Document:

EXHIBIT 10a(8)

                  PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

                     MANAGEMENT INCENTIVE COMPENSATION PLAN

                 Restated and Amended effective January 1, 2001

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                                TABLE OF CONTENTS

                                                                           Page

                                                                           ----

   I. PURPOSE ...........................................................    1

  II. DEFINITIONS .......................................................    1

 III. ADMINISTRATION ....................................................    2

  IV. ELIGIBILITY .......................................................    2

   V. AWARD FUND ........................................................    3

  VI. TARGET INCENTIVE AWARDS ...........................................    3

 VII. AWARDS ............................................................    3

 VII. LIMITATIONS .......................................................    3

  IX. LIMITATION OF ACTIONS .............................................    3

   X. CLAIMS PROCEDURES .................................................    4

  XI. PLAN AMENDMENT, SUSPENSION OR TERMINATION .........................    4

 XII. OTHER COMPENSATION PLANS...........................................    4

XIII. MISCELLANEOUS......................................................    4

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                  PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED

                     MANAGEMENT INCENTIVE COMPENSATION PLAN

                                   I.  PURPOSE

     The purposes of this Plan are to foster attainment of the financial and
operating objectives of the Company and its Participating Affiliates that are
important to customers and stockholders by providing incentive to members of
management who contribute to attainment of these objectives. This Plan is
designed to provide for awards to selected salaried employees in executive or
other important positions, who, individually or as members of a group,
contribute in a substantial degree to the success of the Company and its
Participating Affiliates, and who are in a position to have a direct and
significant impact on the growth and success of the Company and its
Participating Affiliates, thus affording to them a means of participating in
that success and an incentive to contribute further to that success. This Plan
also serves to supplement the Company's and Participating Affiliates' salary and
benefit programs so as to provide overall compensation for such executives which
is competitive with corporations with which the Company and its Participating
Affiliates must compete for executive talent and to assist the Company and its
Participating Affiliates in attracting and retaining executives who are
important to their continued success.

                                II. DEFINITIONS

     The following words and phrases shall have the meanings set forth below:

          (a) "Administrative Regulations" shall mean the procedures and
     regulations established by the Committee pursuant to Section III hereof for
     the purpose of administering the Plan.

          (b) "Affiliate" shall mean any organization which is a member of a
     controlled group of corporations (as defined in Code section 414(b), as
     modified by Code section 415(h)) which includes the Company; or any trades
     or businesses (whether or not incorporated) which are under common control
     (as defined in Code section 414(c), as modified by Code section 415(h))
     with the Company; or a member of an affiliated service group (as defined in
     Code section 414(m)) which includes the Company or any other entity
     required to be aggregated with the Company pursuant to regulations under
     Code section 414(o).

          (c) "Award" shall mean the amount determined by the Committee pursuant
     to Section VII hereof.

          (d) "Award Fund" shall mean the aggregate amount made available in any
     Plan Year pursuant to Section V hereof from which awards determined under
     Section VII hereof may be made.

          (e) "Code" shall mean the Internal Revenue Code of 1986, as amended,
     or as it may be amended from time to time.

          (f) "Committee" shall mean the Organization and Compensation Committee
     of the Board of Directors of the Company, the membership on which shall be
     limited to directors of the Company who are not Employees.

          (g) "Company" shall mean Public Service Enterprise Group Incorporated,
     a New Jersey corporation, or any successor thereto.

          (h) "Employee" shall mean any person not included in a unit of
     employees covered by a collective bargaining agreement who is an employee
     (such term having its customary meaning) of the Company or a Participating
     Affiliate, whether full-time or part-time, and whether or not an officer or
     director, and who is receiving remuneration for personal services rendered
     to the Company or Participating Affiliate other than (i) solely as a
     director of the Company or a Participating Affiliate, (ii) as a temporary
     employee, (iii) as a consultant or (iv) as an independent contractor
     (regardless of whether a determination is made by the Internal Revenue
     Service or other governmental agency or court after the individual is
     engaged to perform such services that the individual is an employee of the
     Company or Participating Affiliate for the purposes of the Code or
     otherwise).

          (i) "Net Income" shall mean the amount reported by the Company as
     consolidated income before extraordinary items and the cumulative effect of
     accounting changes, adjusted, however, by adding any amount that has been
     expensed (after taxes) for awards under this Plan in computing such Net
     Income.

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          (j) "Participant" shall mean an Employee who is subject to Section 16
     of the Securities Exchange Act of 1934, as amended, or who has been
     designated by the Committee to participate in the Plan pursuant to Section
     IV hereof.

          (k) "Participating Affiliate" shall mean any Affiliate of the Company
     that adopts this Plan with the approval of the Board of Directors of the
     Company. As a condition to participating in this Plan, such Affiliate shall
     authorize the Board of Directors of the Company and the Committee to act
     for it in all matters arising under or with respect to this Plan and shall
     comply with such other terms and conditions as may be imposed by the Board
     of Directors of the Company.

          (l) "Plan" shall mean this Public Service Enterprise Group
     Incorporated Management Incentive Compensation Plan as amended from time to
     time.

          (m) "Plan Year" shall mean the calendar year.

          (n) "Subsidiary" shall mean any corporation, limited liability company
     or other entity, domestic or foreign (other than the Company), 50% or more
     of the total voting power of which is held by the Company and/or a
     Subsidiary or Subsidiaries.

          (o) "Target Incentive Awards" shall mean the amounts determined by the
     Committee pursuant to Section VII hereof.

                               III. ADMINISTRATION

          (a) The Committee shall administer the Plan. Subject to the provisions
     of the Plan, the Committee shall have full and final authority to select
     Participants, to designate Target Incentive Awards for each Participant and
     to determine the performance objectives and the amount of all Awards under
     this Plan. The Committee may not, however, alter Award Fund provided by
     Article V of this Plan nor the maximum Award provided by Article VII of
     this Plan. The Committee shall also have, subject to the provisions of the
     Plan, full and final authority to interpret the Plan, to establish and
     revise such Administrative Regulations as it deems necessary for the proper
     administration of the Plan and to make any other determinations that it
     believes necessary or advisable for the administration of the Plan. The
     Committee may delegate such responsibilities, other than final approval of
     Awards or appeals of alleged adverse determinations under the Plan, to the
     Chief Executive Officer of the Company or to any other officer of the
     Company or any Participating Affiliate.

          (b) All decisions and determinations by the Committee shall be final
     and binding upon all parties, including stockholders, Participants, legal
     representatives and other Employees.

          (c) The Committee may rely conclusively on the determinations made by
     the Company's independent public accountants.

                                 IV. ELIGIBILITY

          (a) Those Employees who are subject to Section 16 of the Securities
     Exchange Act of 1934, as amended, and those Employees who are key officers
     or management Employees of the Company, a Subsidiary or an Affiliate who,
     in the opinion of the Committee, are in a position to have a direct and
     significant impact on achieving the Company's long-term objectives are
     eligible to participate in the Plan.

          (b) The Committee may select such Employees of the Company or
     Participating Affiliate (individually or by position) for participation in
     the Plan upon such terms as it deems appropriate, due to the Employee's
     responsibilities and his/her opportunity to contribute substantially to the
     attainment of financial and operating objectives of the Company or
     Participating Affiliate. A determination of participation for a Plan Year
     shall be made no later than the beginning of that Plan Year. Provided,
     however, that an Employee whose duties and responsibilities change
     significantly during a Plan Year may be added or deleted as a Participant
     by the Committee. Provided further, the Committee may prorate the Incentive
     Award of any Participant if appropriate to reflect any such change in
     duties and responsibilities during a Plan Year.

          (c) Participation in the Plan in one Plan Year shall not guarantee
     participation in another Plan Year.

          (d) The Committee shall have sole discretion as to whether to suspend
     operation of the Plan for any period of time.

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                                  V. AWARD FUND

     In each Plan Year, an Award Fund shall be established equal to 2.5% of Net
Income. No amounts are paid under the Plan for any Plan Year unless the Company
has Net Income. However, the Committee shall have the right to decrease the
amount of the Award Fund in any Plan Year.

                           VI. TARGET INCENTIVE AWARDS

          (a)  For each Plan Year, the Committee shall determine:

               (i) Whether or not the Plan shall be in operation for such Plan
          Year.

               (ii) The names of those Employees who will participate in the
          Plan for such Plan Year.

               (iii) The Target Incentive Awards for each Participant. For any
          Participant not subject to Section 162(m) of the Code, other
          performance measures or objectives, whether quantitative or
          qualitative, may be established. The Committee shall establish the
          specific targets for any such selected measures. These targets may be
          set at a specific level or may be expressed as relative to the
          comparable measure at comparison companies or a defined index.

          (b) At any time after the commencement of a Plan Year, but prior to
     the close thereof, the Committee may, in its discretion, eliminate or add
     Participants, or increase or decrease the Target Award of any Participant;
     but the Committee may not alter Award Fund or the maximum Award provided by
     Articles V and VII of this Plan.

                                   VII. AWARDS

          (a) The chief executive officer of the Company may receive an award
     not to exceed 10% of the maximum Award Fund for that Plan Year.

          (b) All other Participants may receive an award not to exceed that
     amount which is 90% of the maximum Award Fund for that Plan Year divided by
     the number of Participants, other than the chief executive officer, in the
     Plan for that Plan Year.

          (c) The Committee, however, shall have the right to pay to the chief
     executive officer less than 10% of the maximum Award Fund, and pay to the
     other Participants, less than that amount which is 90% of the maximum Award
     Fund divided by the number of Participants, other than the chief executive
     officer, in the Plan for that Plan Year.

          All such determinations, except in the case of the award for the chief
     executive officer, shall be made after considering the recommendations of
     the chief executive officer and such other matters as the Committee shall
     deem relevant. In making such determinations, the Committee may, in
     addition to achievement of short-term business objectives, take into
     account achievement by key executives of long-term goals of the Company.
     All awards shall be charged against the Award Fund and shall be made in one
     lump sum cash payment as soon as practicable after determined by the
     Committee.

                                VIII. LIMITATIONS

     Although this Plan sets the maximum amount that may be paid to a
Participant in any given year, the Committee shall retain the right to decrease
the maximum or eliminate any Award to any Participant. No director, officer or
Employee of the Company, its Subsidiaries or its Affiliates nor any other person
shall have the authority to enter into any agreement with any person for the
making or payment of an Award or to make any representation or warranty with
respect thereto.

     Neither the action of the Company in establishing the Plan, nor any action
taken by it or by the Committee under the provisions hereof, nor any provision
of the Plan, shall be construed as giving to any Employee the right to be
retained in the employ of the Company, its Subsidiaries or its Affiliates.

     The Company may offset against any payments to be made to a Participant or
his/her beneficiary under this Plan any amounts owing to the Company, its
Subsidiaries or its Affiliates from the Participant for any reason.

                            IX. LIMITATION OF ACTIONS

     Every asserted right of action by or on behalf of the Company or by or on
behalf of any stockholder against any past, present or future member of the
Committee or director, officer or Employee of the Company or any Subsidiary or
Affiliate

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thereof, arising out of or in connection with this Plan, shall, irrespective of
the place where such right of action may arise or be asserted and irrespective
of the place of residence of any such member director, officer or Employee,
cease and be barred upon the expiration of three years (i) from the date of the
alleged act or omission in respect of which such right of action arises or (ii)
from the date upon which the Company's Annual Report to Stockholders setting
forth the aggregate amount of the awards to all or any part of which such action
may relate is made generally available to stockholders, whichever date is
earlier; and every asserted right of action by or on behalf of any Employee,
past, present or future, or any beneficiary, spouse, child or legal
representative thereof, against the Company or any Subsidiary or Affiliate
thereof, arising out of or in connection with this Plan, shall, irrespective of
the place where such right of action may arise or be asserted, cease and be
barred by the expiration of three years from the date of the alleged act or
omission in respect of which such right of action arises.

                               X. CLAIMS PROCEDURE

     In the case of any Participant (whether active, retired or terminated) or
beneficiary whose claim for an award under this Plan has been denied, the
Company shall provide adequate notice in writing of such adverse determination
setting forth the specific reasons for such denial in a manner calculated to be
understood by the recipient thereof. Such Participant or beneficiary shall be
afforded a reasonable opportunity for a full and fair review of the decision
denying the claim by the Committee.

                  XI. PLAN AMENDMENT, SUSPENSION OR TERMINATION

     The Board of Directors or the stockholders may discontinue the Plan at any
time and may, from time to time, amend or revise the terms of the Plan as
permitted by applicable statutes; provided, however, that no such
discontinuance, amendment or revision shall materially adversely affect any
right or obligation with respect to any award theretofore made. Any amendment or
revision that increases the cost of the Plan by a substantial proportion may be
made only by the stockholders. The Plan will continue in operation until
discontinued as herein provided.

                          XII. OTHER COMPENSATION PLANS

     The adoption of this Plan shall not affect any other incentive compensation
plan, stock option plan or any other compensation plan in effect for the Company
or any Affiliate, nor shall the Plan preclude the Company or any Affiliate from
establishing any other form of incentive compensation plan, stock option plan or
any other compensation plan.

                               XIII. MISCELLANEOUS

          (a) The costs and expenses of administering the Plan shall be borne by
     the Company and its Affiliates and shall not be charged against any Award
     or to any Participant receiving an Award.

          (b) To the extent not preempted by Federal law, this Plan and actions
     taken in connection herewith shall be governed and construed in accordance
     with the laws of the State of New Jersey without reference to its Conflict
     of Laws principles.

          (c) The captions and section numbers appearing in this Plan are
     inserted only as a matter of convenience. They do not define, limit or
     describe the scope or intent of the provisions of this Plan. In this Plan,
     words in the singular number include the plural and in the plural include
     the singular; and words of the masculine gender include the feminine and
     the neuter, and when the sense so indicates, words of the neuter gender may
     refer to any gender. The invalidity or unenforceability of any provision
     hereof shall in no way affect the validity or enforceability of any other
     provision.

          (d) Every direction, revocation or notice authorized or required by
     the Plan shall be deemed delivered to the Company (a) on the date it is
     personally delivered its principal executive offices to the attention of
     the Compensation Manager of PSEG Services Corporation or (b) three business
     days after it is sent by registered or certified mail, postage prepaid,
     addressed to the Company (attn: Compensation Manager of PSEG Services
     Corporation) at such offices; and shall be deemed delivered to a
     Participant (a) on the date it is personally delivered to him or her, or
     (b) three business days after it is sent by registered or certified mail,
     postage prepaid, addressed to him or her at the last address shown for him
     or her on the records of the Company.

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          (e) Except as otherwise provided herein, this Plan shall inure to the
     benefit of and be binding upon the Company, its successors and assigns,
     including but not limited to any corporation which may acquire all or
     substantially all of the Company's assets and business or with or into
     which the Company may be consolidated or merged.

          (f) Failure by the Company or the Committee to insist upon strict
     compliance with any of the terms, covenants or conditions hereof shall not
     be deemed a waiver of any such term, covenant or condition, nor shall any
     waiver or relinquishment of any right or power hereunder at any one or more
     times be deemed a waiver or relinquishment of any such right or power at
     any other time or times.

          (g) The Company shall have the right to deduct from any Award payment
     any sum required to be withheld by federal, state, or local tax law. There
     is no obligation hereunder that any Participant or other person be advised
     in advance of the existence of the tax or the amount so required to be
     withheld.

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         THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT
         HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
         NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY BE SOLD, TRANSFERRED OR
         ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH
         SECURITIES UNDER SAID ACT OR, AN OPINION OF COUNSEL, IN FORM, SUBSTANCE
         AND SCOPE, CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE
         TRANSACTIONS, THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR
         UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.

                             STOCK PURCHASE WARRANT

         THIS CERTIFIES THAT, for value received, PPG Industries, Inc. is
entitled to purchase from UNIVERSAL DISPLAY CORPORATION, a Pennsylvania
corporation (the "Company"), at any time or from time to time during the period
specified in Paragraph 2 hereof, _________ (________) fully paid and
nonassessable shares of the Company's Common Stock, par value $.01 per share
(the "Common Stock"), at an exercise price of $24.28 per share, representing
120% of the Average Price as such term is defined in that certain Development
and License Agreement (the "Development Agreement") between the parties entered
into and effective as of October 1, 2000 (the "Exercise Price"). The term
"Warrant Shares," as used herein, refers to the shares of Common Stock
purchasable hereunder. The Warrant Shares and the Exercise Price are subject to
adjustment as provided in Paragraph 4 hereof.

         This Warrant is subject to the following terms, provisions, and
conditions:

         1.  Manner of Exercise; Issuance of Certificates; Payment for Shares.
Subject to the provisions hereof, this Warrant may be exercised by the holder
hereof, in whole or in part, from time to time, by the surrender of this
Warrant, together with a completed exercise agreement in the form attached
hereto (the "Exercise Agreement"), to the Company during normal business hours
on any business day at the Company's principal executive offices (or such other
office or agency of the Company as it may designate by notice to the holder
hereof), and upon payment to the Company in cash, by certified or official bank
check or by wire transfer for the account of the Company of the Exercise Price
for the Warrant Shares specified in the Exercise Agreement. The Warrant Shares
so purchased shall be deemed to be issued to the holder hereof or such holder's
designee, as the record owner of such shares, as of the close of business on the
date on which this Warrant shall have been surrendered, the completed Exercise
Agreement shall have been delivered, and payment shall have been made for such
shares as set forth above. Certificates for the Warrant Shares so purchased,
representing the aggregate number of shares specified in the Exercise Agreement,
shall be delivered to the holder hereof within a reasonable time, not exceeding
three (3) business days, after this Warrant shall have been so exercised. The
certificates so delivered shall be in such denominations as may be requested by
the holder hereof and shall be registered in the name of such holder or such
other name as shall be designated by such holder. Notwithstanding the foregoing,
any partial exercise, other than an exercise of the total remaining shares,
shall be for at least forty thousand (40,000) shares. If under this Section 1

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this Warrant is exercised for less than all Warrant Shares for which this
Warrant is then exercisable, a new Warrant of like tenor and provisions for the
unexercised Warrant Shares shall then also be delivered to the holder.

         2.  Period of Exercise. This Warrant is exercisable at any time or from
time to time on or after the date hereof and through 5:00 p.m., Philadelphia
time, on the date which is the seventh-year anniversary of the date hereof (the
"Exercise Period").

         3.  Certain Agreements of the Company. The Company hereby covenants and
agrees as follows:

             (a) Shares to be Fully Paid. All Warrant Shares will, upon issuance
in accordance with the terms of this Warrant, be validly issued, fully paid, and
nonassessable and free from all taxes, liens, and charges with respect to the
issue thereof.

             (b) Reservation of Shares. The Company agrees that all times prior
to the expiration of the Exercise Period, it shall have authorized, and reserved
for the purpose of issuance upon exercise of this Warrant, a sufficient number
of shares of Common Stock to provide for the exercise of this Warrant in whole.

             (c) Listing. The Company shall promptly secure the listing of the
shares of Common Stock issuable upon exercise of this Warrant upon each national
securities exchange or automated quotation system, if any, upon which shares of
Common Stock are then listed (subject to official notice of issuance upon
exercise of this Warrant) and shall maintain, so long as any other shares of
Common Stock shall be so listed, such listing of all shares of Common Stock from
time to time issuable upon the exercise of this Warrant; and the Company shall
so list on each national securities exchange or automated quotation system, as
the case may be, and shall maintain such listing of, any other shares of capital
stock of the Company issuable upon the exercise of this Warrant if and so long
as any shares of the same class shall be listed on such national securities
exchange or automated quotation system.

             (d) Certain Actions Prohibited. The Company will not, by amendment
of its charter or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed by it hereunder, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the
taking of all such action as may reasonably be requested by the holder of this
Warrant in order to protect the exercise privilege of the holder of this Warrant
against dilution or other impairment, consistent with the tenor and purpose of
this Warrant. Without limiting the generality of the foregoing, the Company (i)
will not increase the par value of any shares of Common Stock receivable upon
the exercise of this Warrant above the Exercise Price then in effect, and (ii)
will take all such actions as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of this Warrant.

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             (e) Successors and Assigns. This Warrant will be binding upon any
entity succeeding to the Company by merger, consolidation, or acquisition of all
or substantially all the Company's assets.

         4.  Antidilution Provisions. During the Exercise Period, the Exercise
Price and the number of Warrant Shares shall be subject to adjustment from time
to time as provided in this Paragraph 4.

             (a) Subdivision or Combination of Common Stock. If the Company at
any time subdivides (by any stock split, stock dividend, recapitalization,
reorganization, reclassification or otherwise) the shares of Common Stock
acquirable hereunder into a greater number of shares, then, after the date of
record for effecting such subdivision, the Exercise Price in effect immediately
prior to such subdivision will be proportionately reduced. If the Company at any
time combines (by reverse stock split, recapitalization, reorganization,
reclassification or otherwise) the shares of Common Stock acquirable hereunder
into a smaller number of shares, then, after the date of record for effecting
such combination, the Exercise Price in effect immediately prior to such
combination will be proportionately increased. Upon each adjustment of the
Exercise Price pursuant to the provisions of this paragraph , the number of
shares of Common Stock issuable upon exercise of this Warrant shall be adjusted
by multiplying a number equal to the Exercise Price in effect immediately prior
to such adjustment by the number of shares of Common Stock issuable upon
exercise of this Warrant immediately prior to such adjustment and dividing the
product so obtained by the adjusted Exercise Price.

             (b) Consolidation, Merger or Sale. In case of any consolidation of
the Company with, or merger of the Company with or into any other corporation,
or in case of any sale or conveyance of all or substantially all of the assets
of the Company other than in connection with a plan of complete liquidation of
the Company, then as a condition of such consolidation, merger or sale or
conveyance, adequate provision will be made whereby the holder of this Warrant
will have the right to acquire and receive upon exercise of this Warrant in lieu
of the shares of Common Stock immediately theretofore acquirable upon the
exercise of this Warrant, such shares of stock, securities or assets as may be
issued or payable with respect to or in exchange for the number of shares of
Common Stock immediately theretofore acquirable and receivable upon exercise of
this Warrant had such consolidation, merger or sale or conveyance not taken
place. The Company will not effect any consolidation, merger or sale or
conveyance unless prior to the consummation thereof, the successor corporation
(if other than the Company) assumes by written instrument the obligations under
this Paragraph 4 and the obligations to deliver to the holder of this Warrant
such shares of stock, securities or assets as, in accordance with the foregoing
provisions, the holder may be entitled to acquire.

             (c) Notice of Adjustment. Upon the occurrence of any event which
requires any adjustment of the Exercise Price, then, and in each such case, the
Company shall give notice thereof to the holder of this Warrant, which notice
shall state the Exercise Price resulting from such adjustment and the increase
or decrease in the number of Warrant Shares purchasable at such price upon
exercise, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based. Such calculation shall be certified
by the chief financial officer of the Company.

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             (d) Minimum Adjustment of Exercise Price. In the event that any
adjustment of the Exercise Price as required herein results in a fraction of a
cent, such Exercise Price shall be rounded up to the nearest cent. No adjustment
of the Exercise Price shall be made in an amount of less than 1% of the Exercise
Price in effect at the time such adjustment is otherwise required to be made,
but any such lesser adjustment shall be carried forward and shall be made at the
time and together with the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to not less than 1% of such
Exercise Price.

             (e) No Fractional Shares. No fractional shares of Common Stock are
to be issued upon the exercise of this Warrant, but the Company shall pay a cash
adjustment in respect of any fractional share which would otherwise be issuable
in an amount equal to the same fraction of the Market Price of a share of Common
Stock on the date of such exercise.

             (f) Other Notices. In case at any time:

                 (i)   the Company shall declare any dividend upon the Common
Stock payable in shares of stock of any class or make any other distribution
(including dividends or distributions payable in cash out of retained earnings)
to the holders of the Common Stock;

                 (ii)  the Company shall offer for subscription pro rata to the
holders of the Common Stock any additional shares of stock of any class or other
rights;

                 (iii) there shall be any capital reorganization of the Company,
or reclassification of the Common Stock, or consolidation or merger of the
Company with or into, or sale of all or substantially all its assets to, another
corporation or entity; or

                 (iv)  there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company;

then, in each such case, the Company shall give to the holder of this Warrant
(a) notice of the date on which the books of the Company shall close or a record
shall be taken for determining the holders of Common Stock entitled to receive
any such dividend, distribution, or subscription rights or for determining the
holders of Common Stock entitled to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up and (b) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up, notice of
the date (or, if not then known, a reasonable approximation thereof by the
Company) when the same shall take place. Such notice shall also specify the date
on which the holders of Common Stock shall be entitled to receive such dividend,
distribution, or subscription rights or to exchange their Common Stock for stock
or other securities or property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation, or
winding-up, as the case may be. Such notice shall be given at least 30 days
prior to the record date or the date on which the Company's books are closed in
respect thereto. Failure to give any such notice or any defect therein shall not
affect the validity of the proceedings referred to in clauses (i), (ii), (iii)
and (iv) above.

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         5.  Issue Tax. The issuance of certificates for Warrant Shares upon the
exercise of this Warrant shall be made without charge to the holder of this
Warrant or such shares for any issuance tax or other costs in respect thereof,
provided that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than the holder of this Warrant.

         6.  No Rights or Liabilities as a Shareholder. This Warrant shall not
entitle the holder hereof to any voting rights or other rights as a shareholder
of the Company. No provision of this Warrant, in the absence of affirmative
action by the holder hereof to purchase Warrant Shares, and no mere enumeration
herein of the rights or privileges of the holder hereof, shall give rise to any
liability of such holder for the Exercise Price or as a shareholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.

         7.  Transfer and Replacement of Warrant.

             (a) Restrictions on Transfer. The Warrant and the rights granted to
the holder hereof are non-transferable. Notwithstanding the foregoing, the
holder hereof may at any time assign this Warrant in whole or in part to any
affiliate of the holder.

             (b) Replacement of Warrant. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
this Warrant and, in the case of any such loss, theft, or destruction, upon
delivery of an indemnity agreement reasonably satisfactory in form and amount to
the Company, or, in the case of any such mutilation, upon surrender and
cancellation of this Warrant, the Company, at its expense, will execute and
deliver, in lieu thereof, a new Warrant of like tenor.

             (c) Cancellation; Payment of Expenses. Upon the surrender of this
Warrant in connection with any transfer or replacement as provided in this
Paragraph 7, this Warrant shall be promptly canceled by the Company. The Company
shall pay all taxes (other than securities transfer taxes) and all other
expenses (other than legal expenses, if any, incurred by the Holder) and charges
payable in connection with the preparation, execution, and delivery of Warrants
pursuant to this Paragraph 7.

             (d) Register. The Company shall maintain, at its principal
executive offices (or such other office or agency of the Company as it may
designate by notice to the holder hereof), a register for this Warrant, in which
the Company shall record the name and address of the person in whose name this
Warrant has been issued, as well as the name and address of each assignee and
each prior owner of this Warrant.

             (e) Exercise Without Registration. If, at the time of the surrender
of this Warrant in connection with any exercise of this Warrant, this Warrant
(or, in the case of any exercise, the Warrant Shares issuable hereunder), shall
not be registered under the Securities Act of 1933, as amended (the "Securities

<PAGE>

Act"), and under applicable state securities or blue sky laws, the Company may
require, as a condition of allowing such exercise, (i) that the holder of this
Warrant, as the case may be, furnish to the Company a written opinion of
counsel, which opinion and counsel are acceptable to the Company, to the effect
that such exercise may be made without registration under said Act and under
applicable state securities or blue sky laws and (ii) that the holder execute
and deliver to the Company an investment letter in form and substance acceptable
to the Company. The first holder of this Warrant, by taking and holding the
same, represents to the Company that such holder is acquiring this Warrant for
investment and not with a view to the distribution thereof. Notwithstanding the
foregoing, if this Warrant is presented for exercise by the initial Holder
hereof, the foregoing provisions of this Section 7 shall not apply to the
exercise of this Warrant by the initial Holder hereof.

         8.  Registration Rights. The initial holder of this Warrant is entitled
to the benefit of such registration rights in respect of the Warrant Shares as
are set forth in Article 11 of the Development Agreement.

         9.  Notices. All notices, requests, and other communications required
or permitted to be given or delivered hereunder to the holder of this Warrant
shall be in writing, and shall be personally delivered, or shall be sent by
certified or registered mail or by recognized overnight mail courier, postage
prepaid and addressed, to such holder at the address shown for such holder on
the books of the Company, or at such other address as shall have been furnished
to the Company by notice from such holder. All notices, requests, and other
communications required or permitted to be given or delivered hereunder to the
Company shall be in writing, and shall be personally delivered, or shall be sent
by certified or registered mail or by recognized overnight mail courier, postage
prepaid and addressed, to the office of the Company at 375 Phillips Boulevard,
Ewing, New Jersey 08618, Attention: Chief Executive Officer, or at such other
address as shall have been furnished to the holder of this Warrant by notice
from the Company. Any such notice, request, or other communication may be sent
by facsimile, but shall in such case be subsequently confirmed by a writing
personally delivered or sent by certified or registered mail or by recognized
overnight mail courier as provided above. All notices, requests, and other
communications shall be deemed to have been given either at the time of the
receipt thereof by the person entitled to receive such notice at the address of
such person for purposes of this Paragraph 9, or, if mailed by registered or
certified mail or with a recognized overnight mail courier upon deposit with the
United States Post Office or such overnight mail courier, if postage is prepaid
and the mailing is properly addressed, as the case may be.

         10. Governing Law. This warrant shall be governed by and construed and
enforced in accordance with the internal laws of the Commonwealth of
Pennsylvania without regard to the body of law controlling conflicts of law.

         11. Miscellaneous.

             (a) Amendments. This Warrant and any provision hereof may only be
amended by an instrument in writing signed by the Company and the holder hereof.

<PAGE>

             (b) Descriptive Headings. The descriptive headings of the several
paragraphs of this Warrant are inserted for purposes of reference only, and
shall not affect the meaning or construction of any of the provisions hereof.

         IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.

                                      UNIVERSAL DISPLAY CORPORATION

                                      By:    ___________________________________
                                      Name:  ___________________________________
                                      Title: ___________________________________

                                      Issued and dated as of _____________, 2000

<PAGE>

                           FORM OF EXERCISE AGREEMENT

                                                      Dated: ____________, 200__

To:  Universal Display Corporation

         The undersigned, pursuant to the provisions set forth in the within
Warrant, hereby agrees to purchase ________ shares of Common Stock covered by
such Warrant, and makes payment herewith in full therefor at the price per share
provided by such Warrant in cash or by certified or official bank check in the
amount of $_________. Please issue a certificate or certificates for such shares
of Common Stock in the name of and pay any cash for any fractional share to:

                                      Name:_____________________________________

                                      Signature: _______________________________
                                      Address:   _______________________________
                                                 _______________________________

                                      Note: The above signature should
                                            correspond exactly with the name on
                                            the face of the within Warrant.

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