As filed with the Securities and Exchange Commission on January 21, 2004
Registration No. 333-
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
UNIVERSAL DISPLAY CORPORATION
(Exact name of registrant as specified in its charter)
Pennsylvania 3575 23-2372688
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification No.) Identification No.)
375 Phillips Boulevard
Ewing, New Jersey 08618
(609) 671-0980
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
STEVEN V. ABRAMSON
President and Chief Operating Officer
Universal Display Corporation
375 Phillips Boulevard
Ewing, New Jersey 08618
(609) 671-0980
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies of all communications to:
RICHARD A. SILFEN, ESQ.
JUSTIN W. CHAIRMAN, ESQ.
Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, PA 19103
(215) 963-5000
Approximate date of commencement of proposed sale to the public: From time to
time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. |_|
=========================== ================= ========================= ========================== ===================
Title of Each Proposed Proposed
Class of Securities Amount to be Maximum Offering Price Maximum Aggregate Amount of
to be Registered Registered(1) Per Unit(2) Offering Price(2) Registration Fee
--------------------------- ----------------- ------------------------- -------------------------- -------------------
Common Stock, $0.01 $50,000,000 100% $50,000,000 $4,045
par value
Preferred Stock, $0.01
par value
Warrants(3)
Depositary Shares(4)
=========================== ================= ========================= ========================== ===================
(1) Not specified as to each class of the above-referenced securities being
registered hereby, pursuant to General Instruction II.D of Form S-3. In no event
will the aggregate initial offering price of the securities registered hereby
exceed $50,000,000 or the equivalent thereof in one or more foreign currencies
or composite currencies, including currency units. The securities registered
hereby may be sold separately, together or in units with other securities
registered hereby. This registration statement also includes any securities
issuable upon stock splits or similar transactions pursuant to Rule 416 under
the Securities Act.
(2) Estimated solely for the purpose of computing the registration fee, pursuant
to Rule 457(o) under the Securities Act. The proposed maximum offering price per
unit will be determined from time to time by the registrant in connection with
the issuance by the registrant of the securities registered hereby.
(3) There are being registered hereby an indeterminate number of warrants
entitling the holders thereof to purchase shares of common stock or shares of
preferred stock, which may be sold separately, together or in units with other
securities registered hereby.
(4) There are being registered hereby an indeterminate number of depositary
shares to be evidenced by depositary receipts issued pursuant to a deposit
agreement to be entered into between the registrant and a depositary. In the
event the registrant elects to offer to the public fractional interests in the
shares of preferred stock registered hereby, depositary receipts will be
distributed to those persons purchasing such fractional interests and the shares
of preferred stock will be issued to the depositary under a deposit agreement.
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
SUBJECT TO COMPLETION, DATED January 21, 2004
PROSPECTUS
$50,000,000
UNIVERSAL DISPLAY CORPORATION
Common Stock
Preferred Stock
Warrants
Depositary Shares
We may offer up to $50,000,000 of our common stock, preferred stock,
warrants to purchase our common stock and preferred stock and depositary shares.
Our common stock is quoted on the Nasdaq National Market under the symbol
"PANL", and is also traded on the Philadelphia Stock Exchange under the
symbol "PNL."
We may offer these securities at prices and on terms to be set forth in
one or more supplements to this prospectus. These securities may be offered
directly, through agents on our behalf or through underwriters or dealers
An investment in our securities involves significant risks. You should
carefully consider the risk factors beginning on page 5 of this prospectus
before investing in our securities.
The securities described in this prospectus have not been approved by
the Securities and Exchange Commission or any state securities commission, nor
have they determined if this prospectus is accurate or complete. Any
representation to the contrary is a criminal offense.
-----------------------------------------------
The date of this prospectus is January __, 2004
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated by reference contain
some "forward-looking statements" as defined in the Private Securities
Litigation Reform Act of 1995 and information relating to us that is based on
the beliefs of our management, as well as assumptions made by, and the
information currently available to, our management. Among other things, these
statements include, but are not limited to, the statements in this prospectus
and the documents incorporated by reference regarding:
o the outcomes of our ongoing and future Organic Light Emitting Device
("OLED") technology research and development activities;
o our ability to access future OLED technology developments of our academic
and commercial research partners;
o our ability to form and continue strategic relationships with manufacturers
of OLEDs and OLED-containing products;
o the protections afforded to us by the patents that we own or license;
o the anticipated success of our OLED technologies, materials and
manufacturing equipment commercialization strategies;
o the potential commercial applications of our OLED technologies and
materials, and of OLED-containing products in general;
o future demand for our OLED technologies and materials;
o the comparative advantages and disadvantages of our OLED technologies and
materials versus competing technologies and materials currently on the
market;
o the nature and potential advantages of any competing technologies that may
be developed in the future;
o the payments that we expect to receive in the future under our existing
contracts;
o our future capital requirements;
o the amount and type of securities that we will issue in the future to our
business partners and others; and
o our future OLED technology licensing and OLED material sales revenues and
results of operations.
In addition, when used in these documents, the words "estimate,"
"project," "believe," "anticipate," "intend," "expect" and similar expressions
involving potential future developments are intended to identify forward-looking
statements. These statements reflect our current views with respect to future
events and are subject to risks and uncertainties that could cause actual
results to differ materially from those contemplated in these forward-looking
statements, including those risks discussed in this prospectus and the documents
incorporated by reference.
You are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this prospectus or the documents
incorporated by reference, as the case may be. Except for special circumstances
in which a duty to update arises when prior disclosure becomes materially
misleading in light of subsequent events, we do not intend to update any of
these forward-looking statements to reflect events or circumstances after the
date of this prospectus or to reflect the occurrence of unanticipated events.
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ABOUT THIS PROSPECTUS
This prospectus describes certain securities of Universal Display
Corporation, a Pennsylvania corporation. We sometimes refer to Universal Display
Corporation, together with its wholly owned subsidiary, UDC, Inc., using the
words "we," "our" or "us," or as the "Company." This prospectus is part of a
registration statement that we filed with the SEC utilizing a "shelf"
registration process, which allows us to offer and sell any combination of the
securities described in this prospectus in one or more offerings. Using this
prospectus, we may offer up to $50,000,000 worth of securities.
This prospectus contains a general description of the securities we may
offer. We will describe the specific terms of these securities, as necessary, in
supplements that we attach to this prospectus for each offering. Each supplement
will also contain specific information about the terms of the offering it
describes. The supplements may also add, update or change information contained
in this prospectus. In addition, as we describe below in the section entitled
"Where You Can Find More Information," we have filed and plan to continue to
file other documents with the SEC that contain information about us. Before you
decide whether to invest in our securities, you should read this prospectus, the
supplement that further describes the offering of those securities and the
information we otherwise file with the SEC.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and
other information with the Securities and Exchange Commission. You may read and
copy any reports, statements or other information we file at the SEC's public
reference rooms located at Judiciary Plaza, 450 Fifth Street, N.W., Washington,
DC 20549. Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. Our SEC filings are also available to the public from
commercial document retrieval services and at the web site maintained by the SEC
at "http://www.sec.gov."
This prospectus is part of our "shelf" registration statement. We have
filed the registration statement with the SEC under the Securities Act of 1933
to register the securities that we may offer by this prospectus and any
supplements. Not all of the information in the registration statement appears in
this prospectus, or will appear in any supplement. For more detail, you can read
the entire registration statement, and all of the exhibits filed with it, at the
SEC's offices or website as described above.
The SEC allows us to "incorporate by reference" information into this
prospectus, which means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The information
incorporated by reference is deemed to be part of this prospectus, except for
any information superseded by information in this prospectus. This prospectus
incorporates by reference the documents set forth below that we have previously
filed with the SEC. These documents contain important information about us, our
business and our finances.
The documents that we are incorporating by reference are:
o Our Annual Report on Form 10-K for the year ended
December 31, 2002;
o Our Quarterly Reports on Form 10-Q for the quarters ended March
31, June 30 and September 30, 2003;
o Our Current Report on Form 8-K filed with the SEC on August 25,
2003; and
o The description of our common stock that is contained in our
Registration Statement on Form 8-A filed with the SEC on August
6, 1996.
Any documents which we file pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this prospectus but before the end
of any offering of securities made under this prospectus will also be considered
to be incorporated by reference.
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If you request, either orally or in writing, we will provide you with a
copy of any or all documents which are incorporated by reference. We will
provide such documents to you free of charge, but will not include any exhibits,
unless those exhibits are incorporated by reference into the document. You
should address written requests for documents to Sidney D. Rosenblatt, Executive
Vice President, Chief Financial Officer, Treasurer and Secretary, Universal
Display Corporation, 375 Phillips Boulevard, Ewing, New Jersey 08618.
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RISK FACTORS
An investment in our securities involves a high degree of risk. In
addition to the other information contained in this prospectus, you should
carefully consider the following risk factors before making an investment
decision concerning our securities. You should not purchase our securities if
you cannot afford the loss of your entire investment.
Risks Relating to Our Business
We do not expect to be profitable in the foreseeable future, and may never be
profitable.
Since inception, we have generated limited revenues while incurring
significant losses. We expect to incur losses for the foreseeable future and
until such time, if ever, as we are able to achieve sufficient levels of revenue
from the commercial exploitation of our OLED technologies and materials to
support our operations. You should note, however, that:
o OLED technologies may never become commercially viable;
o markets for flat panel displays utilizing OLED technologies may be limited;
and
o we may never generate sufficient revenues from the commercial exploitation
of our OLED technologies and materials to become profitable.
Even if we find commercially viable applications for our OLED
technologies and materials, we may never recover our research and development
costs.
If we do not receive additional financing in the future, we might not be able to
continue the research, development and commercialization of our OLED
technologies and materials.
Our capital requirements have been and will continue to be significant.
Substantial additional funds will be required in the future for research,
development and commercialization of our OLED technologies and materials, to
obtain and maintain patents and other intellectual property rights in these
technologies and materials, and for working capital and other purposes, the
timing and amount of which are difficult to ascertain. Our cash on hand may not
be sufficient to meet all of our future obligations. When we need additional
funds, such funds may not be available when needed, on commercially reasonable
terms or at all. If we cannot obtain more money when needed, our business might
fail. Additionally, if we attempt to raise money in an offering of shares of our
common stock, preferred stock, warrants or depositary shares, or if we engage in
acquisitions involving the issuance of additional shares of our common stock,
preferred stock, warrants or depositary shares, the issuance of these shares
will dilute our then-existing shareholders.
If our OLED technologies and materials are not feasible for broad-based product
applications, we may never generate revenues sufficient to support ongoing
operations.
Before OLED manufacturers will agree to utilize our OLED technologies
and materials for wide-scale commercial production, it is likely that we must
first demonstrate to the satisfaction of these manufacturers that our OLED
technologies and materials are feasible for broad-based product applications.
This, in turn, will require substantial advances in our research and development
efforts in a number of areas, including:
o device reliability;
o the development of long-lived OLED materials for full color OLED displays;
and
o issues related to scalability and cost effective fabrication technologies
for product applications.
Our efforts may never demonstrate the feasibility of our OLED
technologies and materials for broad-based product applications, particularly
full color, large area, high resolution and high information content flat panel
displays such as those used in televisions.
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Our research and development efforts remain subject to all of the risks
associated with the development of new products based on emerging and innovative
technologies, including, without limitation, unanticipated technical or other
problems and the possible insufficiency of funds for completing development of
these products. Technical problems may result in delays and cause us to incur
additional expenses that would increase our losses. If we cannot complete
research and development of our OLED technologies and materials successfully, or
if we experience delays in completing research and development of our OLED
technologies and materials for use in potential applications, particularly after
the occurrence of significant expenditures, our business may fail.
Even if our OLED technologies are technically feasible, they may not be adopted
by manufacturers of OLEDs and OLED-containing products.
The potential size, timing and viability of market opportunities
targeted by us are uncertain at this time. Market acceptance of our OLED
technologies will depend, in part, upon these technologies providing benefits
comparable to CRT and LCD technologies (the current standard display
technologies) at an appropriate cost, and the adoption of these technologies by
consumers, neither of which have been achieved. Also, there may be a number of
additional technologies that OLED manufacturers need to utilize in order to
bring OLED-containing products to the market. Many potential licensees of our
OLED technologies manufacture flat panel displays utilizing competing
technologies, and may, therefore, be reluctant to redesign their products or
manufacturing processes to incorporate our OLED technologies. Moreover, even if
our OLED technologies are a viable alternative to competing technologies, if
additional technologies are required to bring OLED-containing products to the
market and potential licensees are unable to obtain access to these
technologies, they may not utilize our OLED technologies.
The flat panel display industry has historically experienced significant
downturns, which may adversely affect the demand for and pricing of our OLED
technologies and materials.
The flat panel display industry has experienced significant, periodic
downturns, often in connection with, or in anticipation of, declines in general
economic conditions. These downturns have been characterized by lower product
demand, production overcapacity and erosion of average selling prices.
Industry-wide fluctuations and downturns could harm our business.
If our research partners fail to make advances in their research, or if they
terminate their relationships with us, we might not succeed in commercializing
our OLED technologies and materials.
Research and development of commercially viable applications for our
OLED technologies and materials depend substantially on the success of the
sponsored research conducted by our research partners. We cannot be certain that
our research partners will make additional advances in the research and
development of these technologies and materials. Moreover, although we fund OLED
technology research, the scope of and technical aspects of this research and the
resources and efforts directed to this research are in large part subject to the
control of our research partners.
Our most significant research and development relationships are with
Princeton University and the University of Southern California (USC). Our
Research Agreement with Princeton University expires in July 2007 and both this
agreement and our Amended License Agreement with Princeton University and USC
(the agreement under which we license our key OLED technology patents) can be
terminated for various reasons. For example, the Research Agreement provides
that if Dr. Stephen Forrest, the principal investigator for our research program
with Princeton University, is unavailable to continue to serve in this capacity,
because he is no longer associated with Princeton University or for any other
reason, and a successor acceptable to both us and Princeton University is not
available, Princeton University has the right to terminate the Research
Agreement without impacting the Amended License Agreement. The termination of
the Research Agreement or the Amended License Agreement would materially and
adversely affect our ability to research, develop and commercialize our OLED
technologies and materials.
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If we cannot form or maintain strategic relationships with companies that
manufacture OLEDs and OLED-containing products, our commercialization strategy
will fail.
Our strategic plan depends upon the development and maintenance of
strategic licensing and material supply relationships with high-volume
manufacturers of OLEDs and OLED-containing products. We have entered into only
two such relationships, one with Dupont Displays, Inc. and one with Tohoku
Pioneer Corporation. All of our other relationships with manufacturers of OLEDs
and OLED-containing products are currently limited to research, development and
pre-commercial evaluation and qualification of our OLED technologies and
materials. Our ability to enter into additional strategic licensing and supply
relationships, or to maintain our existing relationships, may require us to make
financial or other commitments. We might not be able, for financial or other
reasons, to enter into or continue these relationships on commercially
acceptable terms, or at all. Failure to do so would have a material adverse
effect on us.
Our prospects also will be significantly affected by our ability to
sell our proprietary OLED materials to manufacturers of OLEDs. Our current
Supply Agreement with PPG Industries, Inc. provides us with a source for these
OLED materials and with exclusive rights to sell them to OLED manufacturers, but
this agreement expires at the end of 2007. Our inability to continue obtaining
these OLED materials from PPG Industries, Inc. or another source would have a
material adverse effect on our sales of OLED materials and our ability to
perform and support our customers' performance of OLED technology research.
If we cannot obtain appropriate patent and other intellectual property rights
protection for our OLED technologies and materials, our business will suffer.
The value of our OLED technologies and materials is dependent on our
ability to secure and maintain appropriate patent and other intellectual
property rights protection. Although we own or license many patents respecting
our OLED technologies and materials that have already issued, there can be no
assurance that additional patents applied for will be obtained, or that any of
these patents, once issued, will afford commercially significant protection for
our OLED technologies and materials, or will be found valid if challenged.
Moreover, we have not obtained patent protection for some of our OLED
technologies and materials in all foreign countries in which OLEDs might be
manufactured or sold. In any event, the patent laws of other countries may
differ from those of the United States as to the patentability of our OLED
technologies and materials and the degree of protection afforded.
If our OLED technologies or materials are found to infringe the rights of
others, we may not be able to commercially license or sell them.
Other companies and institutions may independently develop OLED
technologies and materials that are equivalent or superior to ours, and may
obtain patent or similar rights with respect to these technologies. There are a
number of other companies and organizations that have been issued patents and
are filing additional patent applications relating to OLED technologies and
materials, including Eastman Kodak Company, Fuji Photo Film Co., Canon, Inc.,
Pioneer Corporation, Semiconductor Energy Laboratories Co. and Mitsubishi
Chemical Corporation, all of whom have patent rights related to OLED
technologies and materials. There can be no assurance that the utilization of
our OLED technologies or the sale of our OLED materials, including technologies
and materials developed by or licensed from Princeton University, the University
of Southern California, PPG Industries, Inc. or Motorola, Inc., will not
infringe on the patent rights of others. In this event, we or our partners may
be required to obtain licenses, pay damages, modify our products or methods of
operation, or be prohibited from making, using, selling or offering to sell some
or all OLEDs, OLED materials and OLED-containing products. We also might not
have the financial or other resources necessary to enforce or defend a patent
infringement action, and the licensors of our licensed patents might not enforce
or defend such an action in a timely manner. If our OLED materials or products
incorporating our OLED technologies are found to infringe on the patent or other
intellectual property rights of others, it could have a material adverse effect
on us by limiting our ability to sell our OLED materials or license our OLED
technologies to manufacturers of OLEDs and OLED-containing products.
The U.S. Government has rights to our OLED technologies that might prevent us
from realizing the benefits of these technologies.
The U.S. Government, through various government agencies, has provided
and continues to provide funding to us, Princeton University and the University
of Southern California for research activities related to certain aspects of our
OLED technologies. Because we have been provided with this funding, the
government has rights to these OLED technologies that could restrict our ability
to market them to the government for military and other applications, or to
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third parties for commercial applications. Moreover, if the government
determines that we have not taken effective steps to achieve practical
application of these OLED technologies in any field of use in a reasonable time,
the government could require us to grant licenses to other parties in this field
of use. Any of these occurrences would limit our ability to obtain the full
benefits of our OLED technologies.
There are numerous potential alternatives to OLEDs for flat panel displays,
which may limit our ability to commercialize our OLED technologies and
materials.
The flat panel display market is currently, and will likely continue to
be for some time, dominated by products utilizing LCD technology. Numerous
companies are making substantial investments in, and conducting research to
improve characteristics of, LCD technology. Several other flat panel display
technologies have been, or are being, developed, including technologies for the
production of field emission, inorganic electroluminescence, gas plasma and
vacuum fluorescent displays. Advances in LCD technology or any of these
developing technologies may overcome their current limitations and permit them
to become the leading technologies for flat panel displays, either of which
could limit the potential market for flat panel displays utilizing our OLED
technologies and materials. This, in turn, would cause manufacturers of OLEDs
and OLED-containing products to avoid entering into commercial relationships
with us or to terminate their existing relationships with us.
Because many of our competitors have better name-recognition and greater
financial, technical, marketing and research capabilities, we may never be able
to compete successfully in the flat panel display industry.
The flat panel display industry is characterized by intense
competition. Substantially all of our competitors have better name recognition
and greater financial, technical, marketing, personnel and research capabilities
than us. Our competitors may succeed in developing technologies and applications
that are more cost-effective or have fewer display limitations than our OLED
technologies. We may never be able to compete successfully or develop commercial
applications for our OLED technologies.
If we cannot keep our key employees or hire other talented persons as we grow,
our business might not succeed.
Our performance is substantially dependent on the continued services of
senior management and other key personnel, and our ability to offer competitive
salaries and benefits to our employees. We do not have employment agreements
with any of our management or key personnel. Additionally, competition for
highly skilled technical, managerial and other personnel is intense. We might
not be able to attract, hire, train, retain and motivate the highly skilled
managers and employees we need to be successful. If we fail to attract and
retain the necessary technical and managerial personnel, our business will
suffer and might fail.
We can issue shares of preferred stock that can adversely affect your rights as
a shareholder of our common stock.
Our Articles of Incorporation authorize us to issue up to 5,000,000
shares of preferred stock with designations, rights and preferences determined
from time-to-time by our Board of Directors. Accordingly, the Board of Directors
is empowered, without shareholder approval, to issue preferred stock with
dividend, liquidation, conversion, voting or other rights superior to those of
shareholders of our common stock. For example, an issuance of shares of
preferred stock could:
o adversely affect the voting power of the shareholders of our common stock;
o make it more difficult for a third party to gain control of us;
o discourage bids for our common stock at a premium; or
o otherwise adversely affect the market price of our common stock.
Our Board of Directors has designated and issued two series of
preferred stock that are currently outstanding: (a) 200,000 shares of Series A
nonconvertible preferred stock, all of which are held by an entity controlled by
members of the family of Sherwin Seligsohn, our Chairman of the Board and Chief
Executive Officer, and (b) 300,000 shares of Series B convertible preferred
stock that is held by Motorola. The Series B convertible preferred stock is
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convertible into shares of common stock in accordance with our Articles of
Incorporation. As of January 15, 2004, the Series B convertible preferred stock
is convertible into 343,916 shares of our common stock. We may issue additional
shares of authorized preferred stock at any time in the future.
The market price of our common stock might be highly volatile.
The market price of our common stock might be highly volatile, as has
been the case with the securities of many other companies, particularly other
small and emerging-growth companies. The following table sets forth the high and
low bid quotation of our common stock as reported by the Nasdaq National Market
for the periods indicated.
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High Close Low Close
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2001
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First Quarter $ 14.13 $ 7.03
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Second Quarter 20.00 7.88
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Third Quarter 16.32 6.61
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Fourth Quarter 9.88 6.55
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2002
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First Quarter $ 11.78 $ 8.17
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Second Quarter 11.80 8.30
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Third Quarter 8.30 4.95
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Fourth Quarter 11.60 5.76
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2003
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First Quarter $ 8.70 $ 6.33
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Second Quarter 10.80 8.22
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Third Quarter 10.74 8.17
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Fourth Quarter 15.45 10.30
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Factors such as the following may have a significant impact on the market price
of our common stock in the future:
o our expenses and operating results;
o announcements by us or our competitors of technological developments, new
product applications or license arrangements; and
o other factors affecting the flat panel display and related industries in
general.
The issuance of other publicly traded shares of our common stock could drive
down the price of our stock.
The price of our common stock can be expected to decrease if:
o other shares of our common stock that are currently subject to restriction
on sale become freely salable, whether through an effective registration
statement or based on Rule 144 under the Securities Act of 1933; or
o we issue additional shares of common stock that might be or become freely
salable, including shares that would be issued upon conversion of our Series
B convertible preferred stock.
If the price of our common stock goes down, we may have to issue more shares
than are presently anticipated to be issued under the terms of our Development
and License Agreement with PPG Industries, Inc.
Under the Development and License Agreement between us and PPG
Industries, we are required to issue to PPG Industries shares of our common
stock for services rendered by it. If, at the time of issuance, the price of our
common stock has declined materially since the date of the Development and
License Agreement, we may be required to issue to PPG Industries more shares of
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our common stock than were initially anticipated. This increase in the number of
shares available for public sale could cause people to sell our common stock,
including in short sales, which could drive down the price of our common stock,
thus reducing its value and perhaps hindering our ability to raise additional
funds in the future. In addition, such an increase in the number of outstanding
shares of our common stock would further dilute existing holders of this stock.
Our executive officers and directors own a large percentage of our common stock
and could exert significant influence over matters requiring shareholder
approval, including takeover attempts.
Our executive officers and directors, and their respective affiliates,
beneficially own as of January 15, 2004, approximately 11.0% of the outstanding
shares of our common stock. Moreover, Pine Ridge Financial Inc. and First
Investors Holding Co., Inc., as successor to Strong River Investments, Inc.,
assigned to our management their rights to vote the shares of our common stock
issued to them upon conversion of warrants issued to them in an August 2001
private placement transaction, of which warrants to purchase 744,452 shares
remain outstanding as of January 15, 2004. Accordingly, these shareholders and
members of management may, as a practical matter, be able to exert significant
influence over matters requiring approval by our shareholders, including the
election of directors and the approval of mergers or other business
combinations. This concentration could also have the effect of delaying or
preventing a change in control of us.
Our past use of Arthur Andersen LLP as our independent auditor limits the
ability of shareholders to seek potential recoveries from them related to their
work.
On July 30, 2002, we announced that we had appointed KPMG LLP to
replace Arthur Andersen LLP (Arthur Andersen) as our independent public auditor.
Our consolidated financial statements as of and for each of the years ended
December 31, 1999 through 2001 were audited by Arthur Andersen. After reasonable
efforts, we were unable to obtain Arthur Andersen's consent to the incorporation
by reference into the registration statement of which this prospectus supplement
is a part of its report with respect to our financial statements. Under these
circumstances, Rule 437a under the Securities Act of 1933 allowed us to file the
registration statement without a written consent from Arthur Andersen.
The absence of this consent may limit recovery by investors in an
offering made using this prospectus on certain claims. In particular, and
without limitation, investors will not be able to assert claims against Arthur
Andersen under Section 11 of the Securities Act of 1933. In addition, the
ability of Arthur Andersen to satisfy any claims (including claims arising from
Arthur Andersen's provision of auditing and other services to us) will be
limited as a practical matter due to events regarding Arthur Andersen. This
means that if an investor in an offering made using this prospectus were to
assert a claim under Section 11 of the Securities Act relating to its
investment, that investor would not be able to seek damages from Arthur
Andersen. Thus, as compared to a hypothetical investor in an offering by another
company whose inclusion of financial statements in its annual report was
consented to by that company's independent auditor, an investor in an offering
made using this prospectus would have fewer alternatives in seeking damages
relating to its investment.
- 10 -
OUR COMPANY
Universal Display Corporation is engaged in the research, development
and commercialization of organic light emitting device, or OLED, technologies
for use in flat panel displays, lasers and light generating devices. We expect
the initial market for our technologies to be in the electronic flat panel
display industry. This industry includes such products as:
o cellular phone displays;
o portable personal digital assistants and Internet access-type
devices;
o laptop computers; and
o television and computer monitors.
Our executive offices are located at 375 Phillips Boulevard, Ewing, New
Jersey 08618. Our phone number is (609) 671-0980. Our web site can be found at
www.universaldisplay.com.
SECURITIES OFFERED BY THIS PROSPECTUS
Using this prospectus, we may offer from time to time, in one or more
series, together or separately, at prices and on terms to be determined at the
time of offering:
o shares of common stock, $0.01 par value;
o shares of preferred stock, $0.01 par value;
o warrants to purchase shares of common stock or preferred stock;
and
o depositary shares.
The shares of preferred stock may, at our option, be issued in the form
of depositary shares evidenced by depositary receipts, and may be convertible
into or exchangeable for shares of our common stock or other securities issued
by us.
USE OF PROCEEDS
Unless otherwise provided in the applicable prospectus supplement
accompanying this prospectus, the net proceeds, if any, from the sale of the
securities offered hereby will be used for general corporate purposes, including
the acquisition or development of properties, assets, entities or technologies,
and the repayment of indebtedness. As of the date of this prospectus, we have
not identified as probable any specific material proposed uses of these
proceeds. If, as of the date of any prospectus supplement, we have identified
any such uses, we will describe them in the prospectus supplement. The amount of
securities offered from time to time pursuant to this prospectus and any
prospectus supplement, and the precise amount of the net proceeds we will
receive from the sale of such securities, as well as the timing of receipt of
those proceeds, will depend upon our funding requirements. If we elect at the
time of an issuance of securities to make different or more specific uses of the
proceeds than as set forth herein, we will describe those uses in the applicable
prospectus supplement.
CERTAIN RATIOS
The ratios of our earnings to combined fixed charges and preferred
stock dividends for the nine months ended September 30, 2003 and the years ended
December 31, 2002, 2001, 2000, 1999 and 1998 are not meaningful because we did
not have earnings during any of those periods. The dollar amount of the
deficiency in each of such periods was $11,619,623, $31,019,201, $16,356,100,
$9,529,046, $5,125,006 and $2,793,842, respectively.
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For the purpose of computing the amount of our combined fixed charges
and preferred stock dividends, fixed charges consist of interest costs, whether
expensed or capitalized, and amortization of debt discounts. Preferred stock
dividends consist of deemed dividends relating to beneficial conversion features
of certain of the outstanding series of preferred stock.
DESCRIPTION OF PREFERRED STOCk
General
The rights, preferences, privileges and restrictions of the shares of
preferred stock in respect of which this prospectus is delivered, if any, shall
be described in the prospectus supplement relating to those shares of preferred
stock. Among the terms of the preferred stock which may be specified in the
related prospectus supplement are the following:
o the annual dividend rate, if any, or the means by which the
dividend rate may be calculated, including the possibility that
the dividend rate may bear an inverse relationship to some index
or standard;
o the date or dates from which dividends shall accrue, the date or
dates on which dividends shall be paid and whether dividends
shall be cumulative;
o the price at which and the terms and conditions on which the
series of preferred stock described in the prospectus supplement
may be redeemed, including the period of time during which the
shares may be redeemed, any premium to be paid over and above the
par value of the preferred stock, and whether and to what extent
accumulated dividends on the preferred stock will be paid upon
the redemption of the shares;
o the liquidation preference, if any, over and above the par value
of the shares of preferred stock and whether and to what extent
the holders of those shares shall be entitled to accumulated
dividends in the event of the voluntary or involuntary
liquidation, dissolution or winding-up of our affairs;
o whether the preferred stock shall be subject to the operation of
a retirement or sinking fund and, if so, a description of the
operation of the retirement or sinking fund;
o the terms and conditions, if any, on which the preferred stock
may be convertible into, or exchangeable for, shares of any other
class or classes of our equity interests, including the price or
rate of conversion or exchange and the method for effecting the
conversion or exchange;
o a description of the voting rights, if any, of the preferred
stock; and
o other preferences, rights, qualifications or restrictions or
material terms of the preferred stock.
The description of the foregoing provisions of the preferred stock as
set forth in the applicable prospectus supplement is only a summary, is not
complete and is subject to, and is qualified in its entirety by, reference to
the definitive Articles of Amendment to our Articles of Incorporation relating
to that series of preferred stock. In connection with any offering of preferred
stock, the Articles of Amendment will be filed with the SEC as an exhibit to, or
incorporated by reference in, the registration statement of which this
prospectus is a part.
Rank
Unless otherwise specified in the applicable prospectus supplement,
each series of preferred stock will, with respect to dividend rights and rights
upon the liquidation, dissolution or winding up of our company or affairs, rank:
o senior to all classes or series of common stock, and to all
equity securities ranking junior to that series of preferred
stock;
o on a parity with all equity securities issued by us, the terms of
which specifically provide that those equity securities rank on a
parity with that series of preferred stock; and
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o junior to all equity securities issued by us, the terms of which
specifically provide that those equity securities rank senior to
that series of preferred stock.
For these purposes, the term "equity securities" does not include
convertible debt securities.
Dividends
Holders of the preferred stock of each series will be entitled to
receive, when, as and if declared by our Board of Directors, out of our assets
legally available for payment, cash dividends, or dividends in kind or in other
property if expressly permitted and described in the applicable prospectus
supplement, at the rates and on the dates as will be set forth in the applicable
prospectus supplement. Each dividend shall be payable to holders of record as
they appear in our shareholder records at the close of business on the record
date(s) as shall be fixed by the Board of Directors.
Dividends on any series of preferred stock may be cumulative or
non-cumulative, as provided in the applicable prospectus supplement. Dividends,
if cumulative, will be cumulative from and after the date set forth in the
applicable prospectus supplement. If the Board of Directors fails to declare a
dividend payable on a dividend payment date on any series of preferred stock for
which dividends are non-cumulative, then the holders of that series of preferred
stock will have no right to receive a dividend in respect of the dividend period
ending on that dividend payment date, and we will have no obligation to pay the
dividend accrued for that period, whether or not dividends on the series are
declared payable on any future dividend payment date.
Unless otherwise specified in the applicable prospectus supplement, if
any shares of preferred stock of any series are outstanding, no full dividends
shall be declared, paid or set apart for payment on any of our capital shares of
any other series ranking, as to dividends, on a parity with or junior to the
preferred stock of that series for any period unless (i) if the series of
preferred stock has a cumulative dividend, full cumulative dividends on the
preferred stock of that series have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof is set apart for
payment for all past dividend periods and the then-current dividend period; or
(ii) if the series of preferred stock does not have a cumulative dividend, full
dividends on the preferred stock of that series for the then-current dividend
period have been or contemporaneously are declared and paid, or declared and a
sum sufficient for the payment thereof is set apart for payment. When dividends
are not paid in full (or a sum sufficient for such full payment is not so set
apart) upon preferred stock of any series, as well as on the shares of any other
series of preferred stock ranking on a parity as to dividends with the preferred
stock of that series, all dividends declared upon preferred stock of that series
and any other series of preferred stock ranking on a parity therewith shall be
declared pro rata so that the amount of dividends declared per share of
preferred stock of that series and the other series of preferred stock shall in
all cases bear to each other the same ratio that accrued dividends per share on
the preferred stock of that series (which shall not include any accumulation in
respect of unpaid dividends for prior dividend periods if such shares of
preferred stock do not have a cumulative dividend) and the other series of
preferred stock bear to each other. No interest, or sum of money in lieu of
interest, shall be payable in respect of any dividend payment or payments on
preferred stock of any series which may be in arrears.
Except as provided in the immediately preceding paragraph, unless (i)
if the series of preferred stock has a cumulative dividend, full cumulative
dividends on the shares of preferred stock of that series have been or
contemporaneously are declared and paid, or declared and a sum sufficient for
the payment thereof set apart for payment, for all past dividend periods and the
then-current dividend period; and (ii) if the series of preferred stock does not
have a cumulative dividend, full dividends on the shares of preferred stock of
that series for the then-current dividend period have been or contemporaneously
are declared and paid, or declared and a sum sufficient for the payment thereof
is set apart for payment, no dividends (other than in shares of common stock or
other capital stock ranking junior to the shares of preferred stock of such
series as to dividends and upon liquidation) shall be declared, paid or set
aside for payment or other distribution upon the shares of common stock, or any
other of our capital shares ranking junior to or on a parity with the preferred
stock of that series as to dividends or upon liquidation, nor shall any shares
of common stock, or any other of our capital shares ranking junior to or on a
parity with the preferred stock of that series as to dividends or upon
liquidation, be redeemed, purchased or otherwise acquired for any consideration
(or any monies be paid to, or made available for, a sinking fund for the
redemption of any such shares) by us, except by conversion into or exchange for
other of our capital shares ranking junior to the shares of preferred stock of
that series as to dividends and upon liquidation.
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Redemption
If so provided in the applicable prospectus supplement, the preferred
stock will be subject to mandatory redemption or redemption at our option, in
whole or in part, in each case upon the terms, at the times and at the
redemption prices set forth in the applicable prospectus supplement.
The prospectus supplement relating to a series of shares of preferred
stock that is subject to mandatory redemption will specify the number of those
shares of preferred stock that shall be redeemed by us in each year commencing
after a date to be specified, at a redemption price per share to be specified,
together with an amount equal to all accrued and unpaid dividends thereon (which
shall not, if such shares of preferred stock do not have a cumulative dividend,
include any accumulation in respect of unpaid dividends for prior dividend
periods) to the date of redemption. The redemption price may be payable in cash
or other property, as specified in the applicable prospectus supplement. If the
redemption price for shares of preferred stock of any series is payable only
from the net proceeds of the issuance of our capital shares, the terms of those
shares of preferred stock may provide that, if no such capital shares shall have
been issued or to the extent the net proceeds from any issuance are insufficient
to pay in full the aggregate redemption price then due, the shares of preferred
stock shall automatically and mandatorily be converted into the applicable
capital shares pursuant to conversion provisions specified in the applicable
prospectus supplement.
Notwithstanding the foregoing, unless (i) if the series of preferred
stock has a cumulative dividend, full cumulative dividends on all shares of
preferred stock of any series shall have been or contemporaneously are declared
and paid, or declared and a sum sufficient for the payment thereof is set apart
for payment, for all past dividend periods and the then-current dividend period;
and (ii) if the series of preferred stock does not have a cumulative dividend,
full dividends of the shares of preferred stock of any series for the
then-current dividend period have been or contemporaneously are declared and
paid, or declared and a sum sufficient for the payment thereof is set apart for
payment, no shares of preferred stock of any series shall be redeemed unless all
outstanding shares of preferred stock of that series are simultaneously
redeemed. The foregoing, however, shall not prevent the purchase or acquisition
of shares of preferred stock of such series pursuant to a purchase or exchange
offer made on the same terms to holders of all outstanding shares of preferred
stock of such series. In addition, unless (i) if the series of preferred stock
has a cumulative dividend, full cumulative dividends on all outstanding shares
of any series of preferred stock shall have been or contemporaneously are
declared and paid, or declared and a sum sufficient for the payment thereof is
set apart for payment, for all past dividends periods and the then-current
dividend period; and (ii) if the series of preferred stock does not have a
cumulative dividend, full dividends on the shares of preferred stock of any
series for the then-current dividend period have been or contemporaneously are
declared and paid, or declared and a sum sufficient for the payment thereof is
set apart for payment, we shall not purchase or otherwise acquire, directly or
indirectly, any shares of preferred stock of that series, except by conversion
into or exchange for other of our capital shares ranking junior to the shares of
preferred stock of such series as to dividends and upon liquidation. The
foregoing, however, shall not prevent the purchase or acquisition of shares of
preferred stock of that series pursuant to a purchase or exchange offer made on
the same terms to holders of all outstanding shares of preferred stock of such
series.
If fewer than all of the outstanding shares of preferred stock of any
series are to be redeemed, the number of shares to be redeemed will be
determined by us and those shares may be redeemed pro rata from the holders of
record of those shares in proportion to the number of those shares held or for
which redemption is requested by such holder (with adjustments to avoid
redemption of fractional shares), or by lot in a manner determined by us.
Notice of redemption will be mailed at least 30 days, but not more than
60 days, before the redemption date to each holder of record of shares of
preferred stock of any series to be redeemed at the address shown on our share
transfer books. Each notice shall state:
o the redemption date;
o the number and series of shares of preferred stock to be
redeemed;
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o the place or places where the shares of preferred stock are to be
surrendered for payment of the redemption price;
o that dividends on the shares to be redeemed will cease to accrue
on the redemption date; and
o the date upon which the holder's conversion rights, if any, as to
such shares shall terminate.
If fewer than all of the shares of preferred stock of any series are to
be redeemed, the notice mailed to each holder of shares of that series shall
also specify the number of shares of preferred stock to be redeemed from that
holder. If notice of redemption of any shares of preferred stock has been given
and if the funds necessary for redemption have been set aside by us, from and
after the redemption date dividends will cease to accrue on those shares of
preferred stock, and all rights of the holders of those shares will terminate,
except the right to receive the redemption price.
Liquidation Preference
Upon any voluntary or involuntary liquidation, dissolution or winding
up of our affairs, then, before any distribution or payment shall be made to the
holders of any shares of our common stock or any other class or series of our
capital shares ranking junior to the shares of preferred stock in the
distribution of assets upon any liquidation, dissolution or winding up of our
company or affairs, the holders of shares of each series of preferred stock
shall be entitled to receive, out of our assets legally available for
distribution to shareholders, liquidating distributions in the amount of the
liquidation preference per share (as set forth in the applicable prospectus
supplement), plus an amount equal to all dividends accrued and unpaid thereon
(which shall not include any accumulation in respect of unpaid dividends for
prior dividend periods if such shares of preferred stock do not have a
cumulative dividend). After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of shares of preferred
stock will have no right or claim to any of our remaining assets. In the event
that, upon any such voluntary or involuntary liquidation, dissolution or winding
up of our company or affairs, our available assets are insufficient to pay the
amount of the liquidating distributions on all outstanding shares of preferred
stock and the corresponding amounts payable on all shares of other classes or
series of our capital shares ranking on a parity with the shares of preferred
stock in the distribution of assets, then the holders of the shares of preferred
stock and all other such classes or series of capital shares shall share ratably
in any such distribution of assets in proportion to the full liquidating
distributions to which they would otherwise be respectively entitled.
If liquidating distributions shall have been made in full to all
holders of shares of preferred stock, our remaining assets shall be distributed
among the holders of any other classes or series of capital shares ranking
junior to the shares of preferred stock upon liquidation, dissolution or winding
up of our company or affairs, according to their respective rights and
preferences and in each case according to their respective number of shares. For
these purposes, our consolidation or merger with or into any other corporation,
trust or entity, or the sale, lease or conveyance of all or substantially all of
our property or business, shall not be deemed to constitute a liquidation,
dissolution or winding up of our company or affairs.
Voting Rights
Holders of shares of preferred stock will not have any voting rights
except as indicated in the applicable prospectus supplement.
Conversion Rights
The terms and conditions, if any, upon which shares of any series of
shares of preferred stock are convertible into shares of our common stock will
be set forth in the applicable prospectus supplement relating to that series.
These terms will include the number of shares of common stock into which the
shares of preferred stock are convertible, the conversion price or manner of
calculation thereof, the conversion period, provisions as to whether conversion
will be at the option of the holders of the shares of preferred stock or us, the
events requiring an adjustment of the conversion price and provisions affecting
the conversion in the event of the redemption of that series of shares of
preferred stock.
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Shareholder Liability
As discussed above under "Description of Preferred Stock -- General,"
applicable Pennsylvania law provides that no shareholder, including holders of
shares of preferred stock, shall be personally liable for our acts and
obligations and that our funds and property shall be the only recourse for such
acts or obligations.
Registrar and Transfer Agent
The Registrar and Transfer Agent for the preferred stock will be set
forth in the applicable prospectus supplement.
Depositary Shares
We may, at our option, elect to offer fractional shares of preferred
stock, rather than full shares of preferred stock. In the event such option is
exercised, we will issue receipts for depositary shares, each of which will
represent a fraction (to be set forth in the prospectus supplement relating to
the shares of preferred stock) of a share of such shares of preferred stock.
The shares of preferred stock represented by depositary shares will be
deposited under a deposit agreement between us and a bank or trust company
selected by us having its principal office in the United States and having a
combined capital and surplus of at least $50,000,000. Subject to the terms of
the deposit agreement, each owner of a depositary share will be entitled, in
proportion to the applicable fraction of a preferred share represented by the
depositary share, to all the rights and preferences of the preferred share,
represented thereby (including dividend, voting, redemption, conversion and
liquidation rights).
The above description of the depositary shares is only a summary, is
not complete and is subject to, and is qualified in its entirety by, the
description in the applicable prospectus supplement and the provisions of the
deposit agreement, which will contain the form of depositary receipt. A copy of
the deposit agreement will be filed with the SEC as an exhibit to or
incorporated by reference in the registration statement of which this prospectus
is a part.
DESCRIPTION OF WARRANTS
We may issue separately, or together with any common stock or preferred
stock offered by any prospectus supplement, warrants for the purchase of other
shares of common stock or preferred stock ("Warrants"). The Warrants may be
issued under warrant agreements (each, a "Warrant Agreement") to be entered into
between us and a bank or trust company, as warrant agent (the "Warrant Agent"),
or may be represented by certificates evidencing the Warrants (the "Warrant
Certificates"), all as set forth in the prospectus supplement relating to the
particular series of Warrants. The following summaries of certain provisions of
the Warrants do not purport to be complete and are subject to, and are qualified
in their entirety by reference to, all the provisions of any related Warrant
Agreement and Warrant Certificate, respectively, including the definitions
therein of certain terms. Wherever defined terms of the Warrant Agreement are
summarized herein or in a prospectus supplement, it is intended that such
defined terms shall be incorporated herein or therein by reference. In
connection with any offering of Warrants, any such Warrant Agreement or a form
of any such Warrant Certificate will be filed with the SEC as an exhibit to or
incorporated by reference in the registration statement.
General
The prospectus supplement relating to the particular series of Warrants
offered thereby will describe the terms of the offered Warrants, any related
Warrant Agreements and Warrant Certificates, including the following, to the
extent applicable:
o if the Warrants are offered for separate consideration, the
offering price and the currency for which Warrants may be
purchased;
- 16 -
o the number of shares of common stock purchasable upon exercise of
common stock warrants and the price at which such number of
shares of common stock may be purchased upon such exercise;
o the date, if any, on and after which the offered warrants and the
related shares of common stock will be separately transferable;
o the date on which the right to exercise the offered Warrants
shall commence and the date on which such right shall expire;
o a discussion of the specific U.S. federal income tax, accounting
and other considerations applicable to the Warrants, or to any
securities purchasable upon the exercise of the Warrants;
o whether the offered Warrants represented by Warrant Certificates
will be issued in registered or bearer form, and if registered,
where they may be transferred and registered;
o any applicable anti-dilution provisions;
o any applicable redemption or call provisions;
o any applicable book-entry provisions; and
o any other terms of the offered Warrants.
Warrant Certificates will be exchangeable on the terms specified in the
related prospectus supplement for new Warrant Certificates of different
denominations and Warrants may be exercised, as applicable, at our corporate
offices, the corporate trust office of the Warrant Agent or any other office
indicated in the prospectus supplement relating thereto. Prior to the exercise
of their Warrants, holders of Warrants will not have any of the rights of
holders of the shares of common stock purchasable upon such exercise, including
the right to receive payments of dividends or distributions of any kind, if any,
on the shares of common stock or preferred stock purchasable upon exercise or to
exercise any applicable right to vote such shares.
Exercise of Warrants
Each Warrant will entitle the holder thereof to purchase such number of
shares of common stock or preferred stock at such exercise price as shall in
each case be set forth in, or be determinable from, the prospectus supplement
relating to such Warrant, by payment of such exercise price in full in the
currency and in the manner specified in such prospectus supplement. Warrants may
be exercised at any time up to the close of business on their expiration date(s)
(or any later date to which we may extend such expiration date(s)); unexercised
Warrants will become null and void.
Upon receipt at the corporate trust office of the Warrant Agent or any
other office indicated in the related prospectus supplement of (a) payment of
the exercise price and (b) the Warrant Certificate properly completed and duly
executed, we will, as soon as practicable, forward the shares of common stock or
preferred stock purchasable upon such exercise to the holder of such Warrant. If
less than all of the Warrants represented by such Warrant Certificate are
exercised, a new Warrant Certificate will be issued for the remaining number of
Warrants.
PLAN OF DISTRIBUTION
We may sell the securities being offered hereby: (a) directly to
purchasers; (b) through agents; (c) through underwriters; (d) through dealers;
or (e) through a combination of any such methods of sale.
The distribution of the securities may be effected from time to time in
one or more transactions:
o at a fixed price or at final prices, which may be changed;
o at market prices prevailing at the time of sale;
o at prices related to such prevailing market prices; or
o at negotiated prices.
- 17 -
Offers to purchase securities may be solicited directly by us, or by
agents designated by us, from time to time. Any such agent, which may be deemed
to be an underwriter as that term is defined in the Securities Act of 1933, as
amended (the "Securities Act"), involved in the offer or sale of the securities
in respect of which this prospectus is delivered will be named, and any
commissions payable by us to such agent will be set forth, in the applicable
prospectus supplement.
If an underwriter is, or underwriters are, utilized in the offer and
sale of securities in respect of which this prospectus and the accompanying
prospectus supplement are delivered, we will execute an underwriting agreement
with such underwriter(s) for the sale to it or them and the name(s) of the
underwriter(s) and the terms of the transaction, including any underwriting
discounts and other items constituting compensation of the underwriters and
dealers, if any, will be set forth in such prospectus supplement, which will be
used by the underwriter(s) to make resales of the securities in respect of which
this prospectus and such prospectus supplement are delivered to the public. The
securities will be acquired by the underwriters for their own accounts and may
be resold from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. Any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers may be changed from time to
time.
If a dealer is utilized in the sale of the securities in respect of
which this prospectus is delivered, we will sell such securities to the dealer,
as principal. The dealer may then resell such securities to the public at
varying prices to be determined by such dealer at the time of resale. The name
of the dealer and the terms of the transaction will be identified in the
applicable prospectus supplement.
If an agent is used in an offering of securities being offered by this
prospectus, the agent will be named, and the terms of the agency will be
described, in the applicable prospectus supplement relating to the offering.
Unless otherwise indicated in the prospectus supplement, an agent will act on a
best efforts basis for the period of its appointment.
If indicated in the applicable prospectus supplement, we will authorize
underwriters or their other agents to solicit offers by certain institutional
investors to purchase securities from us pursuant to contracts providing for
payment and delivery at a future date. Institutional investors with which these
contracts may be made include commercial and savings banks, insurance companies,
pension funds, investment companies, educational and charitable institutions and
others. In all cases, these purchasers must be approved by us. The obligations
of any purchaser under any of these contracts will not be subject to any
conditions except that (a) the purchase of the securities must not at the time
of delivery be prohibited under the laws of any jurisdiction to which that
purchaser is subject, and (b) if the securities are also being sold to
underwriters, we must have sold to these underwriters the securities not subject
to delayed delivery. Underwriters and other agents will not have any
responsibility in respect of the validity or performance of these contracts.
Certain of the underwriters, dealers or agents utilized by us in any
offering hereby may be customers of, including borrowers from, engage in
transactions with, and perform services for us or one or more of our affiliates
in the ordinary course of business. Underwriters, dealers, agents and other
persons may be entitled, under agreements which may be entered into with us, to
indemnification against certain civil liabilities, including liabilities under
the Securities Act of 1933, as amended.
Until the distribution of the securities is completed, rules of the SEC
may limit the ability of the underwriters and certain selling group members, if
any, to bid for and purchase the securities. As an exception to these rules, the
representatives of the underwriters, if any, are permitted to engage in certain
transactions that stabilize the price of the securities. Such transactions may
consist of bids or purchases for the purpose of pegging, fixing or maintaining
the price of the securities.
If underwriters create a short position in the securities in connection
with the offering thereof (in other words, if they sell more securities than are
set forth on the cover page of the applicable prospectus supplement), the
representatives of such underwriters may reduce that short position by
purchasing securities in the open market. Any such representatives also may
- 18 -
elect to reduce any short position by exercising all or part of any
over-allotment option described in the applicable prospectus supplement.
Any such representatives also may impose a penalty bid on certain
underwriters and selling group members. This means that if the representatives
purchase securities in the open market to reduce the underwriters' short
position or to stabilize the price of the securities, they may reclaim the
amount of the selling concession from the underwriters and selling group members
who sold those shares as part of the offering thereof.
In general, purchases of a security for the purpose of stabilization or
to reduce a syndicate short position could cause the price of the security to be
higher than it might otherwise be in the absence of such purchases. The
imposition of a penalty bid might have an effect on the price of a security to
the extent that it were to discourage resales of the security by purchasers in
the offering.
Neither we nor any of the underwriters, if any, makes any
representation or prediction as to the direction or magnitude of any effect that
the transactions described above may have on the price of the securities. In
addition, neither we nor any of the underwriters, if any, makes any
representation that the representatives of the underwriters, if any, will engage
in such transactions or that such transactions, once commenced, will not be
discontinued without notice.
The anticipated date of delivery of the securities offered by this
prospectus will be described in the applicable prospectus supplement relating to
the offering. The securities offered by this prospectus may or may not be listed
on a national securities exchange or a foreign securities exchange. We cannot
give any assurances that there will be a market for any of the securities
offered by this prospectus and any prospectus supplement.
We estimate that the total expenses we will incur in offering the
securities to which this prospectus relates, excluding underwriting discounts
and commissions, if any, will be approximately $400,000.
LEGAL MATTERS
Morgan, Lewis & Bockius LLP, Philadelphia, Pennsylvania, will pass on
the validity of the securities.
EXPERTS
The consolidated financial statements of Universal Display Corporation
and subsidiary (a development stage company) as of December 31, 2002, and for
the year ended December 31, 2002, and for the period from June 17, 1994
(inception) through December 31, 2002, have been incorporated by reference
herein in reliance upon the report of KPMG LLP, independent accountants,
incorporated by reference herein, and upon the authority of said firm as experts
in accounting and auditing.
The consolidated financial statements of Universal Display Corporation
and subsidiary (a development stage company) as of December 31, 2001 and for
each of the years in the two-year period ended December 31, 2001, and for the
period from June 17, 1994 (inception) through December 31, 2002 to the extent
related to the period from June 17, 1994 (inception) through December 31, 2001,
were audited by Arthur Andersen LLP. Those other auditors have ceased
operations. Those other auditors expressed an unqualified opinion on those
consolidated financial statements in their report dated March 5, 2002. KPMG
LLP's opinion on the statements of operations, shareholders' equity (deficit)
and cash flows, insofar as it relates to the amounts included for the period
from June 17, 1994 (inception) through December 31, 2001, is based solely on the
report of the other auditors.
There is no effective remedy against Arthur Andersen LLP in connection
with a material misstatement or omission in the financial statements audited by
them, particularly in the event that Arthur Andersen ceases to exist as an
entity or becomes insolvent as a result of the conviction or other proceedings
against it. For more information concerning Arthur Andersen LLP, see "Risk
Factors" in this Prospectus.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The estimated expenses payable by the Registrant in connection with the
issuance and distribution of the securities being registered are as follows:
SEC registration fee $ 4,045
Printing and engraving fees 100,000
Legal fees 200,000
Accounting fees 50,000
Miscellaneous 45,955
---------
Total $ 400,000
Item 15. Indemnification of Directors and Officers
Chapter 17, Subchapter D of the Pennsylvania Business Corporation Law
of 1988, as amended (the "PBCL") contains provisions permitting indemnification
of officers and directors of a business corporation in Pennsylvania.
Sections 1741 and 1742 of the PBCL provide that a business corporation
may indemnify directors and officers against liabilities and expenses they may
incur as such in connection with any threatened, pending or completed civil,
administrative or investigative proceeding, provided that the particular person
acted in good faith and in a manner he or she reasonably believed to be in, or
not opposed to, the best interests of the corporation, and, with respect to any
criminal proceeding, had no reasonable cause to believe his or her conduct was
unlawful. In general, the power to indemnify under these sections does not exist
in the case of actions against a director or officer by or in the right of the
corporation if the person otherwise entitled to indemnification shall have been
adjudged to be liable to the corporation unless it is judicially determined
that, despite the adjudication of liability but in view of all the circumstances
of the case, the person is fairly and reasonably entitled to indemnification for
specified expenses.
Section 1743 of the PBCL provides that the corporation is required to
indemnify directors and officers against expenses they may incur in defending
actions against them in such capacities if they are successful on the merits or
otherwise in the defense of such actions.
Section 1746 of the PBCL grants a corporation broad authority to
indemnify its directors and officers for liabilities and expenses incurred in
such capacity, except in circumstances where the act or failure to act giving
rise to the claim for indemnification is determined by a court to have
constituted willful misconduct or recklessness.
Section 1747 of the PBCL permits a corporation to purchase and maintain
insurance on behalf of any person who is or was a director or officer of the
corporation, or is or was serving at the request of the corporation as a
representative of another corporation or other enterprise, against any liability
asserted against such person and incurred by him or her in any such capacity, or
arising out of his or her status as such, whether or not the corporation would
have the power to indemnify the person against such liability under Chapter
17-Subchapter D of the PBCL.
The Registrant's By-laws provide a right to indemnification to the full
extent permitted by law, for expenses (including attorneys' fees), damages,
punitive damages, judgments, penalties, fines and amounts paid in settlement,
actually and reasonably incurred by any director or officer whether or not the
indemnified liability arises or arose from any threatened, pending or completed
proceeding by or in the right of the Registrant (a derivative action) by reason
of the fact that such director or officer is or was serving as a director,
officer, employee or agent of the Registrant or, at the request of the
Registrant, as a director, officer, partner, fiduciary or trustee of another
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corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, unless the act or failure to act giving rise to the claim for
indemnification is financially determined by a court to have constituted willful
misconduct or recklessness. The By-laws provide for the advancement of expenses
to an indemnified party upon receipt of an undertaking by the party to repay
those amounts if it is finally determined that the indemnified party is not
entitled to indemnification.
The Registrant's By-laws authorize the Registrant to take steps to
ensure that all persons entitled to indemnification are properly indemnified,
including, if the Board of Directors so determines, purchasing and maintaining
insurance.
Item 16. List of Exhibits
The exhibits filed as part of this registration statement are as
follows:
Exhibit
Number Description
------- -----------
5.1 Opinion of Morgan, Lewis & Bockius LLP regarding legality of
securities being registered.
23.1 Consent of Morgan, Lewis & Bockius LLP (included in its opinion
filed as Exhibit 5.1 hereto).
23.2 Consent of KPMG LLP.
Consent of Arthur Andersen LLP (omitted pursuant to Rule 437A
as described in Exhibit 23.2).
24.1 Powers of Attorney (included as part of the signature page
hereof).
Item 17. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933 (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; notwithstanding the foregoing, any
increase or decrease in the volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
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(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) That, insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement on Form S-3 to be signed on its behalf by the undersigned thereunto
duly authorized, in Ewing, New Jersey, on January 21, 2004.
UNIVERSAL DISPLAY CORPORATION
By: /s/ Sidney D. Rosenblatt
---------------------------
Sidney D. Rosenblatt
Executive Vice President
and Chief Financial Officer
In accordance with the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
Each person in so signing also makes, constitutes and appoints Steven
V. Abramson and Sidney D. Rosenblatt, and each of them acting alone, his or her
true and lawful attorney-in-fact, with full power of substitution, to execute
and cause to be filed with the Securities and Exchange Commission pursuant to
the requirements of the Securities Act of 1933, as amended, any and all
amendments and post-effective amendments to this Registration Statement, and
including any Registration Statement for the same offering that is to be
effective upon filing pursuant to Rule 462(b) under the Securities Act, with
exhibits thereto and other documents in connection therewith, and hereby
ratifies and confirms all that said attorney-in-fact or his or her substitute or
substitutes may do or cause to be done by virtue hereof.
Signature Title Date
--------- ----- ----
Chief Executive Officer and Chairman of the
/s/ Sherwin I. Seligsohn Board (principal executive officer) January 21, 2004
-------------------------------------------------
Sherwin I. Seligsohn
President, Chief Operating Officer and
/s/ Steven V. Abramson Director January 21, 2004
-------------------------------------------------
Steven V. Abramson
Executive Vice President, Chief Financial
Officer, Treasurer, Secretary and Director
/s/ Sidney D. Rosenblatt (principal financial and accounting officer) January 21, 2004
-------------------------------------------------
Sidney D. Rosenblatt
/s/ Leonard Becker Director January 21, 2004
-------------------------------------------------
Leonard Becker
/s/ Elizabeth H. Gemmill Director January 21, 2004
-------------------------------------------------
Elizabeth H. Gemmill
/s/ C. Keith Hartley Director January 21, 2004
-------------------------------------------------
C. Keith Hartley
/s/ Lawrence Lacerte Director January 21, 2004
-------------------------------------------------
Lawrence Lacerte
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UNIVERSAL DISPLAY CORPORATION
INDEX
Exhibit Number Description
-------------- -----------
5.1 Opinion of Morgan Lewis & Bockius, LLP.
23.1 Consent of Morgan Lewis & Bockius LLP (contained in
the opinion of counsel filed as Exhibit 5.1 hereto).
23.2 Consent of KPMG LLP.
Consent of Arthur Andersen LLP (omitted pursuant to
Rule 437A as described in Exhibit 23.2).
24.1 Powers of Attorney (included as part of the signature
page hereof).
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