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STOCK-BASED COMPENSATION | 9 Months Ended
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Sep. 30, 2024
Share-Based Payment Arrangement [Abstract] |
STOCK-BASED COMPENSATION | 16. STOCK-BASED COMPENSATION: Equity Compensation Plan On June 15, 2023, the shareholders of the Company voted to approve the Universal Display Corporation 2023 Equity Compensation Plan (the “Equity Compensation Plan”), which replaced the Universal Display Corporation 2014 Equity Compensation Plan. The Equity Compensation Plan provides for the granting of incentive and nonqualified stock options, shares of common stock, stock appreciation rights and performance units to employees, directors and consultants of the Company. Stock options are exercisable over periods determined by the Company’s Human Capital Committee, but for no longer than 10 years from the grant date. The total number of shares that may be subject to awards under the Equity Compensation Plan is equal to the shares that were available for issuance and not subject to an award under the 2014 Equity Compensation Plan at the time it was replaced by the Equity Compensation Plan, subject to adjustment with respect to shares underlying any outstanding award granted under the Equity Compensation Plan or the 2014 Equity Compensation Plan that may expire, or be terminated, surrendered or forfeited for any reason, without issuance of such shares. As of September 30, 2024, there were 1,359,167 shares that remained available to be granted under the Equity Compensation Plan. The Equity Compensation Plan will terminate on June 15, 2033. Restricted Stock Awards and Units The Company has issued restricted stock awards and units to employees and non-employees with vesting terms of one to five years. The fair value is equal to the market price of the Company’s common stock on the date of grant for awards granted to employees. Consistent with the accounting for equity-classified awards issued to employees, our equity-classified nonemployee share-based awards are measured at the grant date fair value. Expense for restricted stock awards and units is amortized ratably over the vesting period for the awards issued to employees and using a graded vesting method for the awards issued to non-employees. During the nine months ended September 30, 2024, the Company granted 86,454 shares of restricted stock awards and restricted stock units to employees and non-employees, which had a total fair value of $14.3 million on the respective dates of grant, and will vest over three to five years from the date of grant, provided that the grantee is still an employee of the Company or is still providing services to the Company on the applicable vesting date. For the three months ended September 30, 2024 and 2023, the Company recorded, as compensation charges related to all restricted stock awards and units granted to employees and non-employees, selling, general and administrative expense of $1.8 million and $2.4 million, respectively, research and development expense of $1.3 million and $1.4 million, respectively, and cost of sales of $411,000 and $454,000, respectively. For the nine months ended September 30, 2024 and 2023, the Company recorded, as compensation charges related to all restricted stock awards and units granted to employees and non-employees, selling, general and administrative expense of $6.1 million and $7.8 million, respectively, research and development expense of $4.1 million and $4.4 million, respectively, and cost of sales of $1.3 million and $1.4 million, respectively. In connection with the vesting of restricted stock awards and units during the three months ended September 30, 2024 and 2023, 4,505 and 3,190 shares, respectively, with aggregate fair values of $927,000 and $465,000, respectively, were withheld in satisfaction of tax withholding obligations and are reflected as a financing activity within the Consolidated Statements of Cash Flows. In connection with the vesting of restricted stock awards and units during the nine months ended September 30, 2024 and 2023, 37,927 and 51,154 shares, respectively, with aggregate fair values of $6.8 million and $7.1 million, respectively, were withheld in satisfaction of tax withholding obligations and are reflected as a financing activity within the Consolidated Statements of Cash Flows. The Company recorded as compensation charges related to all restricted stock units granted to non-employee members of the Scientific Advisory Board, whose unvested shares are marked to market each reporting period, research and development expense of $60,000 for both three months ended September 30, 2024 and 2023. Such compensation charges to research and development expense were $182,000 and $188,000, respectively, for the nine months ended September 30, 2024 and 2023. The Company has granted restricted stock units to non-employee members of the Board of Directors with quarterly vesting over a period of approximately one year. The fair value is equal to the market price of the Company's common stock on the date of grant. The restricted stock units are issued and expense is recognized ratably over the vesting period. For the three months ended September 30, 2024 and 2023, the Company recorded compensation charges for services performed, related to all restricted stock units granted to non-employee members of the Board of Directors, selling, general and administrative expense of $471,000 and $363,000, respectively. Such compensation charges to selling, general, and administrative expense were $1.3 million and $1.1 million, respectively, for the nine months ended September 30, 2024 and 2023. In connection with the vesting of the restricted stock, the Company issued to non-employee members of the Board of Directors 8,044 and 6,588 shares, respectively, during the nine months ended September 30, 2024 and 2023. Performance Unit Awards Each performance unit award is subject to both a performance-vesting requirement (either performance-based or market-based) and a service-vesting requirement. The performance-based vesting requirement is tied to EBITDA and cash flow achievement, as measured over a specific performance period. The market-based vesting requirement is tied to the Company's total shareholder return (TSR) relative to the TSR of companies comprising the Nasdaq Electronics Components Index, as measured over a three-year performance period. The maximum number of performance units that may vest based on performance is three times the shares granted. Further, if the Company's performance falls below certain thresholds, the performance units will not vest at all. During the nine months ended September 30, 2024, the Company granted 69,600 performance units, of which 34,798 units are subject to performance-based vesting requirements based on three-year cumulative adjusted EBITDA, 17,401 units are subject to performance-based vesting requirements based on three-year cumulative gross margin and 17,401 units are subject to market-based, TSR vesting requirements. The grant date fair value of the performance unit awards granted was $11.4 million for the nine months ended September 30, 2024, as determined by the Company’s common stock on date of grant for the units with performance-based vesting and a Monte Carlo simulation model used for the units with market-based vesting. For the three months ended September 30, 2024 and 2023, the Company recorded selling, general and administrative expense of $605,000 and $1.5 million, respectively, research and development expense of $269,000 and $607,000, respectively, and cost of sales expense of $167,000 and $376,000, respectively, related to the performance units. For the nine months ended September 30, 2024 and 2023, the Company recorded selling, general and administrative expense of $6.1 million and $1.7 million, respectively, research and development expense of $2.6 million and $982,000, respectively, and cost of sales expense of $1.6 million and $609,000, respectively, related to the performance units. In connection with the vesting of performance units during the nine months ended September 30, 2024 and 2023, 8,160 and 5,350 shares, respectively, with an aggregate fair value of $1.4 million and $775,000, respectively, were withheld in satisfaction of tax withholding obligations and are reflected as a financing activity within the Consolidated Statements of Cash Flows. Employee Stock Purchase Plan On April 7, 2009, the Board of Directors of the Company adopted an Employee Stock Purchase Plan (ESPP). The ESPP was approved by the Company’s shareholders and became effective on June 25, 2009. The Company has reserved 1,000,000 shares of common stock for issuance under the ESPP. Unless terminated by the Board of Directors, the ESPP will expire when all reserved shares have been issued. Eligible employees may elect to contribute to the ESPP through payroll deductions during consecutive three-month purchase periods, the first of which began on July 1, 2009. Each employee who elects to participate will be deemed to have been granted an option to purchase shares of the Company’s common stock on the first day of the purchase period. Unless the employee opts out during the purchase period, the option will automatically be exercised on the last day of the period, which is the purchase date, based on the employee’s accumulated contributions to the ESPP. The purchase price will equal 85% of the lesser of the closing price per share of common stock on the first business day of the period or the last business day of the period. Employees may allocate up to 10% of their base compensation to purchase shares of common stock under the ESPP; however, each employee may purchase no more than 12,500 shares on a given purchase date, and no employee may purchase more than $25,000 of common stock under the ESPP during a given calendar year. During the nine months ended September 30, 2024 and 2023, the Company issued 11,654 and 13,915 shares, respectively, of its common stock under the ESPP, resulting in proceeds of $1.8 million and $1.5 million, respectively. For the three months ended September 30, 2024 and 2023, the Company recorded charges of $29,000 and $36,000, respectively, to selling, general and administrative expense, $69,000 and $61,000, respectively, to research and development expense, and $54,000 and $46,000, respectively, to cost of sales related to the ESPP equal to the amount of the discount and the value of the look-back feature. For the nine months ended September 30, 2024 and 2023, the Company recorded charges of $101,000 and $105,000, respectively, to selling, general and administrative expense, $206,000 and $186,000, respectively, to research and development expense, and $151,000 and $121,000, respectively, to cost of sales related to the ESPP equal to the amount of the discount and the value of the look-back feature. Scientific Advisory Board Awards During the nine months ended September 30, 2024 and 2023, the Company granted a total of 1,616 and 2,366 shares, respectively, of fully vested common stock to non-employee members of the Scientific Advisory Board for services performed in 2023 and 2022, respectively. The fair value of shares issued to members of the Scientific Advisory Board was $300,000 for both nine-month periods.

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