Document:

exhibit10_1.htm

Exhibit 10.1

	  	
To: Corning Incorporated

	  	
One Riverfront Plaza

	  	
Corning, NY 14831

	  	
Attention:

	
Stephen Propper, Assistant Treasurer

	  	
Telephone No.:

	
(607) 248-4492

	  	
Facsimile No.:

	
(607) 974-4375

	  	  	  
	  	
Re:

	
Master Confirmation—Uncollared Accelerated Share Repurchase

This master confirmation (this “Master Confirmation”), dated as of July 28, 2016, 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.

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.

© 2016 Corning Incorporated. All Rights Reserved.

 

  

1

  

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 Exchange Business 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.

 

© 2016 Corning Incorporated. All Rights Reserved.

 

  

2

  

 

	  	  	
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.

	  	  	  	  
	  	  	
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.

 

© 2016 Corning Incorporated. All Rights Reserved.

 

  

3

  

 

	  	  	  	  
	  	  	  	
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-compliant 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.

	  	  	  	  
	  	  	  	
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.

 

© 2016 Corning Incorporated. All Rights Reserved.

 

  

4

  

 

	  	
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.

 

  

5

  

 

	  	  	
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.

	  	  	  	  
	  	  	
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.

 

© 2016 Corning Incorporated. All Rights Reserved.

 

  

6

  

 

	  	  	
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.

	  	  	  	  
	  	  	
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

 

© 2016 Corning Incorporated. All Rights Reserved.

 

  

7

  

 

	  	  	
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

	  	  	  	  
	  	  	
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

 

© 2016 Corning Incorporated. All Rights Reserved.

 

  

8

  

 

	  	  	
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

	  	  	  	  
	
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.

 

© 2016 Corning Incorporated. All Rights Reserved.

 

  

9

  

 

	
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:

	
Stephen C. Propper

	  	  	
Telephone No.:

	
607-248-4492

	  	  	
Facsimile No.:

	
607-974-4375

	  	  	
Email Address:

	
proppersc@corning.com

	  	  	  	  
	  	
(b)

	
Address for notices or communications to Dealer:

	  	  	  
	  	  	
Morgan Stanley & Co. LLC

	  	  	
Attention:

	
David Oakes

	  	  	
Telephone No.:

	
+1-212-761-5319

	  	  	
Email Address:

	
david.oakes@morganstanley.com

	  	  	  	  
	  	  	
With a copy to:

	  	  	
Morgan Stanley & Co. LLC

	  	  	
Attention:

	
Steven Seltzer

	  	  	
Telephone No.:

	
+1-212-761-1719

	  	  	
Facsimile:

	
+1-212-507-1554

	  	  	
Email Address:

	
steven.seltzer1@morganstanley.com

 

© 2016 Corning Incorporated. All Rights Reserved.

 

  

10

  

 

	
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.

	  	  	  	  
	  	  	
(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.

 

© 2016 Corning Incorporated. All Rights Reserved.

 

  

11

  

 

	  	  	
(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 8 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.

 

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(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.

	  	  	  	  
	  	  	
(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 written procedures provided by Dealer to Counterparty.

	  	  	  	  
	
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.

 

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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

	  	  	  	  
	  	  	
(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 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.

 

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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.

	  	  	  
	  	
(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 “25%” 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 25% 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 25% 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).

 

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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).

	  	  	  	  
	  	
(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.

 

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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.

	  	  
	
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 14 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 14 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 14 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”.

 

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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.

	  	  	  	  
	
16.

	
Limit on Beneficial Ownership.  Notwithstanding any other provisions hereof, Dealer may not be entitled to take delivery of any Shares deliverable hereunder to the extent (but only to the extent) that, after such receipt of any Shares hereunder, the Equity Percentage would exceed 8%.  Any purported delivery hereunder shall be void and have no effect to the extent (but only to the extent) that, after such delivery the Equity Percentage would exceed 8%. If any delivery owed to Dealer hereunder is not made, in whole or in part, as a result of this provision, Counterparty’s obligation to make such delivery shall not be extinguished and Counterparty shall make such delivery as promptly as practicable after, but in no event later than one Business Day after, Dealer gives notice to Counterparty that, after such delivery, the Equity Percentage would not exceed 8%.  The “Equity Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the number of Shares that Dealer and any of its affiliates or any other person subject to aggregation with Dealer for purposes of the “beneficial ownership” test under Section 13 of the Exchange Act, or any “group” (within the meaning of Section 13) of which Dealer is or may be deemed to be a part beneficially owns (within the meaning of Section 13 of the Exchange Act), without duplication, on such day (or, to the extent that for any reason the equivalent calculation under Section 16 of the Exchange Act and the rules and regulations thereunder results in a higher number, such higher number) and (B) the denominator of which is the number of Shares outstanding on such day.

	  	  	  	  
	
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”

	  	  	  
	
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.

 

© 2016 Corning Incorporated. All Rights Reserved.

 

  

20

  

 

	
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).

	  	  	  	  
	
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.

	  	  	  	  

 

© 2016 Corning Incorporated. All Rights Reserved.

 

  

21

  

 

	
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)(iv) of the Equity Definitions is hereby amended by deleting (1) subsection (A) in its entirety, (2) the phrase “or (B)” following subsection (A) and (3) the phrase “in each case” in subsection (B); and replacing the phrase “neither the Non-Hedging Party nor the Lending Party lends Shares” with the phrase “such Lending Party does not lend Shares” in the penultimate sentence.

	  	  	  	  
	  	
(c)

	
Section 12.9(b)(v) of the Equity Definitions is hereby amended by adding the word “or” immediately before subsection “(B)” and deleting the comma at the end of subsection (A); and (1) deleting subsection (C) in its entirety, (2) deleting the word “or” immediately preceding subsection (C), (3) deleting the penultimate sentence in its entirety and replacing it with the sentence “The Hedging Party will determine the Cancellation Amount payable by one party to the other” and (4) deleting clause (X) in the final sentence.

	  	  	  	  
	
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.

	  	  	  	  
	
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).

 

© 2016 Corning Incorporated. All Rights Reserved.

 

  

22

  

 

	
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.

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/ Chris Andrews

	  	
Authorized Signatory

	  	
Name:

	
Chris Andrews

	
Accepted and confirmed

	  
	
as of the date first set

	  
	
forth above:

	  
	  	  
	
CORNING INCORPORATED

	  
	  	  
	  	  
	
By:

	
/s/ Mark S. Rogus

	  
	
Senior Vice President and Treasurer

	  
	
Name:

	
Mark S. Rogus

	  

 

 

© 2016 Corning Incorporated. All Rights Reserved.

 

  

23

  

SCHEDULE A

 

FORM OF SUPPLEMENTAL CONFIRMATION

	
[_____]

	  	  	  	  
	  	  	  	  	  
	  	  	  	  	
[_____], 201[6]

	
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 [_____] (“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

 

© 2016 Corning Incorporated. All Rights Reserved.

A-1

  

  

  

 

	
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:

	
200 basis points per annum

	  	  
	
Initial Stock Loan Rate:

	
25 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

 

© 2016 Corning Incorporated. All Rights Reserved.

A-2

  

  

  

 

	
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.

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,

	  	
[_____]

	  	  
	  	  
	  	
By:

	  
	  	
Authorized Signatory

	  	
Name:

	  

	
Accepted and confirmed

	  
	
as of the Trade Date:

	  
	  	  
	
CORNING INCORPORATED

	  
	  	  
	  	  
	
By:

	  	  
	
Authorized Signatory

	  
	
Name:

	  	  

 

 

 

 

© 2016 Corning Incorporated. All Rights Reserved.

A-3

  

  

  

SCHEDULE B

 

FORM OF CERTIFICATE OF RULE 10B-18 PURCHASES

[_____]

Re:           Uncollared Accelerated Share Repurchase

Ladies and Gentlemen:

In connection with our entry into the Master Confirmation, dated as of [_____], 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:

	  

 

 

© 2016 Corning Incorporated. All Rights Reserved.

B-1

  

  

  

 

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 Scheduled 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.

	  	  

 

© 2016 Corning Incorporated. All Rights Reserved.

Annex A - 1

  

  

  

 

	
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.

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;

© 2016 Corning Incorporated. All Rights Reserved.

Annex A - 2

  

  

  

(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.

© 2016 Corning Incorporated. All Rights Reserved.

Annex A - 3

  

  

  

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:

	
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, 200,000,000 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.

© 2016 Corning Incorporated. All Rights Reserved.

Annex A - 4EMPLOYMENT
AGREEMENT

 

THIS
EMPLOYMENT AGREEMENT (this “Agreement”) is dated as of October 24, 2016 and is entered into by and
between Agustin Gago (the “Executive”) and InspireMD, Inc. (the “Company”).
The Company and the Executive shall be referred to herein as the “Parties.”

 

RECITALS

 

Whereas,
the Company desires to employ the Executive as its Executive Vice-President, Chief Commercial Officer and the Executive desires
to be employed by the Company as its Executive Vice-President, Chief Commercial Officer;

 

Whereas,
the Company and the Executive desire to set forth in writing the terms and conditions of their agreement and understandings with
respect to the employment of the Executive as its Executive Vice-President, Chief Commercial Officer; and

 

Whereas,
the Company hereby employs the Executive, and the Executive hereby accepts employment with the Company for the period and upon
the terms and conditions contained in this Agreement.

 

Now,
Therefore, in consideration of the mutual
promises and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound, the Parties hereby agree as follows:

 

ARTICLE
I.

Services
to be Provided by THE Executive

 

A.Position
and Responsibilities. The Executive shall be employed and serve as the Executive Vice-President, Chief Commercial Officer
of the Company (together with such other position or positions consistent with the Executive’s title as the President and
Chief Executive Officer shall specify from time to time) and shall report directly to the President and Chief Executive Officer.
The Executive shall have such duties and responsibilities commensurate with such title, and as the President and Chief Executive
Officer may require of the Executive from time to time.

 

B.Performance.
During the Executive’s employment with the Company, the Executive shall devote on a full-time basis all of the Executive’s
time, energy, skill and reasonable best efforts to the performance of the Executive’s duties hereunder in a manner that
will faithfully and diligently further the business and interests of the Company, and shall exercise reasonable best efforts to
perform the Executive’s duties in a diligent, trustworthy, good faith and business-like manner, all for the purpose of advancing
the business of the Company. The Executive shall at all times act in a manner consistent with the Executive’s position.

    	 	 	 

     

    

 

C.Compliance.
The Executive agrees to act in accordance with high business and ethical standards at all times. The Executive shall comply with
the policies, codes of conduct, codes of ethics, written manuals and lawful directives of the Company and any of its affiliates.
The Executive shall comply with all laws of any jurisdiction in which the Company does business. The Executive shall keep the
President and Chief Executive Officer promptly and fully informed of the Executive’s conduct in connection with the business
affairs of the Company. The Executive shall report the Executive’s own wrongdoing and any wrongdoing or proposed wrongdoing
of any other employee, director, or contractor of the Company or other person performing services on behalf of the Company to
the President and Chief Executive Officer or the Board of Directors (the “Board”) immediately upon becoming
aware of it.

 

ARTICLE
II.

Compensation
for SErvices

 

As
compensation for all services the Executive will perform under this Agreement, the Company will pay the Executive, and the Executive
shall accept as full compensation, the following:

 

A.Base
Salary. The Company shall pay the Executive an annual salary of $275,000 less applicable payroll deductions and tax withholdings
(the “Base Salary”) for all services rendered by the Executive under this Agreement. Notwithstanding
the foregoing, the Base Salary shall automatically increase to $300,000 effective January 1, 2018. The Company shall pay the Base
Salary in accordance with the normal payroll practices of the Company.

 

B.Annual
Bonus. Commencing in 2017, the Executive shall be eligible to receive an annual bonus (the “Annual Bonus”)
during each year of the Term as provided in this Article II, Section B. The Executive shall be eligible to receive an Annual
Bonus in an amount up to 50% of his then-Base Salary, less applicable payroll deductions and tax withholdings, based upon the
achievement of reasonable target objectives and performance goals as may be determined by the President and Chief Executive Officer
and approved by the Board after consultation with the Executive (the “Objectives”). The Objectives shall
be based 60% on revenue achievement, 20% on marketing objectives, and 20% on corporate objectives. In addition, in the event that
the Executive and his team shall exceed quarterly revenue targets determined by the President and Chief Executive Officer and
approved by the Board after consultation with the Executive, the Executive may receive additional escalating amounts included
as part of the Annual Bonus based upon the payment scales determined by the President and Chief Executive Officer and approved
by the Board after consultation with the Executive. The Annual Bonus shall be payable in accordance with the Company’s annual
bonus plan (the “Bonus Plan”). Amounts payable under the Bonus Plan shall be determined by the Board
and shall be payable following such fiscal year and no later than two and one-half months after the end of such fiscal year.

 

C.2016
Bonus. The Company agrees that should the Company’s net sales for the final quarter of 2016 (as determined by the
Company) exceed its current forecast by 20% or greater, the Company shall pay the Executive a one-time bonus of $25,000, less
applicable payroll deductions and tax withholdings (the “2016 Sales Bonus”). The 2016 Sales Bonus shall
be payable on or before February 1, 2017.

 

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D.One-Time
Bonus and Grant. The Company shall pay to the Executive a one-time lump-sum cash bonus in an amount equal to $25,000,
less applicable taxes and withholdings, payable on or before November 15, 2016. On the Effective Date (defined below), the Company
shall also grant to the Executive a stock option for the number of shares of the Company’s common stock with a fair market
value on the date of grant equal to $25,000, subject to the terms and conditions of the InspireMD, Inc. 2013 Long-Term Incentive
Plan, as amended (or any successor plan thereto) (the “LTIP”) and the Company’s form of option
award agreement, which terms shall include, without limitation, vesting of 100% of the options on the first anniversary of the
date of grant (subject to forfeiture upon termination of employment) and an exercise price equal to the fair market value of the
Company’s common stock on the date of grant.

 

E.Equity
Awards. On the Effective Date (defined below), the Company shall grant to the Executive a second stock option to purchase
32,000 shares of the Company’s common stock, subject to the terms and conditions of the LTIP and the Company’s form
of option award agreement, which terms shall include, without limitation, vesting of the options in equal installments on the
first and second anniversary of the date of grant (subject to forfeiture upon termination of employment) and an exercise price
equal to the fair market value of the Company’s common stock on the date of grant. In addition, the Executive may be eligible
to receive certain stock options or similar stock-based rights granted to the Executive as set forth separately in those certain
agreements and subject to the terms and conditions of the LTIP.

 

F.Expenses.
The Company agrees that, during the Executive’s employment, it will reimburse the Executive for out-of-pocket expenses reasonably
incurred in connection with the Executive’s performance of the Executive’s services hereunder, upon the presentation
by the Executive of an itemized accounting of such expenditures, with supporting receipts. Reimbursement shall be in compliance
with the Company’s expense reimbursement policies.

 

G.Vacation.
The Executive also shall be eligible for paid vacation in accordance with the Company’s policy, as in effect from time to
time.

 

H.Other
Benefits. The Executive is entitled to participate in any group health insurance plan, 401(k) plan, disability plan, group
life plan, and any other benefit or welfare program or policy that is made generally available, from time to time, to other employees
of the Company, on a basis consistent with such participation and subject to the terms of the plan documents, as such plans may
be modified, amended, terminated, or replaced from time to time. Notwithstanding anything to the contrary contained herein and
solely to the extent permitted by applicable law, in the event that the Company does not have a group health plan on the Effective
Date (defined below) and the Executive (and his eligible dependents) purchases group health plan coverage, the Company agrees
to pay or reimburse the Executive for 100% of the premiums due with respect to such coverage, in an amount not to exceed $2,500
per month, less any required tax withholdings, upon presentation by the Executive to the Company of a statement of premiums due
with respect to such coverage, from the Effective Date (defined below) until the earliest of (i) the date the Executive and his
eligible dependents are eligible for coverage under a group health plan of the Company; or (ii) the end of the Term.

 

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ARTICLE
III.

Term; Termination

 

A.Term
of Employment. This Agreement shall be binding upon and enforceable against the Company and the Executive immediately
when both parties execute the Agreement. The Agreement’s stated term and the employment relationship created hereunder will
begin on October 24, 2016 (the “Effective Date”) and will remain in effect until October 23, 2018, unless
earlier terminated or extended in accordance with this Article III. This Agreement shall automatically renew for additional
one-year periods on October 23, 2018 and on each and every October 23 thereafter unless either party gives the other party written
notice of its or his election not to extend such employment at least two (2) months prior to the expiration date or next renewal
date. The period during which the Executive is employed under this Agreement will be referred to as the “Term”
and the effective date of the termination of the Executive’s employment will be referred to as the “Termination
Date.”

 

B.Termination.
Subject to the terms herein, either party may terminate the Executive’s employment at any time; provided that the Executive
will be required to provide the Company at least ninety (90) days’ advance written notice of the Executive’s voluntary
resignation and the Company will be required to provide the Executive at least ninety (90) days’ advance written notice
of the Executive’s termination by the Company without Cause (defined below). The Termination Date shall be the date stated
in the notice of termination. Upon termination of the Executive’s employment, the Company shall pay the Executive (i) any
unpaid Base Salary accrued through the Termination Date, (ii) any accrued and unpaid vacation pay to which the Executive is entitled
as a matter of law or Company policy, and (iii) any unreimbursed expenses properly incurred prior to the Termination Date (the
“Accrued Obligations”).

 

(i)Termination
for Cause or Voluntary Resignation. In the event the Company terminates the Executive’s employment for Cause (defined
below) or the Executive voluntarily resigns, the Company shall have no further liability or obligation to the Executive under
this Agreement or in connection with the Executive’s employment hereunder, except for the Accrued Obligations. The Accrued
Obligations shall be payable in a lump sum within the time period required by applicable law, and in no event later than thirty
(30) days following the Termination Date. For purposes of this Agreement, “Cause” means termination
because of: (a) an act or acts of theft, embezzlement, fraud, or willful or material misrepresentation by the Executive; (b) the
Executive’s indictment or conviction of, or pleading nolo contendere or guilty to, any crime; (c) commission by the Executive
of acts that are dishonest and demonstrably injurious to the Company, monetarily or otherwise; (d) any violation by the Executive
of any fiduciary duties owed by him to the Company; (e) the Executive’s failure or refusal to satisfactorily perform the
duties and responsibilities required to be performed by the Executive under the terms of this Agreement or necessary to carry
out the Executive’s job duties; and (f) a material breach by the Executive of this Agreement or any other agreement to which
the Executive and the Company are parties. In each such event listed above, if the circumstances are curable, the Company shall
give the Executive written notice thereof which shall specify in reasonable detail the circumstances constituting Cause, and there
shall be no Cause with respect to any such circumstances if cured by the Executive within thirty (30) days after such notice.

 

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(ii)Termination
Without Cause; Death. In the event the Executive’s employment is terminated by the Company without Cause or due
to the Executive’s death, the Executive (or his estate) shall receive the Accrued Obligations, payable in a lump sum within
the time period required by applicable law, and in no event later than thirty (30) days following the Termination Date and the
following, subject to, in the event of the Executive’s termination without Cause, the execution and timely return by the
Executive of a release of claims in the form to be delivered by the Company, which release shall, by its terms, be irrevocable
no later than the sixtieth (60th) day following the Termination Date: (a) severance pay in an amount equal to the Executive’s
Base Salary for twelve (12) months, payable in equal installments in accordance with the normal payroll policies of the Company,
with the first installment being paid on the Company’s first regular pay date on or after the sixtieth (60th) day following
the Termination Date, which initial payment shall include all installment amounts that would have been paid during the first sixty
(60) days following the termination of employment had installments commenced immediately following the Termination Date; (b) any
earned but unpaid Annual Bonus under Article II, Section B relating to the calendar year prior to the calendar year in
which the Termination Date occurs, such amount to be paid within the time period set forth in Article II, Section B; and
(c) to the fullest extent permitted by the Company’s then-current benefit plans, continuation of health, dental and vision
benefits for the Executive and the Executive’s eligible dependents substantially similar to coverage they were receiving
immediately prior to termination of the Executive’s employment for the lesser of twelve (12) months after termination of
employment or until the Executive secures coverage from new employment (the “Continuation Period”),
which continued period of coverage shall run concurrently with the period of COBRA health care continuation provided under Section
4980B of the Code, or, if no such benefit plans are in place on the Termination Date, continuation of the payments set forth in
Article II, Section H for the Continuation Period.

 

(iii)Termination
following a Change in Control. The Executive shall have no specific right to terminate this Agreement or right to any
severance payments or other benefits solely as a result of a Change in Control (defined below). However, if following a Change
in Control, during the Term the Company terminates the Executive’s employment without Cause, or the purchaser or surviving
entity following the Change in Control does not offer the Executive a comparable offer of employment, subject to the execution
and timely return by the Executive of a release of claims in the form to be delivered by the Company, which release shall, by
its terms, be irrevocable no later than the sixtieth (60th) day following the termination of employment, in addition
to the receipt of the payments set forth in Article III, Section B(ii), all stock options or similar stock-based rights
granted to the Executive shall vest in full and be immediately exercisable and any risk of forfeiture included in stock grants
previously made to the Executive shall immediately lapse. For purposes of this Agreement, “Change in Control”
shall have the meaning set forth in the LTIP, as such plan may be amended from time to time.

 

C.Survival.
The Executive’s post-termination obligations in Article IV shall continue as provided in this Agreement.

 

    	5

    	 

    

 

ARTICLE
IV.

Restrictive Covenants

 

In
consideration for (i) the Company’s promise to provide Confidential Information (defined below) to the Executive, (ii) the
substantial economic investment made by the Company in the Confidential Information and goodwill of the Company, and/or the business
opportunities disclosed or entrusted to the Executive, (iii) access to the Company’s customers and clients, and (iv) the
Company’s employment of the Executive pursuant to this Agreement and the compensation and other benefits provided by the
Company to the Executive, to protect the Company’s Confidential Information and business goodwill of the Company, the Executive
agrees to the following restrictive covenants. For the purposes of this Article IV, the term “Company”
shall be read as broadly as possible to include, without limitation, any of its affiliates.

 

A.Confidentiality.

 

(i)Confidential
Information. During the Executive’s employment, the Company shall grant the Executive otherwise prohibited access
to its trade secrets and confidential information which is not known to the Company’s competitors or within the Company’s
industry generally, which was developed by the Company over a long period of time and/or at its substantial expense, and which
is of great competitive value to the Company, and access to the Company’s customers and clients. For purposes of this Agreement,
“Confidential Information” includes any trade secrets or confidential or proprietary information of
the Company, including, but not limited to, the following: methods of operation, products, inventions, services, processes, equipment,
know-how, technology, technical data, policies, strategies, designs, formulas, developmental or experimental work, improvements,
discoveries, research, plans for research or future products and services, database schemas or tables, software, development tools
or techniques, training procedures, training techniques, training manuals, business information, marketing and sales methods,
plans and strategies, competitors, markets, market surveys, techniques, production processes, infrastructure, business plans,
distribution and installation plans, processes and strategies, methodologies, budgets, financial data and information, customer
and client information, prices and costs, fees, customer and client lists and profiles, employee, customer and client nonpublic
personal information, supplier lists, business records, product construction, product specifications, audit processes, pricing
strategies, business strategies, marketing and promotional practices, management methods and information, plans, reports, recommendations
and conclusions, information regarding the skills and compensation of employees and contractors of the Company, and other business
information disclosed to the Executive by the Company, either directly or indirectly, in writing, orally, or by drawings or observation.
“Confidential Information” does not include, and there shall be no obligation hereunder with respect
to, information that (i) is generally available to the public on the date of this Agreement or (ii) becomes generally available
to the public other than as a result of a disclosure not otherwise permissible hereunder.

 

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(ii)No
Unauthorized Use or Disclosure. The Executive acknowledges and agrees that Confidential Information is proprietary to
and a trade secret of the Company and, as such, is a special and unique asset of the Company, and that any disclosure or unauthorized
use of any Confidential Information by the Executive will cause irreparable harm and loss to the Company. The Executive understands
and acknowledges that each and every component of the Confidential Information (i) has been developed by the Company at significant
effort and expense and is sufficiently secret to derive economic value from not being generally known to other parties, and (ii)
constitutes a protectable business interest of the Company. The Executive acknowledges and agrees that the Company owns the Confidential
Information. The Executive agrees not to dispute, contest, or deny any such ownership rights either during or after the Executive’s
employment with the Company. The Executive agrees to preserve and protect the confidentiality of all Confidential Information.
The Executive agrees that the Executive shall not during the period of the Executive’s employment with the Company and thereafter,
directly or indirectly, disclose to any unauthorized person or use for the Executive’s own account any Confidential Information
without the Company’s consent. Throughout the Executive’s employment with the Company thereafter: (i) the Executive
shall hold all Confidential Information in the strictest confidence, take all reasonable precautions to prevent its inadvertent
disclosure to any unauthorized person, and follow all Company policies protecting the Confidential Information; and (ii) the Executive
shall not, directly or indirectly, utilize, disclose or make available to any other person or entity, any of the Confidential
Information, other than in the proper performance of the Executive’s duties.

 

(iii)No
Interference. Notwithstanding any other provision of this Agreement, the Executive may disclose Confidential Information
when required to do so by a court of competent jurisdiction, by any governmental agency having authority over the Executive or
the business of the Company or by any administrative body or legislative body (including a committee thereof) with jurisdiction
to order the Executive to divulge, disclose or make accessible such information, following written notice to the Company, which
notice shall be given as soon as practicable, so that the Company may seek a protective order or other appropriate remedy. Nothing
in this Agreement is intended to interfere with the Executive’s right to (i) report possible violations of state or federal
law or regulation to any governmental agency or entity, (ii) make other disclosures that are protected under the whistleblower
provisions of state or federal law or regulation, (iii) file a claim or charge with the EEOC, any state human rights commission,
or any other government agency or entity, or (iv) testify, assist, or participate in an investigation, hearing, or proceeding
conducted by the EEOC, any state human rights commission, or any other government or law enforcement agency, entity or court.

 

(iv)Defend
Trade Secrets Act. The Executive is hereby notified in accordance with the Defend Trade Secrets Act of 2016 that the Executive
will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret
that is made in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney
solely for the purpose of reporting or investigating a suspected violation of law, or is made in a complaint or other document
that is filed under seal in a lawsuit or other proceeding. If the Executive files a lawsuit for retaliation against the Company
for reporting a suspected violation of law, the Executive may disclose the Company’s trade secrets to the Executive’s
attorney and use the trade secret information in the court proceeding if the Executive files any document containing the trade
secret under seal, and does not disclose the trade secret, except pursuant to court order.

 

    	7

    	 

    

 

(v)Return
of Property and Information. Upon the termination of the Executive’s employment for any reason, the Executive shall
immediately return and deliver to the Company any and all Confidential Information, software, devices, cell phones, personal data
assistants, credit cards, data, reports, proposals, lists, correspondence, materials, equipment, computers, hard drives, papers,
books, records, documents, memoranda, manuals, e-mail, electronic or magnetic recordings or data, including all copies thereof,
which belong to the Company or relate to the Company’s business and which are in the Executive’s possession, custody
or control, whether prepared by the Executive or others. If at any time after termination of the Executive’s employment
the Executive determines that the Executive has any Confidential Information in the Executive’s possession or control, the
Executive shall immediately return to the Company all such Confidential Information in the Executive’s possession or control,
including all copies and portions thereof.

 

B.Non-Competition.
The Executive agrees that during the Restricted Period (defined below), other than in connection with the Executive’s duties
under this Agreement, the Executive shall not, and shall not use any Confidential Information to, without the prior written consent
of the Company, directly or indirectly, either individually or as a principal, partner, stockholder, manager, agent, consultant,
contractor, distributor, employee, lender, investor, or as a director or officer of any corporation or association, or in any
other manner or capacity whatsoever, become employed by, control, manage, carry on, join, lend money for, operate, engage in,
establish, perform services for, invest in, solicit investors for, consult for, do business with or otherwise engage in any Competing
Business (defined below). Notwithstanding the restrictions contained in this Article IV, Section B, the Executive may own
an aggregate of not more than two percent (2%) of the outstanding stock of any class of any corporation engaged in a Competing
Business, if such stock is listed on a national securities exchange in the United States (or a comparable exchange in a foreign
jurisdiction) or regularly traded in the over-the-counter market by a member of a national securities exchange in the United States,
without violating the provisions of Article IV, Section B.

 

For
purposes of this Agreement:

 

(i)“Restricted
Period” means during the Executive’s employment with the Company and for a period of twelve (12) months immediately
following the date of the Executive’s termination from employment for any reason.

 

(ii)“Competing
Business” means any business or activity that (i) competes with the Company and (ii) involves (A) the same or substantially
similar types of products or services (individually or collectively) manufactured, marketed or sold by the Company during Term
or (B) products or services so similar in nature to that of the Company during the Term (or that the Company will soon thereafter
offer) that they would be reasonably likely to displace substantial business opportunities or customers of the Company. Competing
Business shall include, but not be limited to, any entity or person engaged in the business of manufacturing and selling medical
devices for the intravascular or intra coronary treatment of vascular diseases, including stents, mesh technologies, and other
embolic protection systems, and any other business the Company is engaged in during the Executive’s employment or that was
seriously considered by the Company within the two (2) years preceding the date of the Executive’s termination from employment
for any reason.

 

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C.Non-Solicitation.
The Executive agrees that during the Restricted Period, other than in connection with Executive’s duties under this Agreement,
the Executive shall not, and shall not use any Confidential Information to, directly or indirectly, either as a principal, manager,
agent, employee, consultant, officer, director, stockholder, partner, investor or lender or in any other capacity, and whether
personally or through other persons:

 

(i)Solicit
business from, interfere with, induce, attempt to solicit business from, interfere with, induce or do business with any actual
or prospective customer, client, supplier (including any content providers), manufacturer, vendor or licensor of the Company with
whom the Company does or did business;

 

(ii)attempt
to influence, encourage, persuade or induce any actual or prospective customer, client, supplier (including any content providers),
manufacturer, vendor or licensor of the Company with whom the Company does or did business to reduce the extent of its business
dealings with the Company; or

 

(iii)Solicit,
induce or attempt to solicit or induce, engage or hire, on behalf of the Executive or any other person or entity, any person who
is an employee or consultant of the Company or who was employed or engaged by the Company within the preceding twelve (12) months.

 

D.Non-Disparagement.
The Executive agrees that the Company’s goodwill and reputation are assets of great value to the Company which were obtained
through great costs, time and effort. Therefore, the Executive agrees that during his employment and after the termination of
his employment, the Executive shall not in any way, directly or indirectly, disparage, libel or defame the Company, its beneficial
owners or its affiliates, their respective business or business practices, products or services, or employees or agents.

 

E.Works.

 

(iv)Assignment
of Work Product. For the purposes of this Agreement, the term “Work Product” shall mean, collectively,
all work product, information, inventions, original works of authorship, ideas, know-how, processes, designs, computer programs,
photographs, illustrations, developments, trade secrets and discoveries, including improvements thereto, that the Executive conceives,
creates, develops, makes, reduces to practice, or fixes in a tangible medium of expression, either alone or with others. During
the Restricted Period, the Executive agrees that the Executive shall promptly make full written disclosure to the Company of all
Work Product conceived, created, developed, made, reduced to practice, or fixed in a tangible medium of expression during the
period of the Executive’s employment with the Company. Executive hereby assigns and shall be deemed to have assigned to
the Company or its designee, all of the Executive’s right, title, and interest in and to any and all Work Product conceived,
created, developed, made, reduced to practice, or fixed in a tangible medium of expression during the period of the Executive’s
employment the Company that (a) relates in any manner to the previous, existing or contemplated business, work, or investigations
of the Company; (b) is or was suggested by, has resulted or will result from, or has arisen or will arise out of any work that
the Executive has done or may do for or on behalf of the Company; (c) has resulted or will result from or has arisen or will arise
out of any materials or information that may have been disclosed or otherwise made available to the Executive as a result of duties
assigned to the Executive by the Company; or (d) has been or will be otherwise made through the use of the Company’s time,
information, facilities, or materials, even if conceived, created, developed, made, reduced to practice, or fixed during other
than working hours. The Executive further acknowledges that all original works of authorship that have been or will be made or
fixed in a tangible medium of expression by the Executive (solely or jointly with others) within the scope of the Executive’s
employment with the Company that are protectable by copyright are “Works Made for Hire,” as that term is defined in
the United States Copyright Act. The Executive understands and agrees that the decision whether or not to commercialize or market
any Work Product is within the Company’s sole discretion and for the Company’s sole benefit, and that no royalty will
be due to the Executive as a result of the Company’s efforts to commercialize or market any such Work Product.

 

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(v)Patent
and Copyright Registrations. The Executive agrees to assist the Company, or its designee, at the Company’s expense,
in every proper way to secure the Company’s rights in Work Product in any and all countries, including the disclosure to
the Company of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths,
assignments, affidavits, and all other instruments which the Company shall deem necessary in order to apply for and obtain such
rights and in order to assign and convey to the Company, its successors, assigns, and nominees the sole and exclusive rights,
title and interest in and to such Work Product. The Executive further agrees that the Executive’s obligation to execute
or cause to be executed, when it is in the Executive’s power to do so, any such instrument or papers shall continue after
the termination of this Agreement.

 

F.Tolling.
If the Executive violates any of the restrictions contained in this Article IV, the Restricted Period shall be suspended
and shall not run in favor of the Executive from the time of the commencement of any violation until the time when the Executive
cures the violation to the satisfaction of the Company.

 

G.Remedies.
The Executive acknowledges that the restrictions contained in Article IV of this Agreement, in view of the nature of the
Company’s business and the Executive’s position with the Company, are reasonable and necessary to protect the Company’s
legitimate business interests and that any violation of Article IV of this Agreement would result in irreparable injury
to the Company. In the event of a breach by the Executive of Article IV of this Agreement, then the Company shall be entitled
to a temporary restraining order and injunctive relief restraining the Executive from the commission of any breach. Such remedies
shall not be deemed the exclusive remedies for a breach or threatened breach of this Article IV but shall be in addition
to all remedies available at law or in equity, including the recovery of damages from the Executive, the Executive’s agents,
any future employer of the Executive, and any person that conspires or aids and abets the Executive in a breach or threatened
breach of this Agreement.

 

H.Reasonableness.
The Executive hereby represents to the Company that the Executive has read and understands, and agrees to be bound by, the terms
of this Article IV. The Executive acknowledges that the scope of the covenants contained in this Article IV are
fair and reasonable in light of (i) the nature and wide geographic scope of the operations of the Company’s business; and
(ii) the amount of compensation, trade secrets and Confidential Information that the Executive is receiving in connection with
the Executive’s employment by the Company.

 

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I.Reformation.
If any of the aforesaid restrictions are found by a court of competent jurisdiction to be unreasonable, or overly broad as to
geographic area or time, or otherwise unenforceable, the Parties intend for the restrictions herein set forth to be modified by
the court making such determination so as to be reasonable and enforceable and, as so modified, to be fully enforced. By agreeing
to this contractual modification prospectively at this time, the Company and the Executive intend to make this provision enforceable
under the law or laws of all applicable jurisdictions so that the entire agreement not to compete and this Agreement as prospectively
modified shall remain in full force and effect and shall not be rendered void or illegal.

 

J.No
Previous Restrictive Agreements. The Executive represents that, except as disclosed to the Company, the Executive is not
bound by the terms of any agreement with any previous employer or other party to refrain from using or disclosing any trade secret
or confidential or proprietary information in the course of the Executive’s employment with the Company or to refrain from
competing, directly or indirectly, with the business of such previous employer or any other party. The Executive further represents
that the Executive’s performance of all the terms of this Agreement and the Executive’s work duties for the Company
do not and will not breach any agreement to keep in confidence proprietary information, knowledge or data acquired by the Executive
in confidence or in trust prior to the Executive’s employment with the Company. The Executive shall not disclose to the
Company or induce the Company to use any confidential or proprietary information or material belonging to any previous employer
or others.

 

ARTICLE
V.

Miscellaneous Provisions

 

A.Governing
Law/Forum. The Parties agree that the Agreement shall be governed by and construed under the laws of the State of New
York. In the event of any dispute regarding this Agreement, the Parties hereby irrevocably agree to submit to the exclusive jurisdiction
of the federal and state courts situated in New York, New York, and the Executive agrees that he shall not challenge personal
or subject matter jurisdiction in such courts. The Parties also hereby waive any right to trial by jury in connection with any
litigation or disputes under or in connection with this Agreement.

 

B.Headings.
The paragraph headings contained in this Agreement are for convenience only and shall in no way or manner be construed as a part
of this Agreement.

 

C.Severability.
In the event that any court of competent jurisdiction holds any provision in this Agreement to be invalid, illegal or unenforceable
in any respect, the remaining provisions shall not be affected or invalidated and shall remain in full force and effect.

 

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D.Reformation.
In the event any court of competent jurisdiction holds any restriction in this Agreement to be unreasonable and/or unenforceable
as written, the court may reform this Agreement to make it enforceable, and this Agreement shall remain in full force and effect
as reformed by the court.

 

E.Entire
Agreement. This Agreement constitutes the entire agreement between the Parties, and fully supersedes any and all prior
agreements, understanding or representations between the Parties pertaining to or concerning the subject matter of this Agreement,
including, without limitation, the Executive’s employment with the Company. No oral statements or prior written material
not specifically incorporated in this Agreement shall be of any force and effect, and no changes in or additions to this Agreement
shall be recognized, unless incorporated in this Agreement by written amendment, such amendment to become effective on the date
stipulated in it. Any amendment to this Agreement must be signed by all parties to this Agreement. The Executive acknowledges
and represents that in executing this Agreement, the Executive did not rely, and has not relied, on any communications, promises,
statements, inducements, or representation(s), oral or written, by the Company, except as expressly contained in this Agreement.
The Parties represent that they relied on their own judgment in entering into this Agreement.

 

F.Waiver.
No waiver of any breach of this Agreement shall be construed to be a waiver as to succeeding breaches. The failure of either party
to insist in any one or more instances upon performance of any terms or conditions of this Agreement shall not be construed as
a waiver of future performance of any such term, covenant or condition but the obligations of either party with respect thereto
shall continue in full force and effect. The breach by one party to this Agreement shall not preclude equitable relief or the
obligations in Article IV.

 

G.Modification.
The provisions of this Agreement may be amended, modified or waived only with the prior written consent of the Company and the
Executive, and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall be construed as a
waiver of such provisions or affect the validity, binding effect or enforceability of this Agreement or any provision hereof.

 

H.Assignment.
This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective heirs, successors and
permitted assigns. The Executive may not assign this Agreement to a third party. The Company may assign its rights, together with
its obligations hereunder, to any affiliate and/or subsidiary of the Company or any successor thereto or any purchaser of substantially
all of the assets of the Company.

 

I.Counterparts.
This Agreement may be executed in separate counterparts, each of which shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed signature page of this Agreement by facsimile or
by electronic mail in portable document format (PDF) will be effective as delivery of a manually executed signature page of this
Agreement.

 

    	12

    	 

    

 

J.Code
Section 409A.

 

(i)To
the extent (A) any payments to which the Executive becomes entitled under this Agreement, or any agreement or plan referenced
herein, in connection with the Executive’s termination of employment with the Company constitute deferred compensation subject
to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”); (B) the Executive is
deemed at the time of his separation from service to be a “specified employee” under Section 409A of the Code; and
(C) at the time of the Executive’s separation from service the Company is publicly traded (as defined in Section 409A of
Code), then such payments (other than any payments permitted by Section 409A of the Code to be paid within six (6) months of the
Executive’s separation from service) shall not be made until the earlier of (1) the first day of the seventh month following
the Executive’s separation from service or (2) the date of the Executive’s death following such separation from service.
Upon the expiration of the applicable deferral period, any payments which would have otherwise been made during that period (whether
in a single sum or in installments) in the absence of this Article V, Section I shall be paid to the Executive or the Executive’s
beneficiary in one lump sum, plus interest thereon at the Delayed Payment Interest Rate (as defined below) computed from the date
on which each such delayed payment otherwise would have been made to the Executive until the date of payment. For purposes of
the foregoing, the “Delayed Payment Interest Rate” shall mean the national average annual rate of interest
payable on jumbo six-month bank certificates of deposit, as quoted in the business section of the most recently published Sunday
edition of The New York Times preceding the Executive’s separation from service.

 

(ii)To
the extent any benefits provided under Article III, Section B above are otherwise taxable to the Executive, such benefits
shall, for purposes of Section 409A of the Code, be provided as separate in-kind payments of those benefits, and the provision
of in-kind benefits during one calendar year shall not affect the in-kind benefits to be provided in any other calendar year.

 

(iii)In
the case of any amounts payable to the Executive under this Agreement, or under any plan of the Company, that may be treated as
payable in the form of “a series of installment payments,” as defined in Treas. Reg. §1.409A-2(b)(2)(iii), the
Executive’s right to receive such payments shall be treated as a right to receive a series of separate payments for purposes
of Treas. Reg. §1.409A-2(b)(2)(iii).

 

(iv)It
is intended that this Agreement comply with or be exempt from the provisions of Section 409A of the Code and the Treasury Regulations
and guidance of general applicability issued thereunder, and in furtherance of this intent, this Agreement shall be interpreted,
operated, and administered in a manner consistent with such intent.

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK. SIGNATURE PAGE FOLLOWS.]

 

    	13

    	 

    

 

IN
WITNESS WHEREOF, the Company and the Executive have caused this Agreement to be executed on the date first set forth above, to
be binding as of that date.

 

EXECUTIVE:

 

	/s/
    Agustin Gago 	 
	Agustin
    Gago	 

 

	COMPANY:
    	 
	 	 	 
	InspireMD,
    Inc.	 
	 	 	 
	By:	/s/
    James J. Barry	 
	 	James
    J. Barry, Ph.D.	 
	 	President
    and Chief Executive Officer	 
	 	 	 
	 	/s/
    Craig A. Shore	 
	 	Craig
    A. Shore	 
	 	Chief
    Financial Officer	 

 

    	14

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