<PAGE>
As filed with the Securities and Exchange Commission on December 13, 1999
Registration No. 333-______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
-------------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
-------------------
UNIVERSAL DISPLAY CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 23-2372688
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
375 Phillips Blvd.
Ewing, New Jersey 08619
------------------------------------------------------------
(Address of principal executive offices, including zip code)
UNIVERSAL DISPLAY CORPORATION
STOCK OPTION PLAN
------------------------
(Full title of the plan)
STEVEN V. ABRAMSON
President and Chief Operating Officer
Universal Display Corporation
375 Phillips Blvd.
Ewing, New Jersey 08619
---------------------------------------
(Name and address of agent for service)
(609) 671-0980
-------------------------------------------------------------
(Telephone number, including area code, of agent for service)
Copy of all communications to:
STEPHEN M. GOODMAN, ESQ.
Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, PA 19103
(215) 963-5000
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===================================================================================================================================
Proposed maximum Proposed maximum
Title of securities Amount to be offering price aggregate Amount of
to be registered registered (1) per share (2) offering price (2) registration fee
- ------------------------- ------------------------ ------------------------ ------------------------ --------------------------
<S> <C> <C> <C> <C>
Common stock, par 1,570,000 $6.67 $10,471,900 $2,765.00
value $.01
===================================================================================================================================
</TABLE>
(1) Pursuant to Rule 416(a) under the Securities Act of 1933, as amended, the
number of shares being registered shall be adjusted to include any
additional shares that may be issuable as a result of stock splits, stock
dividends or similar transactions in accordance with the antidilution
provisions of the Universal Display Corporation Stock Option Plan.
(2) Estimated pursuant to paragraphs (c) and (h) of Rule 457 under the
Securities Act of 1933, as amended, solely for the purpose of calculating
the registration fee, based upon the average of the high and low sales
prices of shares of the Registrant's common stock on December 6, 1999, as
reported on the Nasdaq Small Cap Market.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.*
Item 2. Registrant Information and Employee Plan Annual Information.*
* Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from this Registration Statement in accordance
with Rule 428 under the Securities Act of 1933, as amended, and the
Introductory Note to Part I of Form S-8.
I-1
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
Universal Display Corporation (the "Registrant") incorporates herein by
reference the following documents as filed with the Securities and Exchange
Commission (the "Commission"):
(a) The Registrant's latest annual report (the "Annual
Report"), filed pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act");
(b) All other reports filed pursuant to Section 13(a) or 15(d)
of the Exchange Act since the end of the fiscal year covered by the
Annual Report; and
(c) The description of the Registrant's common stock, par
value $.01 per share, set forth in the Registrant's Registration
Statement on Form 8-A, filed with the Commission on April 14, 1996, as
amended, to register such securities under the Exchange Act.
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act after the date of this registration
statement and prior to the filing of a post-effective amendment to this
registration statement that indicates that all securities offered hereby have
been sold or that deregisters all securities then remaining unsold shall be
deemed to be incorporated by reference in this registration statement and to be
part hereof from the date of filing of such documents.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes hereof to the extent
that a statement contained herein (or in any other subsequently filed document
that is also incorporated by reference herein) modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part hereof.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
II-1
<PAGE>
Item 6. Indemnification of Directors and Officers.
Chapter 17, Subchapter D, of the Pennsylvania Business Corporation Law
of 1988, as amended (the "PBCL"), contains provisions permitting indemnification
of officers and directors of a business corporation in Pennsylvania.
Sections 1741 and 1742 of the PBCL provide that a business corporation
may indemnify directors and officers against liabilities and expenses they may
incur as such in connection with any threatened, pending or completed civil,
administrative or investigative proceeding, provided that the particular person
acted in good faith and in a manner he or she reasonably believed to be in, or
not opposed to, the best interests of the corporation, and, with respect to any
criminal proceeding, had no reasonable cause to believe his or her conduct was
unlawful. In general, the power to indemnify under these sections does not exist
in the case of actions against a director or officer by or in the right of the
corporation if the person otherwise entitled to indemnification shall have been
adjudged to be liable to the corporation unless it is judicially determined
that, despite the adjudication of liability but in view of all the circumstances
of the case, the person is fairly and reasonably entitled to indemnification for
specified expenses.
Section 1743 of the PBCL provides that the corporation is required to
indemnify directors and officers against expenses they may incur in defending
actions against them in such capacities if they are successful on the merits or
otherwise in the defense of such actions.
Section 1746 of the PBCL grants a corporation broad authority to
indemnify its directors and officers for liabilities and expenses incurred in
such capacity, except in circumstances where the act or failure to act giving
rise to the claim for indemnification is determined by a court to have
constituted willful misconduct or recklessness.
Section 1747 of the PBCL permits a corporation to purchase and maintain
insurance on behalf of any person who is or was a director or officer of the
corporation, or is or was serving at the request of the corporation as a
representative of another corporation or other enterprise, against any liability
asserted against such person and incurred by him or her in any such capacity, or
arising out of his or her status as such, whether or not the corporation would
have the power to indemnify the person against such liability under Chapter 17,
Subchapter D, of the PBCL.
The Registrant's Bylaws provide a right to indemnification to the full
extent permitted by law, for expenses (including attorneys' fees), damages,
punitive damages, judgments, penalties, fines and amounts paid in settlement,
actually and reasonably incurred by any director or officer whether or not the
indemnified liability arises or arose from any threatened, pending or completed
proceeding by or in the right of the Registrant (a derivative action) by reason
of the fact that such director or officer is or was serving as a director,
officer, employee or agent of the Registrant or, at the request of the
Registrant, as a director, officer, partner, fiduciary or trustee of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, unless the act or failure to act giving rise to the claim for
indemnification is finally determined by a court to have constituted willful
misconduct or recklessness. The Bylaws provide for the advancement of expenses
to an indemnified party upon receipt of an undertaking by the party to repay
those amounts if it is finally determined that the indemnified party is not
entitled to indemnification.
The Registrant's Bylaws authorize the Registrant to take steps to
ensure that all persons entitled to indemnification are properly indemnified,
including, if the Registrant's board of directors so determines, purchasing and
maintaining insurance.
Item 7. Exemption from Registration Claimed.
Not applicable.
II-2
<PAGE>
Item 8. Exhibits.
The exhibits filed as part of this Registration Statement are as
follows:
Exhibit
Number Exhibit
- ------- -------
4 Universal Display Corporation Stock Option Plan
5 Opinion of Morgan, Lewis & Bockius LLP regarding
legality of securities being registered
23.1 Consent of Morgan, Lewis & Bockius LLP (included in its
opinion filed as Exhibit 5)
23.2 Consent of Arthur Andersen LLP
24 Powers of Attorney (included in signature page)
Item 9. Undertakings.
(a) The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended (the "Securities
Act");
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the registration statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that subparagraphs (a)(1)(i) and (a)(1)(ii) of this section
do not apply if the information required to be included in a post-effective
amendment by those subparagraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered that remain unsold at the
termination of the offering.
II-3
<PAGE>
(b) The Registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference in this registration statement shall be deemed to be a
new registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Ewing New Jersey, on the 13th day of December, 1999.
UNIVERSAL DISPLAY CORPORATION
By: /s/ Steven V. Abramson
------------------------
Steven V. Abramson
President and
Chief Operating Officer
Each person whose signature appears below hereby authorizes, appoints
and constitutes Steven V. Abramson and Sidney D. Rosenblatt, and each of such
officers acting singly, his or her true and lawful attorneys-in- fact, with full
power of substitution and resubstitution, for him or her in his or her name,
place and stead to execute and cause to be filed with the Securities and
Exchange Commission, any or all amendments to this Registration Statement, with
all exhibits and any and all documents required to be filed with respect
thereto, and to do and perform each and every act and thing necessary to
effectuate the same, as the Registrant deems appropriate, and he or she hereby
ratifies and confirms all that said attorneys-in-fact or any of them, or their
substitutes, may lawfully do or cause to be done in connection therewith.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the date indicated.
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
/s/ Sherwin I. Seligsohn Chairman, Director and Chief December 13, 1999
- -------------------------- Executive Officer (Principal
Sherwin I. Seligsohn Executive Officer)
/s/ Steven V. Abramson Director, President and Chief December 13, 1999
- -------------------------- Operating Officer
Steven V. Abramson
/s/ Elizabeth H. Gemmill Director December 13, 1999
- --------------------------
Elizabeth H. Gemmill
/s/ Dean L. Ledger Director December 13, 1999
- --------------------------
Dean L. Ledger
/s/ Camille Naffah Director December 13, 1999
- --------------------------
Camille Naffah
/s/ Sidney D. Rosenblatt Director, Executive Vice President, December 13, 1999
- -------------------------- Chief Financial Officer, Secretary and
Sidney D. Rosenblatt Treasurer (Principal Financial and
Accounting Officer)
/s/ Lawrence Lacerte Director December 13, 1999
- --------------------------
Lawrence Lacerte
</TABLE>
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Exhibit
- ------- -------
4 Universal Display Corporation Stock Option Plan
5 Opinion of Morgan, Lewis & Bockius LLP regarding
legality of securities being registered
23.1 Consent of Morgan, Lewis & Bockius LLP (included in its
opinion filed as Exhibit 5)
23.2 Consent of Arthur Andersen LLP
24 Powers of Attorney (included in signature page)
<PAGE>
EXHIBIT 4
UNIVERSAL DISPLAY CORPORATION
STOCK OPTION PLAN
The purpose of the Universal Display Corporation Stock Option Plan (the
"Plan") is to provide designated key employees (including employees who are also
officers and directors) and directors who are not employees ("Non-Employee
Directors") of Universal Display Corporation and its "subsidiary corporations,"
as that term is defined in section 424(f) of the Internal Revenue Code of 1986,
as amended (the "Code") (hereinafter collectively referred to as the "Company")
and selected consultants ("Consultants") to the Company with the opportunity to
receive grants of incentive stock options and nonqualified stock options;
provided, however, that Non-Employee Directors and Consultants shall only
receive grants of nonqualified stock options. The Company believes that the Plan
will cause the participants to contribute materially to the growth of the
Company, thereby benefiting the Company's stockholders and will align the
economic interests of the participants with those of the stockholders.
1. ADMINISTRATION
The Plan shall be administered and interpreted by the Board of Directors of
the Company (the "Board").
Subject to the provisions of Section 5, the Board shall have the sole
authority to (i) determine the individuals to whom options shall be granted
under the Plan, (ii) determine the type, size and terms of the options to be
granted to each such individual, (iii) determine the time when the options will
be granted and the duration of the exercise period, including the criteria for
vesting and the acceleration of vesting, (iv) select the "Valuation Expert," as
defined below and (v) deal with any other matters arising under the Plan.
The Board shall have full power and authority to administer and interpret
the Plan, to make factual determinations and to adopt or amend such rules,
regulations, agreements and instruments for implementing the Plan and for
conduct of its business as it deems necessary or advisable, in its sole
discretion. The Board's interpretations of the Plan and all determinations made
by the Board pursuant to the powers vested in it hereunder shall be conclusive
and binding on all persons having any interests in the Plan or in any awards
granted hereunder. All powers of the Board shall be executed in the best
interest of the Company and in keeping with the objectives of the Plan.
2. GRANTS
Incentives under the Plan shall consist of options intended to qualify as
incentive stock options ("Incentive Stock Options") within the meaning of
section 422 of the Code or options which are not intended to so qualify
("Nonqualified Stock Options") (hereinafter collectively referred to as "Stock
Options"). All Stock Options shall be subject to the terms and conditions set
forth herein and to those other terms and conditions consistent with this Plan
as the Board deems appropriate and as are specified in writing by the Board to
the individual (the "Grant Letter"). The Board shall approve the form and
provisions of each Grant Letter to an individual. Grants under a particular
section of the Plan need not be uniform as among the Optionees.
3. SHARES SUBJECT TO THE PLAN
(a) Subject to the adjustment specified below, the aggregate number of
shares of the common stock of the Company, par value $.01 (the "Company Stock")
that have been or may be issued or transferred under the Plan is 1,600,000
shares, in the aggregate. The shares may be authorized but unissued shares of
Company Stock or reacquired shares of Company Stock, including shares purchased
by the Company for purposes of the Plan. If and to the extent options granted
under the Plan terminate,
1
<PAGE>
expire, are canceled, forfeited, exchanged or surrendered without having been
exercised, the shares subject to such options shall again be available for
purposes of the Plan.
(b) If there is any change in the number or kind of shares of Company Stock
issuable under the Plan through the declaration of stock dividends or if the
value of outstanding shares of Company Stock is substantially reduced due to the
Company's payment of an extraordinary dividend or distribution, or through a
recapitalization, stock splits, or combinations or exchanges of such shares, or
merger, reorganization or consolidation of the Company, reclassification or
change in par value or by reason of any other extraordinary or unusual events
affecting the outstanding Company Stock as a class without the Company's receipt
of consideration, the maximum number of shares of Company Stock available for
Stock Options, the maximum number of shares of Company Stock for which any one
individual participating in the Plan may be granted over the term of the Plan,
the number of shares covered by outstanding Stock Options, and the price per
share or the applicable market value of such Stock Options, and the other terms
and conditions of the Stock Options, as the Board may deem necessary or
desirable, shall be proportionately adjusted by the Board to reflect any
increase or decrease in the number or kind of issued shares of Company Stock to
preclude the enlargement or dilution of rights and benefits under such Stock
Options; provided, however, that any fractional shares resulting from such
adjustment shall be eliminated. The adjustments determined by the Board shall be
final, binding and conclusive. Notwithstanding the foregoing, no adjustment
shall be authorized or made pursuant to this Section to the extent that such
authority or adjustment would cause any Incentive Stock Option to fail to comply
with Section 422 of the Code.
4. ELIGIBILITY FOR PARTICIPATION
All individuals employed by the Company ("Employees") (including Employees
who are officers or members of the Board) who hold positions of responsibility
and whose performance, in the judgment of the Board, can have a significant
effect on the long-term success of the Company, all Non-Employee Directors and
all consultants whose services, in the judgment of the Board, can have a
significant effect on the long-term success of the Company shall be eligible to
participate in the Plan. Except as provided in Section 5, the Board shall select
the Employees, Non-Employee Directors and consultants to receive Stock Options
(the "Optionees") and determine the number of shares of Company Stock subject to
a particular Stock Option in such manner as the Board determines.
Nothing contained in this Plan shall be construed to limit the right of the
Company to grant options otherwise in connection with the acquisition, by
purchase, lease, merger, consolidation or otherwise, of the business or assets
of any corporation, firm or association, including options granted to employees
thereof who become Employees of the Company, or for other proper corporate
purpose.
5. GRANTING OF OPTIONS
(a) Number of Shares. The Board, in its sole discretion, shall determine
the number of shares of Company Stock that will be subject to each Stock Option
grant.
(b) Type of Option and Price. The Board may grant Incentive Stock Options,
Nonqualified Stock Options or any combination of Incentive Stock Options and
Nonqualified Stock Options, all in accordance with the terms and conditions set
forth herein; provided, however, that neither Non-Employee Directors nor
consultants shall be eligible to receive grants of Incentive Stock Options.
The purchase price of Company Stock subject to a Stock Option shall be
determined by the Board and may be equal to, greater than, or less than the fair
market value of a share of such Stock on the date such Stock Option is granted;
provided, however, that the purchase price of Company Stock subject to an
Incentive Stock Option shall be equal to, or greater than, the fair market value
of a share of such Stock on the date such Stock Option is granted.
During such time that the Company Stock is not listed on an established
stock exchange or traded in the over-the-counter-market, the "fair market value"
of Company Stock shall be determined by an independent firm, i.e., a firm not
otherwise engaged in consulting work for the Company, unless
2
<PAGE>
determined otherwise by the Board, with expertise in the valuation of business
entities and the securities thereof, selected by the Board (the "Valuation
Expert") or as otherwise determined by the Board in good faith based on the best
available facts and circumstances. Such determination of "fair market value"
shall be made on a periodic basis, but no less frequently than once a calendar
year. If the Company Stock is listed upon an established stock exchange or other
market source, as determined by the Board, "fair market value" on any date of
reference shall be the closing price of a share of Company Stock (on a
consolidated basis) on the principal exchange or other recognized market source,
as determined by the Board on such date, or if there is no sale on such date,
then the closing price of a share of Company Stock on the last previous day on
which a sale is reported.
(c) Exercise Period. The Board shall determine the option exercise period
of each Stock Option. The exercise period shall not exceed ten years from the
date of grant.
(d) Exercisability of Options. Stock Options shall become exercisable in
accordance with the terms and conditions determined by the Board, in its sole
discretion, and specified in the Grant Letter. All outstanding Stock Options
shall become immediately exercisable upon a Change in Control (as defined
herein), unless the Board, in its sole discretion, determines not to accelerate
such Stock Options upon a Change in Control. Notwithstanding the foregoing, if
any right granted pursuant to the foregoing would make a transaction that causes
the Change in Control ineligible for pooling of interests accounting treatment
under APB No. 16 that but for this provision would otherwise be eligible for
such accounting treatment, all outstanding Stock Options shall become
immediately exercisable upon the Change in Control and the Board shall not have
any discretion to determine not to accelerate such Stock Options upon the Change
in Control.
(e) Manner of Exercise. An Optionee may exercise a Stock Option which has
become exercisable by delivering a notice of exercise to the Board with
accompanying payment of the option price in accordance with (g) below. Should a
Stock Option become exercisable on and after the Effective Date specified in
Section 18(b), such notice may instruct the Company to deliver shares of Company
Stock due upon the exercise of the Stock Option to any registered broker or
dealer designated by the Company ("Designated Broker") in lieu of delivery to
the Optionee. Such instructions must designate the account into which the shares
are to be deposited. The Optionee may tender this notice of exercise, which has
been properly executed by the Optionee, and the aforementioned delivery
instructions to any Designated Broker.
(f) Termination of Employment, Disability or Death.
(1) Employees.
(a) In the event the Optionee during the Optionee's lifetime ceases
to be an employee of the Company for any reason other than death,
disability (as defined herein), retirement approved by the Company, or
termination for cause, as defined below, by the Company, any Stock
Option which is otherwise exercisable by the Optionee shall terminate
unless exercised within 3 months of the date on which the Optionee
ceases to be an employee (or within such other period of time as may be
specified in the Grant Letter), but in any event no later than the date
of expiration of the option exercise period (except as the Board may
otherwise provide in the Grant Letter). For purposes of this Section
6(f), a leave of absence at the request, or with the approval, of the
Company shall not be deemed a termination of employment so long as the
period of such leave does not exceed 90 days, or, if longer, so long as
the Optionee's right to re-employment with the Company is guaranteed by
contract. Any of the Optionee's Stock Options which are not otherwise
exercisable as of the date on which the Optionee ceases to be an
employee shall terminate as of such date (except as the Board may
otherwise provide).
(b) In the event the Optionee ceases to be an employee of the
Company on account of a termination for cause by the Company, as
determined in accordance with the personnel policies of the Company in
effect before any Change in Control of the Company, any Stock
3
<PAGE>
Option held by the Optionee shall terminate as of the date the Optionee
ceases to be an employee (except as the Board may otherwise provide).
(c) In the event the Optionee ceases to be an employee of the
Company on account of becoming disabled within the meaning of section
22(e) of the Code, any Stock Option which is otherwise exercisable by
the Optionee on the date on which the Optionee ceases to be an employee
shall terminate unless exercised within one year from the date on which
the Optionee ceases to be an employee (or within such other period of
time as may be specified in the Grant Letter), but in any event no later
than the date of the expiration of the option exercise period (except as
the Board may otherwise provide in the Grant Letter).
(d) In the event of the death of the Optionee while he is an
employee of the Company or within 30 days of the date on which he ceases
to be an employee for any reason other than a termination for cause by
the Company (or within such other period of time as may be specified in
the Grant Letter), any Stock Option which is otherwise exercisable by
the Optionee on the date on which the Optionee ceases to be an employee
shall terminate unless exercised by the Optionee's personal
representative within six months of the date on which the Optionee
ceases to be an employee (or within such other period of time as may be
specified in the Grant Letter), but in any event no later than the date
of the expiration of the option exercise period (except as the Board may
otherwise provide in the Grant Letter).
(e) Notwithstanding the foregoing provisions, failure to exercise
an Incentive Stock Option within the periods of time prescribed under
sections 421 and 422(a) of the Code shall cause the Incentive Stock
Option to cease to be treated as an "incentive stock option" for
purposes of sections 421 and 422 of the Code.
(2) Non-Employee Directors and Consultants.
(a) In the event the Optionee during the Optionee's lifetime ceases
to be a Non-Employee Director or consultant to the Company for any
reason other than becoming an employee of the Company, or termination
for cause, as defined below, by the Company, any Stock Option which is
otherwise exercisable by the Optionee shall not terminate until the date
of expiration of the option exercise period (except as the Board may
otherwise provide in the Grant Letter). Any of the Optionee's Stock
Options which are not otherwise exercisable as of the date on which the
Optionee ceases his relationship with the Company shall terminate as of
such date (except as the Board may otherwise provide).
(b) In the event the Optionee ceases to be a Non-Employee Director
or consultant to the Company on account of a termination for cause by
the Company, as determined in accordance with the policies of the
Company in effect before any Change in Control of the Company, any Stock
Option held by the Optionee shall terminate as of the date the Optionee
ceases to serve in such capacity (except as the Board may otherwise
provide).
(c) Satisfaction of Option Price. The Optionee shall pay the
option price specified in the Grant Letter in (i) cash, (ii) with the
approval of the Board, by delivering shares of Company Stock owned by
the Optionee including Company Stock acquired in connection with the
exercise of a particular Stock Option and having a fair market value on
the date of exercise equal to the option price (iii) if, as directed by
the Board, shares of Company Stock may not be sold immediately following
the exercise of a Stock Option, with the proceeds of a promissory note
payable by the Optionee to the Company, but only in accordance with the
provisions of a loan program established by the Company, or any
successor program as in effect from time to time, (A) in a principal
amount of up to 100% of the payment due upon the exercise of the Stock
Option, or such applicable lower percentage as may be specified by the
Board pursuant to the loan program, and (B) bearing interest at a rate
not less than the applicable Federal rate prescribed by Section 1274 of
the Code, or such higher rate as may be specified by the Board pursuant
to the loan program or (iv) through any combination of (i), (ii) or
(iii). Any loan by the Company under (iii) above shall be with full
recourse against the
4
<PAGE>
Optionee to whom the loan is granted, shall be secured in whole or in
part by the shares of Company Stock so purchased. In addition, any such
loan by the Company shall, at the option of the Company, become
immediately due and payable in full upon termination of the Optionee's
employment or position as an officer or director with the Company for
any reason, or upon a sale of any shares of Company Stock acquired with
such loan to the extent of the cash and fair market value of any
property received by the Optionee in such sale. The Board may make
arrangements for the application of payroll deductions from compensation
payable to the Optionee to amounts owing to the Company under any such
loan. Until any loan by the Company hereunder is fully paid in cash, the
shares of Company Stock purchased with the loan shall be pledged to the
Company as security for the loan, and the Company shall retain physical
possession of the stock certificates evidencing such shares together
with a duly executed stock power for such shares. No loan shall be made
hereunder unless counsel for the Company shall be satisfied that the
loan and the issuance of the shares of Company Stock funded thereby will
be in compliance with all applicable federal, state and local laws. The
Optionee shall pay the option price and the amount of withholding tax
due, if any, at the time of exercise. Shares of Company Stock shall not
be issued or transferred upon exercise of a Stock Option until the
option price is fully paid and any amount of withholding tax is paid.
(d) Rule 16b-3 Restrictions. Unless an Optionee could otherwise
transfer Company Stock issued pursuant to a Stock Option granted
hereunder without incurring liability under Section 16(b) of the
Exchange Act, at least six months must elapse from the date of
acquisition of a Stock Option to the date of disposition of the Company
Stock issued upon exercise of such option.
(e) Limits on Incentive Stock Options. Each Incentive Stock Option
shall provide that to the extent that the aggregate fair market value of
the Company Stock on the date of the grant with respect to which
Incentive Stock Options are exercisable for the first time by an
Optionee during any calendar year under the Plan or any other stock
option plan of the Company exceeds $100,000, then such option as to the
excess shall be treated as a Nonqualified Stock Option. An Incentive
Stock Option shall not be granted to any Employee who, at the time of
grant, owns stock possessing more than 10 percent of the total combined
voting power of all classes of stock of the Company or parent of the
Company, unless the option price per share is not less than 110% of the
fair market value of Company Stock on the date of grant and the option
exercise period is not more than five years from the date of grant.
(f) Optional Purchase by the Company. In the sole discretion of
the Board, in lieu of the exercise of a Stock Option, the Optionee may
be permitted to transfer the Stock Option to the Company in exchange for
a cash payment equal to the excess over the purchase price of the then
fair market value of the shares of Company Stock subject to the
Optionee's outstanding Stock Options.
7. TRANSFERABILITY OF OPTIONS
Only the Optionee or his or her authorized legal representative may
exercise rights under a Stock Option. Such persons may not transfer those rights
except by will or by the laws of descent and distribution or, if permitted under
Rule 16b-3 of the Exchange Act and if permitted in any specific case by the
Board in its sole discretion, pursuant to a qualified domestic relations order
as defined under the Code or Title I of ERISA or the regulations thereunder.
When an Optionee dies, the personal representative or other person entitled to
succeed to the rights of the Optionee ("Successor Optionee") may exercise such
rights. A Successor Optionee must furnish proof satisfactory to the Company of
his or her right to receive the Stock Option under the Optionee's will or under
the applicable laws of descent and distribution.
Notwithstanding the foregoing, the Board may permit an Employee to transfer
rights under a Nonqualified Stock Option to the Employee's spouse or a lineal
descendant or to one or more trusts for the benefit of such family members or to
partnerships in which such family members are the only
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partners (a "Family Transfer") provided that the Employee receives no
consideration for a Family Transfer and the Grant Letter relating to the Stock
Options transferred in a Family Transfer continues to be subject to the same
terms and conditions that were applicable to such Stock Options immediately
prior to the Family Transfer.
8. CHANGE IN CONTROL OF THE COMPANY
As used herein, a "Change in Control" shall be deemed to have occurred if:
(i) As a result of any transaction, any one stockholder other than an
existing stockholder as of the Effective Date specified in Section 18(a) of
the Plan, becomes a beneficial owner, as defined below, directly or
indirectly, of securities of the Company representing more than 50% of the
Common Stock of the Company or the combined voting power of the Company's
then outstanding securities;
(ii) A liquidation or dissolution of or the sale of all or
substantially all of the Company's assets occurs; or
(iii) After the Effective Date specified in Section 18(b):
(a) As a result of a tender offer, stock purchase, other stock
acquisition, merger, consolidation, recapitalization, reverse split, or
sale or transfer of assets (but excluding any sale of the Company's
securities to the public pursuant to a public offering), any person or
group (as such terms are used in and under Section 13(d) of the Exchange
Act) other than an existing stockholder, becomes the beneficial owner
(as defined in Rule 13-d under the Exchange Act), directly or
indirectly, of securities of the Company representing more than 30% of
the combined voting power of the Company's then outstanding securities;
or
(b) During any period of two consecutive years, individuals who at
the beginning of such period constitute the board of directors cease for
any reason to constitute at least a majority thereof unless the
election, or the nomination for election by the Company's shareholders,
of each new director was approved by a vote of at least 2/3 of the
directors then still in office who were directors at the beginning of
the period.
9. CERTAIN CORPORATE CHANGES
(a) Sale or Exchange of Assets, Dissolution or Liquidation, or Merger or
Consolidation Where the Company Does Not Survive. If all or substantially all
of the assets of the Company are to be sold or exchanged, the Company is to be
dissolved or liquidated, or the Company is a party to a merger or consolidation
with another corporation in which the Company will not be the surviving
corporation, then, at least 10 days prior to the effective date of such event,
the Company shall give each Optionee with any outstanding Stock Options written
notice of such event. Each such Optionee shall thereupon have the right to
exercise in full any installments of such Stock Options not previously exercised
(whether or not the right to exercise such installments has accrued pursuant to
such Stock Options), within 10 days after such written notice is sent by the
Company or, if a cashout of such Stock Options would not affect the pooling of
interest accounting treatment under APB No. 16 of any such transaction, to
require that the Company purchase such Stock Options for a cash payment equal to
the excess over the purchase price of the then fair market value of the shares
of Company Stock subject to the Optionee's outstanding Stock Options.
(b) Merger or Consolidation Where the Company Survives. If the Company is
a party to a merger or consolidation in which the Company will be the surviving
corporation, then the Board may, in its sole discretion, elect to give each
Optionee with any outstanding Stock Options written notice of such event. If
such notice is given, each such Optionee shall thereupon have the right to
exercise some or all of any installments of such Stock Options not previously
exercised (whether or not the right to exercise such installments has accrued
pursuant to such Stock Options), within 10 days after such written notice is
sent by the Company or, if a cashout of such Stock Options would not affect the
pooling of interest accounting treatment under APB No. 16 of any such
transaction, to require that the Company purchase such Stock Options for a cash
payment equal to the excess over the purchase price of the then fair market
value of the shares of Company Stock subject to the Optionee's outstanding Stock
Options.
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10. AMENDMENT AND TERMINATION OF THE PLAN
(a) Amendment. The Board, by written resolution, may amend or terminate
the Plan at any time; provided, however, that any amendment that increases the
aggregate number (or individual limit for any single Optionee) of shares of
Company Stock that may be issued or transferred under the Plan (other than by
operation of Section 3(b)), or modifies the requirements as to eligibility for
participation in the Plan, shall be subject to approval by the stockholders of
the Company.
(b) Termination of Plan. The Plan shall terminate on the tenth anniversary
of its effective date unless terminated earlier by the Board of Directors of the
Company or unless extended by the Board with the approval of the stockholders.
(c) Termination and Amendment of Outstanding Stock Options. A termination
or amendment of the Plan that occurs after a Stock Option is made shall not
materially impair the rights of an Optionee unless the Optionee consents or
unless the Board acts under Section 19(b) hereof. The termination of the Plan
shall not impair the power and authority of the Board with respect to an
outstanding Stock Option. Whether or not the Plan has terminated, an outstanding
Stock Option may be terminated or amended under Section 19(b) hereof or may be
amended by agreement of the Company and the Optionee consistent with the Plan.
(d) Governing Document. The Plan shall be the controlling document. No
other statements, representations, explanatory materials, or examples, oral or
written, may amend the Plan in any manner. The Plan shall be binding upon and
enforceable against the Company, its successors and assigns and the Optionees
and their assigns.
11. FUNDING OF THE PLAN
This Plan shall be unfunded. The Company shall not be required to establish
any special or separate fund or to make any other segregation of assets to
assure the payment of any Stock Options under this Plan. In no event shall
interest be paid or accrued on any Stock Option, including unpaid installments
of Stock Options.
12. RIGHTS OF INDIVIDUALS
Nothing in this Plan shall entitle any Employee, Non-Employee Director or
other person to any claim or right to be granted a Stock Option under this Plan.
Neither this Plan nor any action taken hereunder shall be construed as giving
any Employee, Non-Employee Director, or consultant any rights to be retained by
or in the employ of the Company or any other employment rights.
13. NO FRACTIONAL SHARES
No fractional shares of Company Stock shall be issued or delivered pursuant
to the Plan or any Stock Option. The Board shall determine whether cash, other
awards or other property shall be issued or paid in lieu of such fractional
shares or whether such fractional shares or any rights thereto shall be
forfeited or otherwise eliminated.
14. WITHHOLDING OF TAXES
The Optionee or other person receiving shares of Company Stock upon the
exercise of a Stock Option shall be required to pay to the Company the amount of
any federal, state or local taxes which the Company is required to withhold with
respect to the exercise of such Stock Options or the Company shall have the
right to deduct from other wages paid to the Employee by the Company (including
through the withholding of Company Stock purchased upon the exercise of a Stock
Option, if then authorized by the Board and applicable law) the amount of any
withholding due with respect to such Stock Options.
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15. AGREEMENTS WITH OPTIONEES
Each Stock Option made under this Plan shall be evidenced by a Grant Letter
containing such terms and conditions as the Board shall approve.
16. REQUIREMENTS FOR ISSUANCE OF SHARES
No Company Stock shall be issued or transferred upon the exercise of any
Stock Option hereunder unless and until all legal requirements applicable to the
issuance or transfer of such Company Stock have been complied with to the
satisfaction of the Board. The Board shall have the right to condition any Stock
Option made to any Optionee hereunder on such Optionee's undertaking in writing
to comply with such restrictions on his subsequent disposition of such shares of
Company Stock as the Board shall deem necessary or advisable as a result of any
applicable law, regulation or official interpretation thereof, and certificates
representing such shares may be legended to reflect any such restrictions.
Certificates representing shares of Company Stock issued under the Plan will be
subject to such stop-transfer orders and other restrictions as may be applicable
under such laws, regulations and other obligations of the Company, including any
requirement that a legend or legends be placed thereon.
17. HEADINGS
Section headings are for reference only. In the event of a conflict between
a title and the content of a Section, the content of the Section shall control.
18. EFFECTIVE DATE
(a) Effective Date of the Plan. Subject to the approval of the Company's
stockholders, this Plan shall be effective as of September 1, 1995.
(b) Effectiveness of Section 16 Provisions. The provisions of the Plan
that refer to, or are applicable to persons subject to, Section 16 of the
Exchange Act shall be effective, if at all, upon registration of the Company
Stock under Section 12(g) of the Exchange Act, and shall remain effective
thereafter for so long as such stock is so registered.
19. MISCELLANEOUS
(a) Substitute Grants. The Board may make a grant to an employee of
another corporation who becomes an Employee by reason of a corporate merger,
consolidation, acquisition of stock or property, reorganization or liquidation
involving the Company or any of its subsidiaries in substitution for a stock
option or restricted stock grant granted by such corporation ("Substituted Stock
Incentives"). The terms and conditions of the substitute grant may vary from the
terms and conditions required by the Plan and from those of the Substituted
Stock Incentives. The Board shall prescribe the provisions of the substitute
grants.
(b) Compliance with Law. The Plan, the exercise of Stock Options and the
obligations of the Company to issue or transfer shares of Company Stock under
Stock Options shall be subject to all applicable laws and to approvals by any
governmental or regulatory agency as may be required. With respect to persons
subject to Section 16 of the Exchange Act, it is the intent of the Company that
the Plan and all transactions under the Plan comply with all applicable
provisions of Rule 16b-3 or its successors under the Exchange Act. The Board may
revoke any Stock Option if it is contrary to law or modify a Stock Option to
bring it into compliance with any valid and mandatory government regulation. The
Board may also adopt rules regarding the withholding of taxes on payments to
Optionees. The Board may, in its sole discretion, agree to limit its authority
under this Section.
(c) Ownership of Stock. An Optionee or Successor Optionee shall have no
rights as a stockholder with respect to any shares of Company Stock covered by a
Stock Option until the shares are issued or transferred to the Optionee or
Successor Optionee on the stock transfer records of the Company.
(d) Governing Law. The validity, construction, interpretation and effect
of the Plan and Grant Letters issued under the Plan shall exclusively be
governed by and determined in accordance with the law of the Commonwealth of
Pennsylvania.
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Exhibit 5
---------
Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, Pennsylvania 19103-2921
Telephone: (215) 963-5000
Facsimile: (215) 963-5299
December 13, 1999
Universal Display Corporation
375 Phillips Blvd.
Ewing, NJ 08619
RE: Universal Display Corporation -- Registration Statement on Form S-8
Ladies and Gentlemen:
As your counsel, we have assisted in the preparation of the above-referenced
Registration Statement on Form S-8 (the "Registration Statement") for filing
with the Securities and Exchange Commission pursuant to the Securities Act of
1933, as amended (the "Act"), and the rules and regulations promulgated
thereunder.
The Registration Statement relates to 1,570,000 shares of common stock, par
value $.01 per share (the "Common Stock"), of Universal Display Corporation (the
"Company"), which may be issued pursuant to the Universal Display Corporation
Stock Option Plan, as amended (the "Plan"). We have examined the Company's
Articles of Incorporation, as amended, By-Laws, as amended, minutes and such
other documents, and have made such inquiries of the Company's officers as we
have deemed appropriate. In our examination, we have assumed the genuineness of
all signatures, the authenticity of all items submitted to us as originals, and
the conformity with originals of all items submitted to us as copies.
Based upon the foregoing, it is our opinion that the Company's Common Stock
originally issued by the Company to participants in the Plan will be, when
issued and delivered in accordance with the terms of the Plan, validly issued,
fully paid and non-assessable.
The foregoing opinion is limited to the laws of the Commonwealth of
Pennsylvania.
We hereby consent to the use of this opinion as Exhibit 5 to the Registration
Statement. In giving such consent, we do not thereby admit that we are acting
within the category of persons whose consent is required under Section 7 of the
Act or the rules or regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
/s/ Morgan, Lewis & Bockius LLP
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-8 of our report dated March
5, 1999 (except with respect to the matter discussed in Note 2, as to which the
date is April 15, 1999) included in Universal Display Corporation's Form
10-KSB/A for the year ended December 31, 1998 and to all references to our Firm
included in this registration statement.
/s/ Arthur Andersen LLP
Philadelphia, Pa.,
December 13, 1999
