED
By: /s/ JAMES B. FLAWS
-----------------------------------------
James B. Flaws
Vice Chairman and Chief Financial Officer
CITIBANK, N.A.,
as Paying Agent
By: /s/ CAMILLE TOMAO
-----------------------------------------
Camille Tomao
Vice President
Exhibit A
---------
---------------------------------------
COLLATERAL & PAYING AGENTS
DELIVERY INSTRUCTIONS
---------------------------------------
To: Citibank, N.A.,
as Collateral Agent and Paying Agent
Agency & Trust Escrow Group
111 Wall Street, 14th Floor/Zone 3
New York, NY 10043
Facsimile: (212) 657-2762
---------
Fax Confirmation No: (212) 657-5810
-------------------
Attention: Ms. Barbara Bennett
Sequence No.: ____________________________
Re: Corning 7.00% Series C Mandatory Convertible Preferred Stock
Pledge, Assignment and Collateral Agency Agreement dated as
of August 6, 2002 ("Collateral Agreement") and Paying Agency
Agreement, dated as of August 6, 2002 ("Paying Agency
Agreement"), between Citibank, N.A. and Corning Incorporated
------------------------------------------------------------
The undersigned as Authorized Person of Pledgor (under the terms of the
Collateral Agreement) and as Issuer Authorized Person (under the terms of the
Paying Agency Agreement) hereby irrevocably instructs Citibank, N.A., as
Collateral Agent under the terms of the Collateral Agreement and as Paying Agent
under the Paying Agency Agreement, take the actions identified below in
accordance with the following instructions:
--------------------------------------------------------------------------------
PLEASE COMPLETE EACH APPLICABLE BOX BELOW.
--------------------------------------------------------------------------------
Source of Funds to be Delivered to Paying Agent:
--------------------------------------------------------------------------------
(a) (i) Specific Collateral to be liquidated:
-----------------------
(Specify amount)
CUSIP No. -------------
---------------------------------------------------- -----------------------
(ii) Broker or dealer to be used for
liquidation:
---------------------------------------------------- -----------------------
(b) Cash in Collateral Account: $
---------------------------------------------------- -----------------------
(c) Cash to be received from Corning: $
---------------------------------------------------- -----------------------
(d) Total amount to be delivered to
Paying Agent: $
---------------------------------------------------- -----------------------
--------------------------------------------------------------------------------
Note: If no broker or dealer is specified in Item (a)(ii) above, any
liquidation of Collateral specified herein may be executed through an
affiliated broker or dealer of the Collateral Agent and such broker or
dealer, along with the Collateral Agent, shall be entitled to its
usual and customary fees. It is agreed and understood that the
Collateral Agent may earn fees associated with the liquidation(s)
specified above.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Delivery of Funds by Paying Agent:
--------------------------------------------------------------------------------
---------------------------------------------------- -----------------------
(a) Purpose of Payment:
-----------------------
---------------------------------------------------- -----------------------
(b) Amount of cash to be delivered by Paying
Agent: $
---------------------------------------------------- -----------------------
(c) Date on which funds are to be delivered by
Paying Agent:
---------------------------------------------------- -----------------------
(d) DTC account to receive funds:
---------------------------------------------------- -----------------------
(e) DTC Participants to receive funds: Acct No.:
$
---------------------------------------------------- -----------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Corning Incorporated
By: ----------------------------------
Signature
Name: --------------------------------
Title: -------------------------------
Date: --------------------------------
Telephone No: ------------------------
E-mail Address: ----------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
[In the event of receipt of fax instructions signature verification and call -
back procedures will apply]
Exhibit B
---------
Form of Incumbency Certificate
corning incorporated incumbency certificate
The undersigned certifies that he/she is the ______________ of Corning
Incorporated, a New York corporation (the "Company"), and as such s/he is
authorized to execute this Certificate and further certifies that the following
persons have been elected or appointed, are qualified, and are now acting as
officers of the Company in the capacity or capacities indicated below, and that
the signatures set forth opposite their respective names are their true and
genuine signatures. He/she further certifies that any of the persons listed
below are authorized jointly to sign agreements and give written instructions
with regard to any matters pertaining to the Paying Agency Agreement dated
August 6, 2002 and the appointment of Citibank, N.A. as the Paying Agent:
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Name Title Phone Signature
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------------------------------- ----------------------------------- --------------------------- ---------------------------------
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IN WITNESS WHEREOF, I have hereunto set my hand and affixed the corporate seal
of the Company this __ day of August, 2002.
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Name:
Title:
Call Back Authorized Individuals:
The below listed persons (must list at least two individuals) have been
designated Call Back Authorized Individuals of the Company and will be notified
by Citibank, N.A. upon the payment of any amounts by the Paying Agent under the
Paying Agency Agreement unless an original "Standing or Predefined Instruction"
letter is on file with the Paying Agent.
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Name Phone
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Exhibit C
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CITIBANK
SCHEDULE OF FEES
FOR SERVICES AS COLLATERAL AGENT, PAYING AGENT
For
Mandatory Convertible Preferred Stock Issue
July 24, 2002
Acceptance Fee - Collateral Agent:
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To cover the acceptance of the appointment under the collateral agreement, the
study of the collateral agreement and the supporting documents submitted in
connection with the execution and delivery thereof, communication with other
members of the working group, attendance at closing in New York:
$5,000 - one time fee, due upon closing
Acceptance Fee - Paying Agent:
------------------------------
To cover the acceptance of the appointment under the collateral agreement, the
study of the collateral agreement and the supporting documents submitted in
connection with the execution and delivery thereof, communication with other
members of the working group, attendance at closing in New York:
$5,000 - one time fee, due upon closing
Annual Administration Fee - Collateral Agency:
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To cover the normal administrative functions of the collateral agent under the
documents, our duties include the administration of the USD collateral accounts
under the collateral agreement and the supporting documents, including
generation of monthly reports, daily transaction confirmations, administration
of the accounts under the collateral agreement:
$15,000 per annum, due at the beginning of each year
Annual Administration Fee - Paying Agency:
------------------------------------------
To cover the normal administrative functions of the collateral agent under the
documents, our duties include the administration of the USD collateral accounts
under the collateral agreement and the supporting documents, including
generation of monthly reports, daily transaction confirmations, administration
of the accounts under the collateral agreement:
$15,000 per annum, due at the beginning of each year
Transaction Fees: $15 per wire for settlement of early conversions, as and when
they occur. These transaction fees are waived if funds are invested in an
approved Money Market Mutual Fund. Information regarding various funds can be
provided upon request.
Legal Fees:
-----------
To cover review of legal documents by Citibank's outside counsel on behalf of
Citibank Agency & Trust:
AT COST
Schedule Assumption:
--------------------
.. Subject to internal approval and satisfactory review of the documentation;
.. Documentation under New York law;
.. Fees are net of applicable Stamp and/or VAT tax.
The above schedule of fees does not include charges for out-of-pocket expenses
or for any services of an extraordinary nature that we or our legal counsel may
be called upon from time to time to perform in either an agency or fiduciary
capacity, nor does it include the fees of our legal counsel. Fees are also
subject to satisfactory review of the documentation, and we reserve the right to
modify them should the characteristics of the transaction change. Our
participation in this transaction is subject to internal approval. The
acceptance fee is payable upon execution of this document. Indemnification for
the corporate trust appointment will be provided by the sponsor(s)/parent
company. Should this schedule of fees be accepted and agreed upon and work
commenced on this transaction but subsequently halted, the Acceptance Fee and
legal fees incurred, if any, will still be payable in full. This Fee Schedule is
offered for, and applicable to the program cited on page one only, and is
guaranteed for sixty days from the date on this proposal. After sixty days, this
offer can be extended in writing only.
Signed: Agreed and Accepted:
CITIBANK, N.A.
/s/ Robert Anthony Evans, Jr. /s/ Mark S. Rogus
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Robert Anthony Evans, Jr. (Signature)
Vice President
Mark S. Rogus
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(Print Name)
Vice President and Treasurer
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(Title)
--------------------------------