Exhibit 97
UNIVERSAL DISPLAY CORPORATION
COMPENSATION RECOUPMENT POLICY
The Board of Directors (“Board”) of Universal Display Corporation (the “Company”), based on the recommendation of its Human Capital Committee (the “Committee”), has adopted this Compensation Recoupment Policy (this “Policy) to implement a mandatory clawback policy if a Restatement in compliance with the Applicable Rules (each as defined below) occurs. This Policy is in addition to the discretionary clawback policies that have been previously adopted in connection with Senior Officers grants of incentive and performance based awards.
Any capitalized terms used but not immediately defined in this Policy shall have the meanings set forth in Section II.
The Committee shall administer this Policy and make all related determinations, in its sole discretion, with respect to this Policy, provided that the Committee interprets this Policy in a manner consistent with the requirements of the Applicable Rules.
Notwithstanding the foregoing, subject to the Applicable Rules, the Board, in its discretion, may assume any or all powers and authority of the Committee with respect to administration of Section VIII of this Policy, in which case references to the Committee shall be deemed to include the Board, as applicable.
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If the Company is required to prepare a Restatement, the Company shall reasonably promptly recover the amount, as calculated pursuant to this Section IV, of any erroneously awarded Incentive-Based Compensation that is Received by any Senior Officer during the Recovery Period. The amount of erroneously awarded Incentive-Based Compensation subject to this Policy will be the excess of the amount of Incentive-Based Compensation that is Received by the Senior Officer (whether in cash or shares) based on the erroneous data in the original financial statements over the amount of Incentive-Based Compensation (whether in cash or in shares) that the Senior Officer would have Received had such Incentive-Based Compensation been based on the restated results, without respect to any tax liabilities that the Senior Officer incurred or paid in respect of such Incentive-Based Compensation.
Other than as set forth in Section VIII, recovery of any erroneously awarded compensation under this Policy is not dependent on fraud or misconduct by any Senior Officer in connection with a Restatement.
Without limiting the foregoing, for Incentive-Based Compensation based on the Company’s stock price or total stockholder return, where the amount of erroneously awarded compensation is not subject to mathematical recalculation directly from the information in the Restatement, (i) the amount shall be based on the Company’s reasonable estimate of the effect of the Restatement on the stock price or total stockholder return upon which the Incentive-Based Compensation was Received and (ii) the Company shall maintain documentation of the determination of that reasonable estimate and provide such estimate to Nasdaq.
In addition to the foregoing, in the event that a Senior Officer fails to repay or reimburse erroneously awarded compensation that is subject to recovery, the Committee may require a Senior Officer to reimburse the Company for any and all expenses reasonably incurred (including legal fees) by the Company in recovering erroneously awarded compensation under this Policy.
This Policy covers all Senior Officers at any time during the Recovery Period who have Received Incentive-Based Compensation. Incentive-Based Compensation shall not be recovered under this Policy to the extent Received by any person before the date the person served as a Senior Officer. Subsequent changes in a Senior Officer’s employment status, including retirement or termination of employment, do not affect the Company’s right or obligation to recover Incentive-Based Compensation under this Policy.
For the avoidance of doubt, and subject to Section VIII hereof, this Policy shall apply to Incentive-Based Compensation that is Received by any Senior Officer on or after October 2, 2023 (the “Nasdaq Rule Effective Date”) and that results from the attainment of a Financial Reporting Measure based on or derived from financial information for any fiscal period ending on or after the Nasdaq Rule Effective Date. For the avoidance of
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doubt, this will include Incentive-Based Compensation that may have been approved, awarded, or granted to a Senior Officer on or before the Nasdaq Rule Effective Date if such Incentive-Based Compensation is Received after the Nasdaq Rule Effective Date.
No recovery of Incentive-Based Compensation shall be required if any of the following conditions are met, and the Committee determines that recovery would be impracticable on such basis:
The Company shall make all required disclosures and filings with the Regulators with respect to this Policy in accordance with the requirements of the Applicable Rules, and any other requirements applicable to the Company, including any disclosures required in connection with SEC filings.
In a Clawback Event, subject to applicable law, the Committee may take any such actions as it deems necessary or appropriate, including, without limitation:
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In addition, the Committee may authorize legal action for breach of fiduciary duty or other violation of law and take such other actions to enforce the Senior Officer’s obligations to the Company as the Committee deems appropriate.
The Company shall not indemnify any current or former Senior Officer against the loss of erroneously awarded compensation and shall not pay or reimburse any Senior Officer for premiums incurred or paid for any insurance policy to fund such Senior Officer’s potential recovery obligations.
Any right of recoupment under this Policy is in addition to, and not instead of, any other remedies or rights of recoupment that may be available to the Company under (a) the Universal Display Corporation Equity Compensation Plan, as amended, any other incentive plan of the Company or any of its subsidiaries or affiliates, and any amendments or successor plans to the foregoing; and (b) the terms of any similar policy or provision in any employment agreement, compensation agreement or arrangement, or similar agreement and any other legal remedies available to the Company.
In addition to recovery of compensation as provided for in this Policy:
The Company may take any and all other actions as it deems necessary, appropriate, and in the Company’s best interest in connection with a Clawback Event, including termination of a Senior Officer’s employment and initiating legal action against a Senior Officer, and nothing in this Policy limits the Company’s rights to take any such or other appropriate actions.
Nothing herein shall restrict or limit the Committee’s discretion to require the return, repayment, recoupment, or forfeiture of any equity-based performance and incentive compensation payment or award, including, without limitation, Time-Based/Bonus Compensation, made or granted to any current or former Senior Officer under the Universal Display Corporation Equity Compensation Plan, as
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amended, any other incentive plan of the Company or any of its subsidiaries or affiliates, and any amendments or successor plans to the foregoing.
The Board, based on the recommendation of the Committee, may amend this Policy at any time for any reason, subject to any limitations under the Applicable Rules. The Board may terminate this Policy at any time that the Applicable Rules are no longer applicable to the Company.
This Policy shall be binding and enforceable against all Senior Officers and their beneficiaries, heirs, executors, administrators, or other legal representatives.
This Policy shall be effective as of December 1, 2023 (the “Policy Effective Date”). For the avoidance of doubt, the terms of this Policy shall apply to any Incentive-Based Compensation that is Received by any Senior Officer on or after the Nasdaq Rule Effective Date, even if such Incentive-Based Compensation was approved, awarded, granted, or paid to such Senior Officer prior to the Policy Effective Date. Without limiting the generality of Section IX hereof, and subject to applicable law, the Committee may effect recovery under this Policy from any amount of compensation approved, awarded, granted, payable, or paid to any Senior Officer prior to, on, or after the Policy Effective Date.
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