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Satcon Adopts Stockholder Rights Plan
BOSTON--(BUSINESS WIRE)--Satcon Technology Corporation® (NASDAQ CM:SATC), a leading provider of utility scale power conversion solutions for the renewable energy market, announced today that its Board of Directors adopted a stockholder rights plan (the ?Rights Plan?) designed to preserve the value of significant tax assets associated with the Company?s tax net operating loss carryforwards (?NOLs?) under Section 382 of the Internal Revenue Code.
?Our NOLs are an important asset of the Company, an asset that we believe we should make every effort to protect?
United States federal income tax rules, and Section 382 of the Internal Revenue Code in particular, substantially limit the use of NOLs if a company experiences an ?ownership change.? Ownership changes under Section 382 generally relate to a cumulative change in ownership among stockholders with at least a 5% ownership interest (as determined under the rules of Section 382) of more than 50% over a rolling three-year period. The purpose of the Rights Plan is to protect the NOLs by reducing the likelihood of an ?ownership change? occurring as a result of transactions in the Company?s common stock.
?Our NOLs are an important asset of the Company, an asset that we believe we should make every effort to protect,? said Steve Rhoades, Satcon?s President and Chief Executive Officer. ?The Rights Plan protects the interests of all stockholders and preserves these substantial tax benefits for the Company.?
Under the Rights Plan, one right will be distributed for each outstanding share of the Company?s common stock held by stockholders of record as of the close of business on January 18, 2011. Pursuant to the Rights Plan, if any person or group (subject to certain exceptions) acquires 4.99% or more of the outstanding shares of the Company?s common stock, without approval of the Board of Directors, a substantial dilution in the voting and economic ownership of such person or group would occur.
The Rights Plan will continue in effect until January 6, 2014 unless earlier terminated or redeemed by the Board of Directors at any time prior to the rights being triggered or certain other events occur. Additional information regarding the Rights Plan will be contained in a Current Report on Form 8-K and a Registration Statement on Form 8-A to be filed by the Company with the Securities and Exchange Commission.