UNITED STATES
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) February 8, 2005
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)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01 Entry into a Material Definitive Agreement
On February 2, 2005, the Compensation Committee of the Board of Directors
took the following actions related to: compensation of non-employee directors;
achievement of performance metrics for 2004 under the Company's Variable
Compensation Plan; adoption of performance metrics for 2005 variable
compensation (payable in 2006) under the Company's Variable Compensation Plan;
achievement of performance metrics for 2004 for performance share restricted
stock under the Company's Incentive Stock Plan; and adoption of performance
metrics for 2005 performance shares under the Company's Incentive Stock Plan
under the 2000 Employee Equity Participation Program and 2003 amendments.
Director Compensation
---------------------
On February 2, 2005, the Company's Board of Directors voted to amend the
director compensation package applicable for non-employee directors for 2005.
The Board decided to maintain the total target of equity compensation at
approximately $80,000, but increased the annual cash retainer from $30,000 to
$50,000. The $1200 per meeting fee for Board and Committee service will remain
at year 2000 levels, although the annual retainers for service as Audit
Committee Chair and as Compensation Committee Chair were each raised from
$10,000 to $15,000 per year. All other Committee Chair retainers increased to
$10,000 per year.
Variable Compensation
---------------------
On February 2, 2005, the Compensation Committee of the Company's Board of
Directors confirmed achievement levels of the 2004 performance metrics for
payment in 2005 under the Company's Variable Compensation Plan. Approximately
700 employees, including executive officers, participate in the Variable
Compensation Plan. The 2004 metrics were based on the Company's adjusted net
profit after taxes, which resulted in a 200% payment of the target award under
the Plan for Messrs. James R. Houghton, Wendell P. Weeks, James B. Flaws, Peter
F. Volanakis and Joseph A. Miller, Jr. as listed in the table below. Cash awards
for other employees were generally based half on individual/business performance
and half on corporate financial performance. In addition, approximately 8,200
U.S. employees participated in the 2004 goalsharing plans of the Corporation
with 75% of the award based on specific unit measurements and 25% based on 2004
adjusted net profit after taxes.
On February 2, 2005, the Compensation Committee of the Company's Board of
Directors adopted performance metrics for 2005 variable compensation (payable in
2006) under the Company's Variable Compensation Plan and 54 goalsharing plans
with up to five measures upon which unit performance is measured. For Messrs.
Houghton, Weeks, Volanakis, Flaws and Miller the variable compensation metrics
include a corporate performance factor based on adjusted net profit after taxes,
and they will have their 2005 goalsharing awards determined as the average of
all other plans. The metrics for other participants include a corporate
performance factor based on adjusted net profit after taxes and an individual
performance factor based on performance against individual objectives and
individual business unit objectives. The Compensation Committee previously
established target percentages for variable compensation as a percent of salary.
For Messrs. Houghton, Weeks, Flaws, Volanakis and Miller, the target percentages
are 100%, 85%, 80%, 80% and 75% of salary.
Incentive Stock Plan
--------------------
On February 2, 2005, the Compensation Committee of the Company's Board of
Directors approved performance shares (restricted stock subject to forfeiture if
certain conditions are not met) grants as a result of achievement of the
adjusted net profit after taxes metric by the Company in 2004 at the 150% level,
resulting in an additional 794,750 performance shares awarded to approximately
150 executives, subject to transfer and forfeiture restrictions through February
1, 2007. These awards include those for Messrs. Houghton, Weeks, Flaws,
Volanakis and Miller listed in the table below. The performance shares were
awarded under the Company's Incentive Stock Plan under the 2000 Employee Equity
Participation Program and 2003 amendments.
On February 2, 2005, the Compensation Committee of the Company's Board of
Directors adopted corporate performance metrics for the 2005 performance shares
(restricted stock) awarded under the Company's Incentive Stock Plan under the
2000 Employee Equity Participation Program and 2003 amendments. Approximately
170 employees, including executive officers, participate. The metrics for the
2005 performance shares (restricted stock) include corporate performance factor
based on adjusted earnings per share and operating cash flow of the Company in
2005. The performance shares earned or forfeited based upon 2005 corporate
performance will have restrictions on transfer and the possibility of forfeiture
until February 1, 2008. The Compensation Committee previously approved target
grant guidelines for individual salary levels, with those for Messrs. Houghton,
Weeks, Flaws, Volanakis and Miller listed below.
As part of the above ordinary course actions taken at its February 2, 2005
meeting relative to variable compensation and performance share restricted
stock, the Compensation Committee approved the following for the Company's named
executive officers as defined in Regulation S-K item 402(a)(3):
2004 2005
Incentive Plan 2004 Incentive Plan
Restricted Cash Restricted
Executive Officer Stock Awards(1) Bonus(2) Stock Awards(3)
----------------- ------------ ----- ------------
James R. Houghton 204,000 $2,047,235 202,000
Chairman &
Chief Executive Officer
Wendell P. Weeks 142,500 $1,382,238 145,000
President &
Chief Operating Officer
Peter F. Volanakis 102,000 $1,043,390 97,000
President, Corning Technologies
James B. Flaws 102,000 $1,173,814 97,000
Vice Chairman &
Chief Financial Officer
Joseph A. Miller, Jr. 78,000 $ 817,492 73,000
Executive Vice President &
Chief Technology Officer
(1) Includes performance share restricted stock awards in December 2003 and
February 2005 based on 2004 performance; shares are restricted through
February 1, 2007.
(2) Variable Compensation Plan payouts for 2004 performance, including
goalsharing amounts.
(3) Includes performance share restricted stock awards in December 2004; number
of shares earned to be determined based on 2005 results; shares earned are
restricted through February 1, 2008.
The Variable Compensation Plan is on file with the Securities Exchange
Commission as Exhibit 2 of Corning Proxy Statement, Definitive 14A filed March
10, 2003. The 2000 Employee Equity Participation Program and 2003 amendments are
filed as Exhibit 1 to Corning Proxy Statement, Definitive 14A filed March 10,
2003.
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: February 8, 2005 By /s/ KATHERINE A. ASBECK
--------------------------------------
Katherine A. Asbeck
Senior Vice President and Controller