Pennsylvania
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23-2372688
|
|
(State or other jurisdiction of
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(I.R.S. Employer Identification No.)
|
|
incorporation or organization)
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||
375 Phillips Boulevard
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||
Ewing, New Jersey
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08618
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
X
|
Accelerated filer
|
Non-accelerated filer ___ (Do not check if a smaller reporting company)
|
Smaller reporting company ___
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PART I – FINANCIAL INFORMATION
|
|
PART II – OTHER INFORMATION
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|
PART I – FINANCIAL INFORMATION
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FINANCIAL STATEMENTS
|
Three Months Ended March 31,
|
||||||||
2012
|
2011
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net loss
|
$ | (1,221 | ) | $ | (11,881 | ) | ||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
|
||||||||
Amortization of deferred revenue
|
(917 | ) | (705 | ) | ||||
Depreciation
|
418 | 372 | ||||||
Amortization of intangibles
|
15 | 5 | ||||||
Amortization of premium and discount on investments, net
|
(238 | ) | (64 | ) | ||||
Stock-based employee compensation
|
800 | 1,039 | ||||||
Non-cash expense under a materials agreement
|
— | 9 | ||||||
Stock-based compensation to Board of Directors and Scientific Advisory Board
|
213 | 529 | ||||||
Loss on stock warrant liability
|
— | 8,926 | ||||||
Retirement plan benefit expense
|
388 | 382 | ||||||
Decrease (increase) in assets:
|
||||||||
Accounts receivable
|
2,019 | 1,263 | ||||||
Inventory
|
(1,731 | ) | (89 | ) | ||||
Other current assets
|
(827 | ) | 394 | |||||
Other assets
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15 | (116 | ) | |||||
(Decrease) increase in liabilities:
|
||||||||
Accounts payable and accrued expenses
|
(1,987 | ) | 253 | |||||
Other current liabilities
|
(1 | ) | — | |||||
Deferred revenue
|
1,042 | 1,300 | ||||||
Net cash (used in) provided by operating activities
|
(2,012 | ) | 1,617 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Purchase of property and equipment
|
(1,802 | ) | (475 | ) | ||||
Purchase of intangibles
|
— | (440 | ) | |||||
Purchase of investments
|
(139,512 | ) | (37,346 | ) | ||||
Proceeds from sale of investments
|
178,638 | 23,396 | ||||||
Net cash provided by (used in) investing activities
|
37,324 | (14,865 | ) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds from the issuance of common stock
|
71 | 249,803 | ||||||
Proceeds from the exercise of common stock options and warrants
|
541 | 5,120 | ||||||
Payment of withholding taxes related to stock-based employee compensation
|
(3,473 | ) | (3,938 | ) | ||||
Net cash (used in) provided by financing activities
|
(2,861 | ) | 250,985 | |||||
INCREASE IN CASH AND CASH EQUIVALENTS
|
32,451 | 237,737 | ||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
111,795 | 20,369 | ||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD
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$ | 144,246 | $ | 258,106 | ||||
The following non-cash activities occurred:
|
||||||||
Unrealized (loss) gain on available-for-sale securities
|
$ | (104 | ) | $ | 11 | |||
Common stock issued to Board of Directors and Scientific Advisory Board that was earned in a previous period
|
328 | 300 | ||||||
Common stock issued to employees that was accrued for in a previous period, net of shares withheld for taxes
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252 | 1,113 | ||||||
Fair value of stock warrant liability reclassified to shareholders’ equity upon exercise
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— | 6,476 |
1.
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BACKGROUND
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2.
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BASIS OF PRESENTATION
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3.
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CASH, CASH EQUIVALENTS AND INVESTMENTS
|
Amortized
|
Unrealized
|
Aggregate Fair
|
||||||||||||||
Investment Classification
|
Cost
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Gains
|
(Losses)
|
Market Value
|
||||||||||||
March 31, 2012 –
|
||||||||||||||||
Certificates of deposit
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$ | 6,612 | $ | — | $ | (7 | ) | $ | 6,605 | |||||||
Commercial paper
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2,993 | 1 | — | 2,994 | ||||||||||||
Corporate bonds
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182,575 | 24 | (109 | ) | 182,490 | |||||||||||
U.S. government bonds
|
3,213 | — | — | 3,213 | ||||||||||||
$ | 195,393 | $ | 25 | $ | (116 | ) | $ | 195,302 |
Amortized
|
Unrealized
|
Aggregate Fair
|
||||||||||||||
Investment Classification
|
Cost
|
Gains
|
(Losses)
|
Market Value
|
||||||||||||
December 31, 2011 –
|
||||||||||||||||
Certificates of deposit
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$ | 5,797 | $ | — | $ | (5 | ) | $ | 5,792 | |||||||
Corporate bonds
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223,260 | 43 | (25 | ) | 223,278 | |||||||||||
U.S. government bonds
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5,224 | — | — | 5,224 | ||||||||||||
$ | 234,281 | $ | 43 | $ | (30 | ) | $ | 234,294 |
Fair Value Measurements, Using
|
||||||||||||||||
Total carrying
value as of
March 31, 2012
|
Quoted prices
in active markets
(Level 1)
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Significant other observable inputs
(Level 2)
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Significant unobservable inputs
(Level 3)
|
|||||||||||||
Cash equivalents
|
$ | 137,986 | $ | 137,986 | $ | — | $ | — | ||||||||
Short-term investments
|
194,331 | 194,331 | — | — | ||||||||||||
Long-term investments
|
971 | 971 | — | — |
Fair Value Measurements, Using
|
||||||||||||||||
Total carrying
value as of December 31, 2011
|
Quoted prices in active markets (Level 1)
|
Significant other observable inputs
(Level 2)
|
Significant unobservable inputs
(Level 3)
|
|||||||||||||
Cash equivalents
|
$ | 96,538 | $ | 96,538 | $ | — | $ | — | ||||||||
Short-term investments
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234,294 | 234,294 | — | — |
2011
|
||||
Fair value of stock warrant liability, beginning of period
|
$ | 10,660 | ||
Loss for period
|
8,926 | |||
Warrants exercised
|
(6,476 | ) | ||
Fair value of stock warrant liability, end of period
|
$ | 13,110 |
2011
|
||||
Contractual life (years)
|
0.4 | |||
Expected volatility
|
58.2 | % | ||
Risk-free interest rate
|
0.1 | % | ||
Annual dividend yield
|
— |
5.
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RESEARCH AND LICENSE AGREEMENTS WITH PRINCETON, USC AND MICHIGAN
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6.
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ACQUIRED TECHNOLOGY
|
7.
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EQUITY AND CASH COMPENSATION UNDER THE PPG INDUSTRIES AGREEMENTS
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8.
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SHAREHOLDERS’ EQUITY
(
in thousands, except for share and per share data)
|
Series A
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Accumulated
|
|||||||||||||||||||||||||||||||
Nonconvertible
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Additional
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Other
|
Total
|
|||||||||||||||||||||||||||||
Preferred Stock
|
Common Stock
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Paid-In
|
Accumulated
|
Comprehensive
|
Shareholders’
|
|||||||||||||||||||||||||||
Shares
|
Amount
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Shares
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Amount
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Capital
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Deficit
|
Loss
|
Equity
|
|||||||||||||||||||||||||
BALANCE, JANUARY 1, 2012
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200,000 | $ | 2 | 46,113,296 | $ | 461 | $ | 561,492 | $ | (213,871 | ) | $ | (5,857 | ) | $ | 342,227 | ||||||||||||||||
Net loss
|
— | — | — | — | — | (1,221 | ) | — | (1,221 | ) | ||||||||||||||||||||||
Other comprehensive income
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— | — | — | — | — | — | 44 | 44 | ||||||||||||||||||||||||
Exercise of common stock options
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— | — | 70,115 | 1 | 540 | — | — | 541 | ||||||||||||||||||||||||
Stock-based employee compensation, net of shares withheld for taxes (A)
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— | — | 122,715 | 1 | (2,298 | ) | — | — | (2,297 | ) | ||||||||||||||||||||||
Issuance of common stock to Board of Directors and Scientific Advisory Board (B)
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— | — | 28,341 | — | 541 | — | — | 541 | ||||||||||||||||||||||||
Issuance of common stock under an Employee Stock Purchase Plan
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— | — | 2,298 | — | 71 | — | — | 71 | ||||||||||||||||||||||||
BALANCE,
March 31, 2012
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200,000 | $ | 2 | 46,336,765 | $ | 463 | $ | 560,346 | $ | (215,092 | ) | $ | (5,813 | ) | $ | 339,906 |
(A)
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Includes $376,000 (9,376 shares) that was accrued for in a previous period and charged to expense when earned, but issued in 2012, less shares withheld for taxes in the amount of $124,000 (3,070 shares).
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(B)
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Includes $328,000 (7,490 shares) that was earned in a previous period and charged to expense when earned, but issued in 2012.
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9.
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STOCK-BASED COMPENSATION
|
10.
|
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
|
2012
|
2011
|
|||||||
Service cost
|
$ | 144 | $ | 136 | ||||
Interest cost
|
96 | 96 | ||||||
Amortization of prior service cost
|
146 | 146 | ||||||
Amortization of actuarial loss
|
2 | 4 | ||||||
Total net periodic benefit cost
|
$ | 388 | $ | 382 |
11.
|
COMMITMENTS AND CONTINGENCIES
|
12.
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CONCENTRATION OF RISK
|
% of Total Revenue
|
Accounts Receivable
(in thousands)
|
||||||||||||
Customer
|
2012
|
2011
|
March 31, 2012
|
||||||||||
A | 42% | 43% | $ | 3,831 | |||||||||
B | 13% | 20% | 1,602 | ||||||||||
C | 12% | — | — |
Country
|
2012
|
2011
|
||||||
United States
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$ | 1,274 | $ | 2,002 | ||||
South Korea
|
7,393 | 6,154 | ||||||
Japan
|
2,566 | 1,116 | ||||||
Taiwan
|
1,257 | 287 | ||||||
Other
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130 | 42 | ||||||
All foreign locations
|
11,346 | 7,599 | ||||||
Total revenue
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$ | 12,620 | $ | 9,601 |
13.
|
INCOME TAXES
|
14.
|
NET LOSS PER COMMON SHARE
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
·
|
intellectual property and technology licensing;
|
·
|
sales of OLED materials for evaluation, development and commercial manufacturing; and
|
·
|
technology development and support, including government contract work and support provided to third parties for commercialization of their OLED products.
|
·
|
the timing of our receipt of license fees and royalties, as well as fees for future technology development and evaluation activities;
|
·
|
the timing and volume of sales of our OLED materials for both commercial usage and evaluation purposes;
|
·
|
the timing and magnitude of expenditures we may incur in connection with our ongoing research and development activities; and
|
·
|
the timing and financial consequences of our formation of new business relationships and alliances.
|
·
|
an increase in revenue of $3.0 million; offset by
|
·
|
an increase in operating expenses of $1.8 million.
|
·
|
increased employee costs of $351,000, due primarily to increased salaries, costs associated with retirement benefits and stock-based compensation for certain executive officers;
|
·
|
increased costs of $214,000 related to outsourced research and development efforts;
|
·
|
decreased costs of $421,000 related to stock-based compensation for members of our Scientific Advisory Board.
|
·
|
the impact of the timing of payment of accounts payable and accrued expenses of $2.2 million;
|
·
|
the impact of the timing of inventory purchases of $1.6 million; and
|
·
|
the impact of the timing of payment for other current assets $1.2 million; offset partially by
|
·
|
a decrease in net loss of $912,000, which amount excludes the impact of non-cash items; and
|
·
|
the impact of the timing of receipt of accounts receivable of $756,000.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
CONTROLS AND PROCEDURES
|
PART II – OTHER INFORMATION
|
LEGAL PROCEEDINGS
|
RISK FACTORS
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Period
|
Total Number of Shares Purchased
|
Weighted Average Price Paid per Share
|
Total Number of Shares Purchased as Part of Publicly Announced Program
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program
|
||||||||||||
January 1 – January 31
|
— | $ | — | n/a | -- | |||||||||||
February 1 – February 29
|
175 | 44.70 | n/a | -- | ||||||||||||
March 1 – March 31
|
39,520 | 40.54 | n/a | -- | ||||||||||||
Total
|
39,695 | $ | 40.56 | n/a | -- |
DEFAULTS UPON SENIOR SECURITIES
|
MINE SAFETY DISCLOSURES
|
OTHER INFORMATION
|
EXHIBITS
|
Exhibit
|
||
Number
|
Description
|
|
10.1*
#
|
OLED Technology License Agreement between the registrant and Lumiotec, Inc., dated as of January 5, 2012
|
|
10.2*
|
Amendment No. 7 to the Commercial Supply Agreement between the registrant and LG Display Co., Ltd., dated as of March 6, 2012
|
|
10.3*
|
Universal Display Corporation Equity Retention Agreement with Julia J. Brown, dated as of March 8, 2012
|
|
10.4*
|
Universal Display Corporation Equity Retention Agreement with Janice K. Mahon, dated as of March 8, 2012
|
|
10.5*
|
Universal Display Corporation Equity Retention Agreement with Michael G. Hack, dated as of March 8, 2012
|
|
31.1*
|
Certifications of Steven V. Abramson, Chief Executive Officer, as required by Rule 13a-14(a) or Rule 15d-14(a)
|
|
31.2*
|
Certifications of Sidney D. Rosenblatt, Chief Financial Officer, as required by Rule 13a-14(a) or Rule 15d-14(a)
|
|
32.1**
|
Certifications of Steven V. Abramson, Chief Executive Officer, as required by Rule 13a-14(b) or Rule 15d-14(b), and by 18 U.S.C. Section 1350 (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)
|
|
32.2**
|
Certifications of Sidney D. Rosenblatt, Chief Financial Officer, as required by Rule 13a-14(b) or Rule 15d-14(b), and by 18 U.S.C. Section 1350 (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)
|
|
101.INS**
|
XBRL Instance Document
|
|
101.SCH**
|
XBRL Taxonomy Extension Schema Document
|
|
101.CAL**
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF**
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB**
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
101.PRE**
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
*
|
Filed herewith.
|
|
**
|
Furnished herewith.
|
|
#
|
Confidential treatment has been requested as to certain portions of this exhibit pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
|
|
Note: Any of the exhibits listed in the foregoing index not included with this report may be obtained, without charge, by writing to Mr. Sidney D. Rosenblatt, Corporate Secretary, Universal Display Corporation, 375 Phillips Boulevard, Ewing, New Jersey 08618.
|
UNIVERSAL DISPLAY CORPORATION
|
||
Date: May 9, 2012
|
By:
|
/s/ Sidney D. Rosenblatt
|
Sidney D. Rosenblatt
|
||
Executive Vice President and Chief Financial Officer
|
Universal Display Corporation
|
Lumiotec, Inc.
|
|
375 Phillips Boulevard
|
4149-8, Hachimanpara 5-chome,
|
|
Ewing, New Jersey 08618
|
Yonezawa-shi, Yamagata 992-1128 Japan
|
|
Attn: [***]
|
Attn: [***]
|
|
Fax No.: [***]
|
Fax No.: [***]
|
|
Tel No.: [***]
|
Tel No.: [***]
|
|
E-mail: [***]
|
E-mail: [***]
|
[same as above]
|
[same as above
]
|
|
Attn: [***]
|
Attn: [***]
|
|
Fax No.: [***]
|
Fax No.: [***]
|
|
Tel No.: [***]
|
Tel No.: [***]
|
|
E-mail: [***]
|
E-mail: [***]
|
Lumiotec, Inc.
|
Universal Display Corporation
|
|||
By:
|
/s/ Hisao Shigenaga
|
By:
|
/s/ Steven V. Abramson
|
|
Name:
|
Hisao Shigenaga
|
Name:
|
Steven V. Abramson
|
|
Title:
|
President
|
Title:
|
President & CEO
|
|
Date:
|
January 5, 2012
|
Date:
|
December 19, 2011
|
o
|
US$[***] by January 31, 2012
|
o
|
US$[***] by January 31, 2013
|
o
|
US$[***] by January 31, 2014
|
o
|
US$[***] by January 31, 2015
|
o
|
if the Licensed Product does not include every element of an OLED Light Source, this royalty rate shall be adjusted so that the overall royalty payment to Universal Display is the same as it would have been if the Licensed Product sold or otherwise disposed of had consisted of a complete OLED Light Source; and
|
o
|
if the Licensed Product includes components in addition to those of an OLED Light Source, the Net Sales Revenue on which royalties are payable shall exclude the portion of such revenue attributable to the additional components.
|
o
|
For a Licensed Product that is an OLED Light Source minus [***], the adjusted royalty rate during the term of this Agreement shall be [***].
|
o
|
For a Licensed Product that is an OLED Light Source minus [***], the adjusted royalty rate during the term of this Agreement shall be [***].
|
LG DISPLAY CO., LTD.
|
UNIVERSAL DISPLAY CORPORATION
|
|||
By:
|
/s/ Soo Jin Oh
|
By:
|
/s/ Steven V. Abramson
|
|
Name:
|
Soo Jin Oh
|
Name:
|
Steven Abramson
|
|
Title:
|
Head of Purchasing Division
|
Title:
|
President
|
|
Date:
|
Feb 29, 2012
|
Date:
|
March 6, 2012
|
·
|
Devote substantial time and attention to promotion and development of the Company at a time that is important for the future success of the Company;
|
·
|
Maintain a long-term ownership interest in the Company;
|
·
|
Continue in employment in order to ensure continuity of management for the Company; and thereby
|
·
|
Increase shareholder value.
|
Vesting Date
|
Vested Shares
|
First Anniversary of Date of Grant
|
11702
|
Second Anniversary of Date of Grant
|
11702
|
Third Anniversary of Date of Grant
|
11702
|
Fourth Anniversary of Date of Grant
|
11701
|
UNIVERSAL DISPLAY CORPORATION
|
||
By:
|
/s/ Sidney Rosenblatt
|
|
Name:
|
Sidney Rosenblatt
|
|
Title:
|
CFO
|
|
Date:
|
4/10/12
|
/s/ Julia J. Brown
|
||
Grantee
|
||
4-10-2012
|
||
Date
|
·
|
Devote substantial time and attention to promotion and development of the Company at a time that is important for the future success of the Company;
|
·
|
Maintain a long-term ownership interest in the Company;
|
·
|
Continue in employment in order to ensure continuity of management for the Company; and thereby
|
·
|
Increase shareholder value.
|
Vesting Date
|
Vested Shares
|
First Anniversary of Date of Grant
|
6451
|
Second Anniversary of Date of Grant
|
6451
|
Third Anniversary of Date of Grant
|
6451
|
Fourth Anniversary of Date of Grant
|
6451
|
UNIVERSAL DISPLAY CORPORATION
|
||
By:
|
/s/ Sidney Rosenblatt
|
|
Name:
|
Sidney Rosenblatt
|
|
Title:
|
CFO
|
|
Date:
|
4/10/12
|
/s/ Janice K. Mahon
|
||
Grantee
|
||
4/10/12
|
||
Date
|
·
|
Devote substantial time and attention to promotion and development of the Company at a time that is important for the future success of the Company;
|
·
|
Maintain a long-term ownership interest in the Company;
|
·
|
Continue in employment in order to ensure continuity of management for the Company; and thereby
|
·
|
Increase shareholder value.
|
Vesting Date
|
Vested Shares
|
First Anniversary of Date of Grant
|
6442
|
Second Anniversary of Date of Grant
|
6441
|
Third Anniversary of Date of Grant
|
6441
|
Fourth Anniversary of Date of Grant
|
6441
|
UNIVERSAL DISPLAY CORPORATION
|
||
By:
|
/s/ Sidney Rosenblatt
|
|
Name:
|
Sidney Rosenblatt
|
|
Title:
|
CFO
|
|
Date:
|
4/10/12
|
/s/ Michael Hack
|
||
Grantee
|
||
4/10/12
|
||
Date
|
Date: May 9, 2012
|
By:
/s/ Steven V. Abramson
|
Steven V. Abramson
|
|
President and Chief Executive Officer
|
Date: May 9, 2012
|
By:
/s/ Sidney D. Rosenblatt
|
Sidney D. Rosenblatt
|
|
Executive Vice President and Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: May 9, 2012
|
By:
/s/ Steven V. Abramson
|
Steven V. Abramson
|
|
President and Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: May 9, 2012
|
By:
/s/ Sidney D. Rosenblatt
|
Sidney D. Rosenblatt
|
|
Executive Vice President and Chief Financial Officer
|