Exhibit 99.1

 

UNIVERSAL DISPLAY CORPORATION

EQUITY COMPENSATION PLAN

 

EQUITY RETENTION AGREEMENT

 

This EQUITY RETENTION AGREEMENT (this “ Agreement ”), effective as of January 6, 2011 (the “ Date of Grant ”), is delivered by Universal Display Corporation (the “ Company ”), to Julia J. Brown (the “ Grantee ”).

 

RECITALS

 

The Universal Display Corporation Equity Compensation Plan (the “ Plan ”) provides for the grant of Stock Awards in accordance with the terms and conditions of the Plan.

 

The Compensation Committee of the Board of Directors of the Company (the “ Committee ”) has determined that it is in the best interests of the shareholders to make a significant Stock Award to the Grantee, subject to the restrictions set forth in this Agreement, as an inducement for the Grantee to:

 

·                   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.

 

The Committee has determined that the Stock Award is reasonable and appropriate compensation for the services to be provided by the Grantee to the Company.  References in this Agreement to capitalized terms not defined herein shall have the meanings given to those terms in the Plan.

 

NOW, THEREFORE, the parties to this Agreement, intending to be legally bound, hereby agree as follows:

 

1.                                        Stock Award .  As approved by the Committee, the Company hereby grants to the Grantee 10,780 shares of common stock of the Company, subject to the terms, conditions and restrictions set forth below and in the Plan (the “ Stock Award ”).

 

2.                                        Vesting and Restriction on Disposition of the Stock Award .

 

(a)                                   The Stock Award shall become vested according to the following schedule, if the Grantee continues to be employed by the Company from the Date of Grant until the applicable vesting date.

 

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Vesting Date		Vested Shares
First Anniversary of Date of Grant		10,780

 

(b)                                  Notwithstanding the foregoing, the Stock Award shall vest in accordance with the terms of the Amended and Restated Change in Control Agreement made as of November 4, 2008, between the Company and the Grantee (the “ Change in Control Agreement ”) in the event of a Change in Control, as defined in the Change in Control Agreement (a “ Change in Control ”).

 

(c)                                   If the Grantee ceases to be employed by the Company for any reason before the Stock Award is fully vested, the shares of the Stock Award that are not then vested shall be forfeited and must be immediately returned to the Company.  The Stock Award (whether or not vested) may also be forfeited under the circumstances described in Section 4 below.

 

(d)                                  In no event may any unvested shares of the Stock Award be assigned, transferred, pledged or otherwise disposed of or encumbered by the Grantee before the shares vest.  After shares of the Stock Award vest, the vested shares (net of any applicable tax withholding) may not be assigned, transferred, pledged or otherwise disposed of or encumbered by the Grantee until the fifth anniversary of the of vesting of said shares, except in the event of the Grantee’s death or a Change in Control.  With respect to each share subject to the Stock Award, the “ Restriction Period ” is the period beginning on the Date of Grant and ending on the first to occur of the fifth anniversary of the date of vesting of such share, the Grantee’s death or a Change in Control.  Any attempt to assign, transfer, pledge or otherwise dispose of or encumber the shares contrary to the provisions hereof, and the levy of any execution, attachment or similar process upon such shares, shall be null, void and without effect.

 

3.                                        Issuance of Certificates .

 

(a)                                   Stock certificates representing the Stock Award, with appropriate legends reflecting the restrictions under this Agreement, may be issued by the Company to the Grantee or may be held in escrow by the Company during the Restriction Period, as determined by the Committee.  When the Grantee obtains a vested right to shares of the Stock Award, the Grantee shall have the right to receive a certificate representing the vested shares (net of any applicable tax withholding), with appropriate legends reflecting the restrictions under this Agreement.  During the Restriction Period, the Grantee shall receive any cash dividends with respect to the shares of the Stock Award, may vote the shares of the Stock Award and may participate in any distribution pursuant to a plan of dissolution or complete liquidation of the Company.  In the event of a dividend or distribution payable in stock or other property or a reclassification, split up or similar event during the Restriction Period, the shares or other property issued or declared with respect to the Stock Award shall be subject to the same terms and conditions relating to vesting and transfer as the shares to which they relate.

 

(b)                                  The Company’s obligation to deliver shares pursuant to the Stock Award shall be subject to all applicable laws, rules and regulations and also to such approvals by governmental agencies as may be deemed appropriate to comply with relevant securities laws and regulations.

 

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4.                                        Clawback .  Notwithstanding any provisions of this Agreement to the contrary, with respect to each share subject to the Stock Award  (whether or not vested), the share shall be forfeited, and must be immediately returned to the Company, upon request by the Committee in the event that, during the Restriction Period for such share, (i) the Grantee materially breaches a written non-competition, non-solicitation or confidentiality agreement between the Grantee and the Company and the Grantee fails to cure the breach (if such breach is curable) within 30 days after receiving written notice from the Company of the breach; (ii) the Grantee commits an act of dishonesty, fraud, embezzlement or theft in connection with his duties or in the course of the Grantee’s employment with the Company; (iii) the Grantee is convicted of a felony or a crime of moral turpitude; or (iv) the Grantee engages in actions that are materially detrimental to the Company, including, without limitation, any actions that result in a material restatement of the financial statements of the Company.

 

5.                                        Grant Subject to Plan Provisions .  This grant is made pursuant to the Plan, the terms of which are incorporated herein by reference, and in all respects shall be interpreted in accordance with the Plan.  The grant is subject to interpretations, regulations and determinations concerning the Plan established from time to time by the Committee in accordance with the provisions of the Plan, including, but not limited to, provisions pertaining to (i) the registration, qualification or listing of the shares, (ii) changes in capitalization of the Company, and (iii) other requirements of applicable law.  The Committee shall have the authority to interpret and construe the grant pursuant to the terms of the Plan, and its decisions shall be conclusive as to any questions arising hereunder.

 

6.                                        Tax Withholding .  Withholding for any federal, state, local or other taxes required with respect to the vesting of the Stock Award shall be governed by the Plan, except that the Grantee may elect to satisfy any tax withholding obligation of the Company with respect to the Stock Award by having shares withheld up to an amount that does not exceed the minimum applicable withholding tax rate for federal (including FICA), state, local and other tax liabilities.  The Company shall establish procedures for such an election by the Grantee.

 

7.                                        No Employment or Other Rights .  This grant shall not confer upon the Grantee any right to be retained by or in the employ of the Company and shall not interfere in any way with the right of the Company to terminate the Grantee’s employment at any time. The right of the Company to terminate at will the Grantee’s employment at any time for any reason is specifically reserved.

 

8.                                        Assignment by Company .  The rights and protections of the Company hereunder shall extend to any successors or assigns of the Company and to the Company’s parents, subsidiaries, and affiliates.  This Agreement may be assigned by the Company without the Grantee’s consent.

 

9.                                        Applicable Law .  The validity, construction, interpretation and effect of this instrument shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, without giving effect to the conflicts of laws provisions thereof.

 

10.                                  Notice .  Any notice to the Company provided for in this instrument shall be addressed to the Company care of the General Counsel at 375 Phillips Boulevard, Ewing, New Jersey 08618, and any notice to the Grantee shall be addressed to such Grantee at the current address shown on

 

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the payroll of the Company, or to such other address as the Grantee may designate to the Company in writing.  Any notice shall be delivered by hand or by a recognized courier service such as FedEx or UPS, sent by telecopy or enclosed in a properly sealed envelope addressed as stated above, registered and deposited, postage prepaid, in a post office regularly maintained by the United States Postal Service.

 

IN WITNESS WHEREOF, the Company has caused its duly authorized officer to execute this instrument, and the Grantee has placed his signature hereon.

 

 

UNIVERSAL DISPLAY CORPORATION

 

 

By:	/s/ Sidney D. Rosenblatt
Name:	Sidney D. Rosenblatt
Title:	Chief Financial Officer
Date:	Jan 20, 2011

 

I hereby accept the grant of the Stock Award described in this Agreement, and I agree to be bound by the terms of the Plan and this Agreement.  I hereby further agree that all of the decisions and determinations of the Committee with respect to the Stock Award and this Agreement shall be final and binding.

 

 

/s/ Julia J. Brown
Grantee
Feb 14, 2011
Date

 

4

Exhibit 99.2

 

UNIVERSAL DISPLAY CORPORATION

EQUITY COMPENSATION PLAN

 

EQUITY RETENTION AGREEMENT

 

This EQUITY RETENTION AGREEMENT (this “ Agreement ”), effective as of January 6, 2011 (the “ Date of Grant ”), is delivered by Universal Display Corporation (the “ Company ”), to Janice K. Mahon (the “ Grantee ”).

 

RECITALS

 

The Universal Display Corporation Equity Compensation Plan (the “ Plan ”) provides for the grant of Stock Awards in accordance with the terms and conditions of the Plan.

 

The Compensation Committee of the Board of Directors of the Company (the “ Committee ”) has determined that it is in the best interests of the shareholders to make a significant Stock Award to the Grantee, subject to the restrictions set forth in this Agreement, as an inducement for the Grantee to:

 

·                   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.

 

The Committee has determined that the Stock Award is reasonable and appropriate compensation for the services to be provided by the Grantee to the Company.  References in this Agreement to capitalized terms not defined herein shall have the meanings given to those terms in the Plan.

 

NOW, THEREFORE, the parties to this Agreement, intending to be legally bound, hereby agree as follows:

 

1.                                        Stock Award .  As approved by the Committee, the Company hereby grants to the Grantee 7,428 shares of common stock of the Company, subject to the terms, conditions and restrictions set forth below and in the Plan (the “ Stock Award ”).

 

2.                                        Vesting and Restriction on Disposition of the Stock Award .

 

(a)                                   The Stock Award shall become vested according to the following schedule, if the Grantee continues to be employed by the Company from the Date of Grant until the applicable vesting date.

 

1

 

Vesting Date		Vested Shares
First Anniversary of Date of Grant		7,428

 

(b)                                  Notwithstanding the foregoing, the Stock Award shall vest in accordance with the terms of the Amended and Restated Change in Control Agreement made as of November 4, 2008, between the Company and the Grantee (the “ Change in Control Agreement ”) in the event of a Change in Control, as defined in the Change in Control Agreement (a “ Change in Control ”).

 

(c)                                   If the Grantee ceases to be employed by the Company for any reason before the Stock Award is fully vested, the shares of the Stock Award that are not then vested shall be forfeited and must be immediately returned to the Company.  The Stock Award (whether or not vested) may also be forfeited under the circumstances described in Section 4 below.

 

(d)                                  In no event may any unvested shares of the Stock Award be assigned, transferred, pledged or otherwise disposed of or encumbered by the Grantee before the shares vest.  After shares of the Stock Award vest, the vested shares (net of any applicable tax withholding) may not be assigned, transferred, pledged or otherwise disposed of or encumbered by the Grantee until the fifth anniversary of the of vesting of said shares, except in the event of the Grantee’s death or a Change in Control.  With respect to each share subject to the Stock Award, the “ Restriction Period ” is the period beginning on the Date of Grant and ending on the first to occur of the fifth anniversary of the date of vesting of such share, the Grantee’s death or a Change in Control.  Any attempt to assign, transfer, pledge or otherwise dispose of or encumber the shares contrary to the provisions hereof, and the levy of any execution, attachment or similar process upon such shares, shall be null, void and without effect.

 

3.                                        Issuance of Certificates .

 

(a)                                   Stock certificates representing the Stock Award, with appropriate legends reflecting the restrictions under this Agreement, may be issued by the Company to the Grantee or may be held in escrow by the Company during the Restriction Period, as determined by the Committee.  When the Grantee obtains a vested right to shares of the Stock Award, the Grantee shall have the right to receive a certificate representing the vested shares (net of any applicable tax withholding), with appropriate legends reflecting the restrictions under this Agreement.  During the Restriction Period, the Grantee shall receive any cash dividends with respect to the shares of the Stock Award, may vote the shares of the Stock Award and may participate in any distribution pursuant to a plan of dissolution or complete liquidation of the Company.  In the event of a dividend or distribution payable in stock or other property or a reclassification, split up or similar event during the Restriction Period, the shares or other property issued or declared with respect to the Stock Award shall be subject to the same terms and conditions relating to vesting and transfer as the shares to which they relate.

 

(b)                                  The Company’s obligation to deliver shares pursuant to the Stock Award shall be subject to all applicable laws, rules and regulations and also to such approvals by governmental agencies as may be deemed appropriate to comply with relevant securities laws and regulations.

 

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4.                                        Clawback .  Notwithstanding any provisions of this Agreement to the contrary, with respect to each share subject to the Stock Award  (whether or not vested), the share shall be forfeited, and must be immediately returned to the Company, upon request by the Committee in the event that, during the Restriction Period for such share, (i) the Grantee materially breaches a written non-competition, non-solicitation or confidentiality agreement between the Grantee and the Company and the Grantee fails to cure the breach (if such breach is curable) within 30 days after receiving written notice from the Company of the breach; (ii) the Grantee commits an act of dishonesty, fraud, embezzlement or theft in connection with his duties or in the course of the Grantee’s employment with the Company; (iii) the Grantee is convicted of a felony or a crime of moral turpitude; or (iv) the Grantee engages in actions that are materially detrimental to the Company, including, without limitation, any actions that result in a material restatement of the financial statements of the Company.

 

5.                                        Grant Subject to Plan Provisions .  This grant is made pursuant to the Plan, the terms of which are incorporated herein by reference, and in all respects shall be interpreted in accordance with the Plan.  The grant is subject to interpretations, regulations and determinations concerning the Plan established from time to time by the Committee in accordance with the provisions of the Plan, including, but not limited to, provisions pertaining to (i) the registration, qualification or listing of the shares, (ii) changes in capitalization of the Company, and (iii) other requirements of applicable law.  The Committee shall have the authority to interpret and construe the grant pursuant to the terms of the Plan, and its decisions shall be conclusive as to any questions arising hereunder.

 

6.                                        Tax Withholding .  Withholding for any federal, state, local or other taxes required with respect to the vesting of the Stock Award shall be governed by the Plan, except that the Grantee may elect to satisfy any tax withholding obligation of the Company with respect to the Stock Award by having shares withheld up to an amount that does not exceed the minimum applicable withholding tax rate for federal (including FICA), state, local and other tax liabilities.  The Company shall establish procedures for such an election by the Grantee.

 

7.                                        No Employment or Other Rights .  This grant shall not confer upon the Grantee any right to be retained by or in the employ of the Company and shall not interfere in any way with the right of the Company to terminate the Grantee’s employment at any time. The right of the Company to terminate at will the Grantee’s employment at any time for any reason is specifically reserved.

 

8.                                        Assignment by Company .  The rights and protections of the Company hereunder shall extend to any successors or assigns of the Company and to the Company’s parents, subsidiaries, and affiliates.  This Agreement may be assigned by the Company without the Grantee’s consent.

 

9.                                        Applicable Law .  The validity, construction, interpretation and effect of this instrument shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, without giving effect to the conflicts of laws provisions thereof.

 

10.                                  Notice .  Any notice to the Company provided for in this instrument shall be addressed to the Company care of the General Counsel at 375 Phillips Boulevard, Ewing, New Jersey 08618, and any notice to the Grantee shall be addressed to such Grantee at the current address shown on

 

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the payroll of the Company, or to such other address as the Grantee may designate to the Company in writing.  Any notice shall be delivered by hand or by a recognized courier service such as FedEx or UPS, sent by telecopy or enclosed in a properly sealed envelope addressed as stated above, registered and deposited, postage prepaid, in a post office regularly maintained by the United States Postal Service.

 

IN WITNESS WHEREOF, the Company has caused its duly authorized officer to execute this instrument, and the Grantee has placed his signature hereon.

 

 

UNIVERSAL DISPLAY CORPORATION

 

 

By:	/s/ Sidney D. Rosenblatt
Name:	Sidney D. Rosenblatt
Title:	Chief Financial Officer
Date:	Jan 20, 2011

 

I hereby accept the grant of the Stock Award described in this Agreement, and I agree to be bound by the terms of the Plan and this Agreement.  I hereby further agree that all of the decisions and determinations of the Committee with respect to the Stock Award and this Agreement shall be final and binding.

 

 

/s/ Janice K. Mahon
Grantee
Jan 25, 2011
Date

 

4

Exhibit 99.3

 

UNIVERSAL DISPLAY CORPORATION

EQUITY COMPENSATION PLAN

 

EQUITY RETENTION AGREEMENT

 

This EQUITY RETENTION AGREEMENT (this “ Agreement ”), effective as of January 6, 2011 (the “ Date of Grant ”), is delivered by Universal Display Corporation (the “ Company ”), to Michael G. Hack (the “ Grantee ”).

 

RECITALS

 

The Universal Display Corporation Equity Compensation Plan (the “ Plan ”) provides for the grant of Stock Awards in accordance with the terms and conditions of the Plan.

 

The Compensation Committee of the Board of Directors of the Company (the “ Committee ”) has determined that it is in the best interests of the shareholders to make a significant Stock Award to the Grantee, subject to the restrictions set forth in this Agreement, as an inducement for the Grantee to:

 

·                   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.

 

The Committee has determined that the Stock Award is reasonable and appropriate compensation for the services to be provided by the Grantee to the Company.  References in this Agreement to capitalized terms not defined herein shall have the meanings given to those terms in the Plan.

 

NOW, THEREFORE, the parties to this Agreement, intending to be legally bound, hereby agree as follows:

 

1.                                        Stock Award .  As approved by the Committee, the Company hereby grants to the Grantee 7,417 shares of common stock of the Company, subject to the terms, conditions and restrictions set forth below and in the Plan (the “ Stock Award ”).

 

2.                                        Vesting and Restriction on Disposition of the Stock Award .

 

(a)                                   The Stock Award shall become vested according to the following schedule, if the Grantee continues to be employed by the Company from the Date of Grant until the applicable vesting date.

 

1

 

Vesting Date		Vested Shares
First Anniversary of Date of Grant		7,417

 

(b)                                  Notwithstanding the foregoing, the Stock Award shall vest in accordance with the terms of the Second Amended and Restated Change in Control Agreement made as of January 11, 2010, between the Company and the Grantee (the “ Change in Control Agreement ”) in the event of a Change in Control, as defined in the Change in Control Agreement (a “ Change in Control ”).

 

(c)                                   If the Grantee ceases to be employed by the Company for any reason before the Stock Award is fully vested, the shares of the Stock Award that are not then vested shall be forfeited and must be immediately returned to the Company.  The Stock Award (whether or not vested) may also be forfeited under the circumstances described in Section 4 below.

 

(d)                                  In no event may any unvested shares of the Stock Award be assigned, transferred, pledged or otherwise disposed of or encumbered by the Grantee before the shares vest.  After shares of the Stock Award vest, the vested shares (net of any applicable tax withholding) may not be assigned, transferred, pledged or otherwise disposed of or encumbered by the Grantee until the fifth anniversary of the of vesting of said shares, except in the event of the Grantee’s death or a Change in Control.  With respect to each share subject to the Stock Award, the “ Restriction Period ” is the period beginning on the Date of Grant and ending on the first to occur of the fifth anniversary of the date of vesting of such share, the Grantee’s death or a Change in Control.  Any attempt to assign, transfer, pledge or otherwise dispose of or encumber the shares contrary to the provisions hereof, and the levy of any execution, attachment or similar process upon such shares, shall be null, void and without effect.

 

3.                                        Issuance of Certificates .

 

(a)                                   Stock certificates representing the Stock Award, with appropriate legends reflecting the restrictions under this Agreement, may be issued by the Company to the Grantee or may be held in escrow by the Company during the Restriction Period, as determined by the Committee.  When the Grantee obtains a vested right to shares of the Stock Award, the Grantee shall have the right to receive a certificate representing the vested shares (net of any applicable tax withholding), with appropriate legends reflecting the restrictions under this Agreement.  During the Restriction Period, the Grantee shall receive any cash dividends with respect to the shares of the Stock Award, may vote the shares of the Stock Award and may participate in any distribution pursuant to a plan of dissolution or complete liquidation of the Company.  In the event of a dividend or distribution payable in stock or other property or a reclassification, split up or similar event during the Restriction Period, the shares or other property issued or declared with respect to the Stock Award shall be subject to the same terms and conditions relating to vesting and transfer as the shares to which they relate.

 

(b)                                  The Company’s obligation to deliver shares pursuant to the Stock Award shall be subject to all applicable laws, rules and regulations and also to such approvals by governmental agencies as may be deemed appropriate to comply with relevant securities laws and regulations.

 

2

 

4.                                        Clawback .  Notwithstanding any provisions of this Agreement to the contrary, with respect to each share subject to the Stock Award  (whether or not vested), the share shall be forfeited, and must be immediately returned to the Company, upon request by the Committee in the event that, during the Restriction Period for such share, (i) the Grantee materially breaches a written non-competition, non-solicitation or confidentiality agreement between the Grantee and the Company and the Grantee fails to cure the breach (if such breach is curable) within 30 days after receiving written notice from the Company of the breach; (ii) the Grantee commits an act of dishonesty, fraud, embezzlement or theft in connection with his duties or in the course of the Grantee’s employment with the Company; (iii) the Grantee is convicted of a felony or a crime of moral turpitude; or (iv) the Grantee engages in actions that are materially detrimental to the Company, including, without limitation, any actions that result in a material restatement of the financial statements of the Company.

 

5.                                        Grant Subject to Plan Provisions .  This grant is made pursuant to the Plan, the terms of which are incorporated herein by reference, and in all respects shall be interpreted in accordance with the Plan.  The grant is subject to interpretations, regulations and determinations concerning the Plan established from time to time by the Committee in accordance with the provisions of the Plan, including, but not limited to, provisions pertaining to (i) the registration, qualification or listing of the shares, (ii) changes in capitalization of the Company, and (iii) other requirements of applicable law.  The Committee shall have the authority to interpret and construe the grant pursuant to the terms of the Plan, and its decisions shall be conclusive as to any questions arising hereunder.

 

6.                                        Tax Withholding .  Withholding for any federal, state, local or other taxes required with respect to the vesting of the Stock Award shall be governed by the Plan, except that the Grantee may elect to satisfy any tax withholding obligation of the Company with respect to the Stock Award by having shares withheld up to an amount that does not exceed the minimum applicable withholding tax rate for federal (including FICA), state, local and other tax liabilities.  The Company shall establish procedures for such an election by the Grantee.

 

7.                                        No Employment or Other Rights .  This grant shall not confer upon the Grantee any right to be retained by or in the employ of the Company and shall not interfere in any way with the right of the Company to terminate the Grantee’s employment at any time. The right of the Company to terminate at will the Grantee’s employment at any time for any reason is specifically reserved.

 

8.                                        Assignment by Company .  The rights and protections of the Company hereunder shall extend to any successors or assigns of the Company and to the Company’s parents, subsidiaries, and affiliates.  This Agreement may be assigned by the Company without the Grantee’s consent.

 

9.                                        Applicable Law .  The validity, construction, interpretation and effect of this instrument shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, without giving effect to the conflicts of laws provisions thereof.

 

10.                                  Notice .  Any notice to the Company provided for in this instrument shall be addressed to the Company care of the General Counsel at 375 Phillips Boulevard, Ewing, New Jersey 08618, and any notice to the Grantee shall be addressed to such Grantee at the current address shown on

 

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the payroll of the Company, or to such other address as the Grantee may designate to the Company in writing.  Any notice shall be delivered by hand or by a recognized courier service such as FedEx or UPS, sent by telecopy or enclosed in a properly sealed envelope addressed as stated above, registered and deposited, postage prepaid, in a post office regularly maintained by the United States Postal Service.

 

IN WITNESS WHEREOF, the Company has caused its duly authorized officer to execute this instrument, and the Grantee has placed his signature hereon.

 

 

UNIVERSAL DISPLAY CORPORATION

 

 

By:	/s/ Sidney D. Rosenblatt
Name:	Sidney D. Rosenblatt
Title:	Chief Financial Officer
Date:	Jan 20, 2011

 

I hereby accept the grant of the Stock Award described in this Agreement, and I agree to be bound by the terms of the Plan and this Agreement.  I hereby further agree that all of the decisions and determinations of the Committee with respect to the Stock Award and this Agreement shall be final and binding.

 

 

/s/ Michael Hack
Grantee
Jan 26, 2011
Date

 

4

Exhibit 99.4

 

AMENDMENT #5

 

to the

 

COMMERCIAL SUPPLY AGREEMENT

(originally effective May 23, 2007)

 

by and between

 

LG DISPLAY CO., LTD. (“LGD”) - formerly named LG.PHILIPS LCD CO., LTD.

 

and

 

UNIVERSAL DISPLAY CORPORATION (“UDC”)

 

This Amendment #5 shall amend and modify, to the extent of any inconsistency, the provisions of the above-referenced Commercial Supply Agreement, as previously amended effective as of June 30, 2008, June 30, 2009, December 31, 2009, and June 30, 2010 (the “Agreement”).  This Amendment #5 shall be effective as of December 31, 2010.

 

1.             Article 9.1 of the Agreement is hereby amended to extend the term of the Agreement for six (6) additional months, through June 30, 2011.

 

2.             Except as set forth in this Amendment #5, all other terms and conditions of the Agreement shall remain in full force and effect.

 

IN WITNESS WHEREOF, the parties, intending to be legally bound, have caused this Amendment #5 to be executed by their duly authorized representatives:

 

 

LG DISPLAY CO., LTD.			UNIVERSAL DISPLAY CORPORATION
By:	/s/ Byung Chul Ahn		By:	/s/ Steven V. Abramson
Name:	Byung Chul Ahn		Name:	Steven V. Abramson
Title:	Senior Vice President		Title:	President
Date:	Jan 6, 2011		Date:	Jan 6, 2011

 

UDC and LGD Confidential

 

Exhibit 99.5

 

NOTE:  THROUGHOUT THIS DOCUMENT, CERTAIN CONFIDENTIAL MATERIAL CONTAINED HEREIN HAS BEEN OMITTED AND HAS BEEN SEPARATELY FILED WITH THE COMMISSION.  EACH PLACE WHERE SUCH AN OMISSION HAS BEEN MADE IS MARKED WITH AN [***]

 

MEMORANDUM OF AGREEMENT

 

THIS MEMORANDUM OF AGREEMENT (“MOA”) is entered into and effective as of February 4, 2011 (the “Effective Date”), by and between UNIVERSAL DISPLAY CORPORATION (“UDC”), with a place of business at 375 Phillips Blvd., Ewing, New Jersey 08618, U.S.A.; and MOSER BAER TECHNOLOGIES INC. (“MBT”), with a place of business at 5450 Campus Drive Suite 200, Canandaigua, New York 14424-8207.  Hereinafter, UDC and MBT are sometimes referred to as each a “party” and collectively the “parties.”

 

Background

 

There is now great interest in using organic light emitting diodes (“OLEDs”) as a unique form of energy-efficient “green” lighting.  Their thin form factor, appealing light quality and high efficiency make OLEDs ideal for lighting applications.  For OLEDs to be adopted rapidly, manufacturers need to demonstrate that they can be produced cost effectively and the necessary infrastructure to support their production needs to be developed.

 

UDC owns or exclusively licenses a broad array of patents relating to OLEDs for use in lighting and other applications.  UDC also has developed valuable technical expertise and proprietary know-how relating to the manufacture of long-lived, highly efficient phosphorescent OLED devices.  UDC is recognized around the world as the leading phosphorescent OLED technology company and supplier of proprietary Universal PHOLED™ phosphorescent OLED materials.

 

UDC has an extensive history and an ongoing productive relationship with the United States Department of Energy (the “DOE”) for OLED lighting technology research and product development.  UDC also has longstanding relationships with various entities in the United States, Europe, Japan, Korea, Taiwan and elsewhere, which entities have expressed a strong interest in entering the OLED lighting market.

 

UDC is currently exploring various approaches to licensing its OLED technology and supplying its proprietary phosphorescent OLED materials to OLED lighting product manufacturers.  In addition, UDC plans to use its technical expertise in the area of designing OLED lighting panels to work closely with lighting integrators and others to facilitate the adoption of novel OLED lighting products, particularly in the North American market.  UDC believes that it can leverage its expertise to accelerate the adoption of OLEDs for lighting by providing the industry with OLED design solutions for fixtures that incorporate the UDC technology and materials.

 

UDC/MBT Confidential

 

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Moser Baer India Ltd. (“MBI”) is a leading manufacturing company with proprietary expertise in the volume manufacture of various electronic products, including optical storage disks and photovoltaic products.  Seeking to apply and leverage its manufacturing expertise in the OLED lighting market, MBI formed MBT, a wholly-owned U.S. subsidiary, to establish a pilot line facility for the manufacture of OLED lighting products in the United States.  MBT’s personnel have conceived a novel manufacturing line process for the fabrication of cost-effective OLED lighting products.  If this process is successful, MBT may be interested in establishing other manufacturing facilities for OLED lighting products in the United States and elsewhere.

 

UDC and MBT submitted a proposal to the DOE to receive funding from the U.S. Government for purposes of helping finance the establishment and operation by MBT of a pilot line facility for the production of phosphorescent OLED lighting panels utilizing UDC’s OLED technologies and phosphorescent OLED materials (the “DOE Project”).  UDC and MBT have been selected by the DOE to receive a funding award for the DOE Project, which began on April 15, 2010.

 

UDC and MBT now wish to enter into a business arrangement covering the DOE Project and related business matters.  This MOA outlines the key terms of that business arrangement, which the parties intend to further describe and refine through separate written agreements to be negotiated in good faith by the parties in the future.

 

NOW THEREFORE, intending to be legally bound, the parties agree as follows:

 

The DOE Project and the Pilot Line

 

1.                As outlined in the funding proposal for the DOE Project, MBT is to design, construct and operate an initial pilot manufacturing line for the manufacture of 150mm X 150mm white phosphorescent OLED (“PHOLED”) lighting panels (the “Pilot Line”).  The Pilot Line will be constructed at a facility located in the United States.

 

2.                UDC and MBT have entered into a separate Subcontractor Agreement covering MBT’s performance of its DOE Project activities.  As indicated in the Subcontractor Agreement, MBT is responsible for securing all funding necessary for the design, establishment and operation of the Pilot Line (other than the DOE funding).

 

3.                As part of the DOE Project, UDC is to demonstrate the relevant UDC OLED technology and its UniversalPHOLED materials for use in manufacturing on the scale of the Pilot Line.  This work will be performed at UDC’s facility in Ewing, New Jersey.  UDC is then to work with MBT to implement the UDC technology in the Pilot Line as outlined in the funding proposal for the DOE Project and as described further below under the section entitled Technology Support Program.

 

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4.                The DOE Project period will run for two years concurrent with the DOE funding award.  However, UDC and MBT will discuss and may agree to seek additional DOE funding for other activities related to the DOE Project, which could extend the DOE Project period.

 

5.                The DOE Project contemplates the future establishment by MBT of a first mass production line for the manufacture of 150mm X 150mm white PHOLED lighting panels that meet certain cost targets (the “First MP Line”).  It is understood that while planning for the First MP Line is part of the DOE Project, construction of the line itself is outside the scope of the DOE Project.  It is also understood that MBT would be responsible for securing all funding necessary for the design, establishment and operation of the First MP Line.

 

License Grant

 

1.                UDC and MBT will negotiate in good faith a separate License Agreement under which UDC would grant a royalty-bearing, non-exclusive license to MBT for MBT’s manufacture and sale of OLED lighting products on rigid substrates, both glass or plastic (the “License”).  The License would cover all relevant UDC patents and know-how, and would be non-sublicensable and non-transferable by MBT.  UDC and MBT will use good faith efforts to finalize the License Agreement by [***].

 

2.                The License will cover the Pilot Line, the First MP Line and other manufacturing lines established by MBT or its “controlled” subsidiaries.  As used herein, “controlled” means ownership of securities representing more than fifty percent (50%) of the voting capital stock of the entity, or of other interests having majority voting rights with respect to the election of the board of directors or similar governing authority of the entity, or of any other power by contract or in any other form which entitles the holder thereof to majority voting rights with respect to management decisions of the entity, but excluding entities established in collaboration with one or more third parties engaged in OLED-related research or conducting OLED-related businesses at the time the collaboration is initiated (each such third party, an “OLED Participant”).  For avoidance of doubt, this exclusion shall not apply to entities [***].

 

3.                If MBT chooses to establish manufacturing lines which utilize any technology licensed to MBT under the License Agreement outside of [***], UDC shall be afforded [***] in order to ensure adequate protection of UDC’s technologies and proprietary materials.  UDC intends to include substantially the same requirement for [***] outside of these countries in its future license agreements with third parties for the manufacture of OLED lighting products.  Should UDC not do this with respect to one or more countries outside of those listed above, the requirement for [***] shall no longer apply to [***].

 

Royalty Rates and Royalty Base

 

1.                The base royalty rate under the License Agreement will be [***] on an OLED Light Source.  If MBT sells a product that includes fewer than all of the elements of an OLED Light Source,

 

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the royalty rate will be adjusted upward to ensure that UDC receives the same revenue as if an OLED Light Source had been sold.

 

2.                An OLED Light Source is defined as an OLED device, together with the following elements:

 

a.                encapsulation or packaging materials or coatings for protection of the OLED device,

 

b.               optical elements, coatings or enhancements added directly to the OLED device for the purpose of affecting or modulating light output from the OLED device,

 

c.                connectors, contacts or similar components attached to the OLED device and designed to connect the OLED device to an external power supply and/or an external frame,

 

d.               a supporting external frame around the OLED device designed to stabilize or protect the device during shipment, installation or usage,

 

e.                thermal elements, coatings, structures or enhancements attached to the OLED device for purposes of reducing, dispersing or modulating the temperature of the OLED device,

 

f.                  control electronics or circuitry designed or utilized to adjust or correct light emission from the OLED device, and

 

g.               power conversion components designed to allow the OLED device to operate utilizing an external power source or supply (the power source or supply itself is not part of the OLED Light Source), but excluding any power conversion components integrated into the infrastructure of a building in which the OLED device is or is intended to be utilized.

 

3.                The proposed product from the Pilot Line is expected to be a 150mm X 150mm OLED device that includes elements (a) through (g) above.  The royalty rate for products containing less than all the elements (a) through (g) above will be determined separately as and when those products are defined.

 

4.                The royalty rate for a given product sold during a calendar quarter will be discounted based on [***], as follows:

 

[***]

 

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For clarification, the discount is a percentage discount on the base royalty rate.  For example, if the base royalty rate is [***], applying a royalty rate discount of [***] would yield an effective royalty rate of [***], applying a royalty rate discount of [***] would yield an effective royalty rate of [***], applying a royalty rate discount of [***] would yield an effective royalty rate of [***]; and applying a royalty rate discount of [***] would yield an effective royalty rate of [***].

 

5.                UDC shall have the right to engage an independent certified public accountant reasonably acceptable to MBT to audit MBT’s records regarding the royalty payments.  UDC shall pay for the audit, except if the audit finds that MBT’s reporting of the royalties due was [***], in which case MBT shall reimburse UDC for its out-of-pocket audit fees and expenses.

 

License Fee

 

1.                As additional consideration for the License, MBT will pay UDC a license fee of [***], as set forth in paragraphs 2 through 4 below (the “License Fee”).  There would be additional license fees for licensed products on flexible substrates if MBT is interested in expanding the License to include such products.

 

2.                The first [***] of the License Fee will be paid by March 31, 2012, or, if sooner, upon the earlier of (a) [***], or (b) any termination of the License.

 

3.                The second [***] of the License Fee will be paid by March 31, 2013; provided, however, that this portion of the License Fee [***].

 

4.                The third and fourth [***] of the License Fee will be paid by March 31, 2014 and March 31, 2015, respectively; provided, however, that each such portion of the License Fee [***].

 

5.                The remaining [***] of the License Fee will be paid only if there is commercial output from the First MP Line.  Payment will be due as follows:  [***] upon [***], and [***] upon [***].  As used herein, “commercial output” means that licensed products from the First MP Line [***].

 

Material Supply

 

1.                MBT will utilize only UDC-supplied PHOLED emitters for its manufacture of products used to satisfy any obligations under the DOE Project.  For future DOE projects in which both UDC and MBT participate, MBT will also utilize only UDC-supplied PHOLED emitters for its manufacture of products used to satisfy any obligations under such projects.  UDC may also offer to make certain PHOLED hosts available to MBT, which MBT may also use for its manufacture products.

 

2.                After the DOE Project period ends, MBT will be free to utilize third-party supplied materials that offer superior product performance for its manufacture of products intended for sale and on which royalties are owed to UDC under the License, provided that the composition

 

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of matter of the third-party material is not covered by UDC’s patents in any country inwhich the products are manufactured or sold and provided, further, that MBT will first give UDC reasonable notice and an opportunity to match the quality and/or price of the third-party material.  For clarification, the License will not authorize MBT to manufacture products using any material the composition of matter of which is covered by UDC’s patents in any country in which such products are manufactured or sold unless the material was obtained from UDC.

 

3.                MBT shall be free to use any third-party phosphorescent emitter materials for internal evaluation purposes only; provided, however, that nothing herein shall authorize MBT to use materials covered by UDC’s composition of matter patents.  MBT agrees to provide reasonable feedback to UDC regarding the performance of white OLED devices that contain such third-party phosphorescent emitter materials (color temperature, LIV and lifetime data) if the devices also contain phosphorescent emitter materials provided by UDC.  If the devices do not also contain phosphorescent emitter materials provided by UDC, MBT agrees to provide such feedback to UDC subject to the limitations of any confidentiality agreement between MBT and the third-party supplier of such materials.

 

4.                UDC will supply materials (a) directly to MBT’s selected equipment manufacturer for Pilot Line equipment design and testing at the equipment manufacturer’s site, (b) to MBT for equipment testing on-site, process development, pre-manufacturing qualification and sampling to customers at no charge (“Development Work”), and (c) to MBT for use in manufacturing products intended to be sold or otherwise disposed of by MBT for value and on which a royalty will be paid to UDC under the License (“Commercial Products”).

 

5.                Materials supplied to MBT’s selected equipment manufacturer for Pilot Line equipment design and testing will be provided [***] under a separate three-way non-disclosure or other similar agreement among UDC, MBT and the equipment manufacturer.  Materials provided to MBT for Development Work will be supplied under a separate Technical Cooperation Agreement, which agreement is described further below.

 

6.                Materials provided to MBT for use in the manufacture of Commercial Products will be supplied under a separate Commercial Material Supply Agreement to be negotiated by UDC and MBT in good faith.  UDC and MBT will use good faith efforts to finalize the Commercial Material Supply Agreement concurrently with the License Agreement.

 

7.                In addition to samples of new phosphorescent emitter materials provided to MBT as part of the technology support program as outlined below, UDC will provide materials to MBT at no charge under the Technical Cooperation Agreement, as follows:

 

a.                [***] of emitter materials commercially available from UDC and down-selected by MBT for Pilot Line manufacturing trials; and

 

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b.               Commensurate commercially available host material down-selected by MBT for similar purposes (amounts to be determined on a case-by-case basis based on emitter:host ratio in device structure).

 

8.                UDC’s pricing for currently available materials provided to MBT for Development Work will be as set forth in Schedule A .

 

9.                Pricing for materials provided to MBT for the manufacture of Commercial Products would be substantially lower due to payment of a product royalty.  UDC’s commercial material pricing is currently [***] for red and green PHOLED emitters, [***] for blue PHOLED emitters and [***] for host materials (with volume price reductions for host materials so that their pricing is no higher than the pricing of host materials provided in similar volumes for Development Work).  UDC agrees to offer MBT volume-based discounts on this pricing, which will be negotiated in good faith as part of the Commercial Material Supply Agreement.

 

10.          UDC will to explore manufacturing options that would allow UDC to reduce its pricing in the future for materials for both Development Work and the manufacture of Commercial Products.  The parties shall review and discuss this pricing on an annual basis.

 

11.          The foregoing pricing quotes and proposed volume discounts and materials to be provided at no charge are subject to MBT purchasing from UDC all of MBT’s requirements for phosphorescent emitter materials for the manufacture of Commercial Products.  UDC reserves the right to change its pricing to MBT if and when MBT ceases purchasing from UDC all of MBT’s requirements for such phosphorescent emitter materials.

 

12.          MBT understands that certain third-party materials will be required in order for MBT to make and sell OLED lighting products.  UDC will assist MBT in identifying potential suppliers of such materials; however, MBT is solely responsible for entering into agreements with the suppliers of and paying for all such third-party materials.

 

The OM&T Collaboration

 

1.                UDC has separately entered into a Collaboration Agreement with OM&T B.V. (“OM&T”), a subsidiary of MBI, under which UDC has agreed to perform certain work relating to the application of UDC’s white PHOLED technology to OM&T’s lighting substrates.  The period for performance of work on this program (the “OM&T Program”) will begin on the Effective Date and continue through [***].

 

2.                UDC is to be reimbursed for its costs and reasonable out-of—pocket expenses in performing work on the OM&T Program (“Total Costs”), as actually incurred.  Total Costs shall not exceed a maximum amount of [***] without prior written authorization by OM&T.  UDC will notify OM&T prior to performing any requested OM&T Program work that would cause Total Costs to exceed the maximum authorized amount.  UDC has no obligation to perform

 

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any work that would cause its Total Costs to exceed the maximum authorized amount.  Payment of these costs and expenses to UDC is to be handled as described further below.

 

3.                All costs and expenses incurred by UDC under the OM&T Program will be charged by UDC according to principles outlined in Schedule B , as and when such costs and expenses are actually incurred.

 

4.                UDC will receive a credit for these costs and expenses, which UDC will be entitled to apply against the purchase of panel output from MBT for UDC or its customers, as discussed further below.  However, in the event that MBT fails to perform any of its material obligations respecting any matter covered by this MOA, UDC will have the right to demand from MBT an immediate cash payment of the unused portion of the credit.  This shall be in addition to, and not in lieu of, any other rights or remedies that may be available to UDC for MBT’s failure to perform such obligations.

 

5.                UDC’s ability to apply the credit will begin during the quarter that panels from the Pilot Line are available for purchase.  UDC may utilize up to [***] of the credit amount each year.  Any amount remaining unused as of [***] will expire and be automatically forfeited at such time.

 

Technology Support Program

 

1.                UDC and MBT will use good faith efforts to finalize a Technical Cooperation Agreement by [***].  The Technical Cooperation Agreement will encompass a technology support program between UDC and MBT that will date back to April 15, 2010 and will continue through [***].  UDC would perform its technical support work for the DOE Project under the Technical Cooperation Agreement.  Under the Technical Cooperation Agreement, UDC would also:

 

a.                periodically update MBT on technology developments, including updated device data and device structures, and new UDC panel designs when available, which technology shall be deemed to be included within the technology licensed to MBT under the License Agreement;

 

b.               provide updated technology process documents when available;

 

c.                provide samples of promising new OLED materials to MBT for evaluation (including [***] of new phosphorescent emitter materials for initial evaluation);

 

d.               use reasonable efforts to achieve the goals outlined in the technology support program roadmap attached hereto as Schedule C , including [***];

 

e.                host MBT technical team members at UDC for consultation visits [***]; and

 

f.                  send UDC technical team members to MBT for consultation visits [***].

 

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2.                MBT will pay UDC a technology support program fee of [***].  The fee will be paid in [***] equal installments of [***], with installment payments due by June 30 and December 31 of each year, beginning with [***] and through and including [***].

 

3.                For installment payments of the fee made in [***].

 

4.                From time to time during the term of the Technical Cooperation Agreement, MBT may request that UDC perform additional development work.  In such event, the parties will discuss in good faith the work that would be performed and the separate fees, if any, payable to UDC for its performance of this work.  The parties would then negotiate in good faith a written amendment to the Technical Cooperation Agreement to cover any such agreed-upon work.

 

5.                UDC shall have the right to terminate the technology support program on written notice to MBT if MBT [***].  In the event of such a termination, MBT’s obligation to pay any then-unpaid installments of the technology support program fee shall [***].  Prior to termination under this section, UDC shall provide MBT with 60 days’ prior written notice. During that 60-day period, the parties will confer and consider in good faith whether UDC’s concerns can be accommodated without termination.  If no accommodation is reached, the technology support program shall terminate in accordance with UDC’s earlier notice.

 

6.                UDC intends to include substantially the same requirement regarding [***] in its future agreements with third parties for the conduct of similar technology support programs.  Should UDC not do this, [***].

 

Intellectual Property Rights

 

1.                As between the parties, all inventions, copyrightable materials and proprietary know-how arising from work performed under the DOE Project, the OM&T Program or the Technical Cooperation Agreement, together with any associated patents or patent applications (or individual claims thereof) or other intellectual property rights based thereon (collectively, “Project IP”), will be owned as follows:

 

a.                Project IP conceived, developed or reduced to practice jointly by the researchers of both parties, including through discussions or exchanges of Confidential Items by the parties (collectively, “Joint Project IP”), shall be owned jointly by both parties, with neither party having any obligation of accounting to the other or being required to obtain any additional consents from the other in relation to its practice, use or other exploitation or transfer thereof.

 

b.               Project IP conceived, developed or reduced to practice solely by the researchers of one party, and which are based on the independent efforts of that party (collectively, “Sole Project IP”), shall be owned solely by UDC if such researchers are working on behalf of UDC or its affiliates, and by MBT if such researchers are working on behalf of MBT or its affiliates.

 

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c.                It is understood that UDC will be providing MBT with technology that includes UDC’s proprietary and confidential information and know-how for the fabrication of phosphorescent OLED devices, including UDC’s recommendations for materials and device structures, as well as UDC’s methods of substrate preparation, cathode selection and deposition, encapsulation and packaging.  It is also understood that MBT may choose to utilize the recommendations of UDC, or MBT may choose to apply its own, independent technologies and processes to accomplish certain of these fabrication steps.  For clarification and notwithstanding the foregoing, any new Project IP based on or derived from the independent technologies and processes utilized by MBT will be treated as Sole Project IP of MBT, and any new Project IP based on or derived from UDC’s recommendations will be treated as Joint Project IP of MBT and UDC.

 

d.               It is further understood that under their collaboration, MBT will be responsible for conducting [***] and UDC will be responsible for conducting [***].  As a result and notwithstanding the foregoing, any Project IP relating to [***] will be treated as Sole Project IP of MBT, and any Project IP relating to [***] (which, for purposes of this paragraph, shall not include [***]) will be treated as Sole Project IP of UDC.

 

2.                The parties agree that the intellectual property rules described above are to be applied generally to all work activities under their business arrangement, except as may otherwise be agreed in writing.  Concurrent with execution of the Technical Cooperation Agreement, the parties will amend the Collaboration Agreement for the OM&T Program to modify the intellectual property rules of such agreement so as to render them consistent with the rules described above.

 

3.                MBT has filed for a patent claiming [***].  UDC may desire license rights under this patent and its progeny, or under other manufacturing IP solely owned by MBT or its affiliates.  In such event, the parties will in good faith negotiate a separate license agreement under which UDC would be granted these rights and MBT would receive consideration for the license grant.  Any license to UDC for this IP would be on fair and reasonable terms, including compensation to MBT to be agreed upon, and would include rights to sublicense this manufacturing IP to third parties.

 

4.                MBT understands that license rights in addition to the License may be required from third parties in order for MBT to make and sell OLED lighting products.  MBT is solely responsible for securing and paying for all such third-party license rights.  UDC agrees to discuss with MBT any such license rights known by UDC to be required for the specific OLED lighting products that UDC assists MBT in designing and fabricating.

 

Market Development and Sales Activities

 

1.                Both parties recognize that substantial market development activities will need to occur in order to educate lighting integrators and end users about OLED lighting products.  In addition, technical expertise will be required to design panels that meet customer

 

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requirements (panel layout, performance requirements such as luminance, uniformity, color temperature, etc.).  Initial activities may include the sampling of products to customers, product exhibitions and demonstrations and a press and marketing and sales campaign.  In conducting any such activities, MBT will highlight the fact that its OLED panels utilize UDC’s PHOLED technology and materials.

 

2.                Each party recognizes the advantages of coordinating their market development activities for the OLED lighting product market.  UDC and MBT also agree that they should work together to facilitate product sales into this market.  Accordingly, UDC and MBT will in good faith negotiate a separate Marketing and Sales Agreement to address their respective market development and sales activities in greater detail.  UDC and MBT will use good faith efforts to finalize the Marketing and Sales Agreement concurrently with the License Agreement.

 

3.                UDC and MBT will use good faith efforts to conduct regular planning meetings that are to be attended by senior business and technical personnel of each party.  At these meetings, the parties will update each other on their respective market development and sales activities, plan joint marketing activities and customer sales calls where appropriate, discuss product design and performance requirements, and address such other matters as are pertinent to the parties’ business arrangement.

 

Panel Sampling and Sales

 

1.                The Marketing and Sales Agreement will include provisions respecting the ability of UDC to obtain access to OLED lighting panels from the Pilot Line, the First MP Line and future manufacturing lines.  This will include sample panels provided to UDC [***], as discussed further below.

 

2.                MBT will make sample panels from the Pilot Line and future manufacturing lines available to UDC for customer sampling and demonstration purposes [***].  Unless otherwise agreed, quantities will not exceed [***] panels per year (minimum size of 150mm X 150mm) through [***], or, if sooner, [***].  If the per year limit is not reached in any year, the remaining amount of sample panels will be made available in subsequent years, through [***].  MBT’s obligation to make sample panels available to UDC [***] will end as of [***].

 

3.                UDC may request to purchase additional sample panels from MBT for customer sampling and demonstration purposes.  MBT will reasonably prioritize UDC’s orders for such sample panels, and will offer UDC MFN pricing for such panels, as outlined in Schedule D attached hereto.

 

4.                UDC may also work with MBT to solicit customers for the purchase of custom panels manufactured by MBT.  In such event, UDC will work with the customer and MBT to determine specifications for these custom panels.  UDC will be given an option to purchase the custom panels from MBT for resale to the customer, again at MFN pricing as outlined in Schedule D .

 

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5.                If panels are sold directly by MBT to customers solicited by UDC, MBT agrees that the pricing charged to these customers will be at least [***] than the pricing offered to UDC for such panels, unless [***].  MBT and UDC will conduct annual review meetings to discuss whether this [***] should be adjusted based on current market conditions.

 

Miscellaneous

 

1.                Each party agrees to be fair and reasonable in negotiating the remaining financial and other terms of the agreements and other arrangements described above in this MOA.  In such negotiations, each party agrees to take into consideration the nature of the overall business arrangement between the parties and the full scope of the value and benefits afforded to each party thereunder.

 

2.                The term of this MOA shall commence upon the Effective Date and shall continue until terminated by either party as permitted hereunder.

 

3.                UDC will offer MBT an MFN guaranty on the financial terms of this arrangement [***] through [***] (the “MFN Period”).  Accordingly, if UDC, within the MFN Period, enters into any agreement or series of related agreements (other than in the settlement of litigation or other adversarial proceedings) affording a third party not previously licensed by UDC substantially the same rights and licenses as those contemplated under this MOA, and if the financial terms of UDC’s agreement(s) with the third party, when taken as a whole, are more favorable to the third party than the financial terms of this MOA, UDC will offer MBT the same financial terms that were agreed to with the third party, said offer to be on a prospective basis and without repayment of any amounts previously paid or owed to UDC.  Upon MBT’s request during the final year of the MFN Period, UDC will enter into discussions with MBT regarding [***].

 

4.                At MBT’s written request on an annual basis during the MFN Period, UDC will certify to MBT whether or not [***].  MBT shall have the right to engage an independent certified public accountant reasonably acceptable to UDC to audit UDC’s records regarding the MFN guaranty certification.  MBT shall pay for the audit, except if the audit finds that UDC’s MFN guaranty certification was [***], in which case UDC shall reimburse MBT for its out-of-pocket audit fees and expenses.

 

5.                This MOA may be terminated upon mutual written agreement of the parties.  In addition, this MOA may be terminated by either party on written notice to the other party in the event that (a) the other party breaches any material term or condition of this MOA and fails to cure the breach within 60 days following written notice thereof by the terminating party; or (b) the other party is declared bankrupt or insolvent, creates or permits a general assignment for the benefit of its creditors or is dissolved.  Any termination of this MOA shall be in addition to, and not in lieu of, any other rights or remedies that may be available to a party, at law or equity.

 

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6.                Except as set forth herein, this MOA shall be governed by the terms of the Mutual Non-Disclosure Agreement between UDC and MBT effective as of July 12, 2010 (the “MNDA”).  In the event of any inconsistency between this MOA and the MNDA, the terms of this MOA shall be controlling.  Capitalized terms used herein without definition shall have the meanings ascribed to them in the MNDA.

 

7.                This MOA and the arrangements contemplated hereunder are non-exclusive, and each party shall be free to enter into similar arrangements with other parties, or to conduct such activities on its own.

 

Agreed to by the duly authorized representative of each party as follows:

 

 

Moser Baer Technologies Inc.			Universal Display Corporation
By:	/s/ G. Rajeswaran		By:	/s/ Steven V. Abramson
Name:	G. Rajeswaran		Name:	Steven V. Abramson
Title:	CEO		Title:	President
Date:	February 4, 2011		Date:	February 4, 2011

 

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SCHEDULE A

 

Pricing for Currently Available Materials

 

[***]

 

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SCHEDULE B

 

Cost and Expense Principles

 

1.                Rates used to calculate direct labor will represent actual hourly rates for employee assigned to the Program.  Escalation rates will be applied to these employees based on their anniversary dates and average hourly rates for classes identified as of 01/01/11, adjusted on a prorated escalation basis @ [***] (projected 2011).

 

2.                Fringe Benefits are calculated as a percentage of Salaries.  Actual rate billed in 2010 was [***].  UDC will use [***] for the purposes of this Program.

 

3.                Overhead costs are calculated as a percentage of Total Direct Labor and Fringe Benefits.  Actual rate billed in 2010 was [***].  UDC will use [***] for the purposes of this Program.

 

4.                General & administrative (G&A) Costs are calculated as a percentage of Total Direct & Indirect costs, excluding Subcontracts.  Actual rate billed in 2010 was [***].  UDC will use [***] for the purposes of this Program.

 

5.                Reasonable out-of-pocket expenses include, among other items, materials, shipping charges and approved travel and lodging costs.

 

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SCHEDULE C

 

Technology Support Program Roadmap

 

Under the Technology Support Program (TSP), UDC and MBT will work together to improve the performance of the OLED lighting panels being produced by MBT in its manufacturing facilities. UDC will be responsible for improvements related to [***], while MBT will be responsible for [***].

 

The Table below represents the key performance objectives of our joint OLED lighting panel performance roadmap. This non-binding joint roadmap will be updated on an annual basis as part of the TSP, and serves to define projected panel performance improvements over time. It is understood that achieving this roadmap is a shared responsibility, as outlined above. The performance outlined in the Table will be demonstrated on panels made at UDC on MBT substrates.

 

[***]

 

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SCHEDULE D

 

OLED Lighting Product — MFN Pricing Principle & Procedure

 

1.                An OLED lighting panel (“Panel”) is defined as an encapsulated device without attached i) electrical connection(s), ii) drivers, iii) optical and/or iv) mechanical elements.

 

2.                An OLED lighting module (“Module”) is defined as a complete product with attached i) electrical connection(s), ii) drivers, iii) optical and/or iv) mechanical elements; the attachment of such additional elements being collectively known as the back-end process.

 

3.                MBT will be free to price products on a negotiated basis for all its customers.

 

4.                For customers, to whom there would be an MFN commitment, similar transfer price shall be provided to all such customers (“MFN Customer”) purchasing similar volumes of Panels of the same size with equivalent characteristics, quality standard and made from standard production processes at the factory.  Standard Module products from MBT (“Company”) incorporating standard Panels will be known as reference products (“Reference Products”).  However, the Module transfer price varies with differences between specifications of the back-end process, the quality standard, the packaging specification, and the level of customization versus standard products.

 

5.                The price of each individual Module shall take into account the variations in manufacturing costs as a result of product specifications, yield, back-end processes, quality standard and packaging.  The Company shall offer a good faith quotation (“Quotation”) as soon as it receives an inquiry from a MFN Customer and shall determine the final transfer price (“Final Transfer Price”) by the time of product shipment.  The Quotation for each Module shall be based on the Reference Product price for MFN Customers with adjustments for projected variations as described in the first sentence of this No. 5.  The Quotation shall be re-calculated through trial production and may be revised in accordance with this Pricing Procedure.

 

6.                Each Final Transfer Price mentioned in No. 5 may not be more than [***] above initial Quotation price, unless mutually agreed by the Company and the MFN Customer.

 

7.                Ex-works (of the Company factory) shall apply to transactions in this pricing procedure (“Pricing Procedure”).  Other delivery terms may be made available to MFN Customers with reasonable price adjustments (based on changes in delivery costs incurred by the Company).

 

8.                This Pricing Procedure may be amended by mutual agreement of the parties.

 

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