North Coast Solar Stocks

October 1, 2009

Energy Conversion Devices Adopts Tax Benefits Preservation Plan

Filed under: ENER — Tags: , , , — Jason @ 8:00 am

Thursday October 1, 2009, 8:00 am EDT

ROCHESTER HILLS, Mich., Oct. 1 /PRNewswire-FirstCall/ — Energy Conversion Devices, Inc. (ECD) (ENER), the leading global manufacturer of thin-film flexible solar laminate products for the building integrated and commercial rooftop markets, today announced that its Board of Directors has adopted a tax benefits preservation plan to preserve ECD’s ability to fully use certain tax assets, including the company’s substantial net operating loss carryforwards. The plan is similar to tax benefit preservation plans adopted by many other public companies with significant tax attributes.

“Our tax assets, and particularly our net operating loss carryforwards, are important and valuable assets of our company, assets that we believe we should make every effort to protect. This tax benefits preservation plan protects the interests of our stockholders and preserves these substantial tax benefits for our company,” said Mark Morelli, ECD’s President and Chief Executive Officer.

ECD’s use of certain tax assets could be substantially limited if the company experiences an “ownership change,” as defined by Section 382 of the Internal Revenue Code. In general, an ownership change would occur if there were a cumulative change in ECD’s ownership by stockholders who beneficially own (or who are deemed under Section 382 to beneficially own) five percent or more of ECD’s outstanding common stock that exceeds 50 percentage points over a rolling three-year period.

The tax benefits preservation plan is designed to reduce the likelihood that ECD experiences such an ownership change by discouraging any person or group from becoming a 5-percent stockholder and dissuading existing 5-percent stockholders from acquiring additional shares of ECD’s common stock without prior approval of ECD’s Board of Directors. ECD’s Board of Directors has the discretion to exempt any acquisition of common stock from the provisions of the tax benefits preservation plan. The plan may be terminated by the Board at any time prior to the share purchase rights being triggered.

As part of the tax benefits preservation plan, on September 30, 2009, ECD’s Board of Directors declared a dividend of one common stock purchase right (a “Right”) for each outstanding share of common stock held of record as of the close of business on October 15, 2009. Shares of ECD’s common stock issued after that date also will receive Rights.

The Rights will be triggered if any person or group (subject to certain exceptions specified in the tax benefits preservation plan) acquires 4.9% or more of the outstanding shares of ECD’s common stock, thereby becoming an “Acquiring Person” for purposes of the tax benefits preservation plan. If triggered, each Right entitles the holder (other than the Acquiring Person or any transferee of shares of ECD’s stock held by the Acquiring Person) to purchase shares of common stock at a 50 percent discount to the then market price of ECD’s common stock, and the Rights owned by the Acquiring Person (or any transferee of the Acquiring Person) become void. Alternatively, if the Rights are triggered, ECD’s Board of Directors may decide to exchange all or part of the exercised Rights (other than those held by the Acquiring Person or any transferee of the Acquiring Person) for shares of common stock.

Unlike a traditional shareholder rights plan that typically endures for ten years, ECD’s tax benefits preservation plan will expire prior to the end of its ten-year term if the Board of Directors determines that the tax benefits preservation plan is no longer needed to preserve ECD’s ability to fully use its tax benefits due to the repeal of Section 382 of the Internal Revenue Code, or that ECD cannot carry forward any more of its tax benefits.

Details of the tax benefits preservation plan will be filed with the Securities and Exchange Commission and will be accessible via the EDGAR database on the SEC’s website at In addition, ECD’s stockholders of record as of October 15, 2009 may request a detailed summary of the plan from ECD.


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