Exhibit 10.67

Morgan Stanley
MORGAN STANLEY & CO. LLC
1585 BROADWAY
NEW YORK, NY  10036-8293
(212) 761-4000
                     
To: Corning Incorporated
 
One Riverfront Plaza
 
Corning, NY 14831
 
Attention:
Robert Vanni, Assistant Treasurer, Corporate Finance
 
Telephone No.:
(607) 974-8023
 
Facsimile No.:
(607) 974-4375
     
Re:           Master Confirmation—Uncollared Accelerated Share Repurchase
   
This master confirmation (this “Master Confirmation”), dated as of October 28,
2015, is intended to set forth certain terms and provisions of certain
Transactions (each, a “Transaction”) entered into from time to time between
Morgan Stanley & Co. LLC (“Dealer”), and Corning Incorporated, a New York
corporation (“Counterparty”).  This Master Confirmation, taken alone, is neither
a commitment by either party to enter into any Transaction nor evidence of a
Transaction.  The additional terms of any particular Transaction shall be set
forth in a Supplemental Confirmation in the form of Schedule A hereto (a
“Supplemental Confirmation”), which shall reference this Master Confirmation and
supplement, form a part of, and be subject to this Master Confirmation.  This
Master Confirmation and each Supplemental Confirmation together shall constitute
a “Confirmation” as referred to in the Agreement specified below.
 
The definitions and provisions contained in the 2002 ISDA Equity Derivatives
Definitions (the “Equity Definitions”), as published by the International Swaps
and Derivatives Association, Inc., are incorporated into this Master
Confirmation.  This Master Confirmation and each Supplemental Confirmation
evidence a complete binding agreement between Counterparty and Dealer as to the
subject matter and terms of each Transaction to which this Master Confirmation
and such Supplemental Confirmation relate and shall supersede all prior or
contemporaneous written or oral communications with respect thereto.
 
This Master Confirmation and each Supplemental Confirmation supplement, form a
part of, and are subject to an agreement in the form of the 2002 ISDA Master
Agreement (the “Agreement”) as if Dealer and Counterparty had executed the
Agreement on the date of this Master Confirmation (but without any Schedule
except for (i) the election of New York law as the governing law (without
reference to its choice of law provisions) ; the election that Multiple
Transaction Payment Netting apply; (iii) the election that, in Section 5(a)(i)
of the Agreement, each occurrence of the word “first” in the third line thereof
shall be replaced with “third” and (iv) such other elections set forth in this
Master Confirmation.
 
The Transactions shall be the sole Transactions under the Agreement.  If there
exists any ISDA Master Agreement between Dealer and Counterparty or any
confirmation or other agreement between Dealer and Counterparty pursuant to
which an ISDA Master Agreement is deemed to exist between Dealer and
Counterparty, then notwithstanding anything to the contrary in such ISDA Master
Agreement, such confirmation or agreement or any other agreement to which Dealer
and Counterparty are parties, the Transactions shall not be considered
Transactions under, or otherwise governed by, such existing or deemed ISDA
Master Agreement, and the occurrence of any Event of Default or Termination
Event under the Agreement with respect to either party or any Transaction shall
not, by itself, give rise to any right or obligation under any such other
agreement or deemed agreement.  Notwithstanding anything to the contrary in any
other agreement between the parties or their Affiliates, the Transactions shall
not be “Specified Transactions” (or similarly treated) under any other agreement
between the parties or their Affiliates.
 
All provisions contained or incorporated by reference in the Agreement shall
govern this Master Confirmation and each Supplemental Confirmation except as
expressly modified herein or in the related Supplemental Confirmation.

© 2016 Corning Incorporated. All Rights Reserved.

 
 

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If, in relation to any Transaction to which this Master Confirmation and a
Supplemental Confirmation relate, there is any inconsistency between the
Agreement, this Master Confirmation, such Supplemental Confirmation and the
Equity Definitions, the following will prevail for purposes of such Transaction
in the order of precedence indicated: (i) such Supplemental Confirmation; (ii)
this Master Confirmation; (iii) the Equity Definitions; and (iv) the Agreement.
 
1. Each Transaction constitutes a Share Forward Transaction for the purposes of
the Equity Definitions.  Set forth below are the terms and conditions that,
together with the terms and conditions set forth in the Supplemental
Confirmation relating to any Transaction, shall govern such Transaction.

 
General Terms.
           
Trade Date:
For each Transaction, as set forth in the related Supplemental Confirmation.
           
Buyer:
Counterparty
           
Seller:
Dealer
           
Shares:
The common stock of Counterparty, par value USD 0.50 per share (Exchange symbol
“GLW”).
           
Exchange:
The New York Stock Exchange
           
Related Exchange(s):
All Exchanges.
           
Prepayment/Variable Obligation:
Applicable
           
Prepayment Amount:
For each Transaction, as set forth in the related Supplemental Confirmation.
           
Prepayment Date:
For each Transaction, as set forth in the related Supplemental Confirmation.
         
Valuation.
             
VWAP Price:
For any Scheduled Trading Day, the Rule 10b-18-compliant dollar volume-weighted
average price per Share for such day based on transactions executed during such
day, as reported on Bloomberg Screen “GLW US <Equity> AQR SEC” (or any successor
thereto), or in the event such price is not so reported on such day for any
reason or is manifestly incorrect, as determined, in a commercially reasonable
manner, by the Calculation Agent for Rule 10b-18-compliant transactions on such
day using a volume weighted method.
           
Forward Price:
For each Transaction, the arithmetic average of the VWAP Prices for all of the
Exchange Business Days in the Calculation Period for such Transaction, subject
to “Valuation Disruption” below.
           
Exchange Business Day:
As set forth in the Equity Definitions; provided that any Excluded Days for a
Transaction shall not be Exchange Business Days for such Transaction.
           
Excluded Days:
For each Transaction, as set forth in the related Supplemental Confirmation.
           
Forward Price Adjustment Amount:
For each Transaction, as set forth in the related Supplemental Confirmation.
           
Calculation Period:
For each Transaction, the period from, and including, the Calculation Period
Start Date for such Transaction to, and including, the Termination Date for such
Transaction.
           
Calculation Period Start Date:
For each Transaction, as set forth in the related Supplemental Confirmation.

© 2016 Corning Incorporated. All Rights Reserved.

 
 

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Termination Date:
For each Transaction, the Scheduled Termination Date for such Transaction;
provided that Dealer shall have the right to designate any Exchange Business Day
on or after the First Acceleration Date to be the Termination Date for all of
such Transaction (an “Accelerated Termination Date”) by delivering notice (an
“Acceleration Notice”) to Counterparty of any such designation prior to 5:00
p.m. (New York City time) on the Exchange Business Day immediately following the
designated Accelerated Termination Date.
           
Scheduled Termination Date:
For each Transaction, as set forth in the related Supplemental Confirmation,
subject to postponement as provided in “Valuation Disruption” below.
           
First Acceleration Date:
For each Transaction, as set forth in the related Supplemental Confirmation.
           
Valuation Disruption:
The definition of “Market Disruption Event” in Section 6.3(a) of the Equity
Definitions is hereby amended by deleting the words “at any time during the
one-hour period that ends at the relevant Valuation Time, Latest Exercise Time,
Knock-in Valuation Time or Knock-out Valuation Time, as the case may be” and
inserting the words “at any time on any Scheduled Trading Day during the
Calculation Period or Settlement Valuation Period” after the word “material,” in
the third line thereof.
             
Section 6.3(d) of the Equity Definitions is hereby amended by deleting the
remainder of the provision following the term “Scheduled Closing Time” in the
fourth line thereof.
             
Notwithstanding anything to the contrary in the Equity Definitions, if a
Disrupted Day occurs (i) in the Calculation Period, the Calculation Agent may,
in its good faith and commercially reasonable discretion, postpone the Scheduled
Termination Date, or (ii) in the Settlement Valuation Period, the Calculation
Agent may extend the Settlement Valuation Period.  The Calculation Agent may
also determine that (i) such Disrupted Day is a Disrupted Day in full, in which
case the VWAP Price for such Disrupted Day shall not be included for purposes of
determining the Forward Price or the Settlement Price, as the case may be, or
(ii) such Disrupted Day is a Disrupted Day only in part, in which case the VWAP
Price for such Disrupted Day shall be determined by the Calculation Agent based
on Rule 10b-18 Eligible Transactions in the Shares on such Disrupted Day taking
into account the nature and duration of the relevant Market Disruption Event,
and the weighting of the VWAP Price for the relevant Exchange Business Days
during the Calculation Period or the Settlement Valuation Period, as the case
may be, shall be adjusted in a commercially reasonable manner by the Calculation
Agent for purposes of determining the Forward Price or the Settlement Price, as
the case may be, with such adjustments based on, among other factors, the
duration of any Market Disruption Event and the volume, historical trading
patterns and price of the Shares; provided, however, that any Market Disruption
Event due to a Regulatory Disruption shall be a Disrupted Day in full.  Any
Exchange Business Day on which, as of the date hereof, the Exchange is scheduled
to close prior to its normal close of trading shall be deemed not to be an
Exchange Business Day; if a closure of the Exchange prior to its normal close of
trading on any Exchange Business Day is scheduled following the date hereof,
then such Exchange Business Day shall be deemed to be a Disrupted Day in full.

 

© 2016 Corning Incorporated. All Rights Reserved.

 
 

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If a Disrupted Day occurs during the Calculation Period for any Transaction or
the Settlement Valuation Period for any Transaction, as the case may be, and
each of the nine immediately following Scheduled Trading Days is a Disrupted Day
(a “Disruption Event”), then the Calculation Agent, in its good faith and
commercially reasonable discretion, may deem such Disruption Event (and each
consecutive Disrupted Day thereafter) to be either (x) a Potential Adjustment
Event in respect of such Transaction or (y) an Additional Termination Event in
respect of such Transaction, with Counterparty as the sole Affected Party and
such Transaction as the sole Affected Transaction.
         
Settlement Terms.
             
Settlement Procedures:
For each Transaction:
             
(i)if the Number of Shares to be Delivered for such Transaction is positive,
Physical Settlement shall be applicable to such Transaction; provided that
Dealer does not, and shall not, make the agreement or the representations set
forth in Section 9.11 of the Equity Definitions related to the restrictions
imposed by applicable securities laws with respect to any Shares delivered by
Dealer to Counterparty under any Transaction; or
             
(ii)if the Number of Shares to be Delivered for such Transaction is negative,
then the Counterparty Settlement Provisions in Annex A hereto shall apply to
such Transaction
           
Number of Shares to be Delivered:
For each Transaction, a number of Shares (rounded down to the nearest whole
number) equal to (a)(i) the Prepayment Amount for such Transaction, divided by
(ii)(A) the Forward Price for such Transaction minus (B) the Forward Price
Adjustment Amount for such Transaction, minus (b) the number of Initial Shares
for such Transaction; provided that if the result of the calculation in clause
(a)(ii) is equal to or less than the Floor Price for such Transaction, then the
Number of Shares to be Delivered for such Transaction shall be determined as if
clause (a)(ii) were replaced with “(ii) the Floor Price for such
Transaction”.  For the avoidance of doubt, if the Forward Price Adjustment
Amount for any Transaction is a negative number, clause (a)(ii) of the
immediately preceding sentence shall be equal to (A) the Forward Price for such
Transaction, plus (B) the absolute value of the Forward Price Adjustment Amount.
           
Floor Price:
For each Transaction, as set forth in the related Supplemental Confirmation.
           
Excess Dividend Amount:
For the avoidance of doubt, all references to the Excess Dividend Amount shall
be deleted from Section 9.2(a)(iii) of the Equity Definitions.
           
Settlement Date:
For each Transaction, if the Number of Shares to be Delivered for such
Transaction is positive, the date that is one Settlement Cycle immediately
following the Termination Date for such Transaction.
           
Settlement Currency:
USD

 

© 2016 Corning Incorporated. All Rights Reserved.

 
 

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Initial Share Delivery:
For each Transaction, Dealer shall deliver a number of Shares equal to the
Initial Shares for such Transaction to Counterparty on the Initial Share
Delivery Date for such Transaction in accordance with Section 9.4 of the Equity
Definitions, with such Initial Share Delivery Date deemed to be a “Settlement
Date” for purposes of such Section 9.4.
           
Initial Share Delivery Date:
For each Transaction, as set forth in the related Supplemental Confirmation.
           
Initial Shares:
For each Transaction, as set forth in the related Supplemental Confirmation.
         
Share Adjustments.
             
Potential Adjustment Event:
In addition to the events described in Section 11.2(e) of the Equity
Definitions, it shall constitute an additional Potential Adjustment Event if (x)
the Scheduled Termination Date for any Transaction is postponed pursuant to
“Valuation Disruption” above (including, for the avoidance of doubt, pursuant to
Section 7 hereof), (y) a Regulatory Disruption as described in Section 7 occurs
or (z) a Disruption Event occurs.  In the case of any event described in clause
(x), (y) or (z) above occurs, the Calculation Agent may, in its commercially
reasonable judgment, adjust any relevant terms of such Transaction as necessary
to preserve as nearly as practicable the fair value of such Transaction to
Dealer prior to such postponement, Regulatory Disruption or Disruption Event, as
the case may be, provided that the Calculation Agent shall not adjust any of the
dates identified as Calculation Dates in the related Supplemental Confirmation.
           
Excess Dividend:
For any calendar quarter, any dividend or distribution on the Shares with an
ex-dividend date occurring during such calendar quarter (other than any dividend
or distribution of the type described in Section 11.2(e)(i) or Section
11.2(e)(ii)(A) of the Equity Definitions or any Extraordinary Dividend) (a
“Dividend”) the amount or value of which per Share (as determined by the
Calculation Agent), when aggregated with the amount or value (as determined by
the Calculation Agent) of any and all previous Dividends with ex-dividend dates
occurring in the same calendar quarter, exceeds the Ordinary Dividend Amount.
           
Extraordinary Dividend
Means the per Share cash dividend or distribution, or a portion thereof,
declared by Counterparty on the Shares that is classified by the board of
directors of Counterparty as an “extraordinary” dividend.  For the avoidance of
doubt, no dividend paid on Counterparty’s Fixed Rate Cumulative Convertible
Preferred Stock, Series A, par value $100 per share (“Preferred Stock”), shall
be considered a Dividend, Excess Dividend or Extraordinary Dividend under this
Master Confirmation or any Supplemental Confirmation.
           
Consequences of Excess Dividend:
The declaration by the Issuer of any Excess Dividend, the ex-dividend date for
which occurs or is scheduled to occur during the Relevant Dividend Period for
any Transaction, shall, at Dealer’s election in its sole judgment, either (x)
constitute an Additional Termination Event in respect of such Transaction, with
Counterparty as the sole Affected Party and such Transaction as the sole
Affected Transaction or (y) result in an adjustment, by the Calculation Agent,
to the Floor Price as the Calculation Agent determines appropriate to account
for the economic effect on such Transaction of such Excess Dividend; provided
that Dealer’s election must be made within 10 days of the first public
announcement of such Excess Dividend.

© 2016 Corning Incorporated. All Rights Reserved.

 
 

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Ordinary Dividend Amount:
For each Transaction, as set forth in the related Supplemental Confirmation.
           
Method of Adjustment:
Calculation Agent Adjustment
           
Early Ordinary Dividend Payment:
For each Transaction, if an ex-dividend date for any Dividend that is not (x) an
Excess Dividend or (y) a dividend or distribution of the type described in
Section 11.2(e)(i) or Section 11.2(e)(ii)(A) of the Equity Definitions, occurs
during any calendar quarter occurring (in whole or in part) during the Relevant
Dividend Period for such Transaction and is prior to the Scheduled Ex-Dividend
Date for such Transaction for the relevant calendar quarter (as determined by
the Calculation Agent), then the Calculation Agent shall make such adjustment to
the exercise, settlement, payment or any other terms of the relevant Transaction
as the Calculation Agent determines appropriate to account for the economic
effect on such Transaction of such event.
           
Scheduled Ex-Dividend Dates:
For each Transaction, as set forth in the related Supplemental Confirmation for
each calendar quarter.
           
Relevant Dividend Period:
For each Transaction, the period from, and including, the Trade Date for such
Transaction to, and including, the Relevant Dividend Period End Date for such
Transaction.
           
Relevant Dividend Period End Date:
For each Transaction, if the Number of Shares to be Delivered for such
Transaction is negative, the last day of the Settlement Valuation Period;
otherwise, the Termination Date for such Transaction.
         
Extraordinary Events.
             
Consequences of Merger Events:
               
(a) Share-for-Share:
Modified Calculation Agent Adjustment
             
(b) Share-for-Other:
Cancellation and Payment
             
(c) Share-for-Combined:
Component Adjustment
           
Tender Offer:
Applicable; provided that (a) Section 12.1(l) of the Equity Definitions shall be
amended (i) by deleting the parenthetical in the fifth line thereof, (ii) by
replacing “that” in the fifth line thereof with “whether or not such
announcement” and (iii) by adding immediately after the words “Tender Offer” in
the fifth line thereof “, and any publicly announced change or amendment to such
an announcement (including, without limitation, the announcement of an
abandonment of such intention)” and (b) Sections 12.3(a) and 12.3(d) of the
Equity Definitions shall each be amended by replacing each occurrence of the
words “Tender Offer Date” by “Announcement Date.”
           
Consequences of Tender Offers:
               
(a) Share-for-Share:
Modified Calculation Agent Adjustment
             
(b) Share-for-Other:
Modified Calculation Agent Adjustment
             
(c) Share-for-Combined:
Modified Calculation Agent Adjustment

 

© 2016 Corning Incorporated. All Rights Reserved.

 
 

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Nationalization, Insolvency or Delisting:
Cancellation and Payment; provided that in addition to the provisions of Section
12.6(a)(iii) of the Equity Definitions, it shall also constitute a Delisting if
the Exchange is located in the United States and the Shares are not immediately
re-listed, re-traded or re-quoted on any of the New York Stock Exchange, The
NASDAQ Global Select Market or The NASDAQ Global Market (or their respective
successors); if the Shares are immediately re-listed, re-traded or re-quoted on
any such exchange or quotation system, such exchange or quotation system shall
be deemed to be the Exchange.
           
Additional Disruption Events:
               
(a) Change in Law:
Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is
hereby amended by (i) replacing the phrase “the interpretation” in the third
line thereof with the phrase “, or public announcement of, the formal or
informal interpretation”; provided further that Section 12.9(a)(ii) of the
Equity Definitions is hereby amended by replacing the parenthetical beginning
after the word “regulation” in the second line thereof with the words
“(including, for the avoidance of doubt and without limitation, (x) any tax law
or (y) adoption or promulgation of new regulations authorized or mandated by
existing statute)”.  Notwithstanding the Equity Definitions, the consequence of
an occurrence of a Change in Law under clause (y) thereof shall be as set forth
under 12.9(b)(vi) of the Equity Definitions.
             
(b) Failure to Deliver:
Applicable
             
(c) Insolvency Filing:
Applicable
               
(d) Loss of Stock Borrow:
Applicable
                 
Maximum Stock Loan Rate:
For each Transaction, as set forth in the related Supplemental Confirmation.
                 
Hedging Party:
Dealer
               
Determining Party:
Dealer
               
(e) Increased Cost of Stock Borrow:
Applicable
                 
Initial Stock Loan Rate:
For each Transaction, as set forth in the related Supplemental Confirmation.
                 
Hedging Party:
Dealer
                 
Determining Party:
Dealer
             
Hedging Adjustments:
For the avoidance of doubt, whenever the Calculation Agent is called upon to
make an adjustment pursuant to the terms of this Confirmation or the Equity
Definitions to take into account the effect of an event, the Calculation Agent
shall make such adjustment by reference to the effect of such event on Dealer,
assuming that Dealer maintains a commercially reasonable Hedge Position.
           
Non-Reliance/Agreements and Acknowledgements Regarding Hedging
Activities/Additional Acknowledgements:
Applicable

 

© 2016 Corning Incorporated. All Rights Reserved.

 
 

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2.
Calculation Agent.
Dealer; In addition, if at any time an Event of Default occurs or exists with
respect to Dealer ,then Counterparty will appoint a third party independent
dealer in the relevant market to act as Calculation Agent.  For the avoidance of
doubt, all calculations and determinations of the Calculation Agent shall be
done in a commercially reasonable manner.  Following any determination or
calculation by the Calculation Agent hereunder, upon a written request by
Counterparty, the Calculation Agent will promptly (but in any event no later
than five (5) Exchange Business Days following receipt of such written request
by Dealer) provide to Counterparty by e-mail to the e-mail address provided by
Counterparty in such written request a report (in a commonly used file format
for the storage and manipulation of financial data) displaying in reasonable
detail the basis for such determination or calculation, as the case may be, it
being understood that the Calculation Agent shall not be obligated to disclose
any proprietary or confidential models or any other confidential or proprietary
information, in each case, used by it for such determination or calculation.
       
3.
Account Details.
           
(a)
 
Account for payments to Counterparty:
             
Bank:
JPMorgan Chase Bank, NA
     
ABA#:
021000021
     
Acct No.:
XXXXX6911
     
Beneficiary:
Corning Incorporated
             
Account for delivery of Shares to Counterparty:
             
DTC 50108
         
(b)
 
Account for payments to Dealer:
               
To be provided separately
                       
Account for delivery of Shares to Dealer:
               
To be provided separately
         
4.
Offices.
           
(a)
 
The Office of Counterparty for each Transaction is:  Inapplicable, Counterparty
is not a Multibranch Party.
         
(b)
 
The Office of Dealer for each Transaction is: London
       
5.
Notices.
           
(a)
 
Address for notices or communications to Counterparty:
             
Corning Incorporated
     
Attention:
Robert P. Vanni
     
Telephone No.:
607-974-8023
     
Facsimile No.:
607-974-4375
     
Email Address:
vannirp@corning.com
       

 

© 2016 Corning Incorporated. All Rights Reserved.

 
 

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(b)
 
Address for notices or communications to Dealer:
             
Morgan Stanley & Co. LLC
     
1585 Broadway
     
New York, New York 10036
     
Attention:
David Oakes
     
Telephone No.:
212-761-5319
     
Email Address:
david.oakes@morganstanley.com
             
With a copy to:
     
Morgan Stanley & Co. LLC
     
1585 Broadway
     
5th Floor
     
New York, New York 10036
     
Attention:
Anthony Cicia
     
Telephone No.:
212-762-4828
     
Facsimile:
212-507-4338
     
Email Address:
anthony.cicia@morganstanley.com
         
6.
Representations, Warranties and Agreements.
           
(a)
 
Additional Representations, Warranties and Covenants of Each Party.  In addition
to the representations, warranties and covenants in the Agreement, each party
represents, warrants and covenants to the other party that:
             
(i)
It is an “eligible contract participant” (as such term is defined in the
Commodity Exchange Act, as amended).
             
(ii)
Each party acknowledges that the offer and sale of each Transaction to it is
intended to be exempt from registration under the Securities Act of 1933, as
amended (the “Securities Act”), by virtue of Section 4(2) thereof.  Accordingly,
each party represents and warrants to the other that (A) it has the financial
ability to bear the economic risk of its investment in each Transaction and is
able to bear a total loss of its investment, (B) it is an “accredited investor”
as that term is defined under Regulation D under the Securities Act and (C) the
disposition of each Transaction is restricted under this Master Confirmation,
the Securities Act and state securities laws.
         
(b)
 
Additional Representations, Warranties and Covenants of Counterparty.  In
addition to the representations, warranties and covenants in the Agreement,
Counterparty represents, warrants and covenants to Dealer that:
               
(i)
As of the Trade Date for each Transaction hereunder, (A) such Transaction is
being entered into pursuant to a publicly disclosed Share buy-back program and
its Board of Directors has approved the use of derivatives to effect the Share
buy-back program, and (B) there is no internal policy of Counterparty, whether
written or oral, that would prohibit Counterparty from entering into any aspect
of such Transaction, including, without limitation, the purchases of Shares to
be made pursuant to such Transaction.
             
(ii)
As of the Trade Date for each Transaction hereunder, the purchase or writing of
such Transaction and the transactions contemplated hereby will not violate Rule
13e-1 or Rule 13e-4 under the Exchange Act.

 

© 2016 Corning Incorporated. All Rights Reserved.

 
 

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(iii)
As of the Trade Date for each Transaction hereunder, it is not entering into
such Transaction, in each case (A) on the basis of, and is not aware of, any
material non-public information regarding Counterparty or the Shares, (B) in
anticipation of, in connection with, or to facilitate, a distribution of its
securities, a self tender offer or a third-party tender offer in violation of
the Exchange Act or (C) to create actual or apparent trading activity in the
Shares (or any security convertible into or exchangeable for the Shares) or to
raise or depress or otherwise manipulate the price of the Shares (or any
security convertible into or exchangeable for the Shares).
               
(iv)
Counterparty (A) is capable of evaluating investment risks independently, both
in general and with regard to all transactions and investment strategies
involving a security or securities; (B) will exercise independent judgment in
evaluating the recommendations of any broker-dealer or its associated persons,
unless it has otherwise notified the broker-dealer in writing; and (C) has total
assets of at least USD 50,000,000 as of the date hereof.
             
(v)
As of the Trade Date for each Transaction hereunder, Counterparty is in
compliance in all material respects with its reporting obligations under the
Exchange Act and its most recent Annual Report on Form 10-K, together with all
reports filed by it through the Trade Date pursuant to the Exchange Act, taken
together and as amended and supplemented to the date of this representation, do
not, as of their respective filing dates, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
             
(vii)
The Shares are not, and Counterparty will not cause the Shares to be, subject to
a “restricted period” (as defined in Regulation M promulgated under the Exchange
Act) at any time during any Regulation M Period (as defined below) for any
Transaction unless Counterparty has provided written notice to Dealer of such
restricted period not later than the Scheduled Trading Day immediately preceding
the first day of such “restricted period”; Counterparty acknowledges that any
such notice may cause a Disrupted Day to occur pursuant to Section 7 below;
accordingly, Counterparty acknowledges that its delivery of such notice must
comply with the standards set forth in Section 7 below.  Counterparty is not
currently contemplating any “distribution” (as defined in Regulation M
promulgated under the Exchange Act) of Shares, or any security for which Shares
are a “reference security” (as defined in Regulation M promulgated under the
Exchange Act).  “Regulation M Period” means, for any Transaction, (A) the
Relevant Period (as defined below) for such Transaction, (B) the Settlement
Valuation Period, if any, for such Transaction and (C) the Seller Termination
Purchase Period (as defined below), if any, for such Transaction.  “Relevant
Period” means, for any Transaction, the period commencing on the Calculation
Period Start Date for such Transaction and ending on the later of (1) the
earlier of (x) the Scheduled Termination Date and (y) the last Additional
Relevant Day (as specified in the related Supplemental Confirmation) for such
Transaction, or such earlier day as elected by Dealer and communicated to
Counterparty on such day (or, if later, the First Acceleration Date without
regard to any acceleration thereof pursuant to “Special Provisions for
Acquisition Transaction Announcements” below) and (2) if Section 14 is
applicable to such Transaction, the date on which all deliveries owed pursuant
to Section 14 have been made.
               
(viii)
As of the Trade Date, the Prepayment Date, the Initial Share Delivery Date, the
Settlement Date, any Cash Settlement Payment Date and any Settlement Method
Election Date for each Transaction, Counterparty is not “insolvent” (as such
term is defined under Section 101(32) of the U.S.  Bankruptcy Code (Title 11 of
the United States Code) (the “Bankruptcy Code”)) and Counterparty would be able
to purchase a number of Shares with a value equal to the Prepayment Amount in
compliance with the laws of the jurisdiction of Counterparty’s incorporation.
               
(ix)
Counterparty is not, and after giving effect to each Transaction will not be,
required to register as an “investment company” as such term is defined in the
Investment Company Act of 1940, as amended.

 

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(x)
Counterparty has not entered, and will not enter, into any repurchase
transaction with respect to the Shares (or any security convertible into or
exchangeable for the Shares) (including, without limitation, any agreements
similar to the Transactions described herein), except with Dealer or any of its
affiliates, where any initial hedge period, calculation period, relevant period,
settlement valuation period or seller termination purchase period (each however
defined) in such other transaction will overlap at any time (including, without
limitation, as a result of extensions in such initial hedge period, calculation
period, relevant period, settlement valuation period or seller termination
purchase period as provided in the relevant agreements) with any Relevant
Period, any Settlement Valuation Period (if applicable) or any Seller
Termination Purchase Period (if applicable) under this Master Confirmation.  In
the event that the initial hedge period, relevant period, calculation period or
settlement valuation period in any other transaction overlaps with any Relevant
Period, any Settlement Valuation Period (if applicable) or any Seller
Termination Purchase Period (if applicable) under this Master Confirmation as a
result of any postponement of the Scheduled Termination Date or extension of the
Settlement Valuation Period pursuant to “Valuation Disruption” above or any
analogous provision in such other transaction, Counterparty shall promptly amend
such other transaction to avoid any such overlap.
               
(xi)
Counterparty shall, at least one day prior to the first day of the Calculation
Period, the Settlement Valuation Period, if any, or the Seller Termination
Purchase Period, if any, for any Transaction, notify Dealer of the total number
of Shares purchased in Rule 10b-18 purchases of blocks pursuant to the
once-a-week block exception set forth in paragraph (b)(4) of Rule 10b-18 under
the Exchange Act (“Rule 10b-18”) by or for Counterparty or any of its
“affiliated purchasers” (as defined in Rule 10b-18) during each of the four
calendar weeks preceding such day and during the calendar week in which such day
occurs (“Rule 10b-18 purchase” and “blocks” each being used as defined in Rule
10b-18), which notice shall be substantially in the form set forth in Schedule B
hereto.
               
(xii)
As of the Trade Date for each Transaction hereunder, and as of the date of any
election with respect to any Transaction hereunder, there has not been any
Merger Announcement (as defined below).
           
(c)
 
Additional Representations, Warranties and Covenants of Dealer.  In addition to
the representations, warranties and covenants in the Agreement, Dealer
represents, warrants and covenants to Counterparty that it has implemented
policies and procedures, taking into consideration the nature of its business,
reasonably designed to ensure that individuals making investment decisions
related to any Transaction would not violate the laws prohibiting trading on the
basis of material nonpublic information regarding Issuer.
       
7.
Regulatory Disruption.  In the event that Dealer concludes, in its good faith
and commercially reasonable discretion based on the advice of counsel that it is
necessary with respect to any legal, regulatory or self-regulatory requirements
or related policies and procedures (whether or not such requirements, policies
or procedures are imposed by law or have been voluntarily adopted by Dealer, and
provided that such policies or procedures are related to legal or regulatory
issues and are generally applicable in similar situations and applied to any
Transaction hereunder in a non-discriminatory manner), for it to refrain from or
decrease any market activity on any Scheduled Trading Day or Days during the
Calculation Period or, if applicable, the Settlement Valuation Period, Dealer
may by written notice to Counterparty elect to deem that a Market Disruption
Event has occurred and will be continuing on such Scheduled Trading Day or Days.

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8.
Other Provisions
         
(a)
 
Rule 10b-18:
             
(i)
Dealer covenants and agrees to use commercially reasonable efforts, during the
Calculation Period and any Settlement Valuation Period (as defined in Annex A)
for any Transaction, to make all purchases of Shares in connection with such
Transaction in a manner that would comply with the limitations set forth in
clauses (b)(1), (b)(2), (b)(3) and (b)(4) and (c) of Rule 10b-18, as if such
rule were applicable to such purchases and taking into account any applicable
Securities and Exchange Commission no-action letters as appropriate, and subject
to any delays between the execution and reporting of a trade of the Shares on
the Exchange and other circumstances beyond Dealer’s control; provided that,
during the Calculation Period, the foregoing agreement shall not apply to
purchases made to dynamically hedge for Dealer’s own account or the account of
its affiliate(s) the optionality arising under a Transaction (including, for the
avoidance of doubt, timing optionality); provided further that, without limiting
the generality of the first sentence of this Section 6(c)(i), Dealer shall not
be responsible for any failure to comply with Rule 10b-18(b)(3) to the extent
any transaction that was executed (or deemed to be executed) by or on behalf of
Counterparty or an “affiliated purchaser” (as defined under Rule 10b-18)
pursuant to a separate agreement is not deemed to be an “independent bid” or an
“independent transaction” for purposes of Rule 10b-18(b)(3).
             
(ii)
Except as disclosed to Dealer in writing prior to the Trade Date, Counterparty
represents and warrants to Dealer that it has not made any purchases of blocks
by or for itself or any of its "affiliated purchasers" pursuant to the one block
purchase per week exception in Rule 10b-18(b)(4) under the Exchange Act during
each of the four calendar weeks preceding such date ("Rule 10b-18 purchase,"
"blocks" and "affiliated purchaser", each as defined in Rule 10b-18).
         
(b)
 
10b5-1 Plan:
             
(i)
Counterparty is entering into this Master Confirmation and each Transaction
hereunder in good faith and not as part of a plan or scheme to evade the
prohibitions of Rule 10b5-1 under the Exchange Act (“Rule 10b5-1”) or any other
antifraud or anti-manipulation provisions of the federal or applicable state
securities laws and that it has not entered into or altered and will not enter
into or alter any corresponding or hedging transaction or position with respect
to the Shares.  Counterparty acknowledges that it is the intent of the parties
that each Transaction entered into under this Master Confirmation comply with
the requirements of paragraphs (c)(1)(i)(A) and (B) of Rule 10b5-1 and each
Transaction entered into under this Master Confirmation shall be interpreted to
comply with the requirements of Rule 10b5-1(c).
               
(ii)
During the Calculation Period and the Settlement Valuation Period, if any, for
any Transaction and in connection with the delivery of any Alternative Delivery
Units for any Transaction, Dealer (or its agent or Affiliate) may effect
transactions in Shares in connection with such Transaction.  The timing of such
transactions by Dealer, the price paid or received per Share pursuant to such
transactions and the manner in which such transactions are made, including,
without limitation, whether such transactions are made on any securities
exchange or privately, shall be within the sole judgment of
Dealer.  Counterparty acknowledges and agrees that all such transactions shall
be made in Dealer’s sole judgment and for Dealer’s own account.
             
(iii)
Counterparty represents that it does not have, and shall not attempt to
exercise, any control or influence over how, when or whether Dealer (or its
agent or Affiliate) makes any “purchases or sales” (within the meaning of Rule
10b5-1(c)(1)(i)(B)(3)) in connection with any Transaction, including, without
limitation, over how, when or whether Dealer (or its agent or Affiliate) enters
into any hedging transactions.  Counterparty represents and warrants that it has
consulted with its own advisors as to the legal aspects of its adoption and
implementation of this Master Confirmation and each Supplemental Confirmation
under Rule 10b5-1.

 

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(iv)
Counterparty acknowledges and agrees that any amendment, modification, waiver or
termination of this Master Confirmation or any Supplemental Confirmation must be
effected in accordance with the requirements for the amendment or termination of
a “plan” as defined in Rule 10b5-1(c).  Without limiting the generality of the
foregoing, any such amendment, modification, waiver or termination shall be made
in good faith and not as part of a plan or scheme to evade the prohibitions of
Rule 10b-5, and no such amendment, modification or waiver shall be made at any
time at which Counterparty or any officer, director, manager or similar person
of Counterparty is aware of any material non-public information regarding
Counterparty or the Shares.
             
(v)
Counterparty shall not, directly or indirectly, communicate any information
relating to the Shares or any Transaction (including, without limitation, any
notices required by Section 10(a)) to any employee of Dealer, other than as set
forth in the Communications Procedures attached as Annex C hereto.
         
9.
Counterparty Purchases.  Counterparty (or any “affiliate” or “affiliated
purchaser” as defined in Rule 10b-18) shall not, without the prior written
consent of Dealer (which written consent shall not be unreasonably withheld or
delayed, but it being understood that Dealer may withhold such consent if it
determines that such request would adversely impact Dealer’s trading activity in
respect of any Transaction), directly or indirectly purchase any Shares
(including by means of a derivative instrument), listed contracts on the Shares
or securities that are convertible into, or exchangeable or exercisable for
Shares (including, without limitation, any Rule 10b-18 purchases of blocks (as
defined in Rule 10b-18)) during any Relevant Period, any Settlement Valuation
Period (if applicable) or any Seller Termination Purchase Period (if applicable)
provided that this Section 9 shall not apply to any of the following: (A)
purchases of Shares pursuant to
exercises  of  stock  options  granted  to  former  or  current  employees,
officers,  directors,  or  other  affiliates of Counterparty, including the
withholding  and/or  purchase  of  Shares  from  holders of such options to
satisfy payment of the option exercise price and/or satisfy tax withholding
requirements  in  connection  with  the  exercise  of  such  options; (B)
purchases  of  Shares  from  holders  of  performance  shares  or  units or
restricted  shares  or  units  to  satisfy  tax withholding requirements in
connection with vesting; (C) the conversion or exchange by holders of any
convertible  or  exchangeable  securities  of  the  Counterparty previously
issued;  (D)  purchases  of Shares effected by or for a plan by an
agent  independent  of  Counterparty  that  satisfy the requirements of Rule
10b-18(a)(13)(ii); (E) purchases which are not solicited by or on behalf of
Counterparty, its “affiliates” or “affiliated purchasers” (each as defined in
Rule 10b-18) and are not reasonably expected to result in purchases of Shares in
the market; (F) purchases of Preferred Stock; (G) purchases executed by or
through Dealer or an Affiliate of Dealer and, if Dealer is requested to make any
such purchases, Dealer will endeavor in good faith and in a commercially
reasonable manner to fulfill such request, taking into account such factors as
it deems appropriate at such time in light of this Transaction and existing
liquidity conditions at such time.
       
10.
Special Provisions for Merger Transactions.  Notwithstanding anything to the
contrary herein or in the Equity Definitions:
         
(a)
 
Counterparty agrees that it:
             
(i)
will not during the period commencing on the Trade Date for any Transaction and
ending on the last day of the Relevant Period or, if applicable, the later of
the last day of the Settlement Valuation Period and the last day of the Seller
Termination Purchase Period, for such Transaction make, or to the extent it is
within its reasonable control, permit to be made, any public announcement (as
defined in Rule 165(f) under the Securities Act) of any Merger Transaction or
potential Merger Transaction (a “Merger Announcement”) unless such Merger
Announcement is made prior to the opening or after the close of the regular
trading session on the Exchange for the Shares;
             
(ii)
shall promptly (but in any event prior to the next opening of the regular
trading session on the Exchange) notify Dealer following any such Merger
Announcement that such Merger Announcement has been made; and

 

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(iii)
shall promptly (but in any event prior to the next opening of the regular
trading session on the Exchange) provide Dealer with written notice specifying
(i) Counterparty’s average daily Rule 10b-18 Purchases (as defined in Rule
10b-18) during the three full calendar months immediately preceding the
announcement date of any Merger Transaction or potential Merger Transaction that
were not effected through Dealer or its Affiliates and (ii) the number of Shares
purchased pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act
for the three full calendar months preceding the announcement date of any Merger
Transaction or potential Merger Transaction.  Such written notice shall be
deemed to be a certification by Counterparty to Dealer that such information is
true and correct.  In addition, Counterparty shall promptly notify Dealer of the
earlier to occur of the completion of such transaction and the completion of the
vote by target shareholders.
         
(b)
 
Counterparty acknowledges that any such Merger Announcement or delivery of a
notice with respect thereto may cause the terms of any Transaction to be
adjusted or such Transaction to be terminated; accordingly, Counterparty
acknowledges that its delivery of such notice must comply with the standards set
forth in Section 8 above.
         
(c)
 
Upon the occurrence of any Merger Announcement (whether made by Counterparty or
a third party), Dealer in its sole discretion may (i) make commercially
reasonable adjustments to the terms of any Transaction (other than the dates
identified as Calculation Dates in the related Supplemental Confirmation)
including, without limitation, the Scheduled Termination Date or the Forward
Price Adjustment Amount, and/or suspend the Calculation Period and/or any
Settlement Valuation Period or (ii) treat the occurrence of such Merger
Announcement as an Additional Termination Event with Counterparty as the sole
Affected Party and the Transactions hereunder as the Affected Transactions and
with the amount under Section 6(e) of the Agreement determined taking into
account the fact that the Calculation Period or Settlement Valuation Period, as
the case may be, had fewer Scheduled Trading Days than originally anticipated.
         
“Merger Transaction” means any merger, acquisition or similar transaction
involving a recapitalization as contemplated by Rule 10b-18(a)(13)(iv) under the
Exchange Act, other than, solely for purposes of this Section 10, any such
transaction in which the consideration consists solely of cash and there is no
valuation period.
       
11.
Special Provisions for Acquisition Transaction Announcements.  Notwithstanding
anything to the contrary herein or in the Equity Definitions:
         
(a)
 
If an Acquisition Transaction Announcement occurs on or prior to the Settlement
Date for any Transaction, then the Calculation Agent shall make such adjustments
to the exercise, settlement, payment or any of the other terms of such
Transaction as the Calculation Agent determines reasonably commercially
appropriate (including, without limitation and for the avoidance of doubt,
adjustments that would allow the Number of Shares to be Delivered to be less
than zero), at such time or at multiple times as the Calculation Agent
determines to be commercially reasonably appropriate, to account for the
economic effect of such Acquisition Transaction Announcement on such Transaction
(including adjustments to account for changes in volatility, expected dividends,
stock loan rate, value of any commercially reasonable Hedge Positions in
connection with the Transaction and liquidity relevant to the Shares or to such
Transaction).  If an Acquisition Transaction Announcement occurs after the Trade
Date, but prior to the First Acceleration Date of any Transaction, the First
Acceleration Date shall be the date of such Acquisition Transaction
Announcement.  If the Number of Shares to be Delivered for any settlement of any
Transaction is a negative number, then the terms of the Counterparty Settlement
Provisions in Annex A hereto shall apply.

 

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(b)
 
“Acquisition Transaction Announcement” means (i) the announcement of an
Acquisition Transaction or an event that, if consummated, would result in an
Acquisition Transaction, (ii) an announcement that Counterparty or any of its
subsidiaries has entered into an agreement, a letter of intent or an
understanding designed to result in an Acquisition Transaction, (iii) the
announcement of the intention to solicit or enter into, or to explore strategic
alternatives or other similar undertaking that may include, an Acquisition
Transaction, (iv) any other announcement that in the reasonable judgment of the
Calculation Agent is reasonably likely to result in an Acquisition Transaction,
or (v) any announcement of any change or amendment to any previous Acquisition
Transaction Announcement (including any announcement of the abandonment of any
such previously announced Acquisition Transaction, agreement, letter of intent,
understanding or intention).  For the avoidance of doubt, announcements as used
in the definition of Acquisition Transaction Announcement refer to any public
announcement whether made by the Issuer or a third party.
         
(c)
 
“Acquisition Transaction” means (i) any Merger Event (for purposes of this
definition the definition of Merger Event shall be read with the references
therein to “100%” being replaced by “51%” and references to “50%” being replaced
by “75%” and without reference to the clause beginning immediately following the
definition of Reverse Merger therein to the end of such definition), Tender
Offer or Merger Transaction or any other transaction involving the merger of
Counterparty with or into any third party, (ii) the sale or transfer of all or
substantially all of the assets of Counterparty, (iii) a recapitalization,
reclassification, binding share exchange or other similar transaction with
respect to Counterparty, (iv) any acquisition by Counterparty or any of its
subsidiaries where the aggregate consideration transferable by Counterparty or
its subsidiaries exceeds 50% of the market capitalization of Counterparty, (v)
any lease, exchange, transfer, disposition (including, without limitation, by
way of spin-off or distribution) of assets (including, without limitation, any
capital stock or other ownership interests in subsidiaries) or other similar
event by Counterparty or any of its subsidiaries where the aggregate
consideration transferable or receivable by or to Counterparty or its
subsidiaries exceeds 33% of the market capitalization of Counterparty or (vi)
any transaction in which Counterparty or its board of directors has a legal
obligation to make a recommendation to its shareholders in respect of such
transaction (whether pursuant to Rule 14e-2 under the Exchange Act or
otherwise).
       
12.
Acknowledgments.
         
(a)
 
The parties hereto intend for:
             
(i)
each Transaction to be a “securities contract” as defined in Section 741(7) of
the Bankruptcy Code and a “forward contract” as defined in Section 101(25) of
the Bankruptcy Code, and the parties hereto to be entitled to the protections
afforded by, among other Sections, Sections 362(b)(6), 362(b)(27), 362(o),
546(e), 546(j), 555, 556, 560 and 561 of the Bankruptcy Code;
             
(ii)
the Agreement to be a “master netting agreement” as defined in Section 101(38A)
of the Bankruptcy Code;
             
(iii)
a party’s right to liquidate, terminate or accelerate any Transaction, net out
or offset termination values or payment amounts, and to exercise any other
remedies upon the occurrence of any Event of Default or Termination Event under
the Agreement with respect to the other party or any Extraordinary Event that
results in the termination or cancellation of any Transaction to constitute a
“contractual right” (as defined in the Bankruptcy Code); and
             
(iv)
all payments for, under or in connection with each Transaction, all payments for
the Shares (including, for the avoidance of doubt, payment of the Prepayment
Amount) and the transfer of such Shares to constitute “settlement payments” and
“transfers” (as defined in the Bankruptcy Code).

 

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(b)
 
Counterparty acknowledges that:
             
(i)
during the term of any Transaction, Dealer and its Affiliates may buy or sell
Shares or other securities or buy or sell options or futures contracts or enter
into swaps or other derivative securities in order to establish, adjust or
unwind its hedge position with respect to such Transaction;
             
(ii)
Dealer and its Affiliates may also be active in the market for the Shares and
Share-linked transactions other than in connection with hedging activities in
relation to any Transaction;
               
(iii)
Dealer shall make its own determination as to whether, when or in what manner
any hedging or market activities in Counterparty’s securities shall be conducted
and shall do so in a manner that it deems appropriate to hedge its price and
market risk with respect to the Forward Price and the VWAP Price;
             
(iv)
any market activities of Dealer and its Affiliates with respect to the Shares
may affect the market price and volatility of the Shares, as well as the Forward
Price and VWAP Price, each in a manner that may be adverse to Counterparty; and
               
(v)
each Transaction is a derivatives transaction in which it has granted Dealer an
option; Dealer may purchase shares for its own account at an average price that
may be greater than, or less than, the price paid by Counterparty under the
terms of the related Transaction.
       
13.
No Collateral, Netting or Setoff.  Notwithstanding any provision of the
Agreement or any other agreement between the parties to the contrary, the
obligations of Counterparty hereunder are not secured by any
collateral.  Obligations under any Transaction shall not be netted, recouped or
set off (including pursuant to Section 6 of the Agreement) against any other
obligations of the parties, whether arising under the Agreement, this Master
Confirmation or any Supplemental Confirmation, or under any other agreement
between the parties hereto, by operation of law or otherwise, and no other
obligations of the parties shall be netted, recouped or set off (including
pursuant to Section 6 of the Agreement) against obligations under any
Transaction, whether arising under the Agreement, this Master Confirmation or
any Supplemental Confirmation, or under any other agreement between the parties
hereto, by operation of law or otherwise, and each party hereby waives any such
right of setoff, netting or recoupment.

 

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14.
Alternative Termination Settlement.  In the event that (a) an Early Termination
Date (whether as a result of an Event of Default or a Termination Event) occurs
or is designated with respect to any Transaction or (b) any Transaction is
cancelled or terminated upon the occurrence of an Extraordinary Event (except as
a result of (i) a Nationalization, Insolvency or Merger Event in which the
consideration to be paid to holders of Shares consists solely of cash, (ii) a
Merger Event or Tender Offer that is within Counterparty’s control, or (iii) an
Event of Default in which Counterparty is the Defaulting Party or a Termination
Event in which Counterparty is the Affected Party other than an Event of Default
of the type described in Section 5(a)(iii), (v), (vi), (vii) or (viii) of the
Agreement or a Termination Event of the type described in Section 5(b) of the
Agreement, in each case that resulted from an event or events outside
Counterparty’s control), if either party would owe any amount to the other party
pursuant to Section 6(d)(ii) of the Agreement or any Cancellation Amount
pursuant to Article 12 of the Equity Definitions (any such amount, a “Payment
Amount”), then, in lieu of any payment of such Payment Amount, unless
Counterparty makes an election to the contrary no later than the Early
Termination Date or the date on which such Transaction is terminated or
cancelled, Counterparty or Dealer, as the case may be, shall deliver to the
other party a number of Shares (or, in the case of a Nationalization, Insolvency
or Merger Event, a number of units, each comprising the number or amount of the
securities or property that a hypothetical holder of one Share would receive in
such Nationalization, Insolvency or Merger Event, as the case may be (each such
unit, an “Alternative Delivery Unit”) with a value equal to the Payment Amount,
as determined by the Calculation Agent over a commercially reasonable period of
time (and the parties agree that, in making such determination of value, the
Calculation Agent may take into account a number of factors, including, without
limitation, the market price of the Shares or Alternative Delivery Units on the
Early Termination Date or the date of early cancellation or termination, as the
case may be, and, if such delivery is made by Dealer, the prices at which Dealer
purchases Shares or Alternative Delivery Units to fulfill its delivery
obligations under this Section 14); provided that in determining the composition
of any Alternative Delivery Unit, if the relevant Nationalization, Insolvency or
Merger Event involves a choice of consideration to be received by holders, such
holder shall be deemed to have elected to receive the maximum possible amount of
cash; and provided further that Counterparty may elect that the provisions of
this Section 15 above providing for the delivery of Shares or Alternative
Delivery Units, as the case may be, shall not apply only if Counterparty
represents and warrants to Dealer, in writing on the date it notifies Dealer of
such election, that, as of such date, Counterparty is not aware of any material
non-public information regarding Counterparty or the Shares and is making such
election in good faith and not as part of a plan or scheme to evade compliance
with the federal securities laws.  If delivery of Shares or Alternative Delivery
Units, as the case may be, pursuant to this Section 15 is to be made by
Counterparty, paragraphs 2 through 7 of Annex A hereto shall apply as if (A)
such delivery were a settlement of such Transaction to which Net Share
Settlement applied, (B) the Cash Settlement Payment Date were the Early
Termination Date or the date of early cancellation or termination, as the case
may be, and (C) the Forward Cash Settlement Amount were equal to (x) zero minus
(y) the Payment Amount owed by Counterparty.  For the avoidance of doubt, if
Counterparty validly elects for the provisions of this Section 15 relating to
the delivery of Shares or Alternative Delivery Units, as the case may be, not to
apply to any Payment Amount, the provisions of Article 12 of the Equity
Definitions, or the provisions of Section 6(d)(ii) of the Agreement, as the case
may be, shall apply.  If delivery of Shares or Alternative Delivery Units, as
the case may be, is to be made by Dealer pursuant to this Section 14, the period
during which Dealer purchases Shares or Alternative Delivery Units to fulfill
its delivery obligations under this Section 14 shall be referred to as the
“Seller Termination Purchase Period”.
   
15.
Calculations and Payment Date upon Early Termination.  The parties acknowledge
and agree that in calculating (a) the Close-Out Amount pursuant to Section 6 of
the Agreement and (b) the amount due upon cancellation or termination of any
Transaction (whether in whole or in part) pursuant to Article 12 of the Equity
Definitions as a result of an Extraordinary Event, Dealer may (but need not)
determine such amount based on (i) expected losses assuming a commercially
reasonable (including, without limitation, with regard to reasonable legal and
regulatory guidelines) risk bid were used to determine loss or (ii) the price at
which one or more market participants would offer to sell to the Seller a block
of shares of Common Stock equal in number to the Seller’s hedge position in
relation to the Transaction.  Notwithstanding anything to the contrary in
Section 6(d)(ii) of the Agreement or Article 12 of the Equity Definitions, all
amounts calculated as being due in respect of an Early Termination Date under
Section 6(e) of the Agreement or upon cancellation or termination of the
relevant Transaction under Article 12 of the Equity Definitions will be payable
on the day that notice of the amount payable is effective; provided that if
Counterparty elects to receive or deliver Shares or Alternative Delivery Units
in accordance with Section 14, such Shares or Alternative Delivery Units shall
be delivered on a date selected by Dealer as promptly as practicable.

 

© 2016 Corning Incorporated. All Rights Reserved.

 
 

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16.
Limit on Beneficial Ownership.  Notwithstanding anything to the contrary in this
Master Confirmation, Counterparty acknowledges and agrees that, on any day,
Dealer shall not be obligated to receive from Counterparty any Shares, and
Counterparty shall not be entitled to deliver to Dealer any Shares, to the
extent (but only to the extent) that after such transactions Dealer’s ultimate
parent entity would directly or indirectly “beneficially own” (as such term is
defined for purposes of Section 13(d) of the Exchange Act) at any time on such
day in excess of 8% of the outstanding Shares.  Any purported receipt of Shares
shall be void and have no effect to the extent (but only to the extent) that
after such receipt, Dealer’s ultimate parent entity would directly or indirectly
so beneficially own in excess of 8% of the outstanding Shares.  If, on any day,
any receipt of Shares by Dealer is not effected, in whole or in part, as a
result of this Section 16, Counterparty’s obligations to deliver such Shares
shall not be extinguished and any such delivery shall be effected over time by
Counterparty as promptly as Dealer determines, such that after any such
delivery, Dealer’s ultimate parent entity would not directly or indirectly
beneficially own in excess of 8% of the outstanding Shares.
       
17.
Maximum Share Delivery. Notwithstanding anything to the contrary in this Master
Confirmation, in no event shall Dealer be required to deliver any Shares, or any
Shares or other securities comprising Alternative Delivery Units, in respect of
any Transaction in excess of the Maximum Number of Shares set forth in the
Supplemental Confirmation for such Transaction, as such number may be
proportionately adjusted by the Calculation Agent to reflect stock splits or
similar events.
       
18.
Additional Termination Events.
         
(a)
 
Notwithstanding anything to the contrary in Section 6 of the Agreement, if a
Termination Price is specified in the Supplemental Confirmation for any
Transaction, then an Additional Termination Event will occur without any notice
or action by Dealer or Counterparty if the closing price of the Shares on the
Exchange for any two consecutive Exchange Business Days falls below such
Termination Price and for the purposes of the Agreement, such second consecutive
Exchange Business Day will be the “Early Termination Date”; and
         
(b)
 
[Reserved]
       
19.
Non-confidentiality.  Notwithstanding any provision in this Master Confirmation
to the contrary, in connection with Section 1.6011-4 of the Treasury
Regulations, the parties hereby agree that each party (and each employee,
representative, or other agent of such party) may disclose to any and all
persons, without limitation of any kind, the U.S. tax treatment and U.S. tax
structure of any Transaction and all materials of any kind (including opinions
or other tax analyses) that are provided to such party relating to such U.S. tax
treatment and U.S. tax structure, other than any information for which
nondisclosure is reasonably necessary in order to comply with applicable
securities laws.
   
20.
Counterparty Indemnification.  Counterparty agrees to indemnify and hold
harmless Dealer and its officers, directors, employees, Affiliates, advisors,
agents and controlling persons (each, an “Indemnified Person”) from and against
any and all losses, claims, damages and liabilities, joint or several
(collectively, “Obligations”), to which an Indemnified Person may become subject
arising out of or attributable to: (a) any breach by Counterparty of its
obligations under this Master Confirmation; (b) the incorrectness or inaccuracy
of any of Counterparty’s representations or warranties; or (c) any violation by
Counterparty of applicable laws or regulations relating to this Master
Confirmation or any Transaction, or any claim, litigation, investigation or
proceeding relating thereto, regardless of whether any of such Indemnified
Person is a party thereto, and to reimburse, upon written request, each such
Indemnified Person for any reasonable legal or other expenses incurred in
connection with investigating, preparation for, providing evidence for or
defending any of the foregoing; provided, however, that Counterparty shall not
have any liability to any Indemnified Person to the extent that such Obligations
(a) are finally determined by a court of competent jurisdiction to have resulted
from the gross negligence, bad faith, breach of agreement or willful misconduct
of such Indemnified Person (and in such case, such Indemnified Person shall
promptly return to Counterparty any amounts previously expended by Counterparty
hereunder) or (b) are trading losses incurred by Dealer as part of its purchases
or sales of Shares pursuant to this Master Confirmation or any Supplemental
Confirmation (unless such trading losses are a direct result of the breach of
any agreement, term or covenant herein).

 

© 2016 Corning Incorporated. All Rights Reserved.

 
 

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21.
Assignment and Transfer.  Notwithstanding anything to the contrary in the
Agreement, Dealer may assign any of its rights or duties hereunder to any one or
more of its Affiliates organized in the United States (or any State thereof) or
in England whose obligations hereunder are guaranteed by Dealer without the
prior written consent of Counterparty subject to (A) the following conditions:
         
(i) Counterparty will not be required to pay to the transferee an amount in
respect of an Indemnifiable Tax under Section 2(d)(i)(4) of the Agreement
(except in respect of interest under Section 2(e), 6(d)(ii), or 6(e)) greater
than the amount in respect of which Counterparty would have been required to pay
to Dealer  in the absence of such transfer;
         
(ii) Counterparty will not receive a payment from which an amount has been
withheld or deducted, on account of a Tax under Section 2(d)(i) (except in
respect of interest under Section 2(e), 6(d)(ii), or 6(e) of the Agreement), in
excess of that which Dealer would have been required to so withhold or deduct in
the absence of such transfer, unless the transferee would be required to make
additional payments pursuant to Section 2(d)(i)(4) of the Agreement
corresponding to such withholding or deduction;
         
(iii) It is not unlawful for either party to perform any obligation under the
Agreement or the Transaction as a result of such transfer; and
         
(iv) An Extraordinary Event, Announcement Event, Potential Adjustment Event,
Event of Default or Termination Event does not occur as a result of such
transfer;
                         
Notwithstanding any other provision in this Master Confirmation to the contrary
requiring or allowing Dealer to purchase, sell, receive or deliver any Shares or
other securities to or from Counterparty, Dealer may designate any of its
Affiliates to purchase, sell, receive or deliver such Shares or other securities
and otherwise to perform Dealer’s obligations in respect of any Transaction and
any such designee may assume such obligations.  Dealer may assign the right to
receive Settlement Shares to any third party who may legally receive Settlement
Shares.  Dealer shall be discharged of its obligations to Counterparty only to
the extent of any such performance.  For the avoidance of doubt, Dealer hereby
acknowledges that notwithstanding any such designation hereunder, to the extent
any of Dealer’s obligations in respect of any Transaction are not completed by
its designee, Dealer shall be obligated to continue to perform or to cause any
other of its designees to perform in respect of such obligations.
   
22.
Amendments to the Equity Definitions.
         
(a)
 
Section 11.2(e) of the Equity Definitions is hereby amended by deleting items
(iii) and  (v) in their entirety.
         
(b)
 
Section 12.9(b)(v) of the Equity Definitions is hereby amended by adding the
phrase "; provided that the Non-Hedging Party may so elect to terminate the
Transaction only if the Non-Hedging Party notifies the Hedging Party, in
writing, of such election, which writing shall state that, as of such date, the
Non-Hedging Party is making such election in good faith and not as part of a
plan or scheme to evade compliance with the federal securities laws" immediately
prior to the period at the end of subsection (C).
       
23.
Extraordinary Dividend.  If Counterparty declares any Extraordinary Dividend
that has an ex-dividend date during the period commencing on the Trade Date for
any Transaction and ending on the last day of the Relevant Period or, if
applicable, the later of the last day of the Settlement Valuation Period and the
last day of the Seller Termination Purchase Period, for such Transaction, then
prior to or on the date on which such Extraordinary Dividend is paid by
Counterparty to holders of record, Counterparty shall pay to Dealer, for each
Transaction under this Master Confirmation, an amount in cash equal to the
product of (i) the amount of such Extraordinary Dividend and (ii) the
theoretical short delta number of shares as of the opening of business on the
related ex-dividend date, as determined by the Calculation Agent, required for
Dealer to hedge its exposure to such Transaction.

 

© 2016 Corning Incorporated. All Rights Reserved.

 
 

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24.
Status of Claims in Bankruptcy.  Dealer acknowledges and agrees that neither
this Master Confirmation nor any Supplemental Confirmation is intended to convey
to Dealer rights against Counterparty with respect to any Transaction that are
senior to the claims of common stockholders of Counterparty in any United States
bankruptcy proceedings of Counterparty; provided that nothing herein shall limit
or shall be deemed to limit Dealer’s right to pursue remedies in the event of a
breach by Counterparty of its obligations and agreements with respect to any
Transaction; provided further that nothing herein shall limit or shall be deemed
to limit Dealer’s rights in respect of any transactions other than any
Transaction.
       
25.
Wall Street Transparency and Accountability Act.  In connection with Section 739
of the Wall Street Transparency and Accountability Act of 2010 (“WSTAA”), the
parties hereby agree that neither the enactment of WSTAA or any regulation under
the WSTAA, nor any requirement under WSTAA or an amendment made by WSTAA, nor
any similar legal certainty provision in any legislation enacted, or rule or
regulation promulgated, on or after the date of this Master Confirmation, shall
limit or otherwise impair either party’s otherwise applicable rights to
terminate, renegotiate, modify, amend or supplement any Supplemental
Confirmation, this Master Confirmation or the Agreement, as applicable, arising
from a termination event, force majeure, illegality, increased costs, regulatory
change or similar event under any Supplemental Confirmation, this Master
Confirmation, the Equity Definitions incorporated herein, or the Agreement
(including, without limitation, rights arising from Change in Law, Loss of Stock
Borrow, Increased Cost of Stock Borrow, or Illegality).
       
26.
Waiver of Jury Trial.  EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT,
ACTION OR PROCEEDING RELATING TO THE AGREEMENT, THIS MASTER CONFIRMATION, EACH
SUPPLEMENTAL CONFIRMATION, THE TRANSACTIONS HEREUNDER AND ALL MATTERS ARISING IN
CONNECTION WITH THE AGREEMENT, THIS MASTER CONFIRMATION AND ANY SUPPLEMENTAL
CONFIRMATION AND THE TRANSACTIONS HEREUNDER.  EACH PARTY (I) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF SUCH A SUIT,
ACTION OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER AND (II) ACKNOWLEDGES
THAT IT AND THE OTHER PARTY HAVE BEEN INDUCED TO ENTER INTO THE TRANSACTIONS, AS
APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
PROVIDED HEREIN.
   
27.
Counterparts.  This Master Confirmation may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and any
party hereto may execute this Master Confirmation by signing and delivering one
or more counterparts.

© 2016 Corning Incorporated. All Rights Reserved.

 
 

--------------------------------------------------------------------------------

 

Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this Master Confirmation and returning it to us.
 

 
Very truly yours,
 
                   
MORGAN STANLEY & CO. LLC
 
 
 
 
By:
/s/ Scott McDavid
 
Authorized Signatory
 
Name:
Scott McDavid, Managing Director

 

Accepted and confirmed
as of the date first set
forth above:
       
CORNING INCORPORATED
 
 
 
 
By:
/s/ Robert Vanni
 
Authorized Signatory
 
Name:
/s/ Robert Vanni
 

© 2016 Corning Incorporated. All Rights Reserved.

 
 

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SCHEDULE A
 
FORM OF SUPPLEMENTAL CONFIRMATION
 

MORGAN STANLEY & CO. LLC

 
October [_], 2015

To:
Corning Incorporated
 
[_______________]
 
[_______________]
 
Attention:
[Title of contact]
 
Telephone No.:
[____________]
 
Facsimile No.:
[____________]

Re:
Supplemental Confirmation—Uncollared Accelerated Share Repurchase

The purpose of this Supplemental Confirmation is to confirm the terms and
conditions of the Transaction entered into between Morgan Stanley & Co. LLC
(“Dealer”), and Corning Incorporated, a New York corporation (“Counterparty”) on
the Trade Date specified below.  This Supplemental Confirmation is a binding
contract between Dealer and Counterparty as of the relevant Trade Date for the
Transaction referenced below.
 
1.           This Supplemental Confirmation supplements, forms part of, and is
subject to the Master Confirmation, dated as of [  ] (the “Master
Confirmation”), between Dealer and Counterparty, as amended and supplemented
from time to time.  All provisions contained in the Master Confirmation govern
this Supplemental Confirmation except as expressly modified below.
 
2.           The terms of the Transaction to which this Supplemental
Confirmation relates are as follows:
 
Trade Date:
[__________], 2015
   
Forward Price Adjustment Amount:
USD [___]
   
Calculation Period Start Date:
The [__]th Scheduled Trading Day immediately following the Trade Date.
   
Scheduled Termination Date:
[     ]
   
First Acceleration Date:
[     ].
   
Prepayment Amount:
USD [___]
   
Prepayment Date:
[__________], 2015
   

 

A-1

© 2016 Corning Incorporated. All Rights Reserved.

 
 

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Initial Shares:
[___] Shares; provided that if, in connection with the Transaction, Dealer is
unable, after using commercially reasonable efforts, to borrow or otherwise
acquire a number of Shares equal to the Initial Shares for delivery to
Counterparty on the Initial Share Delivery Date, the Initial Shares delivered on
the Initial Share Delivery Date shall be reduced to such number of Shares that
Dealer is able to so borrow or otherwise acquire provided further that (i) if
the Initial Shares are reduced as provided in the preceding proviso, then Dealer
shall use commercially reasonable efforts to borrow or otherwise acquire an
additional number of Shares equal to the shortfall in the Initial Shares
delivered on the Initial Share Delivery Date and shall deliver such additional
Shares as promptly as practicable, and all Shares so delivered shall be
considered Initial Shares, and (ii) if fewer than [same number as above] Initial
Shares are so delivered in the aggregate on or prior to the second Exchange
Business Day following the Initial Share Delivery Date, then (A) the Prepayment
Amount shall be reduced by an amount equal to (x)(I) [same number as above]
minus (II) the aggregate number of Initial Shares so delivered on or prior to
such second Exchange Business Day multiplied by (y) USD [insert closing price on
the Trade Date] divided by (z) [   ], and (B) Dealer shall return to
Counterparty on such second Exchange Business Day the amount by which the
Prepayment Amount is so reduced.  All Shares delivered to Counterparty in
respect of the Transaction pursuant to this paragraph shall be the “Initial
Shares” for purposes of “Number of Shares to be Delivered” in the Master
Confirmation.
   
Initial Share Delivery Date:
[__________], 20[__]
   
Ordinary Dividend Amount:
For any Dividend before the Termination Date, USD [___] per Share
 
For any Dividend after the Termination Date, USD 0.00 per Share
   
Scheduled Ex-Dividend Dates:
[__________]
   
Maximum Stock Loan Rate:
400 basis points per annum
   
Initial Stock Loan Rate:
60 basis points per annum
   
Maximum Number of Shares:
[___]Shares
   
Floor Price:
USD 0.01 per Share
   
Termination Price:
USD [___] per Share
   
Excluded Days:
N/A
   
Additional Relevant Days:
N/A
   
Reserved Shares:
Notwithstanding anything to the contrary in the Master Confirmation, as of the
date of this Supplemental Confirmation, the Reserved Shares shall be equal to
[___] Shares.

A-2

© 2016 Corning Incorporated. All Rights Reserved.

 
 

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3.           Counterparty represents and warrants to Dealer that neither it nor
any “affiliated purchaser” (as defined in Rule 10b-18 under the Exchange Act)
has made any purchases of blocks pursuant to the proviso in Rule 10b-18(b)(4)
under the Exchange Act during either (i) the four full calendar weeks
immediately preceding the Trade Date or (ii) during the calendar week in which
the Trade Date occurs, except as set forth in any notice delivered pursuant to
Section 6(b)(xv) of the Master Confirmation.
 
4.           This Supplemental Confirmation may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and any
party hereto may execute this Supplemental Confirmation by signing and
delivering one or more counterparts.
 
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this Supplemental Confirmation and returning it to us.

 

 
Very truly yours,
 
                   
MORGAN STANLEY & CO. LLC
 
 
 
 
By:
   
Authorized Signatory
 
Name:
 

 

Accepted and confirmed
as of the Trade Date:
       
CORNING INCORPORATED
 
 
 
 
By:
   
Authorized Signatory
 
Name:
   

 
A-3

© 2016 Corning Incorporated. All Rights Reserved.

 
 

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SCHEDULE B

FORM OF CERTIFICATE OF RULE 10B-18 PURCHASES

Morgan Stanley

Morgan Stanley & Co. LLC

Re:           Uncollared Accelerated Share Repurchase

Ladies and Gentlemen:

In connection with our entry into the Master Confirmation, dated as of October
28,2015, between Dealer and Corning Incorporated, a New York corporation, as
amended and supplemented from time to time (the “Master Confirmation”), we
hereby represent that set forth below is the total number of shares of our
common stock purchased by or for us or any of our affiliated purchasers in Rule
10b-18 purchases of blocks (all as defined in Rule 10b-18 under the Securities
Exchange Act of 1934) pursuant to the once-a-week block exception set forth in
Rule 10b-18(b)(4) during the four full calendar weeks immediately preceding the
first day of the [Calculation Period][Settlement Valuation Period][Seller
Termination Purchase Period] (as defined in the Master Confirmation) and the
week during which the first day of such [Calculation Period][Settlement
Valuation Period][Seller Termination Purchase Period] occurs.

Number of Shares:   __________________

We understand that you will use this information in calculating trading volume
for purposes of Rule 10b-18.

Very truly yours,

CORNING INCORPORATED
 
 
 
 
By:
   
Authorized Signatory
 
Name:
   

B-1

© 2016 Corning Incorporated. All Rights Reserved.

 
 

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ANNEX A

COUNTERPARTY SETTLEMENT PROVISIONS
 

 
1.           The following Counterparty Settlement Provisions shall apply to any
Transaction to the extent indicated under the Master Confirmation:

 
Settlement Currency:
USD
   
Settlement Method Election:
Applicable; provided that (i) Section 7.1 of the Equity Definitions is hereby
amended by deleting the word “Physical” in the sixth line thereof and replacing
it with the words “Net Share” and (ii) the Electing Party may make a settlement
method election only if the Electing Party represents and warrants to Dealer in
writing on the date it notifies Dealer of its election that, as of such date,
the Electing Party is not aware of any material non-public information regarding
Counterparty or the Shares and is electing the settlement method in good faith
and not as part of a plan or scheme to evade compliance with the federal
securities laws.
   
Electing Party:
Counterparty
   
Settlement Method Election Date:
Subsequent to the expiration of the Settlement Valuation Period, the earlier of
(i) the date on which Counterparty is able to make the representation and
warranty required for such election, as provided under “Settlement Method
Election”, and (ii) the 45th calendar day following the conclusion of the
Settlement Valuation Period.
   
Default Settlement Method:
Cash Settlement
   
Forward Cash Settlement Amount:
An amount equal to (a) the Number of Shares to be Delivered, multiplied by (b)
the Settlement Price.
   
Settlement Price:
The average of the 10b-18 VWAP prices for the Exchange Business Days in the
Settlement Valuation Period, subject to Valuation Disruption as specified in the
Confirmation.
   
Settlement Valuation Period:
A number of Scheduled Trading Days selected by Dealer in its reasonable
discretion by notice to Counterparty on or prior to the second Schedule Trading
Day prior to the last Scheduled Trading Day thereof, beginning on the Scheduled
Trading Day immediately following the earlier of (i) the Scheduled Termination
Date or (ii) the Exchange Business Day immediately following the Termination
Date.
   
Cash Settlement:
If Cash Settlement is applicable, then Buyer shall pay to Dealer the absolute
value of the Forward Cash Settlement Amount on the Cash Settlement Payment Date.
   
Cash Settlement Payment Date:
The Exchange Business Day immediately following the date of Counterparty’s
Settlement Method Election or, if no election is made, the Settlement Method
Election Date.
   
Net Share Settlement Procedures:
If Net Share Settlement is applicable, Net Share Settlement shall be made in
accordance with paragraphs 2 through 7 below.

 
ANNEX A

© 2016 Corning Incorporated. All Rights Reserved.

 
 

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2.           Net Share Settlement shall be made by delivery on the Cash
Settlement Payment Date of a number of Shares satisfying the conditions set
forth in paragraph 3 below (the “Registered Settlement Shares”), or a number of
Shares not satisfying such conditions (the “Unregistered Settlement Shares”), in
either case with a value equal to 101% (in the case of Registered Settlement
Shares) or 105% (in the case of Unregistered Settlement Shares) of the absolute
value of the Forward Cash Settlement Amount, with such Shares’ value based on
the value thereof to Dealer (which value shall, in the case of Unregistered
Settlement Shares, take into account a commercially reasonable illiquidity
discount), in each case as determined by the Calculation Agent.  If all of the
conditions for delivery of either Registered Settlement Shares or Unregistered
Settlement Shares have not been satisfied, Cash Settlement shall be applicable
in accordance with paragraph 1 above notwithstanding Counterparty’s election of
Net Share Settlement.
 
3.           Counterparty may only deliver Registered Settlement Shares pursuant
to paragraph 2 above if:
 
(a)           a registration statement covering public resale of the Registered
Settlement Shares by Dealer (the “Registration Statement”) shall have been filed
with the Securities and Exchange Commission under the Securities Act and been
declared or otherwise become effective on or prior to the date of delivery, and
no stop order shall be in effect with respect to the Registration Statement; a
printed prospectus relating to the Registered Settlement Shares (including,
without limitation, any prospectus supplement thereto, the “Prospectus”) shall
have been delivered to Dealer, in such quantities as Dealer shall reasonably
have requested, on or prior to the date of delivery;
 
(b)           the form and content of the Registration Statement and the
Prospectus (including, without limitation, any sections describing the plan of
distribution) shall be satisfactory to Dealer;
 
(c)           as of or prior to the date of delivery, Dealer and its agents
shall have been afforded a reasonable opportunity to conduct a due diligence
investigation with respect to Counterparty customary in scope for underwritten
offerings of equity securities and the results of such investigation are
satisfactory to Dealer, in its discretion; and
 
(d)           as of the date of delivery, an agreement (the “Underwriting
Agreement”) shall have been entered into with Dealer in connection with the
public resale of the Registered Settlement Shares by Dealer substantially
similar to underwriting agreements customary for underwritten offerings of
equity securities, in form and substance satisfactory to Dealer, which
Underwriting Agreement shall include, without limitation, provisions
substantially similar to those contained in such underwriting agreements
relating, without limitation, to the indemnification of, and contribution in
connection with the liability of, Dealer and its Affiliates and the provision of
customary opinions, accountants’ comfort letters and lawyers’ negative assurance
letters.
 
4.           If Counterparty delivers Unregistered Settlement Shares pursuant to
paragraph 2 above:
 
(a)           all Unregistered Settlement Shares shall be delivered to Dealer
(or any Affiliate of Dealer designated by Dealer) pursuant to the exemption from
the registration requirements of the Securities Act provided by Section 4(2)
thereof;
 
(b)           as of or prior to the date of delivery, Dealer and any potential
purchaser of any such shares from Dealer (or any Affiliate of Dealer designated
by Dealer) identified by Dealer shall be afforded a commercially reasonable
opportunity to conduct a due diligence investigation with respect to
Counterparty customary in scope for similar size of private placements of equity
securities (including, without limitation, the right to have made available to
them for inspection all financial and other records, pertinent corporate
documents and other information reasonably requested by them); provided that
prior to receiving or being granted access to any such information, any such
potential purchaser may be required by Counterparty to enter into a customary
nondisclosure agreement with Counterparty in respect of any such due diligence
investigation;

 

 
ANNEX A

© 2016 Corning Incorporated. All Rights Reserved.

 
 

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(c)           as of the date of delivery, Counterparty shall enter into an
agreement (a “Private Placement Agreement”) with Dealer (or any Affiliate of
Dealer designated by Dealer) in connection with the private placement of such
shares by Counterparty to Dealer (or any such Affiliate) and the private resale
of such shares by Dealer (or any such Affiliate), substantially similar to
private placement purchase agreements customary for private placements of equity
securities, in form and substance commercially reasonably satisfactory to
Dealer, which Private Placement Agreement shall include, without limitation,
provisions substantially similar to those contained in such private placement
purchase agreements relating, without limitation, to the indemnification of, and
contribution in connection with the liability of, Dealer and its Affiliates and
the provision of customary opinions, accountants’ comfort letters and lawyers’
negative assurance letters, and shall provide for the payment by Counterparty of
all reasonable fees and actual, documented out-of-pocket expenses of Dealer (and
any such Affiliate) in connection with such resale, including, without
limitation, all reasonable fees and actual, documented out-of-pocket expenses of
counsel for Dealer, and shall contain representations, warranties, covenants and
agreements of Counterparty reasonably necessary or advisable to establish and
maintain the availability of an exemption from the registration requirements of
the Securities Act for such resales; and
 
(d)           in connection with the private placement of such shares by
Counterparty to Dealer (or any such Affiliate) and the private resale of such
shares by Dealer (or any such Affiliate), Counterparty shall, if so requested by
Dealer, prepare, in cooperation with Dealer, a private placement memorandum in
form and substance reasonably satisfactory to Dealer.
 
5.           Dealer, itself or through an Affiliate (the “Selling Agent”) or any
underwriter(s), will sell all, or such lesser portion as may be required
hereunder, of the Registered Settlement Shares or Unregistered Settlement Shares
and any Makewhole Shares (as defined below) (together, the “Settlement Shares”)
delivered by Counterparty to Dealer pursuant to paragraph 6 below commencing on
the Cash Settlement Payment Date and continuing until the date on which the
aggregate Net Proceeds (as such term is defined below) of such sales, as
determined by Dealer, is equal to the absolute value of the Forward Cash
Settlement Amount (such date, the “Final Resale Date”).  If Counterparty is
prohibited by law or by contract from disclosing all material information known
to Counterparty with respect to Counterparty and the Shares to any potential
purchasers of such Settlement Shares, then the sale of such Settlement Shares
shall not be required to commence or may be suspended until Counterparty is able
to so disclose such information.  If the proceeds of any sale(s) made by Dealer,
the Selling Agent or any underwriter(s), net of any fees and commissions
(including, without limitation, underwriting or placement fees) customary for
similar transactions under the circumstances at the time of the offering,
together with carrying charges and expenses incurred in connection with the
offer and sale of the Shares (including, without limitation, the covering of any
over-allotment or short position (syndicate or otherwise)) (the “Net Proceeds”)
exceed the absolute value of the Forward Cash Settlement Amount, Dealer will
refund, in USD, such excess to Counterparty on the date that is three (3)
Currency Business Days following the Final Resale Date, and, if any portion of
the Settlement Shares remains unsold, Dealer shall return to Counterparty on
that date such unsold Shares.
 
6.           If the Calculation Agent determines that the Net Proceeds received
from the sale of the Registered Settlement Shares or Unregistered Settlement
Shares or any Makewhole Shares, if any, pursuant to this paragraph 6 are less
than the absolute value of the Forward Cash Settlement Amount (the amount in USD
by which the Net Proceeds are less than the absolute value of the Forward Cash
Settlement Amount being the “Shortfall” and the date on which such determination
is made, the “Deficiency Determination Date”), Counterparty shall on the
Exchange Business Day next succeeding the Deficiency Determination Date (the
“Makewhole Notice Date”) deliver to Dealer, through the Selling Agent, a notice
of Counterparty’s election that Counterparty shall either (i) pay an amount in
cash equal to the Shortfall on the day that is one Currency Business Day after
the Makewhole Notice Date, or (ii) deliver additional Shares.  If Counterparty
elects to deliver to Dealer additional Shares, then Counterparty shall deliver
additional Shares in compliance with the terms and conditions of paragraph 3 or
paragraph 4 above, as the case may be (the “Makewhole Shares”), on the first
Clearance System Business Day which is also an Exchange Business Day following
the Makewhole Notice Date in such number as the Calculation Agent reasonably
believes would have a market value on that Exchange Business Day equal to the
Shortfall.  Such Makewhole Shares shall be sold by Dealer in accordance with the
provisions above; provided that if the sum of the Net Proceeds from the sale of
the originally delivered Shares and the Net Proceeds from the sale of any
Makewhole Shares is less than the absolute value of the Forward Cash Settlement
Amount then Counterparty shall, at its election, either make such cash payment
or deliver to Dealer further Makewhole Shares until such Shortfall has been
reduced to zero.
 
7.           Notwithstanding the foregoing, in no event shall the aggregate
number of Settlement Shares for any Transaction be greater than the Reserved
Shares minus the amount of any Shares actually delivered by Counterparty under
any other Transaction under this Master Confirmation (the result of such
calculation, the “Capped Number”).  Counterparty represents and warrants (which
shall be deemed to be repeated on each day that a Transaction is outstanding)
that the Capped Number is equal to or less than the number of Shares determined
according to the following formula:

 
ANNEX A

© 2016 Corning Incorporated. All Rights Reserved.

 
 

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A – B
   
Where
A
=
the number of authorized but unissued shares of Counterparty that are not
reserved for future issuance on the date of the determination of the Capped
Number; and
             
B
=
the maximum number of Shares required to be delivered to third parties if
Counterparty elected Net Share Settlement of all transactions in the Shares
(other than Transactions in the Shares under this Master Confirmation) with all
third parties that are then currently outstanding and unexercised.
         
“Reserved Shares” means initially, 133,000,000 Shares.  The Reserved Shares may
be increased or decreased in a Supplemental Confirmation.
 
If at any time, as a result of this paragraph 7, Counterparty fails to deliver
to Dealer any Settlement Shares, Counterparty shall, to the extent that
Counterparty has at such time authorized but unissued Shares not reserved for
other purposes, promptly notify Dealer thereof and deliver to Dealer a number of
Shares not previously delivered as a result of this paragraph 7.

ANNEX A

© 2016 Corning Incorporated. All Rights Reserved.

 
 

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