Energy Conversion Devices adopts rights plan to protect use of NOLs

By Lisa Kerner

Charlotte, N.C., Oct. 1 - Energy Conversion Devices, Inc.'s board of directors adopted a tax benefits preservation plan to preserve the company's ability to use certain tax assets, including its "substantial" net operating loss carryforwards, it was announced on Thursday.

According to the company, its use of these tax assets could be limited if the company experiences an ownership change as defined by Section 382 of the Internal Revenue Code.

Energy Conversion's board, as part of the plan, declared a dividend on Wednesday of one common stock purchase right for each outstanding share of common stock held of record as of the close of business on Oct. 15.

The rights will be triggered if any person or group acquires 4.9% or more of Energy Conversion's outstanding shares.

Each right entitles the holder to purchase Energy Conversion common stock at a 50% discount.

"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," Energy Conversion president and chief executive officer Mark Morelli said in a news release.

Energy Conversion is a Rochester Hills, Mich., maker of thin-film flexible solar laminate products for buildings.

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