<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 240.14a-11(c) or 240.14a-12
UNIVERSAL DISPLAY
- -----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- -----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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/ / 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
UNIVERSAL DISPLAY CORPORATION
Three Bala Plaza East
Suite 104
Bala Cynwyd, Pennsylvania 19004
------------------------------
NOTICE OF 1999 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 23, 1999
------------------------------
To All Holders of Shares
of Common Stock of Universal Display Corporation:
The 1999 Annual Meeting of Shareholders (the "Annual Meeting") of
Universal Display Corporation (the "Company") will be held at the Holiday Inn --
City Line Avenue, 4100 Presidential Boulevard, Philadelphia, Pennsylvania 19131
on June 23, 1999, at 4:00 p.m., Eastern Daylight Time, for the following
purposes:
(1) To elect seven directors;
(2) To vote upon a proposal to increase the number of shares of
the Company's common stock subject to the Company's Stock
Option Plan to 1,600,000 from 1,200,000;
(3) To vote upon a proposal to approve the appointment of Arthur
Andersen LLP as the Company's independent auditors for the
year ending December 31, 1999; and
(4) To transact such other business as may properly come before
the Annual Meeting or any adjournments thereof.
The Board of Directors of the Company has fixed April 15, 1999 as the
record date. 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. A list of shareholders 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
Bala Cynwyd, Pennsylvania
May 20, 1999
- -------------------------------------------------------------------------------
PLEASE COMPLETE, SIGN, DATE, AND RETURN THE ENCLOSED PROXY CARD IN THE
POSTAGE-PAID RETURN ENVELOPE PROVIDED 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 IF YOU ATTEND THE MEETING. IF YOU ATTEND THE MEETING, YOU MAY REVOKE YOUR
PROXY AND VOTE YOUR SHARES IN PERSON.
- -------------------------------------------------------------------------------
<PAGE>
UNIVERSAL DISPLAY CORPORATION
Three Bala Plaza East
Suite 104
Bala Cynwyd, Pennsylvania 19004
------------------------------
PROXY STATEMENT FOR 1999 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 23, 1999
------------------------------
This proxy statement and the accompanying form of proxy will be first
mailed to shareholders of Universal Display Corporation (the "Company") on or
about May 20, 1999. These materials are being furnished in connection with the
solicitation of proxies by the Board of Directors of the Company for use at the
annual meeting of shareholders (the "Annual Meeting") to be held at the Holiday
Inn -- City Line Avenue, 4100 Presidential Boulevard, Philadelphia,
Pennsylvania, 19131 on June 23, 1999, at 4:00 p.m., Eastern Daylight Time, and
at any adjournments thereof.
At the Annual Meeting, shareholders of the Company will be asked to
vote upon (1) the election of seven directors; (2) a proposal to increase the
number of shares of the Company's common stock subject to the Company's Stock
Option Plan (the "Plan") to 1,600,000 from 1,200,000; (3) a proposal to approve
the appointment of Arthur Andersen LLP as the Company's independent auditors for
the year ending December 31, 1999; and (4) such other business as may properly
come before the Annual Meeting or any adjournments thereof.
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 engaged or compensated for such services. The Company also will
request banks, brokers and other nominees, custodians and fiduciaries to send
proxy materials to beneficial owners and will reimburse such persons for
reasonable expenses incurred in that regard.
VOTING AT THE MEETING
Holders of shares of the Company's common stock, par value $.01 per
share (the "Common Stock"), of record at the close of business on April 15, 1999
(the "Record Date") are entitled to vote at the Annual Meeting. As of the Record
Date, there were 11,371,294 shares of Common Stock outstanding. Each shareholder
entitled to vote will have one vote for each share of Common Stock owned of
record by such shareholder as of the close of business on the Record Date.
Shareholders do not have cumulative voting rights with regard to the election of
directors.
The presence, in person or by proxy, of shareholders entitled to cost
at least a majority of the votes that all shareholders are entitled to cast are
the matters to be acted upon at the Annual Meeting will constitute a quorum.
The persons named in the enclosed proxy will vote the shares
represented by each properly executed proxy as directed therein. In the absence
of such direction on a properly executed proxy card, the persons named in the
enclosed proxy will vote FOR the persons nominated by the Board of Directors for
election as directors, FOR the proposal to increase the number of shares of the
Company's common stock subject to the Plan and FOR the proposal to approve the
appointment of Arthur Andersen LLP as the Company's independent auditors for the
year ending December 31, 1999. As to other items of business that may properly
be presented to the Annual Meeting for action, the proxy holders will vote the
proxies in accordance with their best judgment.
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 Annual Meeting in person may vote by ballot at the Annual Meeting.
<PAGE>
Assuming a quorum is present, nominees for directors must receive a
plurality of the votes cast at the meeting to be elected. Assuming a quorum is
present, the proposals to increase the number of shares of Common Stock subject
to the Plan and to approve the appointment of Arthur Andersen LLP as the
Company's independent auditors for the year ending December 31, 1999 must
receive a majority of the votes cast at the meeting to be approved. 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 increase the number of shares subject to 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.
The Company believes that 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, the proposal to increase the number of shares of
Common Stock subject to the Plan 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 the number
of shares subject to the Plan or the adoption of the proposal to ratify the
appointment of the independent public accountants.
Your proxy vote is important. Please 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 of Common Stock.
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors 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 2000 annual meeting and until a successor has been selected and
qualified or until the director's earlier death, 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
------------------------------
NOMINEES FOR ELECTION
------------------------------
<TABLE>
<CAPTION>
Name of Director Age Year First Became Director, Principal Occupations During
---------------- --- Past Five Years and Certain Directorships
-----------------------------------------
<S> <C> <C>
Sherwin I. Seligsohn...................... 63 Mr. Seligsohn has been Chairman and Chief Executive
Officer of the Company since 1994. 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"). Mr. Seligsohn was
the founder of InterDigital Communication Corporation 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........................ 47 Mr. Abramson joined the Company as President and Chief
Operating Officer in May 1996. He also has been a member
of the Board of Directors since May 1996. Mr. Abramson is
also a member of the Board of Directors of Global. From
March, 1992 to May, 1996 he was Vice President, General
Counsel, Secretary and Treasurer of Roy F. Weston, Inc., a
worldwide environmental consulting and engineering firm.
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).
Sidney D. Rosenblatt...................... 51 Mr. Rosenblatt 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, and served as the
President and Chief Executive Officer of S. Zitner Company
from August 1990 until 1998. Mr. Rosenblatt sits on the
Board of Directors and Executive Committee for the Greater
Philadelphia Chamber of Commerce, is 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.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Dean L. Ledger ........................... 50 Mr. Ledger 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.
Camille Naffah............................ 72 Mr. Naffah has been a director of the Company 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...................... 52 Ms. Gemmill has been a Director of the Company since April
1997. Since March 1999, she has been Managing Trustee of
the Warwick Foundation. From 1988 to March 1999, Ms.
Gemmill was Vice President of Tasty Baking Company, a
manufacturer of bakery products. 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.................. 49 Dr. Forrest 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 Department of Engineering 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.
</TABLE>
General Information Concerning the Board of Directors and its Committees
The Board of Directors held seven meetings during 1998. Each incumbent
director attended at least 75% of the aggregate of all meetings of the Board of
Directors during the period for which he or she was a director and the meetings
of the committees on which he or she served. The Board of Directors has
established an Audit Committee and has not established either a compensation
committee or a nominating committee.
Members of the Board of Directors do not receive cash compensation.
However, they do receive options to purchase 5,000 shares of Common Stock for
service on the Board.
Audit Committee. The Audit Committee is responsible for providing
general oversight with respect to accounting principles employed in the
Company's financial reporting. The Audit Committee meets periodically with the
Company's principal financial and accounting officer and independent public
accountants to review the scope of auditing procedures and the Company's
policies related to internal auditing and accounting procedures and controls.
The Audit Committee met once during 1998. The Audit Committee is currently
composed of non-employee directors, Elizabeth Gemmill, Chairman, and Camille
Naffah.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of May 11, 1999, 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 Nature of Percentage
Name and Address of Beneficial Owner (1) Beneficial Ownership(2) of Common Stock(2)
---------------------------------------- ----------------------- -----------------
<S> <C> <C>
Lori S. Rubenstein(3)(4) 3,301,000 27.2%
Scott Seligsohn(3)(4) 3,554,000 29.3
Clifford D. Schlesinger(3) 3,000,000 24.7
Sherwin I. Seligsohn(5) 316,500 2.6
Dean L. Ledger(6) 315,000 2.6
Steven V. Abramson(2) 290,000 2.4
Sidney D. Rosenblatt(2) 345,000 2.8
Camille Naffah 305,000 2.5
Elizabeth H. Gemmill 5,500 *
Stephen R. Forrest 220,000 1.8
All executive officers and directors as a group (seven people) 1,797,000 14.8
</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. The percentage for each
beneficial owner listed above is based on 12,117,527 shares outstanding as
of May 11, 1999. In accordance with the rules of the Securities and Exchange
Commission, options to purchase shares of Common Stock that are exercisable
as of May 11, 1999, or exercisable within 60 days thereafter are deemed to
be outstanding and beneficially owned by the person holding such options for
the purpose of computing such person's percentage ownership, but are not
located as outstanding for the purpose of computing the percentage ownership
of any other person. The numbers of shares indicated in the table includes
the following number of shares issuable upon the exercise of warrants or
options: Scott Seligsohn -- 230,000; Sherwin I. Seligsohn -- 243,000; Dean
L. Ledger -- 245,000; Steven V. Abramson -- 285,000; Sidney D. Rosenblatt --
340,000; 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.
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, which the Rubenstein Trust and Seligsohn Trust are principal
shareholders.
(5) Does not include (i) 176,000 shares of Common Stock owned by American
Biomimetics Corporation, (ii) 200,000 shares of Series A Preferred Stock
owned by American Biomimetics Corporation, (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.
<PAGE>
(6) Does not include 24,000 shares of Common Stock owned by the Ledger Family
Trust II, for which Mr. Ledger disclaims beneficial ownership.
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 subsidiary
for the fiscal year ended December 31, 1998 and the total compensation earned by
such individuals for the Company's two previous fiscal years.
<TABLE>
<CAPTION>
Securities
Year Ended Underlying
Name and Principal Position December 31, Salary ($) Options
- --------------------------- ----------- ---------- ----------
<S> <C> <C> <C>
Sherwin I. Seligsohn........................ 1998 85,000 20,000
Chairman of the Board 1997 85,000 25,000
and Chief Executive Officer 1996 85,000 200,000(3)
Steven V. Abramson.......................... 1998 180,000 120,000
President and 1997 180,000 25,000
Chief Operating Officer 1996 110,796(1) 200,000(3)
Sidney D. Rosenblatt........................ 1998 180,000 120,000
Executive Vice President, Chief Operating 1997 180,000 25,000
Officer, Secretary & Treasurer 1996 128,672(2) 125,000(3)
</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 1998 to the
persons named in the Summary Compensation Table.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Percentage of Total
Options Granted to Exercise Expiration Date
Name Options Granted Employees In 1998 Price ---------------
- ----- --------------- ----------------- -----
<S> <C> <C> <C> <C>
Sherwin I. Seligsohn 20,000 8.1% $4.50 12/08
Steven V. Abramson 20,000 8.1% $4.50 12/08
Sidney D. Rosenblatt 20,000 8.1% $4.50 12/08
All Employees as a Group 248,000 100.0% $3.75-6.22 4/08-12/08
</TABLE>
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.
<PAGE>
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.
CERTAIN TRANSACTIONS
In December 1998, 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 $4.50, 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. In addition, on April 2, 1998, the Company granted
warrants to purchase 100,000 shares of Common Stock to each of Mssrs. Abramson,
Rosenblatt and Forrest and Mark Thompson and Mr. Abramson is a director.
The Company shares office space and certain related expenses with Global
Photonic Energy Corporation, ("Global"), a company for which Messrs. Seligsohn,
Rosenblatt and Ledger are directors and executive officers and Mr. Abramson is
a director.
<PAGE>
PROPOSAL 2
APPROVAL OF ADDITIONAL SHARES TO BE ISSUED UNDER THE STOCK OPTION PLAN
At the Annual Meeting, there will be presented to the shareholders a
proposal to increase the number of shares of Common Stock subject to the Plan to
1,600,000 from 1,200,000.
The Board of Directors believes that the amendment to increase the
number of shares of Common Stock available for issuance under the Plan is in the
best interest of the Company. The Board of Directors 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 of Directors 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 other shareholders. As of April 15, 1999, options to
purchase 907,781 shares of Common Stock were outstanding under the Plan; options
to purchase 377,991 shares of Common Stock remain available for future grants.
Assuming approval of this proposal, 777,981 shares will remain available for
future grant.
The Board of Directors Recommends a Vote FOR the Proposal To Increase the Number
of Shares of Common Stock Subject to the Plan to 1,600,000 from 1,200,000.
DESCRIPTION OF THE PLAN
The amended Plan authorizes up to 1,600,000 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 15, 1999 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
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 Small Cap
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 May 10, 1999,
the fair market value of a share of Common Stock was $3.625 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.
<PAGE>
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 1998.
Number of Options
-----------------
All executive officers as a group 80,000
All directors not executive officers as a group 0
All employees, as a group, excluding executive officers 168,000
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 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.
<PAGE>
PROPOSAL 3
APPOINTMENT OF INDEPENDENT ACCOUNTANTS
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, 1999. 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 1999, but the selection of other independent accountants will be
considered in future years.
The Board Recommends a Vote FOR the Proposal To Approve the Appointment of
Arthur Andersen LLP as the Company's Independent Auditors for the Year Ending
December 31, 1999.
SHAREHOLDER PROPOSALS
Shareholders may submit proposals for inclusion in the proxy statement
on matters appropriate for shareholder action at annual meetings in accordance
with regulations adopted by the SEC. The Company must receive such proposals no
later than January 29, 2000 to be considered for inclusion in the proxy
statement and form of proxy relating to the 2000 annual meeting. Shareholders
who intend to submit proposals appropriate for shareholder action at the 2000
annual meeting, but who are not seeking to have the proposal included in the
proxy statement, must submit such proposal so that the Company receives it no
later than April 5, 2000. Proposals should be directed to the attention of the
Secretary of the Company.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
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,
except that Messrs. Seligsohn, Abramson, Rosenblatt and Ledger filed their Form
5's approximately one month late, on March 15, 1998.
ANNUAL REPORT TO SHAREHOLDERS
A copy of the Company's 1998 Annual Report, containing financial
statements for the year ended December 31, 1998, is being transmitted herewith.
A copy of the Company's Annual Report on Form 10-KSB for the year ended
December 31, 1998, as filed with the Securities and Exchange Commission,
excluding exhibits thereto, may be obtained, without charge, by contacting
Sidney D. Rosenblatt, Corporate Secretary, Universal Display Corporation, Three
Bala Plaza East, Suite 104, Bala Cynwyd, Pennsylvania 19004.
<PAGE>
By Order of the Board of Directors,
Sidney D. Rosenblatt
Corporate Secretary
Bala Cynwyd, Pennsylvania
May 20, 1999
<PAGE>
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THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
UNIVERSAL DISPLAY CORPORATION
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS JUNE 23, 1999
The undersigned hereby appoints Sherwin I. Seligsohn, Steven V.
Abramson and Sidney D. Rosenblatt, jointly and severally, as proxies, each with
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 15,
1999 at the Annual Meeting of Shareholders to be held on June 23, 1999, or any
adjournment thereof.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE.
PLEASE VOTE, SIGN ON REVERSE SIDE AND RETURN PROMPTLY
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Please Detach and Mail in the Envelope Provided
A|X| Please mark your boxes as in this example
FOR WITHHELD
1. ELECTION OF [ ] [ ] Nominees: Steven V. Abramson
DIRECTORS Stephen R. Forrest
Elizabeth H. Gemmill
Dean L. Ledger
For, except votes withheld from the following Camille Naffah
nominee(s): Sidney D. Rosenblatt
Sherwin I. Seligsohn
_____________________________________________
FOR AGAINST ABSTAIN
2. Approval of increase in Shares of Common [ ] [ ] [ ]
Stock Subject to the Company's Stock Option
Plan to 1,600,000 from 1,200,000
3. Approval of Arthur Andersen LLP as [ ] [ ] [ ]
independent Accountants
4. In their discretion, the proxies are authorized to vote on such other
business as may properly come before the meeting.
This proxy, when properly exeucted, 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_____________
NOTE: Please sign exactly as your name appears herein. When signing as attorney,
executor, administrator, trustee, guardian, or in any other representative
capacity, please indicate.
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