DEF 14A 1 b50475dfdef14a.htm EVERGREEN SOLAR, INC. EVERGREEN SOLAR, INC.
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U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

(Rule 14A-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934
 
Filed by the Registrant:  þ Filed by a Party other than the Registrant:  o


Check the appropriate box:

o Preliminary Proxy Statement
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

EVERGREEN SOLAR, INC.

(Name of Registrant as Specified in Its Charter)


(Name Of Person(s) Filing Proxy Statement, if other than Registrant)

Payment of Filing Fee (Check the appropriate box):

þ No fee required.
o Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

       (1) Title of each class of securities to which transaction applies:

       (2) Aggregate number of securities to which transaction applies:

       (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):

       (4) Proposed maximum aggregate value of transaction:

       (5) Total fee paid:

o Fee paid previously with preliminary materials.

o  Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number or the Form or Schedule and the date of its filing.

       (1) Amount Previously Paid:

       (2) Form, Schedule or Registration Statement No.:

       (3) Filing Party:

       (4) Date Filed:


PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
PROPOSAL ONE
OCCUPATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
AUDIT COMMITTEE REPORT
COMPENSATION AND OTHER INFORMATION CONCERNING DIRECTORS AND OFFICERS
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
STOCK PERFORMANCE GRAPH
PROPOSAL TWO
PROPOSAL THREE
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
STOCKHOLDER PROPOSALS
INDEPENDENT PUBLIC ACCOUNTANTS
EXPENSES AND SOLICITATION
INCORPORATION BY REFERENCE
Appendix A
Appendix B
Appendix C


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EVERGREEN SOLAR, INC.

259 Cedar Hill Street
Marlboro, Massachusetts 01752

NOTICE OF ANNUAL MEETING

To be Held on August 20, 2004

To the Stockholders of Evergreen Solar, Inc.:

      Notice is hereby given that the annual meeting of Stockholders (the “Annual Meeting”) of Evergreen Solar, Inc., a Delaware corporation (the “Company”), will be held at 11:00 a.m., local time, on Friday, August 20, 2004, at the Royal Plaza Hotel & Trade Center, 181 Boston Post Road West, Marlboro, MA 01752, to consider and act upon the following proposals:

      1.     To elect three directors to Class I of the Company’s board of directors, each to serve for a term of three years or until his or her successor is duly elected and qualified.

      2.     To consider and act upon a proposal to approve the exercisability of warrants to purchase up to 2,423,851 shares of our common stock and the issuance of a corresponding number of shares of our common stock upon the exercise of such warrants, which warrants were issued pursuant to a private placement financing transaction consummated on June 21, 2004.

      3.     To consider and act upon a proposed amendment to Article Fourth of the Company’s Third Amended and Restated Certificate of Incorporation to increase the total number of authorized shares of our common stock from 70,000,000 to 100,000,000, and to increase the total number of authorized shares of the Company’s capital stock from 97,227,668 to 127,227,668.

      4.     To transact such other business as may properly come before the Annual Meeting or any postponements or adjournments thereof.

      Only Stockholders of record at the close of business on July 19, 2004 are entitled to notice of and to vote at the Annual Meeting.

      All Stockholders are cordially invited to attend the Annual Meeting in person. To ensure your representation at the Annual Meeting, however, you are urged to mark, sign, date and return the enclosed proxy card as promptly as possible in the enclosed postage-prepaid envelope. You may revoke your proxy in the manner described in the accompanying Proxy Statement at any time before it has been voted at the Annual Meeting. Any Stockholder attending the Annual Meeting may vote in person even if he or she has returned a proxy.

  By Order of the Board of Directors,
 
  RICHARD G. CHLEBOSKI
  Secretary

Marlboro, Massachusetts

July 16, 2004

WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE IN ORDER TO ASSURE REPRESENTATION OF YOUR SHARES. NO POSTAGE NEED BE AFFIXED IF THE PROXY CARD IS MAILED IN THE UNITED STATES.


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EVERGREEN SOLAR, INC.

259 Cedar Hill Street
Marlboro, MA 01752
 
PROXY STATEMENT

July 16, 2004

 
INFORMATION CONCERNING SOLICITATION AND VOTING

General

      This proxy statement is being furnished in connection with the solicitation of proxies by the board of directors of Evergreen Solar, Inc., a Delaware corporation for use at the Annual Meeting of Stockholders to be held on Friday, August 20, 2004 (the “Annual Meeting”) at 11:00 a.m., local time, at the Royal Plaza Hotel & Trade Center, 181 Boston Post Road West, Marlboro, MA 01752, or at any adjournments or postponements thereof. Our Annual Report to Stockholders for the fiscal year ended December 31, 2003, is being mailed together with this Proxy Statement to all stockholders entitled to vote at the Annual Meeting. This Proxy Statement and the accompanying notice and form of proxy will be first mailed to stockholders on or about July 23, 2004.

Voting at the Annual Meeting; Record Date

      The board of directors has fixed the close of business on July 19, 2004 as the record date (the “Record Date”). Accordingly, only holders of record of common stock as of the close of business on the Record Date will be entitled to notice of, and to vote at, the Annual Meeting or an adjournment thereof. As of July 15, 2004, an aggregate of 47,523,287 shares of our common stock were issued and outstanding. The holders of common stock are entitled to one vote per share on any proposal presented at the Annual Meeting. Execution of a proxy will not in any way affect a stockholder’s right to attend the Annual Meeting and vote in person. Any proxy given pursuant to this solicitation may be revoked by the person giving it at any time before it is voted. Proxies may be revoked by (1) filing with our Secretary, before the taking of the vote at the Annual Meeting, a written notice of revocation bearing a later date than the date of this proxy statement, above, (2) duly executing a later dated proxy relating to the same shares and delivering it to the Secretary of the Company before the taking of the vote at the Annual Meeting or (3) attending the Annual Meeting and voting in person (although attendance at the Annual Meeting will not in and of itself constitute a revocation of a proxy). Any written notice of revocation or subsequent proxy should be sent so as to be delivered to Evergreen Solar, Inc., 259 Cedar Hill Street, Marlboro, MA 01752, Attention: Richard G. Chleboski, at or before the taking of the vote at the Annual Meeting.

Quorum and Votes Required

      The representation in person or by proxy of at least a majority of the outstanding shares of our capital stock entitled to vote at the Annual Meeting is necessary to establish a quorum for the transaction of business at the Annual Meeting. Votes withheld from the nominee, abstentions and broker “non-votes” are counted as present or represented for purposes of determining the presence or absence of a quorum. A “non-vote” occurs when a broker holding shares for a beneficial owner votes on one proposal, but does not vote on another proposal because, in respect of such other proposal, the broker does not have discretionary voting power and has not received instructions from the beneficial owner.

 
Votes Required for Proposal One

      In the election of directors, the nominees receiving the highest number of affirmative votes of the shares present or represented and entitled to vote at the Annual Meeting shall be elected as directors.

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Votes Required for Proposal Two

      The affirmative vote of a majority of the total votes cast by holders of the outstanding shares of common stock present in person or represented by proxy and entitled to vote at the Annual Meeting is required to approve the exercisability of warrants to purchase up to 2,423,851 shares of our common stock and the issuance of shares of our common stock upon the exercise of such warrants, which warrants were issued pursuant to a private placement financing transaction consummated on June 21, 2004. However, in accordance with the Marketplace Rules of the Nasdaq National Market, none of the shares of common stock acquired in the private placement financing transaction are eligible to be voted with respect to Proposal Two, and no votes cast in respect of such shares of common stock will be counted toward the applicable threshold needed to approve the exercisability of the warrants and the issuance of shares of common stock upon the exercise of such warrants. Accordingly, of the approximately 47,523,287 shares of our common stock that will be issued and outstanding as of the Record Date, only 39,860,452 shares of our common stock are eligible to vote on proposal two.

 
Votes Required for Proposal Three

      The affirmative vote of a majority of the outstanding shares of our common stock is required to approve the proposal to amend our certificate of incorporation to increase the number of authorized shares of our common stock from 70,000,000 to 100,000,000 and to increase the total number of authorized shares of our capital stock from 97,227,668 to 127,227,668.

      On all other matters being submitted to stockholders, the affirmative vote of a majority of shares present, in person or represented by proxy, and voting on each such matter is required for approval. An automated system administered by our transfer agent tabulates the votes received from holders of shares of our common stock. The vote on each matter submitted to stockholders is tabulated separately. Abstentions are included in the number of shares present or represented and voting on each matter. Broker “non-votes” are not considered voted for the particular matter and have the effect of reducing the number of affirmative votes required to achieve a majority for such matter by reducing the total number of shares from which the majority is calculated.

      The persons named as attorneys-in-fact in the proxies, Richard M. Feldt and Richard G. Chleboski, were selected by the board of directors and are executive officers of Evergreen. All properly executed proxies returned in time to be counted at the Annual Meeting will be voted. Any stockholder giving a proxy has the right to withhold authority to vote for any individual nominee to the board of directors by writing that nominee’s name in the space provided on the proxy. All proxies will be voted in accordance with the stockholders’ instructions, and if no choice is specified, the enclosed proxy card (or any signed and dated copy thereof) will be voted in favor of the matters set forth in the accompanying Notice of Annual Meeting.

      The board of directors knows of no other matter to be presented at the Annual Meeting. If any other matter should be presented at the Annual Meeting upon which a vote may properly be taken, shares represented by all proxies received by the board of directors will be voted with respect thereto in accordance with the judgment of the persons named as attorneys in the proxies.

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SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The following table sets forth certain information regarding beneficial ownership of our common stock as of June 30, 2004 (the “Measurement Date”) by: (i) each person who is known by us to own beneficially more than 5% of the outstanding shares of common stock; (ii) each of our directors or nominees for director; (iii) each of our executive officers named in the Summary Compensation Table on page 15; and (iv) all of our current directors, nominees for director and executive officers as a group. Unless otherwise indicated, the address for each beneficial owner is c/o Evergreen Solar, Inc., 259 Cedar Hill Street, Marlboro, MA 01752.

                   
Number of Shares Percentage of
Beneficially Shares of
Name and Address of Beneficial Owner Owned(1) Common Stock(2)



5% Stockholders:
               
Beacon Power Corporation(3)
    3,373,528       6.8 %
  234 Ballardvale Street                
  Wilmington MA 01887                
CDP Entities(4)
    2,920,584       6.1 %
  1981, avenue McGill College,                
  Montreal, Quebec H3A3C7                
  Canada                
Massachusetts Technology Park Corporation
    2,433,820       5.1 %
  75 North Drive                
  Westborough, MA 01581                
Nth Power Technologies Entities(5)
    4,911,026       10.3 %
  50 California Street                
  Suite 840                
  San Francisco, CA 94111                
Perseus 2000, L.L.C. 
    2,920,585       6.1 %
  2099 Pennsylvania Avenue, N.W., 9th Floor                
  Washington, D.C. 20006                
RockPort Capital Entities(6)
    5,111,023       10.8 %
  160 Federal Street, 18th Floor                
  Boston, MA 02110                
SAM Equity Partners Entities(7)
    2,920,586       6.1 %
  P.O. Box 255                
  Trafalgar Court                
  St. Peter Port, Guernsey                
Executive Officers and Directors:
               
Richard M. Feldt(8)
    250,000       *  
Mark A. Farber(9)
    353,491       *  
Richard G. Chleboski(10)
    314,954       *  
Dr. Jack I. Hanoka(11)
    310,859       *  
John J. McCaffrey(12)
    113,073       *  
Rex D’Agostino(13)
    50,000       *  
Dr. Brown F. Williams(14)
    77,273       *  
Luc Charron(15)
    2,942,127       6.2 %
Phillip J. Deutch(16)
    2,944,128       6.2 %
Charles J. McDermott(17)
    5,134,066       10.8 %
Dr. Robert W. Shaw, Jr.(18)
    439,409       *  
Dr. William P. Sommers(19)
    78,965       *  
Timothy Woodward(20)
    4,934,069       10.4 %
All executive officers and directors as a group (13 persons)(21)
    17,942,414       35.2 %

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Less than one percent of the outstanding shares of Class.

  (1)  The persons named in the table have sole voting and investment power with respect to all shares shown as beneficially owned by them, except as noted in the footnotes below.
 
  (2)  Applicable percentage ownership as of the Measurement Date is based upon 47,523,287 shares of common stock outstanding as of the Measurement Date. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and includes voting and investment power with respect to shares. Shares of common stock subject to options and warrants currently exercisable or exercisable within 60 days after the Measurement Date are deemed outstanding for computing the percentage ownership of the person holding such options or warrants, as the case may be, but are not deemed outstanding for computing the percentage ownership of any other person.
 
  (3)  Includes 2,400,000 shares of common stock issuable upon exercise of a warrant held by Beacon Power Corporation.
 
  (4)  Includes 2,482,497 shares of common stock held by Caisse dépôt et placement du Québec and 438,087 shares of common stock held by CDP Capital-Technology Ventures U.S. Fund 2002 L.P.
 
  (5)  Includes 1,016,914 shares of common stock held by Nth Power Technologies Fund I, L.P., 1,947,056 shares of common stock held by Nth Power Technologies Fund II, L.P. and 1,947,056 shares of common stock held by Nth Power Technologies Fund II-A, L.P.
 
  (6)  Includes 3,894,113 shares of common stock held by RockPort Capital Partners, L.P. and 1,216,910 shares of common stock held by RP Co-Investment Fund I L.P.
 
  (7)  Includes 2,102,821 shares of common stock held by SAM Private Equity Energy Fund L.P. and 817,764 shares of common stock held by SAM Sustainability Private Equity LP.
 
  (8)  Includes 250,000 shares of common stock issuable upon the exercise of options that may be exercised within 60 days from the Measurement Date.
 
  (9)  Includes 168,609 shares of common stock issuable upon the exercise of options that may be exercised within 60 days from the Measurement Date.

(10)  Includes 128,350 shares of common stock issuable upon the exercise of options that may be exercised within 60 days from the Measurement Date.
 
(11)  Includes 60,774 shares of common stock held by Dr. Hanoka and 138,568 shares of common stock held by Hanoka Evergreen Limited Partnership. Includes 111,517 shares of common stock issuable upon the exercise of options that may be exercised within 60 days from the Measurement Date.
 
(12)  Includes 102,556 shares of common stock issuable upon the exercise of options that may be exercised within 60 days from the Measurement Date.
 
(13)  Includes 50,000 shares of common stock issuable upon the exercise of options that may be exercised within 60 days from the Measurement Date.
 
(14)  Includes 77,273 shares of common stock issuable upon the exercise of options that may be exercised within 60 days from the Measurement Date.
 
(15)  Includes 21,543 shares of common stock issuable upon the exercise of options that may be exercised within 60 days from the Measurement Date.
 
(16)  Includes 23,543 shares of common stock issuable upon the exercise of options that may be exercised within 60 days from the Measurement Date and 2,920,585 shares of common stock held by Perseus 2000, L.L.C. Mr. Deutch disclaims beneficial ownership of all of the shares of common stock held by Persues 2000, L.L.C., other than shares in which he has a pecuniary interest.
 
(17)  Includes 23,043 shares of common stock issuable upon the exercise of options that may be exercised within 60 days from the Measurement Date and 5,111,023 shares of common stock held by the RockPort Capital Entities. Mr. McDermott disclaims beneficial ownership of all of the shares of common stock held by the RockPort Capital Entities, other than shares in which he has a pecuniary interest.

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(18)  Includes 47,543 shares of common stock issuable upon the exercise of options that may be exercised within 60 days from the Measurement Date and 391,866 shares of common stock of which 9,111 shares of common stock are held by Dr. Shaw’s wife.
 
(19)  Includes 78,965 shares of common stock issuable upon the exercise of options that may be exercised within 60 days from the Measurement Date.
 
(20)  Includes 23,043 shares of common stock issuable upon the exercise of options that may be exercised within 60 days from the Measurement Date and an aggregate of 4,911,026 shares of common stock held by Nth Power Technologies Entities. Mr. Woodward disclaims beneficial ownership of all of the shares of common stock held by the Nth Power Technologies Entities, other than shares in which he has a pecuniary interest.
 
(21)  For purposes of calculating the Percentage of Shares of common stock outstanding, the number of shares beneficially owned includes 2,400,000 shares of common stock issuable upon exercise of warrants and 1,105,985 shares of common stock issuable upon the exercise of options that may be exercised within 60 days from the Measurement Date.

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PROPOSAL ONE

ELECTION OF DIRECTORS

      Our board of directors is currently fixed at nine (9) members. There are presently nine (9) individuals serving as directors. Our Third Amended and Restated Certificate of Incorporation divides our board of directors into three classes. The members of each class of directors serve for staggered three-year terms.

      Drs. William P. Sommers, Mr. Luc Charron and Mr. Richard M. Feldt are Class I directors whose terms expire at this Annual Meeting. The board is also composed of three (3) Class II directors (Dr. Robert W. Shaw, Jr., Mr. Charles J. McDermott and Dr. Brown F. Williams) whose terms expire upon the election and qualification of directors at the Annual Meeting to be held in 2005, and three (3) Class III directors (Mr. Mark A. Farber, Mr. Phillip J. Deutch and Mr. Timothy Woodward), whose term expires upon the election and qualification of directors at the Annual Meeting to be held in 2006.

      Three Class I Directors will be elected at this Annual Meeting for a term of three years. The Class I nominees, Dr. Sommers, Mr. Charron and Mr. Feldt, are each currently serving as a Class I Director. Shares represented by all proxies received by the board of directors and not marked to withhold authority to vote for the nominees will be voted FOR the election of all three nominees, to hold office until the Annual Meeting to be held in 2007 or until their respective successors are duly elected and qualified. All of the nominees have indicated their willingness to serve, if elected; however, if any nominee should be unable or unwilling to serve, the proxies may vote for the election of a substitute nominee designated by the board of directors.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS

A VOTE “FOR” THE NOMINEES LISTED BELOW

      The following table sets forth for each nominee to be elected at the Annual Meeting and for each director whose term of office will extend beyond the Annual Meeting, the year each such nominee or director was first elected a director, the positions currently held by each nominee or director with us, the year each nominee’s or director’s term will expire and the class of director of each nominee or director:

                     
Nominee’s or Director’s Name
and Year Nominee or Director Year Term Class of
First Became a Director Position(s) Held with the Company Will Expire Director




Nominees:
                   
Dr. William P. Sommers (1999)
  Director     2007       I  
Luc Charron (2003)
  Director     2007       I  
Richard M. Feldt (2003)
  Chief Executive Officer, President and Director     2007       I  
Continuing Directors:
                   
Mark A. Farber (1994)
  Vice President, Marketing & Business Development and Director     2006       III  
Phillip J. Deutch (2003)
  Director     2006       III  
Timothy Woodward (2003)
  Director     2006       III  
Dr. Robert W. Shaw, Jr. (1994)
  Director     2005       II  
Charles J. McDermott (2003)
  Director     2005       II  
Dr. Brown F. Williams (1999)
  Director     2005       II  

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OCCUPATIONS OF DIRECTORS AND EXECUTIVE OFFICERS

      The following table sets forth for each Class I nominee to be elected at the Annual Meeting, the current Class III Directors and Class II Directors who will continue to serve as directors beyond the Annual Meeting, and our current executive officers, their ages and present positions with us as of the date of the Annual Meeting. Each officer shall serve until his or her successor is elected and qualified.

             
Name Age Position



Richard M. Feldt
    52     Chief Executive Officer, President and Director
Richard G. Chleboski
    38     Chief Financial Officer, Vice President, Treasurer, and Secretary
Mark A. Farber
    51     Vice President, Marketing & Business Development and Director
Dr. Jack I. Hanoka
    68     Chief Technical Officer
John J. McCaffrey, Jr.
    52     Vice President, Manufacturing and Engineering
Dr. Rex A. D’Agostino
    61     Vice President, Sales
Luc Charron
    52     Director
Phillip J. Deutch(1)
    39     Director
Charles J. McDermott(2)(3)
    53     Director
Dr. Robert W. Shaw, Jr.(1)
    60     Director
Dr. William P. Sommers(2)
    68     Director
Dr. Brown F. Williams(2)(3)
    61     Chairman of the Board of Directors
Timothy Woodward(1)(3)
    43     Director


(1)  Member of the Compensation Committee.
 
(2)  Member of the Audit Committee.
 
(3)  Member of the Nominating and Corporate Governance Committee.

Directors to be Elected at the Annual Meeting:

      Luc Charron is a Senior Partner at CDP Capital — Technology Ventures, a technology venture capital firm and subsidiary of Caisse de dépôt et placement du Québec. From 1998 to 2000, Mr. Charron was Senior Vice-President and Director of KPMG Corporate Finance Inc. and from 1992 to 1998, Mr. Charron was Vice-President, Investments, of the Solidarity Fund QFL, a leading Quebec development capital fund. Mr. Charron also served as Senior Vice-President and Director of Power Financial Capital Corporation. Prior to that, he was Vice-President, Merchant Banking and Credit, for the Quebec region for RoyNat, where he managed portfolios of $200-300 million and specialized in management buyouts. Mr. Charron serves on the board of directors of Hyradix, Inc., Cellex Power Products Inc., D.J. Livingston & Co., Groupe Triton International, Inc., and Ormecon GmbH. Mr. Charron received a B.B.A. from the École des Hautes Études Commerciales.

      Dr. William P. Sommers has served as a director since January 1999. Dr. Sommers retired in 1998. From 1994 to 1998, Dr. Sommers was President and Chief Executive Officer of SRI International, formerly Stanford Research Institute, a contract research and development organization. From 1963 to 1993, he was an Executive Vice President and director of Booz-Allen & Hamilton. Dr. Sommers serves on the board of directors of Litton Industries, Inc. and Deutsche-Scudder Investments. Dr. Sommers received a B.S. and M.S. in Mechanical Engineering and Ph.D. in Aeronautical Engineering from the University of Michigan, with highest honors.

      Richard M. Feldt became our President and Chief Executive Officer and a director in December 2003. Previously he was employed by Perseid, a developer of optical phased array technology created by Raytheon, where he served as Chief Executive Officer in 2002. Prior to that, from 2000 to 2001, Mr. Feldt served as

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Chief Operating Officer of SupplierMarket.com, a B2B internet supply chain management company which was sold to Ariba. Prior to that, from 1995 to 2000, Mr. Feldt was Senior Vice President and General Manager of Worldwide Operations at Symbol Technologies, a data transaction systems company. In addition, Mr. Feldt has held senior positions at A.T. Cross Company, Eastman Kodak Company, and Spectra-Physics, Inc. He received a bachelor’s degree in industrial engineering from Northeastern University.

Directors Whose Terms Extend Beyond the Annual Meeting:

      Philip J. Deutch is a Managing Director of Perseus, L.L.C., a Washington, D.C. and New York City-based private equity firm and has lead Perseus’ energy technology investing since 1997. Mr. Deutch serves on the board of directors of Beacon Power Corporation, Metallic Power, Inc., Encorp, Inc. and International Marketing Concepts. Prior to joining Perseus, Mr. Deutch worked at Williams & Connolly and in the Mergers and Acquisitions Department of Morgan Stanley & Co. Mr. Deutch is a Term Member of the Council on Foreign Relations, a member of the board of directors of the International Center for Research on Women and the City Lights School of Washington, D.C. and a member of the Board of Advisors of Jumpstart DC. Mr. Deutch received a J.D. from Stanford Law School and a B.A. from Amherst College.

      Timothy Woodward is a Managing Director of Nth Power, L.L.C., a venture capital firm dedicated to the global energy sector. Mr. Woodward joined Nth Power in 1998 following eight years of managing venture capital investments at Liberty Environmental Partners, a venture capital firm focused on environmental, industrial and energy technologies. In 1991, Mr. Woodward assisted in the formation of Liberty Environmental Partners, where he co-managed the firm’s venture capital activities. Prior to forming Liberty Environmental Partners, Mr. Woodward was part of the founding senior management team of First Source, a company providing industrial solvent recycling services, and from 1982 to 1987 he worked in international marketing at Claude Laval Corporation, an industrial filtration equipment manufacturer. Mr. Woodward serves on the board of directors of AllConnect, Wellspring International and H2Gen. Mr. Woodward received an M.B.A. from the University of California, Los Angeles and a B.S. in resource economics from the University of California, Berkeley.

      Charles J. McDermott is a Partner in RockPort Capital Partners and Chief Executive Officer of the RockPort Group. From 1990 to 1998, Mr. McDermott was Vice President of Waste Management Inc., overseeing advocacy before the U.S. Congress, the Environmental Protection Agency and other federal agencies and the White House. During his tenure from 1984 to 1986 at Citizens Energy, a non-profit energy company, Mr. McDermott helped pioneer the creation of the nation’s first bulk electric power trading company. Mr. McDermott later served as Campaign Director and then as Chief of Staff for Congressman Joseph P. Kennedy II from 1986 to 1990 and has served on various EPA advisory councils and presidential task forces. Mr. McDermott serves on the board of directors and as President of the CEO Coalition to Advance Sustainable Technologies, is a member of the Board of Governors of the National Association of Small Business Investment Companies and also serves on the board of directors of Cerox Corporation.

      Dr. Brown F. Williams has served as Chairman of our board of directors since January 2004 and has been a director since January 1999. Since July 1990, Dr. Williams has been Chairman of the board of directors of Princeton Video Image, Inc., a media services company active in broadcast and cable television, virtual advertising and interactive telecommunications. Princeton Video Image filed a petition for protection under the federal bankruptcy laws in September 2003. From 1966 to 1988, he worked at RCA Laboratories in various capacities, including as a Vice President, where his responsibilities included research in solar power technology. Dr. Williams received a B.A., M.A. and Ph.D. in Physics from the University of California, Riverside.

      Mark A. Farber served as our President and Chief Executive Officer until December 2003 and has been a director since August 1994. Mr. Farber was elected our first Chief Executive Officer in May 2000 and currently serves as Vice President, Marketing & Business Development. From July 1988 until February 1994, Mr. Farber worked at Mobil Solar Energy Corporation, the solar power subsidiary of Mobil Corporation, where he was responsible for marketing, sales and corporate partnering activities. From June 1976 until June 1988, Mr. Farber was employed by Temple, Barker and Sloane, now Mercer Management Consulting, as a

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management consultant where he advised electric utilities, equipment manufacturers and government agencies on economic, business and policy issues related to energy. Mr. Farber received a B.S. in Industrial Engineering and Operations Research from Cornell University and a M.S. in Management from the Sloan School of Management of the Massachusetts Institute of Technology.

      Dr. Robert W. Shaw, Jr. served as the Chairman of our board of directors from October 1994 until January 2004 and continues to serve as a director. Since 1983, Dr. Shaw has served as President of Arete Corporation, a venture capital management firm with a focus on the energy technology sector, and has been General Partner of six venture capital funds. Prior to that time, Dr. Shaw was a senior vice president and director of Booz-Allen & Hamilton, an international management and technology consulting firm, where he founded the firm’s energy division. Dr. Shaw is Chairman of the board of directors of Proton Energy Systems, Inc. Dr. Shaw received a B.E.P. degree and an M.S. in Electrical Engineering from Cornell University, an M.P.A. from American University, and a Ph.D. in Applied Physics from Stanford University.

Non-Director Executive Officers:

      Richard G. Chleboski has served as our Chief Financial Officer, Vice-President and Treasurer since August 1994 and our Secretary since May 2000. From June 1995 until May 2003, Mr. Chleboski served as a director of the Company. From July 1987 until February 1994, Mr. Chleboski worked at Mobil Solar Energy Corporation, the solar power subsidiary of Mobil Corporation where he was the Strategic Planner from March 1991 until February 1994 and a Process Engineer from 1987 until 1991. Mr. Chleboski received a B.S. in Electrical Engineering from the Massachusetts Institute of Technology and an M.B.A. from Boston College.

      Dr. Rex A. D’Agostino served as our Vice President, Marketing and Sales from January 2001 until December 2003 and currently serves as our Vice President, Sales. From August 1996 until January 2001, Dr. D’Agostino was President and Chief Executive Officer of Environmizer Systems Corporation, a manufacturer of magnetohydrodynamic products for fluid processing applications. From August 1989 to August 1996, he was President of The Graver Company, a division of the Marmon Group, a developer and manufacturer of water and wastewater treatment equipment and systems. Dr. D’Agostino received his B.A. in Biological Sciences from Shorter College and a Ph.D. in microbiology and biophysics from Notre Dame University.

      Dr. Jack I. Hanoka has served as our Chief Technical Officer since August 1994. From December 1978 until February 1994, Dr. Hanoka worked at Mobil Solar Energy Corporation, the solar power division of Mobil Corporation, where he was a Research Associate. Dr. Hanoka received a B.A. in Liberal Arts and a B.S. in Ceramic Engineering from Rutgers University and a M.S. in Ceramic Science and a Ph.D. in Solid State Physics from Pennsylvania State University.

      John J. McCaffrey, Jr. has served as our Vice President, Manufacturing and Engineering since December 2000 and previously served as our Vice President, Manufacturing since June 1999. From June 1979 until June 1999, Mr. McCaffrey worked for Polaroid Corporation where he managed manufacturing, equipment engineering and quality control, including factory start-ups and international operations. Mr. McCaffrey received a B.S. in Chemistry and General Engineering from The United States Naval Academy, Annapolis.

CORPORATE GOVERNANCE AND BOARD AND COMMITTEE MATTERS

Independence of Members of the Board of Directors and Committees

      The board of directors has determined that each of Mr. Woodward, Mr. Deutch, Dr. Williams, Dr. Shaw, Mr. McDermott, Dr. Sommers and Mr. Charron has no relationship with the Company other than as a stockholder and as a result of service on the board of directors and each is independent within the meaning of the Company’s director independence standards and the director independence standards of The Nasdaq Stock Market, Inc. (“Nasdaq”). Furthermore, the board of directors has determined that each member of each of the committees of the board of directors has no relationship with the Company other than as a

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stockholder and service on the board of directors and the committee(s) thereof and each is independent within the meaning of the Company’s and Nasdaq’s director independence standards.

Board of Directors Meetings

      The board of directors met 12 times during the fiscal year ended December 31, 2003. During the fiscal year ended December 31, 2003, each of our directors attended at least seventy five percent (75%) of the total number of meetings of the board of directors (held during the period for which he has been a director) and all committees of the board of directors on which he served (during the periods that he served). Independent members of the board of directors of the Company meet in executive session without management present and are scheduled to do so at least two times during fiscal year 2004.

Policy on Director Attendance at Annual Meetings

      The Company’s policy on director attendance at annual meetings is that all directors are expected to prepare for, attend in person and participate in the annual meeting of the stockholders of the Company. Each of the Company’s board members attended last year’s annual meeting in person except for Dr. Sommers who attended the meeting via teleconference.

Security Holder Communications with the Board

      The board of directors provides to every security holder the ability to communicate with the board of directors, as a whole, and with individual directors on the board, through an established process for security holder communication as follows:

        For communication directed to the board of directors as a whole, security holders may send such communication to the attention of the Chairman of the Board via U.S. Mail or Expedited Delivery Service to the address below:

Evergreen Solar, Inc.

259 Cedar Hill Street
Marlboro, Massachusetts 01752
Attn: Chairman of the board of directors

        For communication directed to an individual director in his or her capacity as a member of the board of directors, security holders may send such communication to the attention of the individual director via U.S. Mail or Expedited Delivery Service to the address below:

Evergreen Solar, Inc.

259 Cedar Hill Street
Marlboro, Massachusetts 01752
Attn: [Name of Individual Director]

      The Company will forward by U.S. Mail any such security holder communication to each director, and the Chairman of the Board in his or her capacity as a representative of the board of directors, to whom such security holder communication is addressed to the address specified by each such director and the Chairman of the Board.

      More information regarding Security Holder — Board communications is contained in our Policy Governing Director Nominations and Security Holder — Board Communications which may be obtained by written request sent to Evergreen Solar, Inc. Nominating and Corporate Governance Committee, 259 Cedar Hill Street, Marlboro, Massachusetts 01752.

Audit Committee

      The Audit Committee of the board of directors, established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended, currently consists of Drs. Williams and Sommers and Mr. McDermott. Mr. Mason Willrich, formerly a member of the Audit Committee, resigned as a director and

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member of the Audit Committee effective May 15, 2003. Each of the members of the Audit Committee is independent within the meaning of the Company’s director independence standards and the applicable standards of Nasdaq and the U.S. Securities and Exchange Commission (the “SEC”). The board of directors has determined that William P. Sommers is an “audit committee financial expert” under the rules of the SEC.

      The Audit Committee met five times during 2003. The Audit Committee oversees our accounting and financial functions and periodically meets with our management and independent auditors to review financial and accounting controls and quarterly and annual financial reports. The primary functions of the Audit Committee are to (i) oversee the appointment, compensation and retention of the Company’s independent public accountants and to oversee the work performed by such accountants; (ii) assist the board of directors in fulfilling its responsibilities by reviewing: (a) the financial reports provided by the Company to the SEC, the Company’s stockholders or to the general public, and (b) the Company’s internal financial and accounting controls; (iii) recommend, establish and monitor procedures designed to improve the quality and reliability of the disclosure of the Company’s financial condition and results of operations; (iv) establish procedures designed to facilitate (a) the receipt, retention and treatment of complaints relating to accounting, internal accounting controls or auditing matters and (b) the receipt of confidential, anonymous submissions by employees of concerns regarding questionable accounting or auditing matters; (v) engage advisors as necessary; and (vi) distribute relevant funding from the Company that is necessary or appropriate to carry out the Audit Committee’s duties.

      The Audit Committee operates under a written charter adopted by the board of directors setting out the functions the Audit Committee is to perform, which charter is attached to this Proxy Statement as Appendix A.

Compensation Committee

      The Compensation Committee of the board of directors currently consists of Dr. Shaw, Mr. Deutch and Mr. Woodward, each of whom is independent within the meaning of the director independence standards of the Company and of Nasdaq. The Compensation Committee met 7 times during 2003. The functions of the Compensation Committee include: (i) reviewing and making recommendations to management on company-wide compensation programs and practices; (ii) taking final action with respect to the individual salary, bonus and equity arrangements of the Company’s Chief Executive Officer (the “CEO”); and (iii) recommending, subject to approval by the board of directors, new equity-based plans and any material amendments thereto for which stockholder approval is required or desirable.

      The Compensation Committee operates under a written charter adopted by the board of directors.

Compensation Committee Interlocks and Insider Participation

      The members of the Compensation Committee are currently Dr. Shaw, Mr. Deutch and Mr. Woodward. Dr. Williams served as a member of the Compensation Committee until May 2003. No current member of the Compensation Committee or person who was a member of such committee at any time during 2003 was at any time during the past year an officer or employee of the Company (or any of our subsidiaries), was formerly an officer of the Company (or any of its subsidiaries), or had any relationship with the Company requiring disclosure herein.

      During the last fiscal year, none of our executive officers served as (i) a member of the compensation committee (or other committee of the board of directors performing equivalent functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose executive officers served on our Compensation Committee; (ii) a director of another entity, one of whose executive officers served on our Compensation Committee; or (iii) a member of the compensation committee (or other committee of the board of directors performing equivalent functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose executive officers served as a director of our board of directors.

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Nominating and Corporate Governance Committee

      The Nominating and Corporate Governance Committee of the board of directors was established on April 21, 2004 and currently consists of Dr. Williams, Mr. McDermott and Mr. Woodward, each of whom is independent within the meaning of the director independence standards of the Company and of Nasdaq. The Nominating and Corporate Governance Committee is responsible for (i) reviewing and making recommendations to the board of directors regarding the composition and structure of the board of directors; (ii) establishing criteria for membership on the board of directors and evaluating corporate policies relating to the recruitment of members of the board of directors; and (iii) establishing, implementing and monitoring policies and processes regarding principles of corporate governance in order to ensure compliance by the board of directors with its fiduciary duties to the Company and its stockholders. The Nominating and Corporate Governance Committee operates under a written charter adopted by the board of directors, a current copy of which is attached as Appendix B.

Director Nominations

 
Nominations by Stockholders

      The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders provided that such recommendations are delivered pursuant to the Policy Governing Director Nominations and Security Holder — Board Communications. A copy of this policy may be obtained by writing to Evergreen Solar, Inc. Nominating and Corporate Governance Committee, 259 Cedar Hill Street, Marlboro, MA 01752. Stockholders who wish to recommend individuals for consideration by the Nominating and Corporate Governance Committee as nominees for election to the board of directors must give written notice to the Nominating and Corporate Governance Committee of the Company via one of three methods: (i) via U.S. Mail or Expedited Delivery to Evergreen Solar, Inc., 259 Cedar Hill Street, Marlboro, MA 01752, c/o Secretary of the Company; (ii) via facsimile at (508) 357-2279 or (iii) via email to the Chairman of the Nominating and Corporate Governance Committee at nominations@evergreensolar.com. Such notice must set forth all information that is required to be disclosed under applicable rules and regulations of the SEC and the Policy Governing Director Nominations and Security Holder — Board Communications for each person whom such stockholder proposes to nominate. The Nominating and Corporate Governance Committee does not intend to alter the manner in which it evaluates director candidates, including the criteria set forth in the Policy Governing Director Nominations and Security Holder-Board Communications, based on whether the candidate was recommended by a stockholder or otherwise.

 
Evaluation of Director Candidates

      Generally, the Nominating and Corporate Governance Committee identifies director candidates in consultation with management, through the use of search firms or other advisers, or through the recommendations submitted by stockholders or through such other methods as the Nominating and Corporate Governance Committee deems to be helpful to identify candidates. Once candidates have been identified, the Nominating and Corporate Governance Committee confirms that the candidates meet all of the minimum qualifications for director nominees established by the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee may gather information about the candidates through various means that the Nominating and Corporate Governance Committee deems to be helpful in the evaluation process, including through interviews. The Nominating and Corporate Governance Committee then meets as a group to discuss and evaluate the qualities and skills of each candidate, both on an individual basis and taking into account the overall composition and needs of the board of directors.

      The board of directors believes that all of its directors should have the highest personal integrity and have a record of exceptional ability and judgment. The board of directors also believes that its directors should ideally reflect a mix of experience and other qualifications. There is no firm requirement of minimum qualifications or skills that candidates must possess. The Nominating and Corporate Governance Committee evaluates director candidates based on a number of qualifications, including their independence, judgment, leadership ability, expertise in the industry, experience developing and analyzing business strategies, financial

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literacy, and, for incumbent directors, his or her past performance. Based on the results of the evaluation process, the Nominating and Corporate Governance Committee recommends candidates for the board of directors’ approval as director nominees for election to the board of directors. The Nominating and Corporate Governance also recommends candidates for the board of directors’ appointment to the committees of the board of directors.

Director Compensation

      Non-employee directors are reimbursed for their reasonable out-of-pocket expenses incurred in attending meetings of the board of directors and any committees of the board of directors on which they serve. Directors are also eligible to participate in the 2000 Stock Option and Incentive Plan. Our board of directors recently approved a Compensation Policy for Directors which will be put into effect at the board of directors meeting to be held immediately following the annual meeting of stockholders. Under this Compensation Policy for Directors, non-employee directors, including directors affiliated with our stockholders, are entitled to receive options to purchase 10,000 shares of common stock upon their election to the board. All non-employee directors will receive 10,000 options at the board of directors meeting held immediately following the annual meeting of stockholders and will receive an additional 10,000 options at each annual meeting thereafter. These annual option grants will vest daily, and directors who join the board between annual meetings will receive a pro-rated number of options based on the date such director joins the board. Directors will also receive, at their option, an additional $2,500 or 2,500 fully vested options at the end of each quarter of service on the board. The Chairman of the Board will receive an additional $5,000 on the date of the annual meeting each year. Each member of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee will receive an additional 2,500 fully vested options on the date of the annual meeting each year and the chairman of each such committee will receive an additional 1,000 fully vested options on such date. In consideration of the new option grants to be made under the new Compensation Policy for Directors, all of the non-employee directors agreed to forfeit, as of the date of the annual meeting, the then unvested portion of the 7,000 options granted to each such director on January 1, 2004 under the previous director compensation plan. The board of directors may, from time to time, set lump-sum compensation for special committees.

AUDIT COMMITTEE REPORT

      The Audit Committee is currently comprised of Dr. Brown F. Williams, Dr. William P. Sommers and Mr. Charles J. McDermott, each of whom are independent within the meaning of the Company’s director independence standards and the applicable standards of Nasdaq and the SEC. That is, none of the members of the Audit Committee has a relationship which, in the opinion of the board of directors, would interfere with the exercise of independent judgement in carrying out his or her responsibilities as a director. The board of directors has determined that William P. Sommers qualifies as an “audit committee financial expert” under the rules of the SEC.

      The Audit Committee operates under a written charter adopted by the board of directors setting out the functions the Audit Committee is to perform, which charter was originally adopted by the board of directors in May 2000 and which was restated in its entirety in April 2004 by the written charter attached to this Proxy Statement as Appendix A. The charter of the Audit Committee is reviewed on an annual basis by the Audit Committee.

      The Audit Committee met five times during 2003, and periodically meets privately with PricewaterhouseCoopers LLP, the Company’s independent accountants, who have unrestricted access to the Audit Committee.

      Management has primary responsibility for the Company’s consolidated financial statements and the overall reporting process, including the Company’s system of internal controls. The Audit Committee oversees the accounting and financial functions of the Company and periodically meets with the Company’s management and independent auditors to review financial and accounting controls and quarterly and annual financial reports. The Audit Committee also has the sole authority board of directors and is directly

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responsible for the appointment, compensation, retention and oversight of the independent accountants and reviews periodically their performance and independence.

      In connection with these responsibilities, the Audit Committee has reviewed the audited financial statements of the Company for the fiscal year ended December 31, 2003, and has discussed them with both management and the Company’s independent accountants.

      The Audit Committee has also discussed with the independent accountants the matters required to be discussed by Statement on Auditing Standards No. 61 (Communications with Audit Committees), as currently in effect. PricewaterhouseCoopers LLP has provided the Audit Committee with written disclosures and the letter required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees), as currently in effect, and has discussed with the Audit Committee that firm’s independence.

      Based on the review and discussions described above, the Audit Committee concluded that it would be reasonable to recommend, and on that basis did recommend, to the board of directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003.

      Respectfully submitted by the Audit Committee.

  THE AUDIT COMMITTEE
 
  Dr. Brown F. Williams
  Dr. William P. Sommers
  Mr. Charles J. McDermott

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COMPENSATION AND OTHER INFORMATION CONCERNING DIRECTORS AND OFFICERS

Executive Compensation Summary

      The following table sets forth the annual and long-term compensation of our Chief Executive Officer and each of our four other most highly compensated executive officers who were serving as executive officers as of December 31, 2003 and whose salary and bonus exceeded $100,000 for fiscal year 2003 (collectively, the “Named Executive Officers”) for fiscal years ended December 31, 2003, 2002 and 2001. Mr. Farber served as our Chief Executive Officer and President until December 11, 2003. Mr. Feldt was appointed as our Chief Executive Officer and President on December 11, 2003.

Summary Compensation Table

                                   
Long-Term
Compensation
Awards(2)
Annual
Compensation(1) Securities

Underlying
Name and Principal Position(s) Salary($) Bonus($) Options




Richard M. Feldt(3)
    2003       13,587       0       2,000,000  
 
Chief Executive Officer, President and Director
    2002       0       0       0  
        2001       0       0       0  
Mark A. Farber
    2003       172,093       4,000       300,000  
  Vice President, Marketing & Business Development and     2002       167,357       0       0  
  Director     2001       156,770       0       20,000  
Richard G. Chleboski
    2003       136,372       4,000       275,000  
  Chief Financial Officer, Treasurer, and Secretary     2002       130,771       0       0  
        2001       122,455       0       15,000  
Dr. Jack I. Hanoka
    2003       138,120       2,000       190,000  
  Chief Technical Officer     2002       135,982       0       0  
        2001       128,770       0       20,000  
John J. McCaffrey, Jr.
    2003       151,687       3,000       205,000  
  Vice President, Manufacturing and Engineering     2002       146,464       0       0  
        2001       138,420       5,000       40,000  
Dr. Rex D’Agostino(4)
    2003       150,062       1,000       85,000  
  Vice President, Sales     2002       144,371       0       0  
        2001       137,705       0       70,000  


(1)  The compensation described in this table does not include medical, group life insurance and other benefits received by the Named Executive Officers which are available generally to all of our salaried employees and certain perquisites and other personal benefits received by the Named Executive Officers which do not exceed the lesser of $50,000 or 10% of any such officer’s total salary and bonus reported in this table.
 
(2)  We did not grant any stock appreciation rights or make any long-term incentive plan payouts to the Named Executive Officers during the fiscal years ended December 31, 2003, 2002 and 2001.
 
(3)  Mr. Feldt became an employee and executive officer when he was elected Chief Executive Officer, President and Director on December 11, 2003.
 
(4)  Dr. D’Agostino became an employee and an executive officer when he was elected Vice President, Marketing and Sales in January of 2001. Included in Dr. D’Agostino’s compensation was $18,000.00, $13,599.99, and $16,833.29 to cover costs associated with relocation to Evergreen Solar, Inc. during fiscal years 2003, 2002 and 2001, respectively.

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Option Grants in Last Fiscal Year

      The following table sets forth certain information concerning grants of stock options to the Named Executive Officers during the fiscal year ended December 31, 2003. The percentage of total options granted to employees in 2003 shown in the table below is based on options to purchase an aggregate of 4,137,447 shares of common stock granted during the year ended December 31, 2003. Except as noted below, the options, which were granted under our 2000 Stock Option and Incentive Plan, become exercisable over a four year period, with 25% of the option shares granted vesting on each of the one-year, two-year, three-year and four-year anniversary of the grant date, and expire on the tenth anniversary of the date of grant, subject to earlier termination in certain situations related to resignation or termination of employment. Options are subject to the employee’s continued employment. We did not grant any stock appreciation rights during the fiscal year ended December 31, 2003.

Option Grants in Last Fiscal Year

                                                 
Individual Grants Potential Realizable

Value at Assumed Annual
Percent of Total Rates of Stock Price
Options Appreciation for Option
Number of Securities Granted to Exercise Term(1)
Underlying Options Employees in Price Expiration
Name Granted Fiscal Year(%) ($/Sh)(2) Date 5%($) 10%($)







Richard M. Feldt(3)
    2,000,000       48.3 %     1.61       12/11/17       3,156,232       9,011,138  
Mark A. Farber
    250,000       6.0 %     2.00       11/18/17       490,098       1,399,245  
      50,000       1.2 %     1.54       05/12/17       75,516       215,636  
Richard G. Chleboski
    225,000       5.4 %     2.00       11/18/17       441,088       1,259,320  
      50,000       1.2 %     1.54       05/12/17       75,516       215,636  
Dr. Jack I. Hanoka
    175,000       4.2 %     2.00       11/18/17       343,068       979,471  
      15,000       0.4 %     1.54       05/12/17       22,654       64,690  
John J. McCaffrey, Jr.
    175,000       4.2 %     2.00       11/18/17       343,068       979,471  
      30,000       0.7 %     1.54       05/12/17       45,309       129,381  
Dr. Rex D’Agostino
    75,000       1.8 %     2.00       11/18/17       147,029       419,773  
      10,000       0.2 %     1.54       05/12/17       15,103       43,127  


(1)  Amounts represent hypothetical gains that could be achieved for the respective options if exercised at the end of the option term. These gains are based on assumed rates of stock price appreciation of 5% and 10% compounded annually from the date the respective options were granted to their expiration date. These assumptions are not intended to forecast future appreciation of Evergreen’s stock price. The potential realizable value computation does not take into account any federal or state tax consequences of option exercises or sales of appreciated stock. This table does not take into account any appreciation in the price of the common stock since the date of grant.
 
(2)  The exercise price per share of each option was determined by the board of directors to be equal to the fair market value per share of common stock on the date of grant.
 
(3)  12.5% of Mr. Feldt’s options, which were granted on December 11, 2003, vest 6 months from the date of grant, with an additional 12.5% vesting one year form the grant date. Thereafter, 25% of the option shares granted vest on each of the second, third and fourth anniversary of the grant date.

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Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values

      The following table sets forth certain information with respect to options to purchase our common stock granted to the Named Executive Officers, including (i) the number of shares of common stock purchased upon exercise of options in the fiscal year ended December 31, 2003; (ii) the net value realized upon such exercise; (iii) the number of unexercised options outstanding at December 31, 2003; and (iv) the value of unexercised options at exercise prices equal to or less than the market value of the common stock at December 31, 2003 (“In-the-Money”).

Aggregated Option Exercises in Last Fiscal Year

and Fiscal Year-End Option Values
                                                 
Number of Securities
Underlying Unexercised Value of Unexercised
Options held at In-the-Money Options at
Shares December 31, 2003 December 31, 2003($)(2)
Acquired on Value

Name Exercise Realized($)(1) Exercisable Unexercisable Exercisable Unexercisable







Richard M. Feldt
    0       0       0       2,000,000       0       140,000  
Mark A. Farber
    0       0       141,675       335,982       44,640       7,000  
Richard G. Chleboski
    0       0       108,344       298,667       42,909       7,000  
Dr. Jack I. Hanoka
    0       0       96,219       217,322       27,876       2,100  
John J. McCaffrey, Jr
    0       0       89,282       236,548       28,060       4,200  
Dr. Rex D’Agostino
    0       0       35,000       120,000       0       1,400  


(1)  Amounts calculated by subtracting the aggregate exercise price of the options from the market value of the underlying common stock on the date of exercise, and do not reflect amounts actually received by the Named Executive Officers.
 
(2)  Amounts calculated by subtracting the exercise price of the options from the fair market value of the underlying common stock as quoted on The Nasdaq Stock Market, Inc. on December 31, 2003 of $1.68 per share, multiplied by the number of shares underlying the options, and do not reflect amounts that may be actually received by the Named Executive Officers upon exercise of options.

Equity Compensation Plan Information

      The following table provides information as of December 31, 2003 with respect to shares of our common stock that may be issued under equity compensation plans:

                           
Number of securities remaining
Number of securities to be available for future issuance
issued upon exercise Weighted-average exercise under equity compensation
of outstanding options, price of outstanding options, plans (excluding securities
Plan category warrants and rights warrants and rights reflected in column (a))




(a) (b) (c)
Equity compensation plans approved by security holders
    5,263,937     $ 2.42       2,386,063  
Equity compensation plans not approved by security holders
    0             0  
 
Total
    5,263,937     $ 2.42       2,386,063  

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COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

      The Compensation Committee of the board of directors is currently composed of Dr. Robert W. Shaw, Jr., Mr. Phillip J. Deutch, and Mr. Timothy Woodward. Pursuant to authority delegated by the board of directors, the Compensation Committee reviews and evaluates the performance of the Company’s executive officers and makes recommendations to the board of directors regarding the appropriate level of base compensation and bonus and other incentive compensation for certain senior employees, including all executive officers other than the Chief Executive Officer, whose base compensation, bonus and other incentive compensation the Compensation Committee establishes and approves. The Compensation Committee is also responsible for establishing general compensation policies and guidelines and for administering and making recommendations and awards under Evergreen’s 2000 Stock Option and Incentive Plan and Evergreen’s 2000 Employee Stock Purchase Plan.

      Overview and Philosophy. Evergreen’s executive compensation policies are designed to:

  •  provide compensation that attracts, motivates and retains experienced and well-qualified executives capable of leading Evergreen to meet its business objectives;
 
  •  recognize and reward performance of Evergreen’s executive officers, both as individuals and as members of a cohesive management team, in meeting certain strategic objectives;
 
  •  align the interests of Evergreen’s executive team with those of Evergreen; and
 
  •  align the interests of Evergreen’s executive team with those of Evergreen’s stockholders through long-term equity-based incentives.

      Evergreen’s executive officers receive a compensation package consisting of base salary, incentive cash bonuses, long-term incentive awards in the form of stock options, and participation in benefit plans generally available to all of Evergreen’s employees. In setting executive officer compensation levels, the Committee is guided by the following considerations:

  •  a portion of each executive officer’s compensation should be contingent upon the achievement of specific predetermined corporate objectives as well as upon each executive officer’s individual level of performance;
 
  •  compensation levels should reflect Evergreen’s past performance and expectations of future performance;
 
  •  compensation levels should be competitive with compensation generally being paid to executives in Evergreen’s industry to ensure Evergreen’s ability to attract and retain experienced and well-qualified executives; and
 
  •  a significant portion of executive officer compensation should be paid in the form of equity-based incentives to link closely stockholder and executive interests.

      The Committee also considered Evergreen’s financial performance in fiscal year 2003, certain milestones achieved by Evergreen, and individual executive officer duties. Additional factors which the Compensation Committee considered with respect to each executive officer’s compensation package for fiscal year 2003 are summarized below. The Compensation Committee may, however, in its discretion, apply different or additional factors in making decisions with respect to executive compensation in future years. Also, the committee does not assign relative weights or rankings to these factors, but instead makes a determination based upon the consideration of all of these factors as well as the progress made with respect to Evergreen’s long-term goals and strategies.

      Base Salary. Fiscal 2003 base salaries for Evergreen’s executive officers who earned over $100,000 during fiscal 2003 are listed in the “Summary Compensation Table” found on page 15. Fiscal 2003 base salaries were determined by the Compensation Committee after considering the base salary level of the executive officers in prior years, and taking into account for each executive officer the amount of base salary as a component of total compensation. Generally, salary decisions for Evergreen’s executive officers are made

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after the end of each fiscal year. Base salary, while reviewed annually, is only adjusted as deemed necessary by the Compensation Committee in determining total compensation. Base salary levels for each of Evergreen’s executive officers, other than the Chief Executive Officer, were also based in part upon evaluations and recommendations made by the Chief Executive Officer.

      Bonus Compensation. In determining bonus compensation for Evergreen’s executive officers, the Compensation Committee evaluates Evergreen’s achievement of its strategic objectives, individual performance and the actual performance of each such executive officer. The balance of cash-incentive versus equity-based bonus is driven both by the individual’s performance as well as by the Company’s overall performance and situation. Future bonus compensation, if any, will be awarded based on factors described above as well as any additional factors the Committee deems necessary.

      Long Term Incentive Compensation. The Compensation Committee believes that stock option participation aligns the interests of executive officers with those of the stockholders. In addition, the Compensation Committee believes that equity ownership by executive officers helps to balance the short-term focus of annual incentive compensation with a longer term view and may help to retain such persons. Long-term incentive compensation, in the form of stock options, allows executive officers to share in any appreciation in the value of the Evergreen’s common stock. The Compensation Committee generally grants stock options that become exercisable over a four year period as a means of encouraging executive officers to remain with us and promote Evergreen’s success. In general, the Compensation Committee awards stock options to Evergreen’s executive officers with exercise prices equal to the market price of a share of Evergreen’s common stock on the date of grant. As a result, executive officers will benefit from these stock option grants only to the extent that the price of Evergreen’s common stock increases and Evergreen’s stockholders have also benefited.

      When establishing stock option grant levels, the Compensation Committee considers general corporate performance, individual performance, the Chief Executive Officer’s recommendations (except with respect to his own stock option grant levels), level of seniority and experience, existing levels of stock ownership, previous grants of stock options, vesting schedules of outstanding options and the current stock price.

      The Compensation Committee generally grants an initial stock option award to executive officers at the time they commence employment, consistent with the number of options granted to peers within and outside the industry at similar levels of seniority. In addition, the Compensation Committee may make performance-based grants from time-to-time, as it deems appropriate. In making such performance-based grants, the Compensation Committee considers individual contributions to Evergreen’s financial, operational and strategic objectives. For fiscal year 2003, the Committee awarded certain of Evergreen’s executive officers additional stock option awards in recognition of Evergreen’s performance during fiscal year 2003, including the successful scale up of our manufacturing operations.

      Other Benefits. Evergreen also offers various broad-based employee benefit plans. Executive officers participate in these plans on the same terms as eligible, non-executive employees, subject to any legal limits on the amounts that may be contributed or paid to executive officers under these plans. Evergreen offers a stock purchase plan, under which employees may purchase shares of Evergreen’s common stock at a discount, and offers a 401(k) Plan, which allows employees to invest in a wide array of funds on a pre-tax basis. Evergreen also maintains insurance and other benefit plans for its employees, including executive officers.

      Chief Executive Officer Compensation. On December 11, 2003, Mr. Richard M. Feldt was appointed Evergreen’s Chief Executive Officer at which time Mr. Farber assumed the title of Vice President, Marketing & Business Development. Compensation for Evergreen’s Chief Executive Officer and President was determined in accordance with the policies applicable to Evergreen’s other executive officers described above. In addition, the Committee considered Evergreen’s overall performance, the performance of the management team, compensation paid by competing companies, and Evergreen’s prospects, among other objective and subjective factors.

      Mr. Farber’s base salary for fiscal year 2003 was $172,093, which represents an increase of $4,736 or 2.8% over his 2002 base salary. Mr. Farber received bonus compensation of $4,000 for fiscal year 2003. The number of options granted to Mr. Farber in fiscal 2003 is set forth in the table captioned “Option Grants in Last Fiscal

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Year” found on page 16. The total options held by Mr. Farber at December 31, 2003 is set forth in the table captioned “Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values” found on page 17. The Compensation Committee believes Mr. Farber’s compensation as Chief Executive Officer was consistent with the compensation received by chief executive officers at companies within the same industry in which Evergreen operates, as adjusted to reflect the relative size of Evergreen to such comparable companies.

      Because Mr. Feldt did not begin his employment with Evergreen until December 2003, his base salary for fiscal year 2003 was $13,587, an annualized rate of $250,000. The number of options granted to Mr. Feldt in fiscal 2003 is set forth in the table captioned “Option Grants in Last Fiscal Year” found on page 16. The total options held by Mr. Feldt at December 31, 2003 is set forth in the table captioned “Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values” found on page 17. The Compensation Committee believes Mr. Feldt’s compensation is consistent with the compensation received by chief executive officers at companies within the same industry in which Evergreen operates, as adjusted to reflect the relative size of Evergreen to such comparable companies.

      Tax Deductibility of Executive Compensation. In general, under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), Evergreen cannot deduct, for federal income tax purposes, compensation in excess of $1,000,000 paid to certain executive officers. This deduction limitation does not apply, however, to compensation that constitutes “qualified performance-based compensation” within the meaning of Section 162(m) of the Code and the regulations promulgated thereunder. The Compensation Committee has considered the limitations on deductions imposed by Section 162(m) of the Code, and it is the Compensation Committee’s present intention that, for so long as it is consistent with its overall compensation objectives, substantially all tax deductions attributable to executive compensation will not be subject to the deduction limitations of Section 162(m) of the Code.

      Respectfully submitted by the Compensation Committee.

  THE COMPENSATION COMMITTEE:
 
  Dr. Robert W. Shaw, Jr.
  Phillip J. Deutch
  Timothy Woodward

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      We believe that all transactions set forth below were made on terms no less favorable to us than would have been obtained from unaffiliated third parties. We have adopted a policy that all transactions between us and any of our officers, directors, principal stockholders and affiliates will be on terms no less favorable to us than could be obtained unaffiliated third parties, and will be approved by a majority of the disinterested members of our board of directors.

Indemnification Agreements

      In November 2000 and May 2003, we entered into indemnification agreements with each of our directors and executive officers. These agreements require us to, among other things, indemnify each of our directors and executive officers for any and all expenses (including attorney fees), judgments, fines, penalties and amounts paid in settlement (if such settlement is approved in advance by us, which approval may not be unreasonably withheld), in connection with any action suit or proceeding arising out of the individual’s status as a director or executive officer of Evergreen and to advance expenses incurred by the individual in connection with any proceeding against the individual with respect to which he or she may be entitled to indemnification by us.

Series A Convertible Preferred Stock Private Placement and Common Stock Private Placement

      On May 15, 2003, we consummated a $29.3 million private placement financing transaction whereby we issued 26,227,668 shares of our series A convertible preferred stock and a warrant to purchase up to 2,400,000 shares of our common stock pursuant to a stock and warrant purchase agreement with certain purchasers (the “Series A Private Placement”). On June 21, 2004, we consummated a $20 million private placement financing transaction whereby we issued 7,662,835 shares of our common stock and warrants to purchase up to 2,298,851 shares of our common stock pursuant to a stock and warrant purchase agreement and a warrant agreement with certain purchasers (the “Common Stock Private Placement”). Additionally, in connection with the Common Stock Private Placement we issued a warrant to purchase 125,000 shares of common stock to CRT Capital Group LLC, as compensation for CRT Capital Group’s services as the placement agent for the Common Stock Private Placement. All of the shares of series A convertible preferred stock issued pursuant to the Series A Private Placement were converted into shares of common stock in connection with the consummation of the Common Stock Private Placement. As an incentive to encourage the holders of series A convertible preferred stock to convert all of the outstanding shares of series A convertible preferred stock into shares of common stock in connection with the consummation of the Common Stock Private Placement, the Company agreed to pay each such holder agreeing to so convert a 7% dividend on each share of series A convertible preferred stock so converted. Philip Deutch, Timothy Woodward, Luc Charron, Charles McDermott and Dr. Robert W. Shaw, Jr., each of whom is a director of ours, are affiliated with entities that acquired shares of series A convertible preferred stock in the Series A Private Placement and that received the 7% dividend upon the conversion of those shares into shares of common stock in connection with the consummation of the Common Stock Private Placement. The 7% dividend was negotiated by an independent committee of our board of directors and neither Messrs. Deutch, Woodward, Charron, McDermott nor Dr. Shaw were a member of, nor participated in, any meetings of this independent committee.

      Micro-Generation Technology Fund, LLC, UVCC Fund II, and UVCC II Parallel Fund, L.P., each of which is an investment entity affiliated with Dr. Shaw, invested $3.5 million in the aggregate in the Series A Private Placement in return for shares of series A convertible preferred stock on terms identical to those afforded to each other purchaser in the Series A Private Placement, except that Arete Corporation, as one of the five purchasers who signed the initial term sheet with respect to the Series A Private Placement, had the right to designate a member of our board of directors. Dr. Shaw is the President of Arete Corporation, which is the manager of Micro-Generation Technology Fund, LLC. Dr. Shaw is a general partner of Arete Venture Investors II, L.P., which is the general partner of UVCC Fund II. Dr. Shaw is also a general partner of Arete Ventures III, L.P., which is the general partner of UVCC II Parallel Fund, L.P. As of the consummation of the Series A Private Placement, Arete Corporation designated Dr. Shaw as its designee to our board of directors.

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      Dr. Shaw is a limited partner of Nth Power Management II, L.P., the general partner of Nth Power Technologies Fund II, LP, and in such capacity provides advice as requested to this entity. Dr. Shaw does not serve on this entity’s investment committee nor does he have any decision making authority with respect thereto. Dr. Shaw has also agreed to become a member of, and perform comparable services for, Nth Power Management II-A, LLC, the general partner of Nth Power Technologies Fund II-A, L.P., and will have a similar advisory role with that entity. Nth Power Technologies Fund II, LP and Nth Power Technologies Fund II-A, LP, each of which is an investment entity affiliated with Nth Power Management II, L.P. and Nth Power Management II-A, LLC, invested $4 million in the aggregate in the Series A Private Placement in return for shares of series A convertible preferred stock on terms identical to those afforded to each other purchaser, except that Nth Power Technologies Fund II, LP, as one of the five purchasers signed the initial term sheet with respect to the Series A Private Placement, had the right to designate a member of our board of directors. Dr. Shaw did not participate in the decision of either of the two Nth Power-related entities to invest in the Series A Private Placement. As of the consummation of the Series A Private Placement, Nth Power Technologies Fund II, LP designated Timothy Woodward, a Managing Director of Nth Power, LLC, as its designee to our board of directors.

      Dr. Shaw serves as a member of the investment committee of SAM Private Equity Energy Fund L.P. and SAM Sustainability Private Equity Fund L.P. and he has a limited partnership interest in SAM Private Equity Energy Fund L.P. These entities and another affiliated entity, SAM Smart Energy, invested $3.25 million in the aggregate in the Series A Private Placement in return for shares of series A convertible preferred stock on terms identical to those afforded to each other purchaser. Dr. Shaw recused himself and did not participate in the SAM investment committee decisions to invest in the Series A Private Placement.

      Dr. Shaw has no voting power or dispositive power over any Evergreen shares held by the Nth Power investment entities or the SAM investment entities.

      Dr. Shaw is not a member of, and did not participate in, any meetings of our financing committee that negotiated the Series A Private Placement and did not participate in any discussions with the purchasers concerning the terms of the Series A Private Placement.

      Mason Willrich, a former director of ours, was previously affiliated with Nth Power, LLC. From 1996 through December 1999, Mr. Willrich served as a Principal of Nth Power, LLC, a managerial role that entails reviewing investment candidates and participating in day-to-day operations management, and from January 2000 through February 2002, he was a Special Limited Partner of Nth Power, LLC, an advisory role that entailed reviewing investment candidates and providing insights into market trends and opportunities.

      Mr. Willrich was not a member of, and did not participate in, any meetings of our financing committee that negotiated the terms of the Series A Private Placement and did not participate in any discussions with the purchasers concerning the terms of the Series A Private Placement.

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STOCK PERFORMANCE GRAPH

      The following graph compares the percentage change in the cumulative total stockholder return on our common stock during the period from our initial public offering through December 31, 2003, with the cumulative total return of (i) the Media General Market Weighted Nasdaq Index (the “NASDAQ Market Index”) and (ii) an SIC Index that includes all organizations in our Standard Industrial Classification (SIC) Code 836 — Diversified Electronics (the “SIC Code Index”). The comparison assumes $100 was invested on November 2, 2000 in our common stock and in each of the foregoing indices and assumes any dividends were reinvested, if any.

COMPARISON OF CUMULATIVE TOTAL RETURN AMONG

EVERGREEN SOLAR, INC., SIC CODE INDEX
AND NASDAQ MARKET INDEX

Stock Performance Graph

ASSUMES $100 INVESTED ON NOV. 02, 2000

ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING DEC. 31, 2003
                                         
11/2/00 12/29/00 12/31/01 12/31/02 12/31/03





Evergreen Solar, Inc
  $ 100.00     $ 35.53     $ 17.89     $ 6.79     $ 8.84  
SIC Code Index
  $ 100.00     $ 66.09     $ 38.31     $ 24.21     $ 38.00  
NASDAQ Market Index
  $ 100.00     $ 73.35     $ 58.47     $ 40.78     $ 61.32  


(1)  Prior to November 2, 2000 our common stock was not publicly traded. Comparative data is provided only for the period since that date. This graph is not “soliciting material,” is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference in any of our filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
 
(2)  The stock price information shown on the graph is not necessarily indicative of future price performance. Information used on the graph was obtained from Media General Financial Services, Inc., a source believed to be reliable, but we are not responsible for any errors or omissions in such information.

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PROPOSAL TWO

APPROVE THE EXERCISABILITY OF WARRANTS TO PURCHASE UP TO 2,423,851 SHARES OF OUR COMMON STOCK AND THE ISSUANCE OF SHARES OF OUR COMMON STOCK UPON THE EXERCISE OF SUCH WARRANTS.

Background

      In order to satisfy our existing capital requirements and to fund the continuing capacity expansion of our Marlboro, Massachusetts manufacturing facilities, on June 21, 2004, we consummated a $20 million private placement financing transaction whereby we issued 7,662,835 shares of our common stock and warrants to purchase up to 2,298,851 shares of our common stock to certain institutional investors pursuant to a stock and warrant purchase agreement dated June 16, 2004, and a warrant agreement dated June 21, 2004 (the “Common Stock Private Placement”). Additionally, in connection with the Common Stock Private Placement we issued a warrant to purchase 125,000 shares of common stock to CRT Capital Group LLC, as compensation for CRT Capital Group’s services as the placement agent for the Common Stock Private Placement (the “Placement Agent Warrant”). The terms of the Placement Agent Warrant are identical to the terms of the warrants issued to the investors participating in the Common Stock Private Placement and references herein to the “warrants” shall be read to include the Placement Agent Warrants. The shares of common stock were sold at a per share price of $2.61, which represented a 10% discount to the $2.90 closing price of shares of our common stock on the Nasdaq National Market as of the close of business on June 15, 2004 (the “Closing Price”). The warrants entitle the holders thereof to purchase up to 2,423,851 shares of our common stock at an exercise price of $3.335, which represented a 15% premium to the Closing Price. The warrants are exercisable at any time on or after December 22, 2004 and prior to June 22, 2009. As more fully described below, the warrants provide that they may only be exercised with respect to 350,000 shares of common stock in the aggregate prior to approval of the exercisability of the remaining warrants by stockholders of the Company.

What are stockholders being asked to approve and why?

      Stockholders are being asked to approve the exercisability in full of warrants issued pursuant to the Common Stock Private Placement and the subsequent issuance of shares of our common stock upon the exercise of such warrants. Because shares of our common stock are listed on the Nasdaq National Market, we are subject to the Nasdaq Marketplace Rules. Rule 4350 of the Nasdaq Marketplace Rules requires stockholder approval for any issuance of stock at a price below the greater of the book or market value of such stock, where the amount of stock being issued is equal to 20% or more of the total number of shares of common stock outstanding or 20% or more of the total voting power outstanding.

      The 7,662,835 shares of common stock issued pursuant to the Common Stock Private Placement were issued at a price below the market value of shares of our common stock. However, stockholder approval of the issuance of such shares was not required under the Nasdaq Marketplace Rules as the total number of shares of common stock issued represented less than 20% of the total number of shares of common stock outstanding immediately prior to the issuance of such shares. Although the $3.335 per share exercise price of the warrants was set at a premium to the market value of shares of our common stock when the warrants were issued, the exercise price is subject to certain adjustments pursuant to the terms of the warrants, including reduction in the event that we issue or sell, or are deemed to have issued or sold shares of our common stock or derivative securities convertible into shares of our common stock in the future for consideration per share less than the then effective exercise price. In the event of such an issuance, the exercise price of the warrants may be reduced below the market value of shares of our common stock as established on the date of the issuance of the warrants. If this were the case, the shares of common stock issuable upon exercise of the warrants and the shares of common stock initially issued pursuant to the Common Stock Private Placement may be aggregated and the total number of shares of common stock issued pursuant to the Common Stock Private Placement may exceed the 20% stockholder approval threshold. As a result, in order to comply with the Nasdaq Marketplace Rules, the warrant agreement provides that the exercisability of the warrants is restricted to an aggregate of 350,000 shares until the Company obtains stockholder approval for the exercisability of the

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remaining 2,073,851 shares subject to the warrants and the issuance of the corresponding number of shares of common stock to be issued upon exercise of such warrants.

      As an inducement to the purchasers to participate in the Common Stock Private Placement, we agreed to use our best efforts to obtain stockholder approval of the exercisablility of the remaining 2,073,851 shares subject to the warrants and the issuance of the 2,073,851 shares of common stock to be issued upon exercise of the warrants. Additionally, we agreed that if we were not successful in obtaining stockholder approval at our annual meeting of stockholders, we would cause additional stockholder meetings to be duly called and held every six months thereafter until such approval is obtained.

      By voting in favor of proposal two, you will be approving the exercisability in full of the warrants and the issuance of the shares of common stock to be issued upon the full exercise of the warrants in accordance with the Nasdaq Marketplace Rules. Our board of directors unanimously recommends that you vote for the approval of proposal two.

      Our board of directors, in the course of reaching its decision to consummate the Common Stock Private Placement, consulted with our senior management, as well as our outside legal counsel and financial advisors. After considering a number of factors both for and against the private placement and based upon their knowledge of our business, our capital requirements, our financial condition and prospects, and the views of our senior management and our financial and legal advisors, the board of directors unanimously concluded that the issuance of the shares of common stock and the warrants, and the terms of the stock and warrant purchase agreement and the warrant agreement, are in the Company’s best interests and in the best interests of our stockholders.

Terms of Warrant

THIS SUMMARY OF THE TERMS OF THE WARRANTS ISSUED IN THE COMMON STOCK PRIVATE PLACEMENT IS INTENDED TO PROVIDE YOU WITH BASIC INFORMATION CONCERNING THE TERMS OF THE WARRANTS; HOWEVER, IT IS NOT A SUBSTITUTE FOR REVIEWING THE STOCK AND WARRANT PURCHASE AGREEMENT, THE WARRANT AGREEMENT, THE FORM OF WARRANT AND THE REGISTRATION RIGHTS AGREEMENT IN THEIR ENTIRETY, EACH OF WHICH IS INCLUDED AS AN EXHIBIT TO OUR FORM 8-K FILED WITH THE SEC ON JUNE 22, 2004 AND INCORPORATED BY REFERENCE HEREIN. YOU SHOULD READ THIS SUMMARY IN CONJUNCTION WITH THESE DOCUMENTS.

      Pursuant to the stock and warrant purchase agreement, we agreed to sell to the purchasers in the Common Stock Private Placement 7,662,835 shares of common stock and warrants to purchase 2,298,851 shares of common stock. Additionally, in connection with the Common Stock Private Placement we issued the Placement Agent Warrants. The terms and conditions applicable to the warrants and certain rights and obligations of ours and the holders of the warrants are set forth in a warrant agreement dated June 21, 2004. The warrant agreement provides that the warrants may be exercised at any time on or after December 22, 2004, and prior to June 21, 2009, at an exercise price of $3.335 per share of common stock issuable upon exercise, subject to adjustment according to the terms of the warrants. Until stockholder approval of the exercisability of the warrants is obtained, the maximum aggregate number of shares issuable pursuant to the exercise of the warrants is 350,000 and the maximum number of shares issuable to any individual warrant holder upon exercise of warrant will be the number determined by multiplying 350,000 by a fraction, the numerator of which is the aggregate number of shares such holder would be entitled to receive upon exercise in full of such holder’s warrant and the denominator of which is 2,423,851. The number of shares issuable upon exercise of the warrant and the exercise price thereof is subject to adjustment from time to time in the event of stock subdivisions, stock splits and stock combinations. The warrants contain weighted-average anti-dilution protection that has the effect of reducing the exercise price of the warrants in the event we issue or sell, or are deemed to have issued or sold, any shares of our common stock (or derivative securities convertible into shares of our common stock) for consideration per share less than the exercise price in effect immediately prior to such issuance or sale. In the event of such an issuance the exercise price of the warrants will be reduced to the price determined by dividing (x) the sum of (A) the Common Stock Deemed

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Outstanding (as defined in the warrant agreement) immediately prior to such issuance or sale multiplied by the exercise price then in effect and (B) the consideration, if any, received by the Company upon such issuance or sale by (y) the Common Stock Deemed Outstanding immediately after such issuance or sale. The exercise price may be payable by cash, or by means of an exchange of warrant shares, a so-called “cashless exercise”, in the event that we fail to maintain an effective registration statement with respect to the warrant shares pursuant to the terms and conditions of the registration rights agreement dated as of June 21, 2004 that we entered into with the purchasers in connection with the Common Stock Private Placement. As an inducement to the purchasers to participate in the Common Stock Private Placement, we agreed in the stock and warrant purchase agreement to use our best efforts to obtain stockholder approval of the exercisability in full of the warrants and the issuance of the shares of common stock to be issued upon full exercise of the warrants. Additionally, we agreed that if we were not successful in obtaining stockholder approval at our annual meeting of stockholders, we would cause additional stockholder meetings to be duly called and held every six months thereafter until such approval is obtained.

Conversion, Consent, Voting and Lock-Up Agreement

      In connection with, and as a condition to, the Common Stock Private Placement, certain current stockholders of ours, members of our board of directors and members of our senior management team holding in the aggregate approximately 27,150,000 shares of our common stock, or approximately 57% of the outstanding shares of our common stock as of the Record Date and approximately 68% of the outstanding shares of our common stock eligible to vote on proposal two, have entered into a conversion, consent, voting and lock-up agreement with us pursuant to which each has agreed, solely in his or its capacity as a stockholder, to vote his or its shares of common stock in favor of proposals two and three. The stockholders, members of our board of directors, and members of our senior management team who executed the conversion, consent, voting and lock-up agreement are as follows: Richard M. Feldt, Philip J. Deutch, Timothy Woodward, Charles J. McDermott, Luc Charron, Dr. Robert W. Shaw, Jr., Dr. Brown Williams, Dr. William P. Sommers, Richard G. Chleboski, Mark A. Farber, Dr. Jack Hanoka, Hanoka Evergreen Limited Partnership, Perseus 2000, L.L.C., Nth Power Technologies Fund II, L.P., Nth Power Technologies Fund II-A, LP, RockPort Capital Partners, L.P., RP Co-Investment Fund I L.P., Caisse de dépôt et placement du Québec, CDP Capital – Technology Ventures U.S. Fund 2002 L.P., Beacon Power Corporation, Massachusetts Technology Park Corporation, Merrill Lynch New Energy Technology Fund, MLIIF New Energy Fund, SAM Private Equity Energy Fund L.P. and SAM Sustainability Private Equity L.P. The conversion, consent, voting and lock-up agreement is included as an exhibit to our Form 8-K filed with the SEC on June 22, 2004.

Dilutive Effect of the Warrants

      The approval of the exercisability of the warrants will have a dilutive effect on our current stockholders as up to an additional 2,073,851 shares of our common stock will be eligible for issuance upon exercise of the warrants. The issuance of these additional shares of our common stock will increase the number of shares of our capital stock currently outstanding and thereby the percentage ownership of our current stockholders will decline as a result of approval of the full exercisability of the warrants. For purposes of example only, a stockholder who owned approximately 10% of our outstanding stock as of July 15, 2004 would own approximately 9.5% assuming the full exercise of all of the warrants issued in the Common Stock Private Placement.

Required Vote

      Approval of the exercisability of the warrants and the issuance of the shares of common stock upon exercise of the warrants requires the affirmative vote of a majority of the total votes cast by holders of the outstanding shares of common stock present in person or represented by proxy and entitled to vote at the Annual Meeting, except that in accordance with the Marketplace Rules of the Nasdaq National Market, none of the shares of common stock acquired in the Common Stock Private Placement are eligible to be voted with respect to proposal two, and no votes cast in respect of such shares of common stock will be counted toward

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the applicable threshold needed to approve the exercisability of the warrants and the issuance of shares of common stock upon the exercise of the warrants. Accordingly, of the approximately 47,523,287 shares of our common stock that will be issued and outstanding as of the Record Date, only 39,860,452 shares of our common stock are eligible to vote on proposal two.

Recommendation of the Board of Directors

      THE BOARD OF DIRECTORS HAS APPROVED THE MATTERS INCLUDED IN PROPOSAL TWO. THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL OF PROPOSAL TWO.

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PROPOSAL THREE

TO CONSIDER AND ACT UPON A PROPOSED AMENDMENT TO ARTICLE FOURTH OF OUR THIRD AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK AND TO INCREASE THE TOTAL NUMBER OF AUTHORIZED SHARES OF OUR CAPITAL STOCK.

      Subject to the approval of our stockholders, our board of directors has approved an amendment to the first paragraph of Article FOURTH of our Third Amended and Restated Certificate of Incorporation to increase the number of authorized shares of common stock from 70,000,000 to up to 100,000,000, thereby increasing the total number of authorized shares of capital stock from 97,227,668 to 127,227,668. You are being asked to consider and act upon a proposal to approve the proposed amendment to the Third Amended and Restated Certificate of Incorporation which is attached as Appendix C to this proxy statement.

      The full text of the first paragraph of Article FOURTH of our Third Amended and Restated Certificate of Incorporation would be amended to read as follows:

  “FOURTH: The total number of shares of all classes of capital stock which the Corporation shall have authority to issue is 127,227,668 shares, consisting of (i) 100,000,000 shares of common stock, one cent ($.01) par value per share (the “Common Stock”) and (ii) 27,227,668 shares of Preferred Stock, one cent ($.01) par value per share (the “Preferred Stock”), of which 26,227,668 shares shall be designated Series A Convertible Preferred Stock.”

      On June 21, 2004, we consummated a private placement financing transaction pursuant to which we issued 7,662,835 shares of common stock and warrants to purchase an additional 2,298,851 shares of common stock. We also issued a warrant to purchase 125,000 shares of our common stock to CRT Capital Group LLC, as compensation for CRT Capital Group’s services as the placement agent for the financing transaction. In connection with the consummation of this financing transaction, the holders of all of the outstanding shares of our series A convertible preferred stock agreed to convert all such shares into shares of common stock. The consummation of this financing transaction reduced the number of our authorized and unissued and unreserved shares of common stock by 10,086,686.

      The addition of 30,000,000 shares of authorized common stock is intended to further increase the number of shares available for corporate purposes, including future equity financings involving shares of our common stock. While we believe that our current cash, cash equivalents and short-term investments will be sufficient to fund our planned manufacturing capacity expansion and to fund our operating expenditures over the next twelve months, we will need to raise additional capital in order to further enhance our operating infrastructure and to further increase capacity through the build out of a second manufacturing facility and we may also require additional capital to respond to competitive pressures and acquire complementary businesses or necessary technologies. We may seek to meet our additional capital requirements through future equity financings, however we have no present plans to do so. The availability of an adequate supply of authorized and unissued shares of common stock will provide us with flexibility by allowing shares to be issued without the expense and delay of a special stockholders meeting, unless stockholder action is otherwise required by law or the Marketplace Rules of the Nasdaq National Market which require stockholder approval for any issuance of stock at a price below the greater of the book or market value of such stock, where the amount of stock being issued is equal to 20% or more of the total number of shares of common stock outstanding or 20% or more of the total voting power outstanding.

      As of July 15, 2004, there were:

  •  70,000,000 shares of our common stock authorized;
 
  •  47,523,287 shares of our common stock issued and outstanding;
 
  •  5,679,937 shares of our common stock reserved for issuance upon the exercise of outstanding stock options;

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  •  4,936,650 shares of our common stock reserved for issuance upon the exercise of options granted under our 2000 Stock Option and Incentive Plan and our 1994 Stock Option Plan;
 
  •  4,823,851 share of our common stock reserved for issuance upon the exercise of outstanding warrants;
 
  •  no shares of our preferred stock issued and outstanding and no shares of our common stock reserved for issuance upon the conversion of shares of our preferred stock; and
 
  •  7,036,275 shares of our common stock which are authorized, unreserved and unissued.

      If the amendment is approved there will be a total of 37,036,275 shares of our common stock which are authorized, unreserved and unissued.

      In connection with the consummation of our series A convertible preferred stock financing, on May 15, 2003, our stockholders approved an amendment of our certificate of incorporation to increase the authorized number of shares of all classes of capital stock which the Company had the authority to issue to 97,227,668 shares, consisting of 70,000,000 shares of common stock and 27,227,668 shares of preferred stock. Prior to this amendment, we had the authority to issue 30,000,000 shares of common stock and 1,000,000 shares of preferred stock, in each case a number of shares that remained unchanged from the date of our initial public offering in November 2000 until the increase effected in connection with our series A convertible preferred stock financing on May 15, 2003. In order to consummate the series A convertible preferred stock financing, on May 15, 2003, we issued 26,227,668 shares of series A convertible preferred stock and reserved 40,000,000 shares of common stock for issuance upon conversion of the series A convertible preferred stock, the exercise of a warrant to purchase 2,400,000 shares of common stock issued pursuant to the series A convertible preferred stock financing, and to reflect an increase in the number of shares available for option grants pursuant to our 2000 Stock Option and Incentive Plan from 1,650,000 to 7,000,000.

      The additional common stock to be authorized by approval of this proposal would have identical rights to the currently outstanding common stock. Shares of common stock, including the additional shares proposed for authorization, do not have preemptive or similar rights. Approval of this proposal and issuance of the additional shares of common stock would not affect the rights of the holders of the currently outstanding common stock, except for effects incidental to increasing the number of shares of common stock outstanding, which may include the dilution of our earnings per share and the dilution of the voting power of our existing stockholders.

      We believe that the increase in the number of authorized shares of common stock is in the best interests of Evergreen and its stockholders.

Anti-Takeover Effects of Proposal Three

      We are not seeking passage of proposal three in order to strengthen our anti-takeover defenses nor is proposal three being submitted to stockholders as a result of, or in response to, any accumulation of stock or threatened takeover of the Company. If stockholders approve proposal three we do not expect the authorization of 30,000,000 additional shares of common stock to have any meaningful effect on our ability to deter a third party from making an unsolicited takeover attempt or offer to otherwise acquire a significant block of our common stock.

      We currently have a classified board of directors which provides for staggered director terms and directors may only be removed for cause and may only be removed by the holders of at least seventy-five percent of the shares then entitled to vote at an election of directors. These provisions of our certificate of incorporation and by-laws may prevent a third party from removing directors and electing a majority of directors of its own choosing by requiring at least two annual meetings of stockholders in order to replace a majority of the board of directors. Our certificate of incorporation authorizes the issuance of up to 27,227,668 shares of preferred stock. Our board of directors is authorized, without further stockholder approval, to issue these shares of preferred stock in one or more series, and to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences of these shares of preferred stock. The board of directors has previously designated 26,227,668 shares of this

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preferred stock as series A convertible preferred stock, no shares of which are currently issued or outstanding. The board’s ability to issue preferred stock and to set the terms of the preferred stock could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from attempting to acquire, control of the Company or a significant block of the Company’s common stock. Under our by-laws, a special meeting of stockholders may be called only by the Chairman of the Board, the President or by a majority of the board of directors and stockholders are prohibited from acting by written consent, each of which may have the effect of discouraging unsolicited takeover attempts and making it more difficult for stockholders to change the membership of our board of directors and, correspondingly, management by making it more difficult for the stockholders to take action. In addition, stockholders may amend the provision of the by-laws relating to the taking of action by written consent only by the vote of holders of at least 75% of the shares entitled to vote on the amendment. This supermajority vote provision makes it more difficult for stockholders to take action. Under the Delaware General Corporation Law, stockholders are not entitled to cumulative voting in the election of directors unless it is provided for in the certificate of incorporation. Our certificate of incorporation does not provide for cumulative voting in elections of directors.

      Presently, we have no plans to implement additional measures having anti-takeover effects.

Vote Required

      The affirmative vote of a majority of the outstanding shares of our common stock voting is required to approve this proposal.

Recommendation of the Board of Directors

      THE BOARD OF DIRECTORS HAS APPROVED THE MATTERS INCLUDED IN PROPOSAL THREE. THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE APPROVAL OF PROPOSAL THREE.

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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

      Section 16(a) of the Securities Exchange Act of 1934 requires our officers, directors and holders of more than 10% of our common stock (collectively, the “Reporting Persons”) to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock. Such persons are required by regulations of the SEC to furnish us with copies of all filings. Based on our review of the copies of such filings received by us with respect to the year ended December 31, 2003, we believe that all Reporting Persons complied with Section 16(a) filing requirements during the year ended December 31, 2003, with the following exceptions: (i) each of Messrs. Charron and Deutch and Micro-Generation Technology Fund, LLC filed a late Form 3 on May 27, 2003 reporting the initial statement of beneficial ownership, (ii) each of Messrs. Charron, Deutch and McDermott and Drs. Shaw, Sommers and Williams filed two late Form 4s, one on May 20, 2003 reporting one transaction (except in the case of Dr. Shaw, who reported four transactions) and one on August 26, 2003 reporting one transaction and (iii) each of Dr. D’Agostino and Mr. Woodward filed one late Form 4 on May 15, 2003 and August 26, 2003, respectively, reporting one transaction.

STOCKHOLDER PROPOSALS

      Proposals of stockholders intended to be presented at the Annual Meeting of Stockholders for the fiscal year ended December 31, 2004 must be received by our Secretary no later than March 18, 2005 at our principal executive offices in order to be included in our proxy statement for that meeting. Any such proposal must comply with the rules and regulations of the SEC.

      Our by-laws establish an advance notice procedure with regard to proposals that stockholders otherwise desire to introduce at the annual meeting without inclusion in our proxy statement for that meeting. Written notice of such stockholder proposals for our next annual meeting must be received by our Secretary at our principal executive offices not later than March 18, 2005 and not earlier than February 16, 2005 in order to be considered timely, and must contain specified information concerning the matters proposed to be brought before such meeting and concerning the stockholder proposing such matters. The matters proposed to be brought before the meeting also must be proper matters for stockholder action.

INDEPENDENT PUBLIC ACCOUNTANTS

      The board of directors has selected the firm of PricewaterhouseCoopers LLP as our independent registered public accountants for the 2004 fiscal year. PricewaterhouseCoopers LLP has served as our independent accountants since our inception. Representatives of PricewaterhouseCoopers LLP are expected to be present at the Meeting. They will have the opportunity to make a statement if they desire to do so and will also be available to respond to appropriate questions from stockholders.

      The Audit Committee meets regularly with PricewaterhouseCoopers LLP throughout the year and reviews both audit and non-audit services performed by PricewaterhouseCoopers LLP as well as fees charged by PricewaterhouseCoopers LLP for such services. In engaging PricewaterhouseCoopers LLP for the services described above, the Audit Committee has determined that the provision of such services is compatible with maintaining PricewaterhouseCoopers LLP’s independence in the conduct of its auditing functions pursuant to the auditor independence rules of the SEC.

      Audit Fees. The aggregate fees billed by PricewaterhouseCoopers LLP to Evergreen for professional services relating to the audit of our annual financial statements for 2003 and the review of the financial statements included in our quarterly reports for 2003 were approximately $109,600. The aggregate fees billed by PricewaterhouseCoopers LLP for professional services relating to the audit of our annual financial statements for 2002 and the review of the financial statements included in our quarterly reports for 2002 were approximately $92,750.

      Audit-Related Fees. There were no fees billed by PricewaterhouseCoopers LLP to Evergreen for assurance and related services that are reasonably related to the performance of the audit or review of the financial statements relating to fiscal years 2003 and 2002 and are not reported under “Audit Fees”.

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      Tax Fees. The aggregate fees billed by PricewaterhouseCoopers LLP to Evergreen for professional services for tax compliance, tax advice and tax return preparation relating to our fiscal year 2003 and 2002 were approximately $20,000 and $18,000, respectively.

      All Other Fees. There were no other fees billed by PricewaterhouseCoopers LLP to Evergreen for services other than the services reported under “Audit Fees,” “Audit Related Fees,” and “Tax Fees.”

      Pre-approval Policies and Procedures. The chairman of the Audit Committee is appointed to provide initial approval for further services proposed by PricewaterhouseCoopers LLP up to $50,000, subject to the approval from the other Committee members. Such an appointment allows PricewaterhouseCoopers LLP to commence an engagement without being held up due to scheduling. The audit committee at the next scheduled meeting would make full approval of further services. There were no services performed by PricewaterhouseCoopers LLP that were approved under the Company’s pre-approval policy relating to fiscal years 2003 and 2002.

EXPENSES AND SOLICITATION

      We have retained Strategic Stock Surveillance, LLC, for solicitation and advisory services in connection with solicitations relating to the annual meeting, for which Strategic Stock Surveillance is to receive a fee estimated not to exceed $15,000 in connection with the solicitation of proxies for the meeting. We have also agreed to reimburse Strategic Stock Surveillance for out-of-pocket expenses and to indemnify Strategic Stock Surveillance against certain liabilities and expenses, including reasonable legal fees and related charges. Strategic Stock Surveillance will solicit proxies for the meeting from individuals, brokers, banks, bank nominees and other institutional holders. Directors, officers and certain employees of ours may assist in the solicitation of proxies without any additional remuneration. The entire expense of soliciting proxies for the meeting by or on our behalf will be borne by us.

INCORPORATION BY REFERENCE

      In our filings with the SEC, information is sometimes “incorporated by reference.” This means that we are referring you to information that has previously been filed with the SEC, so the information should be considered as part of the filing you are reading. This proxy statement incorporates by reference our Annual Report on Form 10-K for the year ended December 31, 2003 which contains important information about Evergreen and Evergreen’s financial condition that is not set forth in this proxy statement. Further, this proxy statement incorporates by reference our Form 8-K filed with the SEC on June 22, 2004. A copy of our Annual Report on Form 10-K and our Form 8-K have been filed with the SEC and may be accessed from the SEC’s homepage (www.sec.gov). Based on SEC regulations, the stock performance graph of this proxy statement, the “Audit Committee Report” and the “Compensation Committee Report on Executive Compensation” specifically are not incorporated by reference into any other filings with the SEC.

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Appendix A

EVERGREEN SOLAR, INC.

Audit Committee Charter

      This Charter is intended as a component of the flexible governance framework within which the board, assisted by its committees, directs the affairs of Evergreen Solar, Inc. (the “Corporation”). While it should be interpreted in the context of all applicable laws, regulations and listing requirements, as well as in the context of the Corporation’s Certificate of Incorporation and By-Laws, it is not intended to establish any legally binding obligations.

A.     Purpose and Scope

      The Corporation’s management team is responsible for designing and implementing the Corporation’s accounting and financial reporting systems. Management is responsible for preparing the financial statements of the Corporation, including ensuring the completeness, accuracy and conformity to generally accepted accounting principles of the financial statements, and for planning the annual audit of such financial statements.

      The Corporation’s independent public accountants are responsible for auditing the Corporation’s annual financial statements.

      The primary function of the Audit Committee (the “Committee”) of the Board of Directors of the Corporation is to oversee the accounting and financial reporting systems established by the Corporation’s management, to oversee the audits of the financial statements of the Corporation conducted by the Corporation’s independent public accountants and to exercise the responsibilities and duties set forth below, including but not limited to: (a) appointing, compensating and retaining the Corporation’s independent public accountants, (b) overseeing the work performed by any independent public accountants, including conduct of the annual audit and engagement for any other services, (c) assisting the Board of Directors in fulfilling its responsibilities by reviewing: (i) the financial reports provided by the Corporation to the Securities and Exchange Commission (the “SEC”), the Corporation’s shareholders or to the general public, and (ii) the Corporation’s internal financial and accounting controls, (d) recommending, establishing and monitoring procedures designed to improve the quality and reliability of the disclosure of the Corporation’s financial condition and results of operations, (e) establishing procedures designed to facilitate (i) the receipt, retention and treatment of complaints relating to accounting, internal accounting controls or auditing matters and (ii) the receipt of confidential, anonymous submissions by employees of concerns regarding questionable accounting or auditing matters, (f) engaging advisors as necessary, and (g) distributing relevant funding provided by the Corporation.

B.     Composition and Meetings

      The Committee shall be comprised of a minimum of three directors as appointed by the Board of Directors, each of whom shall (i) meet the independence and audit committee composition requirements promulgated by the SEC, the National Association of Securities Dealers, any exchange upon which securities of the Company are traded, or any governmental or regulatory body exercising authority over the Company (each a “Regulatory Body” and collectively, the “Regulatory Bodies”), as in effect from time to time, (ii) not have participated in the preparation of the financial statements of the Corporation at any time during the past three years, and (iii) be free from any relationship that, in the opinion of the Board of Directors, would interfere with the exercise of his or her independent judgment as a member of the Committee.

      All members of the Committee shall be “financially literate,” which is defined as having a basic understanding of finance and accounting and having the ability to read and understand fundamental financial statements, including a balance sheet, cash flow statement and income statement. At least one member of the Committee shall have had past employment experience in finance or accounting, requisite professional certification in accounting, or any other comparable experience or background which results in the individual’s

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financial sophistication, including being or having been a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities. At least one member of the Committee shall be an “audit committee financial expert” as defined by the SEC.

      To the extent permitted by the Regulatory Bodies, the Board may appoint one member (other than the Chairman of the Committee) who does not meet the independence requirements set forth above and who is not a current officer or employee of the Corporation or a family member of an officer or employee of the Corporation if the Board, under exceptional and limited circumstances, determines that membership on the Committee by the individual is required in the best interests of the Corporation and its shareholders and the member meets all other requirements. The Board shall disclose in the next proxy statement after such determination (or, if the Corporation does not file a proxy, in its Form 10-K) the nature of the relationship and the reasons for the determination.

      The Committee shall ensure that all necessary and proper disclosures shall be made in all applicable filings with the SEC as to composition of the Committee. Committee members may enhance their familiarity with finance and accounting by participating in educational programs conducted by the Corporation or an outside consultant. Independence and financial ability is to be determined by the Board of Directors in its business judgment.

      The members of the Committee shall be elected by the Board of Directors, after considering the recommendations of the Nominating and Corporate Governance Committee, at the meeting of the Board of Directors following each annual meeting of stockholders and shall serve until their successors shall be duly elected and qualified or until their earlier resignation or removal. Unless a Chair is elected by the full Board of Directors, the members of the Committee may designate a Chair by majority vote of the full Committee membership. In the absence of the Chairman at a duly convened meeting, the Committee shall select a temporary substitute from among its members.

      The Committee shall meet on a regularly-scheduled basis at least four times per year or more frequently as circumstances dictate. The Committee shall meet at least quarterly with the independent auditor in separate executive sessions or provide the opportunity for full and frank discussion without members of senior management present.

      The Committee shall establish its own schedule and rules of procedure. Meetings of the Committee may be held telephonically. A majority of the members of the Committee shall constitute a quorum sufficient for the taking of any action by the Committee.

C.     Responsibilities and Duties

      To fulfill its responsibilities and duties the Committee shall:

 
Document Review

      1.     Review and assess the adequacy of this Charter periodically as conditions dictate, but at least annually (and update this Charter if and when appropriate).

      2.     Review with representatives of management and representatives of the independent accounting firm the Corporation’s audited annual financial statements prior to their filing as part of the Corporation’s annual report on Form 10-K. After such review and discussion, the Committee shall recommend to the Board of Directors whether such audited financial statements should be published in the Corporation’s annual report on Form 10-K. The Committee shall also review the Corporation’s quarterly financial statements prior to their inclusion in the Corporation’s quarterly SEC filings on Form 10-Q.

      3.     Take steps designed to ensure that the independent accounting firm reviews the Corporation’s interim financial statements prior to their inclusion in the Corporation’s quarterly reports on Form 10-Q.

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Independent Accounting Firm

      4.     Have sole authority and be directly responsible for the appointment, compensation, retention (including the authority not to retain or to terminate) and oversight of any independent accounting firms engaged by the Corporation for the purpose of preparing or issuing an audit report or related work. The authority of the Committee shall include ultimate authority to approve all audit engagement fees and terms.

      5.     Approve in advance any and all audit and non-audit services to be performed by the independent accounting firm and adopt and implement policies for such pre-approval.

      6.     Determine funding necessary for compensation of any independent accounting firms and notify the Corporation of anticipated funding needs of the Committee.

      7.     Be directly responsible for the resolution of any disagreements between management and the independent accounting firm regarding financial reporting matters.

      8.     On an annual basis, receive from the independent accounting firm a formal written statement identifying all relationships between the independent accounting firm and the Corporation consistent with Independence Standards Board Standard 1, as it may be modified or supplemented. The Committee shall actively engage in a dialogue with the independent accounting firm as to any disclosed relationships or services that may impact its independence. The Committee shall take appropriate action to oversee the independence of the independent accounting firm.

      9.     On an annual basis, discuss with representatives of the independent accounting firm the matters required to be discussed by Statement on Auditing Standards 61, as it may be modified or supplemented.

      10.     Evaluate the performance of the independent accounting firm and consider the discharge of the independent accounting firm when circumstances warrant.

 
Financial Reporting Processes

      11.     In consultation with the independent accounting firm and management, review annually the adequacy of the Corporation’s internal control over financial reporting.

      12.     Based on the Corporation’s chief executive officer and chief financial officer’s evaluation of internal control over financing reporting, prior to the filing of the Form 10-K or a Form 10-Q, (no earlier than 10 days prior to the date of filing of the Form 10-K or Form 10-Q) disclose (a) all significant deficiencies and material weaknesses in the design and operation of internal control over financial reporting which are reasonably likely to adversely affect the Corporation’s ability to record, process, summarize, and report financial information, and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Corporation’s internal control over financial reporting. The Committee shall direct the actions to be taken and/or make recommendations to the Board of Directors of actions to be taken to the extent such disclosure indicates the finding of any significant deficiencies in internal control over financial reporting or fraud.

      13.     Regularly review the Company’s critical accounting policies and accounting estimates resulting from the application of these policies and inquire at least annually of both the Corporation’s internal auditors and the independent accounting firm as to whether either has any concerns relative to the quality of management’s accounting policies.

 
Compliance

      14.     Engage outside advisors, including but not limited to, counsel, independent accounting consultants and/or other experts, as it determines necessary to carry out its duties.

      15.     Determine funding necessary for ordinary administrative expenses of the Committee and for compensation of any outside advisors to be engaged by the Committee and notify the Corporation of anticipated funding needs of the Committee.

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      16.     Establish procedures for (a) the receipt, retention, and treatment of complaints regarding accounting, internal accounting controls, or auditing matters; and (b) the confidential, anonymous submission by employees of the Corporation of concerns regarding questionable accounting or auditing matters.

      17.     Investigate any allegations that any officer or director of the Corporation, or any other person acting under the direction of any such person, took any action to fraudulently influence, coerce, manipulate, or mislead any independent public or certified accountant engaged in the performance of an audit of the financial statements of the Corporation for the purpose of rendering such financial statements materially misleading and, if such allegations prove to be correct, take or recommend to the Board of Directors appropriate disciplinary action.

 
Reporting

      18.     Prepare, in accordance with the rules of the SEC as modified or supplemented from time to time, a written report of the Committee to be included in the Corporation’s annual proxy statement for each annual meeting of stockholders.

      19.     Instruct the Corporation’s management to disclose in its annual proxy statement for each annual meeting of stockholders, Form 10-K and Form 10-Q the approval by the Committee of any non-audit services performed by the independent accounting firm, and review the substance of any such disclosure and the considerations relating to the compatibility of such services with maintaining the independence of the accounting firm.

      While the Committee has the responsibilities and powers set forth in this Charter, the Committee is not responsible for planning or conducting audits, establishing the Corporation’s accounting and financial reporting systems or for determining whether the Corporation’s financial statements are complete and accurate and are in accordance with generally accepted accounting principles.

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Appendix B

EVERGREEN SOLAR, INC.

NOMINATING AND CORPORATE GOVERNANCE COMMITTEE CHARTER

A.     Purpose

      The primary function of the Nominating and Corporate Governance Committee (the “Committee”) is to assist the Board of Directors (the “Board”) of Evergreen Solar, Inc. (the “Company”) in fulfilling its responsibilities by: (i) identifying individuals qualified to become members of the Board and recommending that the Board select the director nominees for election at the next annual meeting of shareholders, (ii) adopting a corporate code of ethics and conduct applicable to all directors, officers and employees (a “Code of Business Conduct”), (iii) monitoring compliance with and periodically reviewing the Code of Business Conduct and (iv) reviewing and approving all related party transactions.

B.     Goals and Responsibilities

      To fulfill its responsibilities and duties the Committee shall:

 
      Board Composition and Nominations.

      1. Evaluate the current composition and organization of the Board and its committees in light of requirements established by the Securities and Exchange Commission, the Nasdaq Stock Market Inc., any exchange upon which securities of the Company are traded, and any governmental or regulatory body exercising authority over the Company (each a “Regulatory Body” and collectively, the “Regulatory Bodies”) or any other applicable statute, rule or regulation which the Committee deems relevant and make recommendations regarding the foregoing to the Board for approval.

      2. Review the composition and size of the Board in order to ensure that the Board is comprised of members possessing the proper expertise, skills, attributes and personal and professional background for service as a director of the Company, as determined by the Committee.

      3. Recommend to the Board for selection nominees for election as directors of the Company in accordance with the criteria set forth in the Company’s Policy Governing Director Nominations and Security Holder — Board Communications as adopted by this Committee.

      4. Recommend to the Board for selection Board members for assignment to serve on committees of the Board.

      5. Evaluate the performance of current Board members proposed for reelection and approve those members of the Board standing for reelection that the Committee determines are appropriate. However, if the Company is legally obligated by contract or otherwise to provide third parties with the ability to nominate directors (for example, the rights of preferred stockholders, rights under shareholder agreements or other agreements), the selection and nomination of such directors shall not be subject to the criteria above.

      6. Review and recommend to the Board an appropriate course of action upon the resignation of current Board members or any planned expansion of the Board and review the qualifications for service on the Board of any potential additional or replacement members of the Board.

 
Establishment and Review of Corporate Governance Policies.

      7. Develop and adopt a Code of Business Conduct for Company employees, directors and officers.

      8. The Code of Business Conduct at a minimum shall (i) comply with any requirements established by any Regulatory Body or any other applicable statute, rule or regulation that the Committee deems relevant, (ii) address conflicts of interest, full and fair disclosure and compliance with laws, (iii) encourage the reporting of any illegal or unethical behavior and expressly prohibit retaliation of any kind for any such reports or complaints, (iv) provide clear and objective standards for compliance with the Code of Business Conduct

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and a fair process by which to determine violations thereof, and (v) contain an enforcement mechanism. Once formulated, the Committee shall recommend the adoption of such Code of Business Conduct to the Board.

      9. Review and assess the adequacy of the Code of Business Conduct periodically, but at least annually. The Committee shall recommend any amendments to the Code of Business Conduct to the Board for approval.

      10. Collaborate with the Company’s officers and legal counsel to disclose publicly any amendments to the Code of Business Conduct required to be disclosed by any Regulatory Body.

      11. Collaborate with the Company’s officers and legal counsel to develop a means by which allegations of violations of or non-compliance with the Code of Business Conduct can be reported to the Committee in a confidential manner.

      12. Review and, if appropriate, approve all related party transactions for potential conflict of interest situations on an ongoing basis.

      13. Review and assess the adequacy of this Charter periodically as conditions dictate, but at least annually, and recommend any modifications to this Charter, if and when appropriate, to the Board for its approval.

      14. Review and assess the adequacy of the Company’s certificate of incorporation and by-laws and the charters of any committee of the Board (the “Governing Documents”) periodically and recommend to the Board any necessary modifications to the Governing Documents.

      15. To the extent required by any Regulatory Body or otherwise deemed advisable by the Committee, develop, implement, review and monitor an orientation and education program for members of the Board.

 
      Oversight of the Evaluation of the Board and Management.

      16. Evaluate and determine an appropriate response to credible evidence indicating violation(s) of or non-compliance with the Code of Business Conduct or the Governing Documents after consulting with legal counsel, including reporting any violation of law to any appropriate Regulatory Body.

      17. Determine criteria for evaluating any and all requests for waivers of the Code of Business Conduct, evaluate any such requests submitted by directors or executive officers, make a recommendation to the Board whether to grant any requests for waivers submitted by directors or executive officers and establish a process for prompt public disclosure upon the grant of any such waivers for directors or executive officers as may be required by any Regulatory Body.

      18. Review and recommend to the Board an appropriate course of action upon the resignation of any executive officer and review the qualifications for service of any potential new executive officers.

      19. At the request of the Board, conduct a performance evaluation of the Board to determine whether it and its committees are functioning effectively.

 
      Shareholder Proposals.

      20. Review all shareholder proposals submitted to the Company (including any proposal relating to the nomination of a member of the Board) and the timeliness of the submission thereof and recommend to the Board appropriate action on each such proposal.

 
      General.

      21. To the extent deemed appropriate by the Committee, engage outside counsel, service providers and/or independent consultants at the Company’s expense to review, or assist with, any matter for which it is responsible and approve the terms of engagement and fees of any outside counsel and/or independent consultants and terminate any such engagement if necessary.

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      22. Take such other actions regarding the Company’s corporate governance that the Committee shall reasonably deem to be appropriate and in the best interests of the Company and its shareholders or as shall otherwise be required by any Regulatory Body.

C.     Annual Performance Evaluation of the Committee

      The Committee shall conduct a self-evaluation at least annually to determine whether it is functioning effectively, and the Committee shall provide the results of such evaluation to the Board for discussion. The assessment may include an evaluation of the Committee’s contribution as a whole and a review of any specific areas in which the Committee believes it can make a better contribution to the governance of the Company. The purpose of any review should be to improve the performance of the unit and not to target the performance of any individual Committee member.

D.     Committee Composition and Procedures

 
Independence Requirements.

      1. Each Committee member shall meet any applicable independence requirements promulgated by any Regulatory Body.

 
Number of Members.

      2. The Committee shall be comprised of a minimum of three members of the Board; provided, however, that if fewer than three directors who meet the applicable independence requirements promulgated by any Regulatory Body sit on the Board, the Committee shall be comprised of such lesser number as the Board from time to time may designate.

 
Committee Member Appointment and Removal.

      3. Members of the Committee shall be elected by the Board and shall serve until their successors shall be duly elected and qualified or until their earlier resignation or removal. Unless the Board elects a Chair, the members of the Committee may designate a Chair by majority vote of the full Committee membership.

 
Committee Structure and Operations.

      4. The Committee may delegate its authority to subcommittees as it deems appropriate.

 
Meetings of the Committee; Quorum.

      5. The Committee shall meet as necessary, but at least annually, to enable it to fulfill its goals and responsibilities as set forth herein. A majority of the members of the Committee shall constitute a quorum for the transaction of business, and the action of a majority of those present, after determining a quorum, shall be the act of the Committee.

 
Committee Reporting to the Board.

      6. The Committee shall report its findings to the Board and shall keep written minutes of its meetings, which shall be recorded and filed with the books and records of the Company.

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Appendix C

FORM OF CERTIFICATE OF AMENDMENT

OF
THIRD AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
EVERGREEN SOLAR, INC.

      Evergreen Solar, Inc. (the “Corporation”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:

      FIRST: That the Board of Directors of the Corporation, at a meeting of the Board of Directors on April 21, 2004, in accordance with the provisions of Section 141(b) of the General Corporation Law of the State of Delaware, duly adopted a resolution setting forth a proposed amendment to the Certificate of Incorporation of the Corporation, as amended. The resolution setting forth the proposed amendment is as follows:

      RESOLVED: That a proposed amendment to the Certificate of Incorporation of the Corporation, as amended (the “Amendment”), effecting a change in the first paragraph of Article FOURTH thereof, so that said first paragraph of Article FOURTH shall read in its entirety as set forth below, is hereby approved, and is recommended to the stockholders of the Corporation (the “Stockholders”) for approval as being advisable and in the best interests of the Corporation:

        “FOURTH: The total number of shares of all classes of capital stock which the Corporation shall have authority to issue is 127,227,668 shares, consisting of (i) 100,000,000 shares of common stock, with a par value of $.01 per share (the “Common Stock”) and (ii) 27,227,668 shares of Preferred Stock, with a par value of $.01 per share (the “Preferred Stock”), of which 26,227,668 shares shall be designated Series A Convertible Preferred Stock.”

      SECOND: That the stockholders of the Corporation duly approved such resolution at the annual meeting of stockholders held on August 20, 2004 by affirmative vote of the majority of shares present in person or represented by proxy and entitled to vote on the subject matter in accordance with the provisions of Section 216 of the General Corporation Law of the State of Delaware.

      THIRD: That said amendment was duly adopted in accordance with the provisions of Sections 216 and 242 of the General Corporation Law of the State of Delaware.

[Remainder of Page Intentionally Left Blank]

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      IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be executed by its President this 20th day of August, 2004.

  EVERGREEN SOLAR, INC.

  By: 
 
  Richard M. Feldt
  Chief Executive Officer and President

ATTEST:


Richard G. Chleboski, Secretary

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Evergreen Solar, Inc.
Proxy for Annual Meeting of Stockholders

August 20, 2004

SOLICITED BY THE BOARD OF DIRECTORS

     The undersigned hereby appoints Richard M. Feldt and Richard G. Chleboski, and each of them singly, proxies, with full power of substitution to vote all shares of stock of Evergreen Solar, Inc. (the “Company”) which the undersigned is entitled to vote at the annual meeting of Stockholders of Evergreen Solar, Inc. to be held on Friday, August 20, 2004, at 11:00 a.m. Eastern time, at the Royal Plaza Hotel & Trade Center, 181 Post Road West, Marlboro, MA 01752, and at any adjournments thereof, upon matters set forth in the Notice of Annual Meeting of Stockholders and Proxy Statement dated July 16, 2004, a copy of which has been received by the undersigned.

         
 
      SEE REVERSE
      SIDE
  CONTINUED AND TO BE SIGNED ON REVERSE SIDE    

x Please mark votes as in this example.

THIS PROXY, WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BY THE UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS, THE EXERCISABILITY OF WARRANTS TO PURCHASE COMMON STOCK AND THE ISSUANCE OF A CORRESPONDING NUMBER OF SHARES OF COMMON STOCK UPON THE EXERCISE OF SUCH WARRANTS, AND THE AMENDMENT OF THE CERTIFICATE OF INCORPORATION (AS EACH IS DESCRIBED BELOW).

The Board of Directors recommends a vote “FOR” the listed nominees.

1.   To elect three members to the board of directors to serve for three-year terms as Class I Directors:

                     
NOMINEES:
  Dr. William P. Sommers   o   FOR   o   WITHHOLD
  Luc Charron   o   FOR   o   WITHHOLD
  Richard M. Feldt   o   FOR   o   WITHHOLD

The Board of Directors recommends a vote “FOR” each of the following proposals.

2.   To approve the approve the exercisability of warrants to purchase up to 2,423,851 shares of our common stock and the issuance of a corresponding number of shares of our common stock upon the exercise of such warrants.

             
o
  FOR   o   WITHHOLD

3.   To increase the total number of authorized shares of common stock of the Company from 70,000,000 to 100,000,000 and to increase the total number of authorized shares of the Company’s capital stock from 97,227,668 to 127,227,668.

             
o
  FOR   o   WITHHOLD

4.   To transact such other business as may properly come before the annual meeting and any adjournment thereof.

 


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o
  MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW



Please sign exactly as name appears below. Joint owners must both sign. Attorney, executor, administrator, trustee or guardian must give full title as such. A corporation or partnership must sign its full name by authorized person.

             

 
   
Signature of Stockholder
   
           
Date:
      , 2004    
 
       
 
           

 
   
Signature if held jointly
   

PLEASE COMPLETE, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE

I/We will attend the annual meeting.   o   YES   o   NO