SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2)
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
UNIVERSAL DISPLAY CORPORATION
________________________________________________________________________________
(Name of Registrant as Specified In Its Charter)
[INSERT NAME OF FILER WHEN APPLICABLE]
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1) or 14a-6(j)(2) or
Item 22(a)(2) of Schedule 14A
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3)
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
(1) Title of each class of securities to which transaction applies:
________________________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
________________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
________________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
________________________________________________________________________________
(5) Total fee paid:
________________________________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
________________________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
________________________________________________________________________________
(3) Filing Party:
________________________________________________________________________________
(4) Date Filed:
________________________________________________________________________________
<PAGE>
UNIVERSAL DISPLAY CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 11, 1998
Three Bala Plaza
Suite 104 East
Bala Cynwyd, PA 19004
May 8, 1998
TO ALL HOLDERS OF SHARES OF COMMON STOCK OF
UNIVERSAL DISPLAY CORPORATION:
The 1998 Annual Meeting of Shareholders (the "Annual Meeting") of Universal
Display Corporation will be held at the Holiday Inn -- City Line Avenue, 4100
Presidential Boulevard, Philadelphia, Pennsylvania, 19131 on June 11, 1998, at
1:00 p.m. Eastern Daylight Time, to consider and take action on the following
matters:
(1) To elect seven directors each to serve for a one-year term until
their successors shall have been duly chosen and qualified;
(2) To consider and act upon a proposal to increase the number of
shares of Common Stock subject to the Company's Stock Option Plan (the "Plan")
to 1,200,000 from 800,000;
(3) To consider and act upon a proposal to approve the appointment of
Arthur Andersen LLP as the Company's independent auditors for the year ending
December 31, 1998; and
(4) To transact such other business as may properly come before the
Annual Meeting or any adjournments thereof.
The Board of Directors has fixed April 17, 1998, as the record date, and only
shareholders of record at the close of business on that date will be entitled to
notice of and to vote at the Annual Meeting or any adjournments thereof. The
Shareholder List as of that date will be available for inspection at the Annual
Meeting.
By Order of the Board of Directors,
Sidney D. Rosenblatt
Corporate Secretary
PLEASE COMPLETE, SIGN, DATE, AND RETURN THE PROXY CARD IN THE ENCLOSED
POSTAGE-PAID RETURN ENVELOPE WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING IN
PERSON. THE GIVING OF A PROXY DOES NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IN
THE EVENT YOU ATTEND THE MEETING. IF YOU ATTEND THE MEETING, YOU MAY REVOKE YOUR
PROXY AND VOTE YOUR SHARES IN PERSON.
<PAGE>
UNIVERSAL DISPLAY CORPORATION
PROXY STATEMENT
FOR 1998 ANNUAL MEETING OF SHAREHOLDERS
May 8, 1998
This statement is furnished to the shareholders of Universal Display
Corporation (the "Company") in connection with the solicitation of proxies by
the Board of Directors for use at the annual meeting of shareholders to be held
on June 11, 1998 and at any adjournments thereof. The Company's principal
executive offices are located at Three Bala Plaza, Suite 104 East, Bala Cynwyd,
Pennsylvania 19004.
It is anticipated that the proxy statement and the accompanying form of
proxy will be first mailed to shareholders on or about May 8, 1998. The expense
of this solicitation will be paid by the Company. In addition to solicitation by
mail, proxies may be solicited by telephone or in person by some officers,
directors, and regular employees of the Company who will not be specially
compensated for such services.
The proxy may be revoked by a shareholder at any time before its
exercise, by giving written notice of such revocation to the Secretary of the
Company. In addition, a shareholder who gives such notice of revocation and
attends the meeting in person may vote by ballot at the meeting. The persons
named in the enclosed proxy will vote the share represented by a valid proxy as
directed therein. In the absence of such direction, the persons named in the
enclosed proxy will vote as stated below in favor of the election of directors,
in favor of the proposed increase in shares of Common Stock subject to the
Company's Stock Option Plan, and in favor of the appointment of Arthur Andersen
LLP as independent auditors. As to other items of business that may arise at the
meeting, the proxy holders will vote in accordance with their best judgment.
At the close of business on April 17, 1998 (the "Record Date"), the
Company had outstanding 10,302,268 shares of Common Stock. Each share of Common
Stock outstanding on the Record Date will entitle the holder to one vote per
share on each matter to be acted upon at the meeting. Shareholders do not have
cumulative voting rights with regard to the election of directors. Nominees for
directors must receive a plurality of the votes cast at the meeting to be
elected. With regard to the election of directors, votes may be cast in favor or
withheld; votes that are withheld will be excluded entirely from the vote and
will have no effect, other than for purposes of determining the presence of a
quorum. Abstentions may be specified on the proposals to approve the Plan and to
ratify the selection of the independent accountants (but not for the election of
directors). Abstentions will be considered present and entitled to vote at the
Annual Meeting, but will not be counted as votes cast in the affirmative.
Abstentions on the proposals to increase the number of shares subject to the
Plan and to ratify the selection of the independent accountants will have the
effect of a negative vote because these proposals require the affirmative vote
of a majority of the shares present at the Annual Meeting in person or
represented by proxy at the Annual Meeting and entitled to vote.
Brokers that are member firms of the New York Stock Exchange ("NYSE")
and who hold shares in street name for customers have the authority under the
rules of the NYSE to vote those shares with respect to the election of directors
and the proposal to ratify the appointment of the independent public accountants
if they have not received instructions from a beneficial owner. A failure by
brokers to vote those shares will have no effect on the outcome of the election
of directors, approval of the increase in shares subject to the Stock Option
Plan or the adoption of the proposal to ratify the appointment of the
independent public accountants because such shares will not be considered shares
present and entitled to vote with respect to such matters.
<PAGE>
Your proxy vote is important. Accordingly, the Company asks you to
complete, sign and return the accompanying proxy whether or not you plan to
attend the Annual Meeting. If you plan to attend the Annual Meeting to vote in
person and your shares are registered with the Company's transfer agent in the
name of a broker, bank or other custodian, nominee or fiduciary, you must secure
a proxy from such person assigning you the right to vote your shares.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of April 17, 1998, certain information
regarding the beneficial ownership of shares of Common Stock: (i) by each
director of the Company, (ii) by each person who is known by the Company to
beneficially own 5% or more of the outstanding shares of Common Stock, (iii) by
each executive officer of the Company named in the Summary Compensation Table
included elsewhere herein, and (iv) by all of the Company's executive officers
and directors as a group.
<TABLE>
<CAPTION>
Amount and Percentage
Nature of of
Beneficial Common
Name and Address of Beneficial Owner(1) Ownership(2) Stock
--------------------------------------- ------------ ----------
<S> <C> <C>
Lori S. Rubenstein(3)(4).................................... 3,301,000 32.0%
Scott Seligsohn(3)(4)....................................... 3,546,000 34.4
Clifford D. Schlesinger(3).................................. 3,000,000 29.1
Sherwin I. Seligsohn(5)..................................... 315,000 3.3
Dean L. Ledger(6)........................................... 295,000 2.9
Steven V. Abramson(2)....................................... 240,000 2.3
Sidney D. Rosenblatt(2)..................................... 218,334 2.1
Camille Naffah.............................................. 305,000 3.0
Elizabeth H. Gemmill........................................ 5,500 *
Stephen R. Forrest.......................................... 220,000 2.1
All executive officers and directors as a group (seven people) 1,598,834 15.5
</TABLE>
* Less than 1%.
(1) Unless otherwise indicated, the address of each beneficial owner is Three
Bala Plaza East, Suite 104, Bala Cynwyd, Pennsylvania 19004.
(2) Unless otherwise indicated, the Company believes that all persons named in
the table have sole voting and investment power with respect to all shares of
Common Stock beneficially owned by them. A person is deemed to be beneficial
owner of securities that can be acquired by such person within 60 days from the
date of this Proxy upon the exercise options, warrants and convertible
securities. The number of shares indicated for each person in the table includes
shares issuable upon the exercise of outstanding options, warrants and
convertible securities held by each person to the extent such options, warrants
and convertible securities are exercisable within sixty days of April 17, 1998.
The percentage for each beneficial owner listed above is based on the aggregate
of the shares outstanding as of April 17, 1998, (10,302,268 shares) and all such
shares issuable upon the exercise of outstanding stock options held by such
beneficial owners to the extent such options are exercisable within sixty days
of April 17, 1998. The numbers of shares indicated in the table includes the
following number of shares issuable upon the exercise of warrants or options:
Scott Seligsohn - 125,000; Sherwin I. Seligsohn - 135,000; Dean L. Ledger -
135,000; Steven V. Abramson - 235,000; Sidney D. Rosenblatt - 213,334; Camille
Naffah - 5,000; Elizabeth H. Gemmill - 5,000; and Stephen R. Forrest - 220,000.
(3) Includes (i) 1,500,000 shares of Common Stock owned by the Sherwin I.
Seligsohn Irrevocable Indenture of Trust dated 7/29/93 FBO Lori S.
<PAGE>
Rubenstein (the "Rubenstein Trust"), of which Lori S. Rubenstein, Scott
Seligsohn and Clifford D. Schlesinger are co-trustees and (ii) 1,500,000 shares
of Common Stock owned by Sherwin I. Seligsohn Irrevocable Indenture of Trust
dated 7/29/93 FBO Scott Seligsohn (the "Seligsohn Trust"), of which Lori S.
Rubenstein, Scott Seligsohn and Clifford D. Schlesinger are co-trustees. Mr.
Schlesigner's address is 1500 Chestnut Street, Philadelphia, Pennsylvania.
(4) Includes 176,000 shares of Common Stock owned by American Biomimetics
Corporation ("ABC") of which the Rubenstein Trust and Seligsohn Trust are
principal shareholders.
(5) Does not include (i) 176,000 shares of Common Stock owned by ABC, (ii)
200,000 shares of Series A Preferred Stock owned by ABC, (iii) 1,500,000 shares
of Common Stock owned by the Rubenstein Trust, (iv) 1,500,000 shares of Common
Stock owned by the Seligsohn Trust, (v) 125,000 shares of Common Stock owned by
Lori S. Rubenstein, his emancipated daughter and (vi) 125,000 shares of Common
Stock owned by Scott Seligsohn, his emancipated son, for which Mr. Seligsohn
disclaims beneficial ownership.
(6) Does not include 24,000 shares of Common Stock owned by the Ledger Family
Trust II, for which Mr. Ledger disclaims beneficial ownership.
NOMINEES FOR ELECTION AS DIRECTORS
(PROPOSAL 1)
The Board has fixed the number of directors at seven, all of whom are to be
elected at the Annual Meeting. Each director elected will serve until the 1999
Annual Meeting and until a successor has been elected and qualified or until the
director's earlier resignation or removal. Each nominee has consented to being
nominated and to serve if elected. If any nominee should subsequently decline or
be unable to serve, the persons named in the proxy will vote for the election of
such substitute nominee as shall be determined by the holders of such proxies.
(All nominees are presently directors of the Company whose terms expire at the
Annual Meeting.)
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES FOR DIRECTOR.
The following sets forth pertinent information with respect to nominees
for director:
Sherwin I. Seligsohn, 62, has been Chairman and Chief Executive Officer
of the Company since the Company's inception. He was President of the Company
until May 1996. Mr. Seligsohn founded, and since August 1991 has served as sole
Director, Chairman, President and Secretary of, American Biomimetics Corporation
("ABC"), International Multi-Media Corporation, and Wireless Unified Network
Systems Corporation. He is also Chairman and Chief Executive Officer of Global
Photonic Energy Corporation ("Global"). From June 1990 to October 1991, Mr.
Seligsohn was Chairman Emeritus of InterDigital Communications, Inc.
("InterDigital"), formerly International Mobile Machines Corporation. Mr.
Seligsohn was the founder of InterDigital and from August 1972 to June 1990
served as its Chairman. Mr. Seligsohn is a member of the Advisory Board of the
Advanced Technology Center for Photonics and Optoelectronic Materials (POEM) at
Princeton University.
Steven V. Abramson, 46, joined Universal Display Corporation as
President and Chief Operating Officer in May 1996. He is also a member of the
Board of Directors. Mr. Abramson is also President and Chief Operating Officer
of Global and a member of its Board of Directors. From March, 1992 -- May, 1996
he was Vice President, General Counsel, Secretary and Treasurer of Roy F.
Weston, Inc. a worldwide environmental consulting and engineering firm. From
1982 -- 1991 he was with InterDigital, where he held various positions,
including General Counsel, Executive Vice President and General Manager of the
Technology Licensing Division. Mr. Abramson is a member of the Advisory Board of
the Advanced Technology Center for Photonics and Optoelectronic Materials (POEM)
at Princeton University and on the Board of Governors of the United States
Display Consortium (USDC).
<PAGE>
Sidney D. Rosenblatt, 50, has been Executive Vice President, Chief
Financial Officer, Treasurer and Secretary of the Company since June 1995. He
has been a member of the Board of Directors since May 1996. Mr. Rosenblatt is
also Executive Vice President, Chief Financial Officer, Secretary and Treasurer
of Global, and a member of its Board of Directors. Mr. Rosenblatt is the owner
of and has served as the President and Chief Executive Officer of S. Zitner
Company since August 1990. From May 1982 to August 1990, Mr. Rosenblatt served
as the Senior Vice President, Chief Financial Officer and Treasurer of
InterDigital. Mr. Rosenblatt sits on the Board of Directors and Executive
Committee for the Greater Philadelphia Chamber of Commerce, Chairman of the
Board for the Small Business Division of the Greater Philadelphia Chamber of
Commerce and sits on various Boards for non-profit organizations.
Dean L. Ledger, 49, has been a director of the Company since 1995. From
January 1997 until the present and from June 1995 to November 1995, Mr. Ledger
was Executive Vice President of the Company. From November 1995 to December 1996
he was a consultant to the Company. Since October 1992, Mr. Ledger has been Vice
President -- Corporate Development and a consultant to ABC. From May 1992 to
October 1992, Mr. Ledger was a financial consultant to Intelcom Group, a
Denver-based competitive telecommunications access provider. From June 1991 to
May 1992, Mr. Ledger was a financial consultant to Kemper Securities. From
October 1989 until April 1991, Mr. Ledger served as a consultant to
InterDigital.
Camille Naffah, 71, has been a director since October 1996. Since 1990
he has been President of Camille Naffah Enterprises, a holding company for
leisure enterprises including hotels, lounges and restaurants.
Elizabeth H. Gemmill, 51, has been a Director of the Company since
April 1997. Since 1988, Ms. Gemmill has been Vice President of Tasty Baking
Company, a manufacturer of bakery products. From 1986 to 1987, she was Vice
President of Drexel University. From 1974 to 1986, she was employed by Mellon
Bank in a number of positions including Senior Vice President. Ms. Gemmill is on
the Boards of American Water Works Company, Inc., Philadelphia College of
Textiles & Science, Philadelphia College of Osteopathic Medicine, the
Pennsylvania Chamber of Business & Industry, and Metropolitan YMCA of Greater
Philadelphia and Vicinity.
Stephen R. Forrest, Ph.D., 48, has been a director of the Company since
April 1998. He has been the James S. McDonnell Distinguished University
Professor of Electrical Engineering at Princeton University since 1992. Since
August 1997, he has also been Chairman of the Electrical Engineering Department.
From 1992 to 1997 he was Director of the Princeton University Advanced
Technology Center for Photonics and Optoelectronic Materials. He is a member of
the Scientific Advisory Board of the Company.
BOARD ORGANIZATION AND COMPENSATION
The Company's Board of Directors held ten meetings during 1997. Each incumbent
director attended at least 75% of the aggregate of all meetings. The Board of
Directors has an Audit Committee comprised of Elizabeth Gemmill, Chairperson and
Camille Naffah. Members of the Board of Directors do not receive cash
compensation, however they do receive options to purchase 5,000 shares of Common
Stock of the Company for service on the Board.
SUMMARY COMPENSATION TABLE
The following table sets forth the total compensation of the Chief Executive
Officer and the other two most highly compensated executive officers of the
Company for services in all capacities to the Company or its Subsidiaries for
the fiscal year ended December 31, 1997 and the total compensation earned by
such individuals for the Company's two previous fiscal years.
<PAGE>
<TABLE>
<CAPTION>
Securities
Year Ended Underlying
Name and Principal Position December 31, Salary ($) Options
--------------------------- ----------- ---------- ----------
<S> <C> <C> <C>
Sherwin I. Seligsohn............................ 1997 $85,000 25,000
Chairman of the Board and 1996 $85,000 200,000(3)
Chief Executive Officer 1995 $77,917 0
Steven V. Abramson.............................. 1997 $180,000 25,000
President and Chief 1996 $110,796(1) 200,000(3)
Operating Officer 1995 0 0
Sidney D. Rosenblatt............................ 1997 $180,000 25,000
Executive Vice President, 1996 $128,672(2) 125,000(3)
Chief Financial Officer 1995 $16,667 75,000
</TABLE>
(1) Mr. Abramson joined the Company effective May 13, 1996.
(2) Mr. Rosenblatt joined the Company full time effective April 15,
1996.
(3) Represents warrants vesting over five years.
No individual named above received perquisites or non-cash compensation
during the years indicated exceeding the lesser of $50,000 or an amount equal to
10% of such person's salary.
No other executive officer of the Company received compensation and
bonuses which exceeded $100,000 during any year.
The following table summarizes stock options granted during 1997 to the persons
named in the Summary Compensation Table.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Percent of Total
Options Options Granted to Exercise Expiration
Name Granted Employees in 1997 Price Date
---- ------- ----------------- ----- ----
<S> <C> <C> <C> <C>
Sherwin I. Seligsohn............. 25,000 12.1% $4.06-5.25 6/12/07-12/17/07
Steven V. Abramson............... 25,000 12.1% $4.06-5.25 6/12/07-12/17/07
Sidney D. Rosenblatt............. 25,000 12.1% $4.06-5.25 6/12/07-12/17/07
All Employees as a Group......... 206,000 100% $4.06-5.25 6/12/07-12/17/07
</TABLE>
Mr. Rosenblatt exercised options to purchase 5,000 shares at a per
share exercise price of $.01.
The Company does not currently grant any long-term incentives, other
than stock options and warrants, to its executives or other employees.
Similarly, the Company does not sponsor any defined benefit or actuarial plans
at this time.
Employment Agreement
The Company had entered into an employment agreement with Sherwin
Seligsohn on November 1, 1995, which expired on November 1, 1997, to serve as
its Chairman of the Board and Chief Executive Officer. The agreement contained a
provision prohibiting Mr. Seligsohn from competing directly with the Company
during the term of employment and for a period of two years thereafter.
<PAGE>
Certain Transactions
In June, 1997, members of the Board of Directors were each granted
options to purchase 5,000 shares of Common Stock, pursuant to the Company's
Stock Options Plan at an exercise price of $4.06, the fair market value on the
date of grant.
In December 1997, pursuant to the Company's Stock Option Plan, the
following officers and directors were granted options to purchase the amounts of
Common Stock reflected below, at an exercise price of $5.25, the fair market
value on the date of grant. Sherwin I. Seligsohn - 20,000; Steven V. Abramson -
20,000; Sidney D. Rosenblatt - 20,000; Dean L. Ledger - 20,000; and Stephen R.
Forrest - 20,000.
The Company shares office space and certain related expenses with
Global Photonic Energy Corporation ("Global"), a company for which Messrs.
Seligsohn, Rosenblatt, Ledger and Abramson are directors and executive officers.
During 1997, Global was billed by the Company $51,906, in connection therewith.
APPROVAL OF INCREASE IN SHARES SUBJECT TO STOCK OPTION PLAN
(PROPOSAL 2)
At the Annual Meeting, there will be presented to the shareholders a
proposal to increase the number of shares subject to the Company's Stock Option
Plan to 1,200,000 from 800,000.
The Board of Directors believes that the amendment to increase the
number of shares of Common Stock available under the Stock Option Plan is in the
best interest of the Company. The Board believes that the Plan allows the
Company to attract, retain and motivate participants and encourages participants
to devote their best efforts to the business and financial success of the
Company. The Board believes that providing key employees, directors, consultants
and advisors of the Company with the opportunity to acquire an equity interest
in the Company will encourage the participants to contribute materially to the
growth of the Company, thereby benefiting the Company's shareholders, and will
align the economic interests of the participants with those of the shareholders.
As of April 17, 1998, options to purchase 690,272 shares of Common Stock were
outstanding under the Plan; options to purchase 189,500 remain available for
future grants. Assuming approval of this Proposal, 589,500 shares will remain
available for future grant.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 2 TO INCREASE THE
NUMBER OF SHARES OF COMMON STOCK SUBJECT TO THE PLAN TO 1,200,000 FROM 800,000.
Stock Option Plan
The Company has reserved 1,200,000 shares of Common Stock for issuance
upon the exercise of options available for future grant under the Plan
designated as either (i) incentive stock options ("ISOs") under the Internal
Revenue Code of 1986, as amended (the "Code") or (ii) non-qualified stock
options ("NQSOs"), ("NQSOs" and ISOs are collectively referred to as "Options").
Subject to approval, ISOs may be granted under the Plan to employees (including
directors) and officers of the Company. NQSOs may be granted to consultants,
directors (including non-employee directors), employees and officers of the
Company. As of April 17, 1998 there were 7 officers, 2 employees and 3
consultants eligible to participate in the Plan. In certain circumstances, the
exercise of options granted under Plan may have an adverse effect on the market
price of the Common Stock.
The Board of Directors of the Company (the "Board") administers the
Plan. The Board has the authority to grant options in its discretion and may
consider the nature of the optionee's services and responsibilities, the
optionee's present and potential contribution to the Company's success and such
other
<PAGE>
factors as it may deem relevant. The Board will determine the excercisability
and term (not to exceed ten years), of options granted under the Plan. The
purchase price of Common Stock subject to an option may be equal to, greater
than or less than fair market value at the time of grant. ISOs granted under the
Plan may not be granted at a price less than the fair market value of the Common
Stock on the date of grant (or 110% of fair market value in the case of persons
holding 10% or more of the voting stock of the Company). The aggregate fair
market value of the shares for which ISOs granted to any employee are
exercisable for the first time by such employee during any calendar year (under
all stock option plans of the Company and related corporation) may not exceed
$100,000. Options granted under the Plan will expire not more than ten years
from the date of grant (five years in the case of ISOs granted to persons
holding 10% or more of the voting stock for the Company). Fair market value is
currently the closing price of a share of Common Stock on the NASDAQ National
market on the date of grant, or if there is no sale on such date, the closing
price on the last previous date on which a sale is reported. As of April 17,
1998, the fair market value of a share of Common Stock was $6.00 per share.
Options granted under the Plan are not transferable during an optionee's
lifetime but are transferable at death by will or by the laws of descent and
distribution. Notwithstanding the foregoing, the Board may permit an employee to
transfer rights under an NQSO to the employee's spouse or family member without
receiving consideration, subject to certain other conditions.
The Board may amend or terminate the Plan at any time; provided that
any amendment that increases the aggregate number of shares of Common Stock that
may be issued or transferred under the Plan or modifies the requirements as to
eligibility for participation in the Plan will be subject to shareholder
approval.
New Plan Benefits
The following table sets forth benefits related to the Plan. Future awards under
the Plan are not determinable because specific awards are made at the discretion
of the Board of Directors, depending upon a variety of factors. For information
concerning awards made under the Plan to the Company's Chief Executive Officer
and other officers, see "Summary Compensation Table." The following table sets
forth additional information with respect to fiscal 1997.
Number of Options
-----------------
All executive officers as a group............................ 75,000
All directors not executive officers as a group.............. 35,000
All employees, as a group, excluding executive officers...... 131,000
Federal Income Tax Consequences
The following discussion is intended to point out the general
principles of current federal income tax law applicable to ISOs and NQSOs
granted under the Plan. Participants should contact their own tax advisors
concerning the tax consequences, if any, of the grant of ISOs and NQSOs,
exercise of Options and the disposition of any shares acquired through the
exercise of Options. Since federal income tax laws may change subsequent to the
date hereof, individual financial situations vary and state and local tax
consequences may also be significant.
A participant is not subject to federal income tax upon the grant or
exercise of ISOs and the Company is not entitled to a federal income tax
deduction by reason of such grant or exercise. The amount by which the fair
market value of the option shares received at the time of exercise exceeds the
option price is, however, a tax preference item for purposes of calculating the
alternative minimum tax. Further, the participants basis in option shares
acquired through exercise of an ISO will, for alternative minimum tax purposes,
equal the fair market value of the option shares taken into account in
determining the participants alternative minimum taxable income.
The disposition of option shares acquired by a participant upon
exercise of an ISO within one year after the issuance of the option shares upon
exercise of the options or before the expiration of two years from the date the
options are granted generally constitute disqualifying dispositions, resulting
in the
<PAGE>
participant recognizing ordinary income in the year of disposition in an
amount equal to the lesser of (i) the excess of the fair market value of the
option shares on the date of exercise over the exercise price or (ii) the excess
of the amount realized on the disposition over the participants tax basis in the
option shares. Any gain realized on the disposition in excess of the amount of
ordinary compensation income recognized is long-term or short-term capital gain,
depending upon the length of the holding period of the option shares. In the
case of a disqualifying disposition, the Company may claim a tax deduction in an
amount equal to the ordinary compensation income recognized by the participant,
but does not receive a deduction corresponding to any capital gain realized by
the participant. If the option shares are sold more than one year after the date
of the exercise of the option and more than two years after the date the options
are granted, the participant will realize capital gain or loss (assuming the
option shares are held as capital assets) equal to the difference between the
amount realized on disposition and the option price. If the participant
satisfies both of the holding periods described above, then the Company will not
be allowed a deduction by reason of the exercise of the ISO.
For federal income tax purposes, the holder of an option that is a NQSO
will not recognize taxable income at the time of grant, and the Company will not
be allowed a deduction by reason of the grant of an NQSO. Except as described
below, the participant will recognize ordinary compensation income upon exercise
of the NQSO, in an amount equal to the difference between the fair market value
of the option shares received at the time of exercise and the option price of
the NQSO. The Company will generally be entitled to a deduction equal to the
amount of ordinary compensation income recognized by the participant.
For the purpose of computing gain or loss on the subsequent sale or
taxable exchange of option shares purchased upon the exercise of the NQSO, a
participant's tax basis in such shares will be the fair market value of the
option shares on the date the participant recognized ordinary compensation
income. Upon the subsequent sale or taxable exchange by the participant of such
option shares acquired by exercise of an NQSO, assuming the option shares are
held as capital assets, the participant will realize capital gain or loss
(long-term or short-term, depending upon the length of the holding period of the
shares) in an amount equal to the difference between the participant's tax basis
in such option shares and the selling price.
APPOINTMENT OF INDEPENDENT ACCOUNTANTS
(PROPOSAL 3)
The Board of Directors of the Company has appointed Arthur Andersen LLP
as independent public accountants to examine the financial statements of the
Company for the year ending December 31, 1998. Arthur Andersen LLP has served as
accountants for the Company since 1994. Representatives of Arthur Andersen LLP
will be present at the meeting to make a statement if they desire to do so and
to respond to appropriate questions of shareholders.
Although the submission of the appointment of Arthur Andersen LLP is
not required by law or the By-Laws of the Company, the Board is submitting it to
the shareholders to ascertain their views. If the shareholders do not approve
the appointment, the Board will not be bound to seek other independent
accountants for 1998, but the selection of other independent accountants will be
considered in future years.
THE BOARD RECOMMENDS A VOTE FOR PROPOSAL 3 TO APPROVE THE APPOINTMENT
OF ARTHUR ANDERSEN LLP.
SHAREHOLDER PROPOSALS
Proposals submitted by shareholders for inclusion in the Board of Directors'
proxy statement and proxy for the 1999 Annual Meeting of Shareholders must be
received by the Corporate Secretary of the Company no later than December 1,
1998, and must comply in all other respects with applicable rules and
regulations of the Securities and Exchange Commission relating to such
inclusion.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
<PAGE>
Section 16(a) of the Securities Exchange Act of 1934 (the "Act") requires
directors and executive officers of the Company and persons or entities
beneficially owning more than 10% of a registered class of the Company's equity
securities to file with the Securities and Exchange Commission reports of
beneficial ownership and reports of changes in beneficial ownership of such
equity securities. Officers, directors and stockholders owning more than 10% of
the Company's equity securities are required by the regulations of the
Securities and Exchange Commission to furnish the Company with copies of all
forms they file under Section 16(a) of the Act. Based solely upon its review of
the copies of such reports and any amendments thereto received by the Company
during the year ended December 31, 1997, all Section 16(a) filing requirements
applicable to its officers, directors and 10% stockholders were satisfied.
ANNUAL REPORT TO SHAREHOLDERS
A copy of the Company's 1997 Annual Report, containing financial
statements for the year ended December 31, 1997, is being transmitted herewith.
A copy of the Company's Annual Report on Form 10-KSB for the year ended
December 31, 1997, as filed with the Securities and Exchange Commission,
excluding exhibits thereto, may be obtained, without charge, by contacting Mr.
Sidney D. Rosenblatt, Corporate Secretary, Universal Display Corporation, Three
Bala Plaza East, Suite 104, Bala Cynwyd, Pennsylvania 19004.
OTHER BUSINESS
The Board of Directors knows of no other matter which will be presented
at the Annual Meeting for action by the stockholders. If any such business is
properly presented, however, the persons named in the enclosed proxy will vote
in accordance with their best judgment.
By Order of the Board of Directors,
Sidney D. Rosenblatt
Corporate Secretary
May 8, 1998
<PAGE>
Please date, sign and mail your
Proxy card back as soon as possible!
Annual Meeting of Shareholders
UNIVERSAL DISPLAY CORPORATION
June 11, 1998
Please Detach and Mail in the Envelope Provided
A /x/ Please mark your
Votes as in this
Example
FOR WITHHELD
1. ELECTION OF / / / / Nominees: Steven V. Abramson
DIRECTORS Stephen R. Forrest
Elizabeth H. Gemmill
Dean L. Ledger
Camille Naffah
Sidney D. Rosenblatt
Sherwin I. Seligsohn
For, except votes withheld from the following nominee(s):
2. Approval of Increase in Shares of Common Stock Subject to the Company's
Stock Option Plan to 1,200,000 from 800,000.
3. Approval of Arthur Andersen LLP as Independent Accountants.
4. In their discretion, the proxies are authorized to return such other business
as may properly come before the meeting.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder(s). If no direction is made, this proxy will be
voted for Proposals 1, 2, and 3.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY IN THE ENCLOSED ENVELOPE.
SIGNATURE__________________ DATE_______ SIGNATURE__________________ DATE_______
Signature if held jointly
Note: Please sign exactly as your name appears hereon. When signing as
attorney, executor, administrator, trustee, guardian, or in any other
representative capacity, please indicate.
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
UNIVERSAL DISPLAY CORPORATION
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS JUNE 11, 1998
The undersigned hereby appoints Sherwin I. Seligsohn, Steven V. Abramson and
Sidney D. Rosenblatt, jointly and severally as proxies, each with the power to
appoint a substitute, and hereby authorizes them to represent and to vote, as
designated on the reverse side, all of the shares of Common Stock of Universal
Display Corporation held of record by the undersigned on April 17, 1998 at the
Annual meeting of Shareholders to be held on June 11, 1998, or any adjournment
thereof.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE.
PLEASE VOTE, SIGN ON REVERSE SIDE AND RETURN PROMPTLY.
