<PAGE>
(PROSPECTUS)
688,408 Shares
UNIVERSAL DISPLAY CORPORATION
Common Stock
The shareholder of Universal Display Corporation identified in this
prospectus under "Selling Shareholder," or its donees or pledgees, is offering
up to 688,408 shares of our common stock for resale to the public. The selling
shareholder will be selling shares of common stock (a) that it owns, (b) that it
can acquire by converting shares of our preferred stock it owns, (c) that it can
acquire by exercising a warrant it owns, and/or (d) that it receives in lieu of
certain cash royalty payments to be made by us.
We will not receive any proceeds from the resale of shares of our
common stock by the selling shareholder. We are paying the expenses of this
offering.
The primary market for our common stock is the Nasdaq National Market
System, where it trades under the symbol "PANL." Our common stock is also traded
on the Philadelphia Stock Exchange under the symbol "PNL." On October 25, 2000,
the last reported sale price of our common stock on the Nasdaq National Market
System was $16.25 per share.
An investment in our common stock involves significant risks. You
should carefully consider the risk factors described on pages 5 to 9 before
investing in our common stock.
The Securities have not been approved by the Securities and Exchange
Commission or any state securities commission, nor have they determined if this
prospectus is accurate or complete. Any representation to the contrary is a
criminal offense.
The information in this prospectus is not complete and may change. We
may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
The date of this Prospectus is November 9, 2000
<PAGE>
TABLE OF CONTENTS
Page
----
Cautionary Statement Concerning Forward-Looking Statements................. 1
Universal Display Corporation.............................................. 2
Risk Factors............................................................... 5
The Offering .............................................................. 10
Use of Proceeds............................................................ 10
Selling Shareholder........................................................ 11
Plan of Distribution....................................................... 11
About this Prospectus...................................................... 12
Where You Can Find More Information........................................ 13
Legal Opinion.............................................................. 13
Experts.................................................................... 13
i
<PAGE>
CAUTIONARY STATEMENT
CONCERNING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve a
number of risks and uncertainties. For such statements, we claim the protection
of the safe harbor for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995. A number of factors could cause our
actual results, performance or achievements or those of the display technology
industry to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. These
factors include, but are not limited to:
o competition in the display technology industry in general and in our
specific target markets;
o changes in prevailing interest rates and the availability of and
terms of financing to fund the growth of our business;
o inflation;
o changes in costs of goods and services;
o economic conditions in general and in our specific target markets;
o changes in consumer preferences and tastes;
o demographic changes;
o changes in, or failure to comply with, federal, state, local or
foreign government regulation;
o liability and other claims asserted against us;
o changes in our commercialization strategy;
o the ability to attract and retain qualified personnel;
o changes in our capital expenditure plans; and
o other factors referred to in this prospectus
In addition, the forward-looking statements included in this prospectus
are not meant to predict future events or circumstances and may not be realized.
Forward-looking statements can be identified by, among other things, the use of
forward-looking terminology such as "believes," "expects," "may," "will,"
"should," "seek," "pro forma," "anticipates," "intends," or "potential" or the
negative of, or any other variations on, those terms or comparable terminology,
or by discussion of strategy or intentions. Given these uncertainties,
prospective investors are cautioned not to place undue reliance on these
forward-looking statements. We disclaim any obligation to update these factors
or to announce the results of any revisions to any of the forward-looking
statements contained in this prospectus publicly to reflect future events or
developments.
1
<PAGE>
UNIVERSAL DISPLAY CORPORATION
This is a summary of information appearing elsewhere in this
prospectus. This summary does not contain all of the information you should
consider before investing in our common stock. This summary is qualified in its
entirety by, and should be read in conjunction with, the more detailed
information and financial statements, including the notes to the financial
statements, appearing elsewhere in this prospectus or in our annual and
quarterly reports and other filings with the Securities and Exchange Commission.
References in this prospectus to "we," "us" and "our" refer to Universal Display
Corporation, together with its wholly-owned subsidiary, UDC, Inc.
Our Company
Universal Display Corporation is engaged in the research, development
and commercialization of organic light emitting diode, or OLED, technology for
use in flat panel displays, lasers and light generating devices. We expect the
initial market for our technology to be in the electronic flat panel display
industry. This industry includes such products as:
o cellular phone displays;
o portable personal digital assistants and
Internet access-type devices;
o laptop computers; and
o television and computer monitors.
Stanford Resources, Inc. estimated the size of the electronic display
market to be approximately $41 billion in 2000. The flat panel part of this
market is approximately $17 billion in 2000.
We have the exclusive, perpetual, worldwide license to commercialize
all OLED technology, intellectual property and know-how developed by Princeton
University and the University of Southern California, subject to the terms of
our license agreement with those universities. To date, 31 patents have been
issued in the United States. Approximately 40 patent applications (with
corresponding foreign protection) have been filed, and additional patents are
being filed monthly. We have also obtained a license, with rights to sublicense,
to 67 US patents, approximately 15 US patent applications, and additional
foreign patents related to OLED technology owned by Motorola, Inc.
Our OLED Technology
Organic light emitting diodes are made of material containing a
carbon-based substance that has the capability to emit light when electric
current is passed through it. We, in collaboration with our research partners,
are working towards commercializing innovative OLED technology, including the
following six proprietary OLED technology platforms
o TOLED Technology: Our transparent OLED can be used to create
transparent displays for information displays on windshields, cockpit
displays on aircraft and head mounted displays. TOLEDs can also be
used in numerous portable electronic applications because of their
bright colors, high contrast, low power requirements and top emission
characteristics.
o SOLED Technology: Unlike traditional side-by-side display
architecture, which places the red, green and blue picture elements,
or pixels, horizontally next to each other, our stacked OLED stacks
the red, green and blue pixels vertically on top of each other. Thus,
to display green in the conventional architecture, you turn off the
red and blue pixels, leaving spaces between each of the illuminated
green pixels. In SOLED, to display green, you turn off the red and
blue sections of the stacked pixel component. The stacked
architecture of the SOLED may increase the resolution of the display
by a factor of three.
2
<PAGE>
o FOLED Technology: Unlike conventional displays, our flexible OLEDs
can be built on flexible materials such as plastic. We believe that
such displays will be lighter in weight and will have lower power
requirements. The FOLED also may provide the opportunity to apply low
cost roll to roll (web processing) technologies to display
fabrication, which can reduce the cost, and therefore expand the
market, of electronic flat panel displays.
o Organic Laser Technology: We and our research partners are attempting
to develop a fourth technology platform based upon the ability to
fabricate an organic laser utilizing OLED technology. In the
September 25, 1997 issue of Nature, our research partners announced
what they believed to be the first evidence of lasing from vacuum
deposited thin films of organic molecules. We believe this is a
significant first step towards the realization of electrically
pumped, solid-state lasers based on organic thin films.
o High Efficiency Materials: A fifth technology platform respects the
use of molecules that emit light through the process of
phosphorescence. This class of molecules has the potential for higher
efficiency, lower power and longer lifetimes than conventional OLED
technology which involves the emission of light through the process
of fluorescence. We and our research partners first announced this
discovery in the September 10,1999 issue of the scientific journal,
Nature.
o Organic Vapor Phase Deposition: A sixth technology platform involves
the use of a carrier gas stream in a hot walled reactor at low vacuum
to precisely deposit the thin layers of organic materials used in
OLED displays. Conventional OLED fabrication equipment evaporates the
organic molecules at high vacuum. We have entered into a Development
and License Agreement with Aixtron AG, a German company that
manufactures precision semiconductor production equipment for LED's,
to further develop, commercialize and produce manufacturing equipment
for OLEDs based on this technology.
Our Research Partners
Princeton and USC have been performing research on OLED technology for
many years, and have continued that research for us since 1994. The sponsored
research agreement between us and our research partners, which was originally
executed in 1994, was extended in 1997 for five additional years and is subject
to further extension by mutual agreement.
Key members of our research team include Dr. Stephen Forrest at
Princeton and Dr. Mark R. Thomson at USC. There are approximately 20 researchers
at Princeton and USC who are engaged in OLED research.
Our Commercialization Strategy
Our approach to developing technology and penetrating the electronic
display market has three major components:
o We are continuing to fund our research partners under the current
sponsored research agreement and to obtain the worldwide exclusive
rights to all intellectual property invented in the project.
o We are working on the development of reliable commercial prototypes
and the optimization of the fabrication processes. We recently moved
into an 11,000 square foot space near Princeton, New Jersey to serve
as a pilot line facility and technology transfer center.
o We intend to license our proprietary OLED technology and enter into
joint ventures and other strategic alliances with experienced
manufacturers and users of display products for the volume
manufacture, distribution and sale of products based upon this
technology. We do not presently intend to become a volume
manufacturer.
3
<PAGE>
Subsequent Developments
Effective September 8, 2000, the listing and trading of our common
stock was moved from the Nasdaq Small Cap Market and was added to and listed on
the Nasdaq National Market System.
On September 26, 2000, we announced that C. Keith Hartley was appointed
to our Board of Directors, replacing Camille Naffah.
On October 5, 2000, we announced that we had entered into a license
agreement with Motorola, Inc. Pursuant to the license agreement, we licensed
from Motorola 67 US patents, 7 US patent applications, and additional foreign
patents. We have the sole right to sublicense these Motorola patents to
manufacturers. In addition, pursuant to our agreement, we have the opportunity
to meet with their product development group, although there are no assurances
that Motorola will purchase any products from UDC or its licensees. As initial
consideration for the licenses, we issued to Motorola 200,000 shares of our
common stock, 300,000 shares of our Series B Convertible Preferred Stock (which
are convertible into shares of common stock based upon a formula set forth in
our Articles of Incorporation) and a warrant to purchase 150,000 shares of our
common stock at $21.60 per share which becomes exercisable on September 29, 2001
and will remain exercisable until September 29, 2007. We will account for the
issuance of the shares and warrants based on the fair market value of the shares
and warrants issued. Accordingly, we expect to record an intangible asset of
approximately $15.5 million for the technology acquired from Motorola during the
quarter ended September 30, 2000. In addition, we will pay to Motorola a royalty
based on the sales of products incorporating OLED technology, a portion of which
we may pay in shares of our common stock.
Executive Offices
Our executive offices are located at 375 Phillips Boulevard, Ewing, New
Jersey 08618. Our phone number is (609) 671-0980. Our web site can be found at
www.universaldisplay.com.
4
<PAGE>
RISK FACTORS
An investment in our common stock involves a high degree of risk. In
addition to the other information contained in this prospectus, you should
carefully consider the following risk factors before making an investment
decision concerning our common stock. You should not purchase our common stock
if you cannot afford the loss of your entire investment.
We do not expect to be profitable in the foreseeable future, and may never be
profitable.
Since inception, we have not generated any product revenues, and have
incurred significant losses, resulting in an accumulated deficit of
approximately $22.7 million, as of June 30, 2000. We expect to incur losses for
the foreseeable future and until such time, if ever, as we are able to achieve
sufficient levels of revenue from the commercial exploitation of the OLED
technology to support our operations. You should note, however, that:
o OLED technology may never become commercially viable;
o markets for flat panel displays utilizing the OLED technology may be
limited; and
o we may never generate sufficient revenues from the commercial
exploitation of the OLED technology to become profitable.
Additionally, even if we find commercially viable applications for our OLED
technology, we may never recover our research and development costs.
If we do not receive additional financing in the future, we will not be able
continue the research, development and commercialization of our OLED technology.
Our capital requirements have been and will continue to be significant.
The completion of the research, development and commercialization of the OLED
technology for potential applications will require significant additional effort
and resources. Our cash on hand is not sufficient to meet all of our future
obligations. When we need additional funds, such funds may not be available on
commercially reasonable terms or at all. If we cannot obtain more money when we
need it, our business might fail. Additionally, if we attempt to raise money in
an offering of our common stock, the issuance of additional stock will dilute
our then existing shareholders.
If our OLED technology is not feasible for product applications, we may never
generate significant revenues.
At this time, we are unable to determine the feasibility of our OLED
technology for the commercial viability of any potential applications. We must
make substantial advances in our research and development efforts in a number of
areas including:
o reliability;
o the development of more fully saturated colors for full color
displays;
o integration with drive electronics; and
o issues related to scalability and cost effective fabrication
technologies for product applications
before products utilizing the OLED technology are manufactured and sold. The
development of an electrically pumped laser is also necessary before products
based on the organic laser research are manufactured and sold. Our efforts may
never demonstrate the feasibility of our OLED technology, particularly for use
in full color, large area, high resolution, high information content flat panel
display applications.
Our research and development efforts remain subject to all of the risks
associated with the development of new products based on emerging and innovative
technologies, including, without limitation, unanticipated technical or other
problems and the possible insufficiency of the funds allocated to complete its
development. Technical problems may result in delays and cause us to incur
additional expenses that would increase our losses. If we cannot complete our
research and development of the OLED technology successfully, or if we
experience delays in completing our research and development of the OLED
technology for use in potential applications, particularly after the occurrence
of significant expenditures, our business may fail.
5
<PAGE>
Even if our technology is technically feasible, it may not be accepted by the
market.
The potential size, timing and viability of market opportunities
targeted by us are uncertain at this time. Market acceptance of the OLED
technology will depend, in part, upon such technology providing benefits
comparable to CRT and LCD technology (the current standard for display quality)
at an appropriate cost, and its adoption by consumers, neither of which have
been achieved. Many potential licensees of the OLED technology manufacture flat
panel displays utilizing competing technologies and may, therefore, be reluctant
to redesign their products or manufacturing processes to incorporate the OLED
technology. Potential licensees may never utilize the commercially viable OLED
technology.
If our research partners fail to make advances in their research, or if they
terminate their relationship with us, we might not succeed in commercializing
our OLED technology.
Research and development of commercially viable applications for OLED
technology is dependent on the success of the research efforts of our research
partners conducted under our sponsored research agreement with them. We cannot
assure you that our research partners will make additional advances in the
research and development of the OLED technology.
Although we fund the OLED technology research, the scope of and
technical aspects of the research as well as the resources and efforts directed
to such research is subject to the control of our research partners. Our
sponsored research agreement provides that if Dr. Forrest is unavailable to
continue to serve as a principal investigator, either because he is no longer
associated with Princeton or otherwise, and a successor acceptable to both us
and Princeton is not available, Princeton has the right to terminate the
sponsored research agreement. The 1997 sponsored research agreement, which
expires in July 2002, may not be extended. The termination or expiration of the
sponsored research agreement or the 1997 license agreement would materially and
adversely affect our ability to research, develop and commercialize our OLED
technology.
If we cannot form strategic relationships with companies that manufacture and
use products that incorporate our OLED technology, our commercialization
strategy will fail.
Our strategic plan depends upon the development of strategic
relationships with companies that will manufacture and use products
incorporating its OLED technology. We have not yet entered into any such
strategic relationships, although we have entered into a Development and
Licensing Agreement with Aixtron AG to develop and commercialize a new type of
production equipment for OLEDs based upon our proprietary technology. Our
agreement with Motorola also includes the opportunity to meet with their product
development group, although there are no assurances that Motorola will purchase
any products from UDC or its licensees. In December, 1999, we moved into a new
facility which includes a prototype pilot line and technology transfer facility
to accelerate the development and commercialization of our technology, We cannot
assure you that such a facility will allow us to enter into such strategic
relationships.
Our prospects will be significantly affected by its ability to
sublicense the OLED technology and successfully develop strategic alliances with
third parties for incorporation of the OLED technology into flat panel displays
manufactured by others. Strategic alliances may require financial or other
commitments by us. We might not be able, for financial or other reasons, to
enter into strategic alliances on commercially acceptable terms, or at all.
Failure to do so would have a material adverse effect on us.
6
<PAGE>
If we cannot protect our intellectual property rights, or if our technology
infringes the rights of others, our business will suffer.
Our rights to the OLED technology are dependent on patents and other
intellectual property rights relating to the OLED technology that are licensed
to us by Princeton and USC. Thirty-two U.S. patents have already been issued,
approximately 40 additional patent applications are pending in the United States
and corresponding international patent applications have been filed to cover the
major industrial countries. However, there can be no assurance that additional
patents applied for will be obtained or that any such patents will afford us
commercially significant protection of our OLED technology, or will be found
valid if challenged. In connection with our license agreement with Motorola,
Inc., we have obtained a license to 67 additional OLED related US patents, 7
patent applications , related foreign patents and applications, and the right to
sublicense this technology.
The patent laws of other countries may differ from those of the United
States as to the patentability of the OLED technology and the degree of
protection afforded. Older companies and institutions may independently develop
equivalent or superior technologies and may obtain patent or similar rights with
respect thereto. There are a number of other companies and organizations that
have been issued patents and are filing additional patent applications relating
to OLED technology, including Eastman Kodak Corporation, which holds a number of
patents related to OLED technology. There can be no assurance that the exercise
of some aspects of our licensing rights respecting its OLED technology being
developed by Princeton and USC or those licensed from Motorola, Inc. will not
infringe on the patents of others, in which event we or our research partners
may be required to obtain a license, pay damages, modify their products or
method of operation or be prohibited from making, using, selling or offering to
sell some or all products incorporating our OLED technology. We also might not
have the financial or other resources necessary to enforce or defend a patent
infringement action, and the licensors of our licensed technology might not
enforce an action in a timely manner. If products incorporating our OLED
technology are found to infringe upon the patent or other intellectual property
rights of others, it could have a material adverse effect on us.
The federal government has rights to our OLED technology that might prevent us
from realizing its benefits.
The United States government, through the Defense Advanced Research
Projects Agency, has provided funding to Princeton and us for research
activities related to certain aspects of its OLED technology. The federal
government could obtain rights to this technology, which would affect our rights
as follows:
o If all or certain aspects of the OLED technology develop from our
funding to Princeton, and those aspects are deemed to fall within the
planned and committed activities of DARPA's funding, the federal
government, pursuant to federal law, could have certain rights
relating to the OLED technology.
o If the federal government determines that we have not taken effective
steps to achieve practical application of such technology in a field
of use in a reasonable time, it may require us to grant licenses to
other parties in any such field of use.
o The federal government could restrict our ability to market the OLED
technology to the federal government for military and other
applications.
o The federal government's continued funding of ours and Princeton's
research activities may also give it rights to aspects of the OLED
technology developed in the future.
If so, we might not realize the benefits of that technology.
Because many of our competitors have better name-recognition, and greater
financial, technical, marketing and research capabilities than us, we may never
be able to compete successfully in the flat panel display industry.
The flat panel display industry is characterized by intense
competition. The market is currently, and will likely continue to be, dominated
by products utilizing LCD technology. Numerous companies are making substantial
investments in, and conducting research to improve characteristics of, LCD
technology. Several other flat panel display technologies have been, or are
being, developed, including field emission, inorganic electroluminescence,
7
<PAGE>
polymeric light emitting diode, gas plasma and vacuum fluorescent displays. In
addition, other companies are engaged in research and development activities
with respect to technology using OLEDs. Advances in LCD technology or any of
these developing technologies may overcome their limitations or become the
leading technology for flat panel displays, either of which could limit the
potential market for flat panel displays utilizing the Company's OLED
technology.
Substantially all of these competitors have better name recognition and
greater financial, technical, marketing, personnel and research capabilities
than us. Our competitors may succeed in developing technologies and applications
that are more cost-effective or have fewer display limitations than our OLED
technology. We may never be able to compete successfully or develop commercial
applications for our OLED technology.
If we cannot keep our key employees or hire other talented persons as we grow,
our business might not succeed.
Our performance is substantially dependent on the continued services of
senior management and other key personnel, and its ability to offer competitive
salaries and benefits to its employees. We do not have employment agreements
with any of our management or key personnel. Additionally, competition for
highly skilled technical, managerial and other personnel is intense. We might
not be able to attract, hire, train, retain and motivate the highly skilled
managers and employees we need to be successful. If we fail to attract and
retain the necessary technical and managerial personnel, we will suffer and
might fail.
We can issue shares of preferred stock that can adversely affect your rights as
a shareholder.
Our articles of incorporation authorize us to issue up to 5,000,000
shares of preferred stock with designations, rights and preferences determined
from time-to-time by our board of directors. Accordingly, our board is
empowered, without shareholder approval, to issue preferred stock with dividend,
liquidation, conversion, voting or other rights superior to those of our common
shareholders. For example, an issuance of shares of preferred stock could:
o adversely affect the voting power of the common shareholders;
o make it more difficult for a third party to gain control of us;
o discourage bids for our common stock at a premium; or
o otherwise adversely affect the market price of the common stock.
Our board has designated and issued (a) 200,000 shares of Series A Preferred
Stock, all of which are held by an entity controlled by Sherwin Seligsohn and
(b) 300,000 shares of Series B Convertible Preferred Stock, which shares are
convertible into shares of our common stock in accordance with our articles of
incorporation. We may issue additional shares of our authorized preferred stock
at any time in the future.
The market price of our common stock might be highly volatile.
The market price of our common stock might be highly volatile, as has
been the case with the securities of other emerging growth companies. Factors
such as:
o our operating results;
o announcements by us or our competitors of technological developments,
new product applications or license arrangements; and
o other factors affecting the flat panel display industry generally may
have a significant impact on the market price of our common stock.
In recent years, the stock market has experienced a high level of price and
volume volatility and market prices for the stock of many companies,
particularly small and emerging-growth companies.
8
<PAGE>
If our shares are delisted, you might not be able to sell your investment in our
company.
Our common stock is listed on the Nasdaq National Market System. To
continue to be listed on that market, however, we must maintain, with certain
exceptions, maintenance criteria, including:
o specified levels for total assets;
o market value of the public float;
o total capital and surplus; and
o a minimum bid price per share.
The failure to meet such maintenance criteria in the future may result in the
delisting of our common stock from the Nasdaq National Market System.
Thereafter, trading, if any, in our common stock would be conducted in the
non-Nasdaq over-the-counter market. As a result of such delisting, you could
find it more difficult to dispose of, or to obtain accurate quotations as to the
market value of, our common stock.
If we are delisted, trading in our common stock may become subject to additional
regulation that could further limit the liquidity of your investment.
In addition, if our common stock were to become delisted from trading
on Nasdaq and the trading price of the common stock were to remain below $5.00
per share, trading in the common stock would also be subject to the requirements
of additional rules under the Exchange Act. These rules require additional
disclosure by broker-dealers in connection with any trades involving any
non-Nasdaq equity security that has a market price of less than $5.00 per share,
subject to certain exceptions. Such rules require the delivery, prior to any
so-called penny stock transaction, of a disclosure schedule explaining the penny
stock market and the risks associated with it, and impose various sales practice
requirements on broker-dealers who sell penny stocks to persons other than
established customers and accredited investors. For these types of transactions,
the broker-dealer must make a special suitability determination for the
purchaser and have received the purchaser's written consent to the transaction
prior to sale. The broker-dealer also must disclose the commissions payable to
the broker-dealer, current bid and offer quotations for the penny stock and, if
the broker-dealer is the sole market-maker, the broker-dealer must disclose this
fact and the broker-dealer's presumed control over the market. Such information
must be provided to the customer orally or in writing prior to effecting the
transaction and in writing before or with the customer confirmation. Monthly
statements must be sent disclosing recent price information for the penny stock
held in the account and information on the limited market in penny stocks. The
additional burdens imposed upon broker-dealers by such requirements may
discourage broker-dealers from effecting transactions in our common stock, which
could severely limit the market liquidity of your investment.
This offering, as well as the issuance of other publicly traded shares, could
drive our stock price down.
Following the effectiveness of our registration statement, the shares
of common stock offered by the selling shareholder will become freely salable in
the public market. Although the sale of these additional shares to the public
might increase the liquidity of our shareholders' investments, the increase in
the number of shares available for public sale could drive the price of our
common stock down, thus reducing the value of your investment and perhaps
hindering our ability to raise additional funds in the future. To the extent
other restricted shares become freely salable, whether through an effective
registration statement or under Rule 144 of the Securities Act, or we issue
additional shares that might be or become freely salable, you could expect our
stock price to decrease.
9
<PAGE>
THE OFFERING
The selling shareholder is offering for resale up to 688,408 shares of
our common stock. Of the shares, the following were issued as nonrefundable,
initial consideration for the licenses granted to us by the selling shareholder
pursuant to a license agreement.
o 200,000 shares of common stock;
o 300,000 shares of Series B preferred stock, which are convertible
into shares of common stock based upon a formula previously agreed
upon between us and the Selling Shareholder; and
o A warrant to purchase 150,000 shares of common stock at an exercise
price of $21.60 which becomes exercisable on September 29, 2001 and
will remain exercisable until September 28, 2007;
The remainder of the common stock offered for resale by the selling shareholder
(or 38,408 shares) may be issued from time to time by us in lieu of our making
cash royalty payments to the selling shareholder under a license agreement
between us and the selling shareholder.
The selling shareholder pursuant to this prospectus may sell the shares
of common stock offered for resale in a secondary offering. Under the terms of
the transactions described above, we are contractually required to register all
of the shares of common stock that are described above.
USE OF PROCEEDS
The selling shareholder will receive the proceeds from the resale of
the shares of common stock. We will not receive any proceeds from the resale of
the shares of common stock by the selling shareholder.
10
<PAGE>
SELLING SHAREHOLDER
The following table sets forth information regarding the beneficial
ownership of shares of common stock by the Selling Shareholder as of October 25,
2000, and the number of shares of common stock covered by this prospectus. We
have entered into a license agreement with the selling shareholder described
under "Universal Display Corporation - Subsequent Developments" in this
prospectus, pursuant to which all of the securities listed below were initially
issued to the selling shareholder in a private placement.
Beneficial ownership is determined in accordance with the rules of the
SEC and generally includes voting or investment power with respect to
securities. The shares of common stock subject to options or warrants currently
exercisable or exercisable within 60 days of October 25, 2000 are deemed
outstanding and to be beneficially owned by the selling shareholder holding such
options or warrants.
<TABLE>
<CAPTION>
Beneficial Ownership After
Resale of Shares
-----------------------------
Number of Maximum
Shares Number of
Name of Beneficially Shares Being Number of
Selling Shareholder Owned Offered Shares Percent (1)
------------------- ----- ------- ------ -----------
<S> <C> <C> <C> <C>
Motorola, Inc. (2) 200,000 688,408(2) 0 0
------- ------- ---
Totals 200,000 688,408 0
</TABLE>
-------------
*Less than 1%.
(1) Based on 15,825,019 shares outstanding as of October 25, 2000.
(2) Includes
o 150,000 shares of common stock that may be acquired upon exercise of
a warrant that becomes exercisable on September 29, 2001,
o 300,000 shares of common stock that may be issuable upon conversion
of 300,000 shares of Series B Convertible Preferred Stock held by the
selling shareholder, which become convertible at the cumulative rate
of 75,000 shares per year over 4 years commencing September 29, 2001,
subject to certain adjustments in the conversion rate provided in our
amended articles of incorporation, and
o 38,408 shares of common stock that may be issued from time to time by
us in lieu of our making certain cash royalty payments to the selling
shareholder under a license agreement between us and the selling
shareholder.
PLAN OF DISTRIBUTION FOR THE RESALE OF THE SHARES
The selling shareholder, including any donees or pledgees who receive
shares from the selling shareholder, may, from time to time, sell all or a
portion of the shares of common stock on any market upon which the common stock
my be quoted, in privately negotiated transactions or otherwise, at fixed prices
that may be changed, at market prices prevailing at the time of sale, at prices
related to such market prices or at negotiated prices. The selling shareholder
may sell the shares of common stock by one or more of the following methods,
without limitation:
o block trades in which the broker or dealer so engaged will attempt to
sell the shares of common stock as agent, but may petition and resell
a portion of the block as principal to facilitate the transaction;
o purchases by the broker or dealer as principal and resale by the
broker or dealer for its account pursuant to this prospectus;
o an exchange distribution in accordance with the rules of the
exchange;
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers;
o negotiated transactions or otherwise, including an underwritten
offering;
11
<PAGE>
o market sales (both long and short to the extent permitted under the
federal securities laws);
o in connection with short sales of the shares of Common Stock;
o in connection with the writing of non-traded and exchange-traded call
options, in hedge transactions and in settlement of other
transactions in standardized or over-the-counter options, if
permitted under the securities laws, and
o a combination of any of these methods of sale.
In effecting sales, brokers and dealers engaged by the selling
shareholder may arrange for other brokers or dealers to participate. Brokers or
dealers may receive commissions or discounts from the selling shareholder or, if
any such broker-dealer acts as agent for the purchaser of such shares, from such
purchaser, in amounts to be negotiated. These commissions or discounts may
exceed those customary in the types of transactions involved. Broker-dealers may
agree with the Selling Shareholder to sell a specified number of shares of
common stock at a stipulated price per share, and, to the extent such
broker-dealer is unable to do so acting as agent for the selling shareholder, to
purchase as principal any unsold shares of common stock at the price required to
fulfill the broker dealer commitment to the selling shareholder. Broker-dealers
who acquire shares of common stock as principal may thereafter resell such
shares of common stock form time to time in transactions (which may involve
block transactions and sales to and through other broker-dealers, including
transactions of the nature described above) at prices and on terms then
prevailing at the time of sale, at prices then related to then-current market
price or in negotiated transactions. In connection with such resales,
broker-dealers may pay to or receive from the purchasers of shares of common
stock commissions as described above. The selling shareholder may also sell the
shares of common stock in accordance with Rule 144 under the Securities Act of
1933 rather than pursuant to this prospectus.
The selling shareholder and any broker-dealers or agents that
participate with the selling shareholder in sales of the shares of common stock
may be deemed to be "underwriters" within the meaning of the Securities Act in
connection with those sales. In such event, any commissions received by such
broker-dealers or agents and any profit on the resale of the shares of common
stock purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act.
From time to time, the selling shareholder may pledge its shares of
common stock pursuant to the margin provisions of its customer agreements with
its brokers. Upon default by a selling shareholder, the broker may offer and
sell such pledged shares of common stock from time to time. Upon a sale of the
shares of common stock, the selling shareholder intends to comply with the
prospectus delivery requirements under the Securities Act by delivering a
prospectus to each purchaser in the transaction. We intend to file any
amendments or other necessary documents in compliance with the Securities Act
that may be required in the event the selling shareholder defaults under any
customer agreement with brokers.
We are required to pay all fees and expenses incident to the
registration of the shares of common stock. We have agreed to indemnify the
selling shareholder against certain losses, claims, damages and liabilities,
including liabilities under the Securities Act. Brokerage commissions and
similar selling expenses, if any, attributable to the sale of shares by the
selling shareholder will be borne by the selling shareholder. The selling
shareholder may agree to indemnify brokers, dealers or agents that participate
in sales by the selling shareholder against certain losses, claims, damages and
liabilities, including liabilities under the Securities Act.
ABOUT THIS PROSPECTUS
You should only rely on the information contained in this prospectus.
We have not authorized anyone to provide you with information different from
that contained in this prospectus. The information contained in this prospectus
is accurate only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or of any sale of common stock.
12
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and
other information with the Securities and Exchange Commission. You may read and
copy any reports, statements or other information we file at the SEC's public
reference rooms located at Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, IL
60661 and 7 World Trade Center, Suite 1300, New York, NY 10048. Please call the
SEC at 1-800-SEC-0330 for further information on the public reference rooms. Our
SEC filings are also available to the public from commercial document retrieval
services and at the web site maintained by the SEC at "http://www.sec.gov."
We have filed a Registration Statement on Form S-3, of which this
prospectus forms a part, to register the resale of the shares with the SEC. As
allowed by SEC rules, this prospectus does not contain all the information you
can find in the Registration Statement or the exhibits to the Registration
Statement.
The SEC allows us to "incorporate by reference" information into this
prospectus, which means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The information
incorporated by reference is deemed to be part of this prospectus, except for
any information superseded by information in this prospectus. This prospectus
incorporates by reference the documents set forth below that we have previously
filed with the SEC. These documents contain important information about us, our
business and our finances.
The documents that we are incorporating by reference are:
o Our Annual Report on Form 10-K for the year ended December 31, 1999,
as amended;
o Our Quarterly Report on Form 10-Q for the quarter ended March 31,
2000;
o Our Quarterly Report on Form 10-Q for the quarter ended June 30,
2000; and
o The description of our common stock that is contained in our
Registration Statement on Form SB-2 filed with the SEC on June 30,
1999, as amended August 25, 1999.
Any documents which we file pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this prospectus but before the end
of any offering of securities made under this prospectus will also be considered
to be incorporated by reference.
If you request, either orally or in writing, we will provide you with a
copy of any or all documents which are incorporated by reference. We will
provide such documents to you free of charge, but will not include any exhibits,
unless those exhibits are incorporated by reference into the document. You
should address written requests for documents to Sidney S. Rosenblatt, Executive
Vice President, Chief Financial Officer, Treasurer and Secretary, Universal
Display Corporation, 375 Phillips Boulevard, Ewing, New Jersey 08618.
LEGAL OPINION
Morgan, Lewis & Bockius LLP, Philadelphia, Pennsylvania, will pass on the
validity of the shares.
EXPERTS
The financial statements incorporated by reference in this prospectus
and elsewhere in this registration statement have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their report with
respect thereto, and are incorporated by reference herein in reliance upon the
authority of said firm as experts in giving said reports.
13
<PAGE>
================================================================================
688,408 Shares
UNIVERSAL DISPLAY CORPORATION
Common Stock
---------------
PROSPECTUS
---------------
November 9, 2000
================================================================================
