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Technology Stocks : SatCon Technology (SATC) -- Ignore unavailable to you. Want to Upgrade?

To: Jim Oravetz who wrote (389)	10/9/2001 7:39:32 AM
From: Jim Oravetz	Read Replies (1) \| Respond to of 440

INFORMATION REGARDING BEACON STOCK DISTRIBUTION Letter to Stockholders from David Eisenhaure President and Chief Executive Officer September 27, 2001 Dear Stockholder On September 11, 2001, the board of directors of SatCon Technology Corporation declared that, subject to three contingencies, we would make a pro rata distribution to our stockholders of 5,000,000 shares of common stock of Beacon Power Corporation held by us. Since the three contingencies to the distribution were satisfied and because you were a SatCon stockholder on September 24, 2001, the record date for the distribution, you are receiving this distribution and will now become a stockholder of Beacon Power. After the distribution, SatCon will continue to own approximately 4,705,910 shares of Beacon Power common stock and a warrant to purchase an aggregate of 173,704 additional shares of Beacon Power common stock with an exercise price of $1.25 per share. As a SatCon stockholder on September 24, you are entitled to the Beacon Power distribution. The enclosed stock certificate represents 0.3023048 of a share of Beacon Power common stock for each share of SatCon common stock that you owned on that date. Beacon Power’s shares are listed on the Nasdaq National Market under the trading symbol “BCON.” On September 24, 2001, the closing price for Beacon Power’s shares was $1.89. If you are entitled to receive fractional shares of Beacon Power common stock in the distribution, our distribution agent, EquiServe, has enclosed a cash payment in lieu of such fractional shares. The name and address of the transfer agent consummating the Beacon Power share distribution is EquiServe Trust Company, N.A., 150 Royall Street, Canton, MA 02021. The following is a summary of the United States federal income tax consequences that generally will arise with respect to the Beacon Power distribution to SatCon’s stockholders. For precise advice as to any specific transaction or set of circumstances, stockholders should consult with their own tax advisors. This summary is based on the federal tax laws in effect as of the date of this notice. Changes to these laws could alter the tax consequences described below. U.S. Federal Income Tax Consequences of the Distribution In general, the fair market value of the Beacon Power shares distributed will represent a taxable dividend if, and to the extent, SatCon has any “accumulated earnings and profits” at the time of the distribution or any “current earnings and profits” for our fiscal year that ends September 30, 2001. We do not expect to have any such accumulated or current earnings and profits, although final determination of these items will not be possible until after the close of our fiscal year and will depend in significant part on the fair market value of the shares of Beacon Power stock at the time of the distribution. If we have either current or accumulated earnings and profits, a portion of the fair market value of the 0.3023048 shares of Beacon Power stock that you receive with respect to each of our shares will be taxable as a dividend up to the proportionate share of these earnings and profits attributable to each of our shares. Any excess of the fair market value of the 0.3023048 shares of Beacon Power stock will be a tax-free return of capital to you to the extent of your adjusted tax basis in the share of our stock for which the 0.3023048 shares of Beacon Power stock were received. If your adjusted tax basis in your share of our stock is exhausted, additional amounts received in the distribution will be treated as short or long-term capital gain depending on how long you have held the share. The computation of both our current and accumulated earnings and profits and the amount of the distribution that you are treated as receiving will depend upon the fair market value of the shares of Beacon Power stock at the time of the distribution. For U.S. federal income tax purposes, there is no prescribed method for determining the fair market value of the Beacon Power shares distributed. After we have determined the fair market value of the shares of Beacon Power stock at the time of the distribution and the amount, if any, of our current and accumulated earnings and profits, we will notify you concerning the aggregate amount of the distribution and the amount that is taxable as a dividend to you. You may wish to use the same determination of fair market value as ours for purposes of your tax computations so that your reporting of the tax consequences of the distribution will be consistent with ours. Tax Basis and Holding Periods Your tax basis in the Beacon Power shares received in the distribution will equal the fair market value of the shares on the date of the distribution (see discussion above). With respect to each share of our stock that you own, your tax basis will be reduced (but not below zero) to the extent that the fair market value of the 0.3023048 Beacon Power shares distributed with respect to such share is not treated as a dividend. The holding period for the Beacon Power shares received by you in the distribution will commence on the day following the distribution. The information in this notice represents our understanding of existing federal income tax laws and regulations and does not constitute tax advice. It does not purport to be complete or to describe tax consequences that may apply to particular categories of stockholders. Each stockholder should consult his or her tax advisor as to the particular consequences of the distribution under U.S. federal, state and local, and foreign tax laws, including, in particular, tax basis allocation rules and the effect of possible changes to tax laws that may affect the description provided above. Sincerely, DAVID B. EISENHAURE President and Chief Executive Officer