CHANGE IN CONTROL AGREEMENT
This Change in Control Agreement (the "Agreement') is made as of April
28, 2003, by and between Universal Display Corporation (the "Company"), and
Julia J. Brown ("Employee").
WHEREAS, Employee is employed by UDC, Inc., an affiliate of the
Company, currently serving in a capacity as Vice President and Chief Technical
Officer of the Company; and
WHEREAS, the Company believes that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of Employee to
the Company without distraction notwithstanding the fact that the Company could
be subject to a "Change in Control" (as hereinafter defined), and that such
possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of key management
personnel to the detriment of the Company; and
WHEREAS, in consideration for Employee agreeing to continue in
employment with the Company and its affiliate and agreeing to keep Company
information confidential and not to compete with the Company (as hereinafter
defined), the Company agrees that Employee shall receive the compensation set
forth in this Agreement as a cushion against the financial and career impact on
Employee in the event Employee's employment with the Company is terminated
without cause in connection with a Change in Control.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, the Company and Employee (individually a "Party" and together, the
"Parties") agree as follows:
1. Definitions.
(a) "Annual Base Salary" shall mean twelve (12) times the
greater of: (a) the highest monthly base salary paid or payable (including any
base salary which has been earned but deferred and any car allowance) to
Employee by the Company and its affiliates (as defined in Section 1504 of the
Code without regard to subsection (b) thereof), together with any and all salary
reduction authorized amounts under any of the Company's and its affiliates'
benefit plans or programs, during the twenty-four (24) month period immediately
preceding the date of the Change in Control, or (b) the monthly base salary paid
or payable to Employee by the Company and its affiliates (including authorized
deferrals, salary reduction amounts and any car allowance), together with any
and all salary reduction authorized amounts under any of the Company's and its
affiliates' benefit plans or programs, for the last full month immediately prior
to Employee's Termination of Employment.
(b) "Annual Bonus" shall mean an amount equal to Employee's
highest annual bonus for the last three (3) full fiscal years prior to the
Change in Control (annualized in the event that Employee was not employed for
the whole of such fiscal year). If any such amount was paid in whole or in part
in the form of stock options, stock appreciation rights, warrants, stock awards
or performance units, whether or not restricted or subject to the satisfaction
of any performance goals or other criteria, the annual bonus for such fiscal
year shall include the fair market dollar value equivalent of all such stock
options, stock appreciation rights, warrants, stock awards and performance
units, determined as of the date of issuance.
(c) "Board" shall mean the board of directors of the Company.
(d) "Cause" shall mean (i) conviction of a crime involving
moral turpitude, or (ii) gross negligence in the performance of duties, which
gross negligence is willful, has or has the potential to have a material adverse
effect on the business, operations, assets, properties or financial condition of
the Company and its affiliates taken as a whole, and is not cured within sixty
(60) days after reasonable written notice from the Company.
(e) "Change in Control" shall mean the occurrence of any of
the following:
(i) if any Person or affiliated group of Persons
(other than in their capacities as trustees of a trust
existing on the Effective Date or any successor trust having
the same beneficiaries) first become the "beneficial owners"
(as defined in Rule 13d-3 under the Securities Exchange Act),
directly or indirectly, of securities of the Company (not
including in the securities beneficially owned by such Persons
any securities acquired directly from the Company or its
affiliates) representing thirty percent (30%) or more of
either the then-outstanding shares of stock of the Company or
the combined voting power of the Company's then-outstanding
securities;
(ii) if, during any period of twenty-four (24)
consecutive months during the existence of this Agreement
commencing on or after the date hereof, the individuals who,
at the beginning of such period, constitute the Board (the
"Incumbent Directors") cease for any reason other than death
to constitute at least a majority thereof; provided that a
director who was not a director at the beginning of such
twenty-four (24) month period shall be deemed to have
satisfied such twenty-four (24) month requirement (and be an
Incumbent Director) if such director was elected by, or on the
recommendation of or with the approval of, at least two-thirds
of the directors who then qualified as Incumbent Directors
either actually (because they were directors at the beginning
of such twenty-four (24) month period) or by prior operation
of this clause (ii);
(iii) the consummation of a merger or consolidation
of the Company with any other corporation other than (A) a
merger or consolidation that would result in the voting
securities of the Company outstanding immediately prior to
such merger or consolidation continuing to represent (either
by remaining outstanding or by being converted into voting
securities of the surviving of the Company or such surviving
entity or any parent thereof) at least fifty percent (50%) of
the combined voting power of the voting securities of the
Company or such surviving entity or any parent outstanding
immediately after such merger or consolidation, or (B) a
merger or consolidation effected to implement a
recapitalization of the Company (or a similar transaction) in
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which no Person or group of affiliated Persons (other than in
their capacities as trustees of a trust existing on the
Effective Date or any successor trust having the same
beneficiaries) first become the "beneficial owners" (as
defined in Rule 13d-3 under the Securities Exchange Act),
directly or indirectly, of securities of the Company (not
including in the securities beneficially owned by such Persons
any securities acquired directly from the Company or its
affiliates) representing thirty percent (30%) or more of
either the then-outstanding shares of stock of the Company or
the combined voting power of the Company's then-outstanding
securities;
(iv) the stockholders of the Company approve a plan
of complete liquidation or dissolution of the Company, or
there is consummated an agreement for the sale or disposition
by the Company of all or substantially all of the Company's
assets, other than a sale or disposition by the Company of all
or substantially all of the Company's assets to an entity, at
least fifty percent (50%) of the combined voting power of the
voting securities of which are owned by Persons in
substantially the same proportion as their ownership of the
Company immediately prior to such sale; or
(v) any Person has consummated a tender offer or
exchange for a majority of the voting power of the then
outstanding shares of stock of the Company.
Upon the occurrence of a Change in Control as provided above, no subsequent
event or condition shall constitute a Change in Control for purposes of this
Agreement, with the result that there can be no more than one Change in Control
hereunder.
(f) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(g) "Person" shall mean any corporation, partnership, limited
liability company, joint venture, other entity or natural person.
(h) "Separation Period" shall mean the twenty-four (24) month
period beginning on the Termination Date.
(i) "Termination Date" shall mean the date of receipt of the
Notice of Termination described in Section 2 hereof, or any later date specified
therein, as the case may be.
(j) "Termination of Employment" shall mean the termination of
Employee's active employment relationship with the Company or its affiliates.
(k) "Termination in Connection with a Change in Control" shall
mean:
(i) a Termination of Employment within two (2) years
after a Change in Control either:
(A) initiated by the Company or its
affiliates for any reason other than (I) Employee's
death, continuous illness, injury or incapacity for a
period of twelve (12) consecutive months, or (II) for
"Cause;" or
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(B) initiated by Employee upon one or more
of the following occurrences:
(I) any material failure of the
Company to comply with and satisfy any of
the terms of this Agreement;
(II) any significant reduction by
the Company or its affiliates of the
authority, duties, reporting
responsibilities or job responsibilities of
Employee;
(III) any removal by the Company or
its affiliates of Employee from the
employment grade, compensation level or
officer positions which Employee holds as of
the effective date hereof except in
connection with a promotion to higher
office;
(IV) the requirement that Employee
undertake business travel to an extent
substantially greater than is reasonable and
customary for the position Employee holds;
(V) the relocation of the offices
of the Company at which Employee is
principally employed to a location more than
twenty-five (25) miles from the location of
such offices immediately prior to the date
that is six (6) months before the Change in
Control, or the Company's requiring Employee
to be based anywhere other than such
offices, except for required travel on the
Company's business to any extent
substantially consistent with Employee's
business travel obligations as of the date
of this Agreement; or
(VI) the failure of the Company to
obtain an agreement from any successor to
assume and agree to perform this Agreement,
as required by Section 14 hereof; or
(ii) a Termination of Employment during the one (1)
year period immediately preceding a Change in Control, unless
the Company establishes by clear and convincing evidence that
such Termination of Employment was for good faith business
reasons not related to the Change in Control.
2. Notice of Termination of Employment. The Company shall communicate
any Termination of Employment to Employee by a Notice of Termination given in
accordance with Section 15 hereof. For purposes of this Agreement, a "Notice of
Termination" means a written notice that (a) briefly summarizes the facts and
circumstances deemed to provide a basis for the Termination of Employment, (b)
indicates whether the Company considers the Termination of Employment to be a
Termination in Connection with a Change in Control and, if not, the specific
reasons why, and (c) if the Termination Date is other than the date of receipt
of such notice, specifies the Termination Date (which date shall not be more
than fifteen (15) days after the giving of such notice).
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3. Compensation upon Termination in Connection with a Change in
Control. In the event of Employee's Termination in Connection with a Change in
Control, the Company shall pay to Employee, or provide to Employee at no
additional cost for the length of the Separation Period, the following:
(a) An amount equal to Employee's earned or accrued but unpaid
compensation (including any unused paid time off) as of the date of Termination
of Employment, said amount to be paid in a lump sum within fifteen (15) days
after the Termination Date.
(b) An amount equal to all reasonable out-of-pocket business
expenses properly incurred but not yet reimbursed by the Company or its
affiliates, said amount to be paid in a lump sum within fifteen (15) days after
the Termination Date.
(c) An amount equal to two (2) times the sum of the Annual
Base Salary and the Annual Bonus, said amount to be paid in a lump sum within
fifteen (15) days after the Termination Date.
(d) An amount equal to the estimated after-tax cost to
Employee of continuing any Company-sponsored life or other insurance, travel or
accident insurance and disability insurance coverage in effect for Employee, and
where applicable, his or her spouse and dependents, for the length of the
Separation Period, as if Employee had continued to be employed by the Company
during the Separation Period at his or her Annual Base Salary, said amount to be
paid in a lump sum within fifteen (15) days after the Termination Date.
(e) The benefits to which Employee would be entitled under the
Company's or its affiliates' long term incentive, savings and retirement plans
(including stock option and other equity compensation plans, whether qualified
or non-qualified) (the "Benefit Plans"), if Employee had continued working for
the Company during the Separation Period at his or her Annual Base Salary, and
were making the maximum amount of employee contributions, if any, as are
required under such Benefit Plans. In the event that applicable law does not
permit continued coverage under any tax qualified benefit plan or incentive or
option plan during the Separation Period, the Company shall provide
economically-equivalent benefits to Employee on a nonqualified, supplemental or
other basis. Employee shall be fully vested in his or her benefits under all
such Benefit Plans, and all stock options, stock appreciation rights, warrants,
stock awards and performance units held by Employee, whether or not restricted
or subject to the satisfaction of any performance goals or other criteria, shall
become fully vested and exercisable as of the Termination Date, or immediately
preceding the Change in Control, whichever occurs sooner.
(f) Continued group hospitalization, health and dental care
coverage, with coverage equivalent to the coverage to which Employee would have
been entitled had Employee continued working for the Company during the
Separation Period at his or her Annual Base Salary. Where the continuation of
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such coverage would adversely affect the tax status of the plan pursuant to
which the coverage is provided, the Company may elect to pay Employee, in lieu
of providing such coverage, an amount equal to the estimated after-tax cost of
continuing such coverage for the length of the Separation Period, said amount to
be paid in a lump sum within fifteen (15) days after the Termination Date. The
COBRA healthcare continuation coverage period under Section 4980B of the
Internal Revenue Code of 1986, as amended, shall run concurrently with the
Separation Period. Following the end of the Separation Period and until the end
of the COBRA continuation coverage period, Employee (or, if Employee is
deceased, Employee's surviving spouse) may continue to purchase health care
coverage for himself (or herself) and eligible dependents under the Company's
health benefits plan at the prevailing rate then in effect for COBRA
continuation coverage.
(g) Outplacement assistance services during the Separation
Period (at a total cost not to exceed $10,000) provided by an outplacement
agency selected by Employee.
Notwithstanding the foregoing, no such payments, benefits or services shall be
made or provided (except as may be required by law) unless Employee executes,
and does not revoke, a written release, substantially in the form attached
hereto as ANNEX I (the "Release"), of any and all claims against the Company and
all related parties with respect to all matters arising out of Employee's
employment by the Company or its affiliates (other than any entitlements under
the terms of this Agreement or under any other plans or programs of the Company
in which Employee participated and under which Employee has accrued or become
entitled to a benefit), or the termination thereof.
4. Other Payments; Non-Exclusivity of Rights. The payments and benefits
due under Section 3 hereof shall be in addition to and not in lieu of any
payments or benefits due to Employee under any other plan, policy or program of
the Company or its affiliates, including, without limitation, any employee
benefit programs, compensation plans and programs and employee perquisite
programs maintained for the benefit of the Company's officers or employees,
except that no cash payments shall be paid to Employee under the Company's
then-current severance pay policies. Moreover, nothing in this Agreement shall
prevent or limit Employee's continuing or future participation in or rights
under any benefit, bonus, incentive or other plan or program provided by the
Company or its affiliates and for which Employee may qualify.
5. Enforcement.
(a) In the event that the Company shall fail or refuse to make
payment of any amounts due Employee under Sections 3 and 4 hereof within the
respective time periods provided therein, the Company shall pay to Employee, in
addition to the payment of any other sums provided in this Agreement, interest,
compounded daily, on any amount remaining unpaid from the date payment is
required under Section 3 and 4, as appropriate, until paid to Employee, at the
rate from time to time reported by The Wall Street Journal as its "prime rate"
plus 2%, each change in such rate to take effect on the effective date of the
change in such prime rate.
(b) It is the intent of the Parties that Employee not be
required to incur any expenses associated with the enforcement of his or her
rights under Sections 3 or 4 hereof by arbitration, litigation or other legal
action because the cost and expense thereof would substantially detract from the
benefits intended to be extended to Employee hereunder. Accordingly, the Company
shall pay Employee, on demand, the amounts necessary to advance to, or reimburse
Employee in full for, all expenses (including all attorneys' fees and legal
expenses) reasonably incurred by Employee in enforcing any of Employee's rights
under this Agreement.
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6. No Mitigation. Employee shall not be required to mitigate the amount
of any payment or benefit provided for in this Agreement by seeking other
employment or otherwise, nor shall the amount of any payment or benefit provided
for herein be reduced by any compensation earned by other employment or
otherwise.
7. No Set-Off. The Company's obligation to make the payments provided
for in this Agreement and otherwise to perform its obligations hereunder shall
not be affected by any circumstances, including, without limitation, any
set-off, counterclaim, recoupment, defense or other right which the Company or
its affiliates may have against Employee or others.
8. Tax Withholding. Any payment required under this Agreement shall be
subject to all requirements of the law with regard to the withholding of taxes,
filing, making of reports and the like, and the Company shall use its best
efforts to satisfy promptly all such requirements.
9. Tax Reimbursement Payments. In the event that any amount or benefit
paid or distributed to Employee pursuant to this Agreement, taken together with
any amounts or benefits otherwise paid or distributed to Employee by the Company
or its affiliates (collectively, the "Covered Payments"), including, without
limitation, any profits realized in respect of the receipt, vesting or exercise
of stock options or warrants and similar events, are or become subject to the
tax (the "Excise Tax") imposed under Section 4999 of the Code", the Company
shall pay to Employee at the time specified below an additional amount (the "Tax
Reimbursement Payment"), such that the net amount retained by Employee with
respect to such Covered Payments, after deducting any Excise Tax on the Covered
Payments, as well as any Federal, state and local income taxes and Excise Tax on
the Tax Reimbursement Payment provided for by this Section 9, but before
deduction for any Federal, state or local income or employment tax withholding
on such Covered Payments, shall be equal to the amount of the Covered Payments.
The Company shall reimburse Employee only as a result of excise taxes imposed
under Section 4999 of the Code (or a successor Code provision of comparable
intent).
(a) For purposes of determining whether any of the Covered
Payments will be subject to the Excise Tax and the amount of such Excise Tax,
(i) such Covered Payments will be treated as
"parachute payments" within the meaning of Section 280G of the
Code, and all "parachute payments" in excess of the "base
amount" (as defined under Section 280G(b)(3) of the Code)
shall be treated as subject to the Excise Tax, unless, and
except to the extent that, in the good faith judgment of the
Company's independent certified public accountants or tax
counsel selected by such Accountants (the "Accountants"), such
Covered Payments, in whole or in part, either do not
constitute "parachute payments" or represent reasonable
compensation for personal services actually rendered (within
the meaning of Section 280G(b)(4)(B) of the Code) in excess of
the "base amount," or such "parachute payments" are otherwise
not subject to the Excise Tax, and
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(ii) the value of any non-cash benefits or any
deferred payments or benefits shall be determined by the
Accountants in accordance with the principles of Section 280G
of the Code.
(b) For purposes of determining the amount of the Tax
Reimbursement Payment, Employee shall be deemed to pay:
(i) Federal income taxes at the highest applicable
marginal rate of Federal income taxation for the calendar year
in which the Tax Reimbursement Payment is to be made, and
taking into account the effect of loss of the value of
itemized deductions and personal exemptions as a result of
Employee's receipt of the Tax Reimbursement Payment; and
(ii) any applicable state and local income taxes at
the highest applicable marginal rate of taxation for the
calendar year in which the Tax Reimbursement Payment is to be
made, net of the maximum reduction in Federal incomes taxes
that could be obtained from the deduction of such state or
local taxes if paid in such year.
(c) In the event that the Excise Tax is subsequently
determined by the Accountants, or pursuant to any proceeding or negotiations
with the Internal Revenue Service, to be less than the amount taken into account
hereunder in calculating the Tax Reimbursement Payment made, Employee shall
repay to the Company, at the time that the amount of such reduction in the
Excise Tax is finally determined, the portion of such prior Tax Reimbursement
Payment that would not have been paid if such Excise Tax had been applied in
initially calculating such Tax Reimbursement Payment, plus interest on the
amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the
Code. Notwithstanding the foregoing, in the event any portion of the Tax
Reimbursement Payment to be refunded to the Company has been paid to any
Federal, state or local tax authority, repayment thereof shall not be required
until actual refund or credit of such portion has been made to Employee, and
interest payable to the Company shall not exceed interest received or credited
to Employee by such tax authority for the period it held such portion. Employee
and the Company shall mutually agree upon a course of action to be pursued (and
the method of allocating the expenses thereof) if Employee's good faith claim
for refund or credit is denied.
(d) In the event that the Excise Tax is later determined by
the Accountants, or pursuant to any proceeding or negotiations with the Internal
Revenue Service, to exceed the amount taken into account hereunder at the time
the Tax Reimbursement Payment is made (including, but not limited to, by reason
of any payment the existence or amount of which cannot be determined at the time
of the Tax Reimbursement Payment), the Company shall make an additional Tax
Reimbursement Payment in respect of such excess (plus any interest or penalty
payable with respect to such excess) at the time that the amount of such excess
is finally determined.
(e) The Tax Reimbursement Payment (or any portion thereof)
provided for in this Section 9 shall be paid to Employee not later than fifteen
(15) days following payment of the Covered Payments; provided, however, that if
the amount of such Tax Reimbursement Payment (or any portion thereof) cannot be
finally determined on or before the date on which payment is due, the Company
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shall pay to Employee by such date an amount estimated in good faith by the
Accountants to be the minimum amount of such Tax Reimbursement Payment, and
shall pay to Employee the remainder of such Tax Reimbursement Payment (together
with interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon
as the amount thereof can be determined, but in no event later than forty-five
(45) days after payment of the related Covered Payment. In the event that the
amount of the estimated Tax Reimbursement Payment exceeds the amount
subsequently determined to have been due, such excess shall constitute a loan by
the Company to Employee, payable within fifteen (15) days after written demand
by the Company for repayment (together with interest at the rate provided in
Section 1274(b)(2)(B) of the Code).
10. Confidential Information. Employee recognizes and acknowledges
that, by reason of his or her employment by and service to the Company, he or
she has had and will continue to have access to confidential information of the
Company, including, without limitation, information and know-how pertaining to
the Company's products and services, innovations, designs, ideas, plans, trade
secrets, proprietary inventions, distribution and sales methods and systems,
sales and profit figures, customer and supplier lists, and relationships with
customers, suppliers and others ("Confidential Information"). Employee
acknowledges that such Confidential Information is a valuable and unique asset
of the Company and covenants that he or she will not, either during or after his
or her employment by the Company, disclose or use any Confidential Information
for any purpose known to be adverse to the interests of the Company, unless the
information is already in the public domain through no fault of Employee or such
disclosure or use is required by law or in a judicial or administrative
proceeding.
11. Non-Competition and Non-Solicitation.
(a) During Employee's employment by the Company and for a
period of six (6) months after Employee's Termination in Connection with a
Change in Control, Employee will not, except with the prior written consent of
the Board (which consent shall not be unreasonably withheld or delayed), own,
manage, operate, join, control or finance, or participate in the ownership,
management, operation, control or financing of, or be connected as an officer,
director, employee, partner, principal, agent, representative, consultant or
otherwise with, or use or permit Employee's name to be used in connection with,
any business or enterprise directly engaged in, or with affiliates directly
engaged in, the business of researching, developing, licensing, selling,
distributing, marketing or otherwise commercializing organic light emitting
device ("OLED") technology, chemicals or manufacturing equipment. The foregoing
restrictions shall not be construed to prohibit the ownership by Employee of
less than five percent (5%) of any class of securities of a corporation engaged
in any of the foregoing business activities that has a class of securities
registered pursuant to the Securities Exchange Act, provided that such ownership
represents a passive investment and that neither Employee nor any group of
Persons including Employee, either directly or indirectly, manages or exercises
control over any such corporation, guarantees any of its financial obligations,
otherwise takes any part in the conduct of its business (other than in
exercising their rights as shareholders), or seeks to do any of the foregoing.
(b) During his or her employment by the Company, and
thereafter during the Separation Period, Employee will not knowingly (i)
solicit, divert, take away, redirect or unreasonably interfere with the
Company's business relationships with any of its suppliers, customers, partners
or joint venturers with whom Employee had any direct or indirect involvement
during the term of this Agreement; or (ii) solicit, induce, recruit or attempt
to influence any person who is now or is hereafter an employee of the Company to
become an employee or be engaged as an independent contractor of any entity
engaged in activities competitive with those of the Company.
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(c) An amount equal to one-half of the severance benefits
payable under this Agreement is specifically designated as additional
consideration for the covenants described in this Section 11. The covenants
described in this Section 11 shall continue to apply during the period specified
herein after Employee's Termination of Employment for any reason, without regard
to whether Employee executes a Release or receives any severance benefits as a
result of such termination. If Employee breaches any of the covenants described
in this Section 11, the applicable period during which the covenant applies
shall be tolled during the period of such breach.
12. Equitable Relief.
(a) Employee acknowledges that the restrictions contained in
Sections 10 and 11 hereof are reasonable and necessary to protect the legitimate
interests of the Company and its affiliates, that the Company would not have
entered into this Agreement in the absence of such restrictions, and that any
violation of any provision of those Sections will result in irreparable injury
to the Company. Employee agrees that the Company shall be entitled to
preliminary and permanent injunctive relief, without the necessity of proving
actual damages, as well as an equitable accounting of all earnings, profits and
other benefits arising from any violation of Sections 10 or 11 hereof, which
rights shall be cumulative and in addition to any other rights or remedies to
which the Company may be entitled. In the event that any of the provisions of
Sections 10 or 11 hereof should ever be adjudicated to exceed the time,
geographic, service, or other limitations permitted by applicable law in any
jurisdiction, then such provisions shall be deemed reformed in such jurisdiction
to the maximum time, geographic, service, or other limitations permitted by
applicable law.
(b) Employee irrevocably and unconditionally (i) agrees that
any suit, action or other legal proceeding arising out of Section 10 or 11
hereof, including without limitation, any action commenced by the Company for
preliminary and permanent injunctive relief or other equitable relief, may be
brought in the state or federal courts of the State of New Jersey, (ii) consents
to the non-exclusive jurisdiction of any such court in any such suit, action or
proceeding, and (iii) waives any objection which Employee may have to the laying
of venue of any such suit, action or proceeding in any such court. Employee also
irrevocably and unconditionally consents to the service of any process,
pleadings, notices or other papers in a manner permitted by the notice
provisions of Section 15 hereof.
13. Term of Agreement. This Agreement shall continue in full force and
effect until all of the obligations of the Parties hereunder are satisfied or
have expired.
14. Successor Company. The Company shall require any successor or
successors (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company, by written agreement in form and substance reasonably satisfactory to
Employee, to acknowledge expressly that this Agreement is binding upon and
enforceable against the Company in accordance with the terms hereof, and to
become jointly and severally obligated with the Company to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform if no such succession or successions had taken place.
Failure of the Company to obtain such agreement prior to the effectiveness of
any such succession shall be a breach of this Agreement. As used in this
Agreement, the Company shall mean the Company as hereinbefore defined and any
such successor or successors to its business and/or assets, jointly and
severally.
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15. Notices. All notices and other communications required or permitted
hereunder or necessary or convenient in connection herewith shall be in writing
and shall be delivered personally or mailed by registered or certified mail,
return receipt requested, or by overnight express courier service, as follows:
If to the Company, to:
Universal Display Corporation
375 Phillips Boulevard
Ewing, New Jersey 08618
Attention: President and Chief Operating Officer
If to Employee, to Employee's address of record with the Company
or to such other names or addresses as the Company or Employee, as the case may
be, shall designate by notice to the other in the manner specified in this
Section; provided, however, that if no such notice is given by the Company
following a Change in Control, notice at the last address of the Company or to
any successor pursuant to this Section shall be deemed sufficient for the
purposes hereof. Any such notice shall be deemed delivered and effective when
received in the case of personal delivery, five (5) days after deposit, postage
prepaid, with the U.S. Postal Service in the case of registered or certified
mail, or on the next business day in the case of overnight express courier
service.
16. Governing Law. This Agreement shall be governed by and interpreted
under the laws of the State of New Jersey, without giving effect to any conflict
of laws provisions.
17. Contents of Agreement, Amendment and Assignment.
(a) This Agreement supersedes all prior agreements, sets forth
the entire understanding between the Parties hereto with respect to the subject
matter hereof and cannot be changed, modified, extended or terminated except
upon written amendment executed by Employee and executed on the Company's behalf
by a senior executive officer or a senior management representative having
supervisory responsibility with respect to Employee and/or Board approval. The
provisions of this Agreement may provide for payments to Employee under certain
compensation or bonus plans under circumstances where such plans would not
provide for payment thereof. It is the specific intention of the Parties that
the provisions of this Agreement shall supersede any provisions to the contrary
in such plans, and such plans shall be deemed to have been amended to correspond
with this Agreement without further action by the Company or the Board.
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(b) Nothing in this Agreement shall be construed as giving
Employee any right to be retained in the employ of the Company, or as changing
or modifying the "at will" nature of Employee's employment status.
(c) All of the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
heirs, representatives, successors and assigns of the Parties hereto, except
that the duties and responsibilities of Employee and the Company hereunder shall
not be assignable, in whole or in part, except as expressly authorized herein.
If Employee should die after a Termination in Connection with a Change in
Control and while any amount payable hereunder would still be payable to
Employee if Employee had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
Employee's devises, legates or other designees or, if there is no such designee,
to Employee's estate.
18. Severability; Effect of Legal Restrictions. If any provision of
this Agreement or application thereof to anyone or under any circumstances shall
be determined to be invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provisions or applications of this
Agreement which can be given effect without the invalid or unenforceable
provision or application. Moreover, the terms of this Agreement shall be deemed
modified to the extent necessary for the Company, in the written opinion of its
outside counsel, to avoid violating the requirements of the Sarbanes-Oxley Act
of 2002, or any other law applicable to the employment arrangements between
Employee and the Company. Any delay in providing benefits or payments, any
failure to provide a benefit or payment, or any repayment of compensation that
is required due to operation of the preceding sentence shall not, in and of
itself, constitute a breach of this Agreement; provided, however, that the
Company shall provide economically equivalent payments or benefits to Employee
to the extent permitted by law.
19. Remedies Cumulative; No Waiver. Except as otherwise expressly set
forth herein, no right conferred upon either Party by this Agreement is intended
to be exclusive of any other right or remedy, and each and every such right or
remedy shall be cumulative and shall be in addition to any other right or remedy
given hereunder, or now or hereafter existing at law or in equity. No delay or
omission by either Party in exercising any right, remedy or power hereunder or
existing at law or in equity shall be construed as a waiver thereof.
20. Miscellaneous. All section headings are for convenience only. This
Agreement may be executed in several counterparts, each of which is an original.
It shall not be necessary in making proof of this Agreement or any counterpart
hereof to produce or account for any of the other counterparts.
EMPLOYEE REPRESENTS AND ACKNOWLEDGES THAT (I) HE OR SHE HAS BEEN ADVISED BY THE
COMPANY TO CONSULT HIS OR HER OWN LEGAL COUNSEL IN RESPECT OF THIS AGREEMENT,
AND (II) THAT HE OR SHE HAS HAD FULL OPPORTUNITY, PRIOR TO EXECUTION OF THIS
AGREEMENT, TO REVIEW THOROUGHLY THIS AGREEMENT WITH HIS OR HER COUNSEL.
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IN WITNESS WHEREOF, the undersigned, intending to be legally bound,
have executed this Agreement as of the date first above written.
UNIVERSAL DISPLAY CORPORATION
By: Sidney D. Rosenblatt
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Name: Sidney D. Rosenblatt
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Title: CFO
---------------------------------
Scott C. Bovino Julia J. Brown
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Witness EMPLOYEE
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ANNEX I
SEPARATION OF EMPLOYMENT AGREEMENT AND GENERAL RELEASE
WHEREAS, Julia J. Brown ("Employee") has been employed by Universal
Display Corporation (the "Company") and its affiliate, UDC, Inc., and because
the Employee's employment with the Company will terminate effective as of
____________________ (the "Termination Date"), Employee and the Company agree as
follows:
In consideration of the promises of the Company set forth in paragraph
3 below, Employee, and his or her heirs, executors and administrators, intending
to be legally bound, hereby permanently and irrevocably agrees to the
termination of Employee's employment with the Company effective as of the
Termination Date, and hereby REMISE, RELEASE and FOREVER DISCHARGE the Company
and any individual or organization related to the Company against whom or which
Employee could assert a claim, including any and all affiliates, and their
officers, directors, shareholders, partners, employees and agents, together with
their respective successors and assigns, heirs, executors and administrators
(hereinafter referred to collectively as the "Releasees"), of and from any and
all causes of action, suits, debts, claims and demands whatsoever, which
Employee had, has, or may have against Releasees up until the date of execution
of this Separation of Employment Agreement and General Release, other than the
Release Exclusions (as defined below). Particularly, but without limitation,
Employee so releases all claims relating in any way to his employment or the
termination of his employment relationship with the Company, including without
limitation claims under the New Jersey Law Against Discrimination, N.J.S.A.
10:5-1 et al., Title VII of the Civil Rights Act of 1964, as amended, ss. 42
U.S.C. 2000e et seq., the Americans with Disabilities Act, 42 U.S.C. ss. 12101
et seq., Employee Retirement Income Security Act 29 U.S.C. ss. 1001 et seq., the
Age Discrimination in Employment Act, as amended 29 U.S.C. ss. 621 et seq. (the
"ADEA"), any common law claims and all claims for attorneys' fees and costs.
Employee agrees and covenants that, should any other person,
organization or other entity file, charge, claim, sue, or cause or permit to be
filed any civil action, suit or legal proceeding involving any matter occurring
at any time in the past, up to and including the date of execution of this
Separation of Employment Agreement and General Release, Employee will not seek
or accept any personal relief in such civil action, suit or legal proceeding.
Moreover, Employee shall promptly take all steps necessary to dismiss, with
prejudice, any and all pending complaints, charges and grievances against the
Company or the Releasees, regardless of whether they are or have been filed
internally or externally.
Notwithstanding anything to the contrary in this Separation of
Employment Agreement and General Release, nothing herein relinquishes any rights
Employee may have to the following claims, or to any civil actions, suits or
legal proceedings involving such claims (the "Release Exclusions"): (i) claims
to seek indemnification pursuant to applicable state law, the Company's By-Laws,
applicable Company resolutions, applicable Company employee benefit plans or
other such documents maintained or required to be maintained by the Company,
(ii) claims to seek coverage under directors' and officers' liability insurance
policies maintained or required to be maintained by the Company, and (iii)
claims to seek enforcement of Employee's rights under the Change in Control
Agreement between Employee and the Company (the "Change in Control Agreement").
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In full consideration of Employee's execution of this Separation of
Employment Agreement and General Release, and his or her agreement to be legally
bound by its terms, the Company has agreed to provide Employee with the
payments, benefits and other consideration specified in the Change in Control
Agreement. Except as set forth in this Separation of Employment Agreement and
General Release, or as may be required by applicable law, it is expressly agreed
and understood that Releasees do not have, and will not have, any obligation to
provide Employee, at any time in the future, with any payments, benefits or
other consideration not specified in the Change in Control Agreement.
Employee hereby agrees and recognizes that, as of the Termination Date,
Employee's employment relationship with the Company will be permanently and
irrevocably severed. Accordingly, Employee will not apply for a position with
the Company or any of its affiliates and Employee waives his or her right to be
hired or rehired in the future by the Company or any of its affiliates. It is
further agreed and understood that Employee will continue to be available and
cooperate in a reasonable manner in providing assistance to the Company in
concluding any matters which are reasonably related to the duties and
responsibilities which Employee had while employed by the Company, provided that
such cooperation and assistance does not interfere with any subsequent
employment obtained by Employee.
Employee agrees and acknowledges that this Separation of Employment
Agreement and General Release is not and shall not be construed to be an
admission of any violation by the Releasees of any federal, state or local
statute or regulation, or of any duty owed by the Releasees to Employee or any
other person.
Employee agrees, covenants and promises that Employee will not
communicate or disclose the terms of this Separation of Employment Agreement and
General Release to any persons with the exception of members of Employee's
immediate family and Employee's attorneys and financial advisors, except as may
be required by applicable law.
Employee hereby certifies that Employee has read the terms of this
Separation of Employment Agreement and General Release, that Employee has been
advised by the Company to consult with an attorney of his or her own choice
prior to executing this Separation of Employment Agreement and General Release,
that Employee has had an opportunity to do so, and that Employee understands the
terms and effects of this Separation of Employment Agreement and General
Release. Employee further certifies that neither the Releasees, nor any
representative of Releasees, have made any representations to Employee
concerning this Separation of Employment Agreement and General Release other
than those contained herein.
Employee acknowledges that Employee has been informed that this
Separation of Employment Agreement and General Release includes a waiver of
claims under the ADEA, and that Employee has the right to reconsider this
Separation of Employment Agreement and General Release as it pertains to claims
under the ADEA for a period of twenty-one (21) days (or forty-five (45) days in
the event of a group termination). Employee also understands that he or she has
the right to revoke this Separation of Employment Agreement and General Release
in its entirety for a period of seven (7) days following Employee's execution
thereof. Should Employee desire to exercise any of the foregoing rights,
Employee shall do so by providing written notice to the Company within the
applicable period at the following address: Universal Display Corporation at 375
Phillips Boulevard, Ewing, New Jersey 08618, Attention: President.
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This Separation of Employment Agreement and General Release, together
with the Change in Control Agreement, constitute the complete and entire
understanding between the parties relating to the subject matter of such
documents, and supersede any and all prior agreements and understandings between
the parties relating thereto. If any provision of this Separation of Employment
Agreement and General Release is deemed invalid, the remaining provisions shall
not be affected. The provisions of this Separation of Employment Agreement and
General Release shall be governed by the laws of New Jersey, without giving
effect to any conflict of laws provisions.
IN WITNESS WHEREOF, and intending to be legally bound hereby, Employee has
executed this Separation of Employment Agreement and General Release as of the
date indicated below.
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EMPLOYEE Date
Acknowledgment of Receipt by: UNIVERSAL DISPLAY CORPORATION
By:
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Name:
----------------------------------
Title:
---------------------------------
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