SatCon Reaffirms Plan to Distribute 5,000,000 Shares of Beacon Stock

    CAMBRIDGE, Mass.--Sept. 21, 2001--To ensure broad awareness of its plan to distribute common stock to stockholders, SatCon Technology Corporation(R) , a leader in power and energy management products, today reaffirmed an announcement made last week wherein the company stated it intends to make a pro rata distribution to its stockholders of 5,000,000 shares of common stock of Beacon Power Corporation held by SatCon, subject to certain contingencies. Terms of the planned distribution have not changed since the company's initial announcement on September 13, 2001.
    SatCon currently owns 9,705,910 shares, or approximately 23%, of Beacon Power's common stock. After the distribution, SatCon will own 4,705,910 shares, or approximately 11%, of Beacon Power's of common stock. SatCon also owns a warrant to purchase 173,704 shares of Beacon Power's common stock at an exercise price of $1.25 per share. SatCon's strategic supply relationship with Beacon Power will continue intact and David Eisenhaure, SatCon's President, CEO and Chairman, will remain on Beacon Power's Board of Directors.
    The record date to establish the SatCon stockholders entitled to receive shares of Beacon Power's common stock has been set for Monday, September 24, 2001. Assuming the contingencies described below have been satisfied, the distribution date is set for Friday, September 28, 2001, and the ex-dividend date will be the next business day, or Monday, October 1, 2001.
    On the distribution date, assuming the contingencies are satisfied, holders of shares of SatCon's common stock are expected to receive approximately .3023 shares of Beacon Power common stock for each share of SatCon common stock held on the record date. Because there are convertible securities of SatCon outstanding, the exact ratio cannot be conclusively determined until the record date. Cash payments will be made in lieu of fractional shares.

    The proposed contingent distribution of Beacon Power common stock is subject to the following three contingencies:

    1. The closing price of Beacon Power's common stock on the Nasdaq National Market on the distribution date may not be in excess of $5.50 per share.

    2. SatCon's Board of Directors must have received a capital surplus and solvency opinion acceptable to the Board of Directors with respect to the distribution.

    3. The distribution must be consummated by SatCon's transfer agent prior to September 30, 2001, the last day of SatCon's fiscal year.

    In the event that any one of these contingencies is not satisfied or waived by SatCon's Board of Directors, SatCon will not effect the proposed contingent distribution.
    The distribution will be treated as a taxable distribution for SatCon and its stockholders for U.S. federal income tax purposes. However, SatCon expects that, based on the current market value of Beacon Power shares, the entire gain will be offset by SatCon's operating loss for its fiscal year ending September 30, 2001. If so, SatCon would not incur any current year obligations to pay federal income taxes, and none of the distribution would be treated as a taxable dividend to SatCon's stockholders. SatCon's stockholders would only recognize gain on the distribution to the extent that the fair market value of the .3023 shares of Beacon Power common stock received by a stockholder exceeded the stockholder's tax basis in the SatCon share with respect to which the distribution was received. SatCon believes that because its operating loss for the current fiscal year will likely be sufficient to offset the amount of gain attributable to the Beacon Power shares that are proposed to be distributed, SatCon has an opportunity, that may not exist in future years, to distribute the Beacon Power shares to SatCon's stockholders with little or no current tax cost. The precise amounts of gain or income on which SatCon and its stockholders will be obligated to pay tax, if any, will depend on several future facts and circumstances including, in particular, SatCon's performance over the remainder of its fiscal year and the price of Beacon Power's common stock on the date of the distribution.