                                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 (Amendment No. ____)

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:
[ ]  Preliminary Proxy Statement
[ ]  Confidential, for Use of the Commission Only (as determined by
     Rule 14a-6(e)(2))
[X]  Definitive Proxy Statement
[ ]  Definitive Additional Materials
[ ]  Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

                        ENERGY CONVERSION DEVICES, INC.
  ----------------------------------------------------------------------------
                 (Name of Registrant as Specified In Its Charter)

  ----------------------------------------------------------------------------
    (Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] 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:

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      (3)   Per unit price or other underlying value of transaction computed
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          ---------------------------------------------------------------------

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      (5) Total fee paid:

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[ ] Fee paid previously with preliminary materials.

          ---------------------------------------------------------------------

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

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    (4) Date Filed:
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<PAGE>

                                [ COMPANY LOGO ]


                         ENERGY CONVERSION DEVICES, INC.
                              2956 Waterview Drive
                         Rochester Hills, Michigan 48309

                                                      February 19, 2004

Dear Stockholder:

You are cordially invited to attend Energy Conversion Devices, Inc.'s 2003
Annual Meeting of Stockholders. This year's meeting will be held at the Michigan
State University Management Education Center, 811 West Square Lake Road, Troy,
Michigan on Thursday, March 18, 2004, at 10:00 a.m. (EST). If you plan to attend
the meeting, we would appreciate your calling the Investor Relations department
at (248) 293-0440 or sending us an e-mail at investor.relations@ovonic.com.

Details of the business to be conducted at this meeting are given in the
attached Notice of Meeting of Stockholders and Proxy Statement.

Whether or not you attend the annual meeting, it is important that your shares
be represented and voted at the meeting. Therefore, I urge you to promptly vote
and submit your proxy by phone, via the Internet or by signing, dating and
returning the enclosed proxy in the accompanying reply envelope. If you decide
to attend the annual meeting, you will be able to vote in person even if you
have previously submitted your proxy.

We look forward to seeing you at the meeting.

                                      Sincerely,


                                      /S/ Robert C. Stempel
                                      ----------------------------
                                      Robert C. Stempel
                                      Chairman of the Board
                                      and Chief Executive Officer



                             YOUR VOTE IS IMPORTANT

In order to assure your representation at this meeting, you are requested to
vote your shares by telephone, via the Internet or by signing, dating and
returning the enclosed proxy as promptly as possible in the enclosed envelope.
No postage need be affixed if mailed in the United States.


<PAGE>


                            ENERGY CONVERSION DEVICES, INC.

                                ----------------------

                           NOTICE OF MEETING OF STOCKHOLDERS

                                ----------------------


                                                      Rochester Hills, Michigan
                                                              February 19, 2004

To the Stockholders of
ENERGY CONVERSION DEVICES, INC.:

NOTICE is hereby given that the Annual Meeting of Stockholders (the "Meeting")
of ENERGY CONVERSION DEVICES, INC. (the "Company" or "ECD") will be held at
10:00 a.m. (EST) on Thursday, March 18, 2004, at the Michigan State University
Management Education Center, 811 West Square Lake Road, Troy, Michigan. The
purpose of the Meeting is to:

     1.   Elect seven directors to hold office until the next Annual Meeting
          of Stockholders of the Company.

     2.   Ratify the appointment of Grant Thornton LLP as independent auditors
          for the fiscal year ending June 30, 2004.

     3.   Consider and act upon a proposal of the Board of Directors to amend
          the Company's Certificate of Incorporation to increase the number
          of authorized shares by 20,000,000.

     4.   Transact such other business as may properly come before the Meeting.

Stockholders of record at the close of business on February 2, 2004 will be
entitled to vote at the Meeting. A list of stockholders entitled to vote at the
Meeting will be available for inspection at our offices. Whether or not you plan
to attend the Meeting in person, please promptly vote your shares by telephone,
via the Internet or by signing, dating and returning the enclosed proxy in the
accompanying reply envelope.

The Company's Annual Report on Form 10-K for its fiscal year ended June 30, 2003
accompanies the enclosed Proxy Statement.


                                      By Order of the Board of Directors


                                      /S/ Ghazaleh Koefod
                                      ----------------------------------
                                      Ghazaleh Koefod
                                      Secretary


<PAGE>

                         Energy Conversion Devices, Inc.
                              2956 Waterview Drive
                            Rochester Hills, MI 48309

                              ----------------------

                                 PROXY STATEMENT

                              ----------------------

This Proxy Statement is furnished in connection with the solicitation of proxies
by the Board of Directors of Energy Conversion Devices, Inc. (the "Company" or
"ECD"), a Delaware corporation, to be voted at the Annual Meeting of
Stockholders (the "Meeting") to be held at the Michigan State University
Management Education Center, 811 West Square Lake Road, Troy, Michigan on
Thursday, March 18, 2004, at 10:00 a.m. (EST).

This proxy statement and accompanying proxy were first mailed to stockholders on
or about February 19, 2004.

PURPOSE OF THE MEETING. The specific proposals to be considered and acted upon
at the Meeting are summarized in the accompanying notice and are described in
more detail in this proxy statement.

VOTING RIGHTS OF STOCKHOLDERS. Holders of record of the Company's Common Stock
at the close of business on February 2, 2004, are entitled to vote at the
Meeting. As of February 2, 2004, there were outstanding 24,523,001 shares of the
Company's Common Stock, $.01 par value ("Common Stock"); 219,913 shares of the
Company's Class A Common Stock, $.01 par value ("Class A Common Stock"); and
430,000 shares of the Company's Class B Common Stock, $.01 par value ("Class B
Common Stock"). Each share of Common Stock is entitled to one vote per share,
Class B Common Stock is currently entitled to one vote per share, and each share
of Class A Common Stock is entitled to 25 votes per share. The three classes
vote as one class on all matters, including the election and removal of
directors, except that with respect to (i) a merger or consolidation of the
Company with another corporation, (ii) the liquidation or dissolution of the
Company, (iii) the sale of all or substantially all of the assets of the
Company, (iv) an amendment to the Company's Certificate of Incorporation for
which class voting is required by Section 242 of the Delaware General
Corporation Law, or (v) the authorization of additional shares of Common Stock,
Class A Common Stock or Class B Common Stock, the affirmative vote of a majority
of the outstanding shares of Common Stock, the majority of the outstanding
shares of Class A Common Stock and the majority of the outstanding shares of
Class B Common Stock, voting as separate classes, and the affirmative vote of a
majority of the Common Stock, Class A Common Stock, Class B Common Stock,
combined, is required. Section 242 of the Delaware General Corporation Law
provides that "the holders of the outstanding shares of a class shall be
entitled to vote as a class upon a proposed amendment [to the corporation's
certificate of incorporation], whether or not entitled to vote thereon by the
certificate of incorporation, if the amendment would increase or decrease the
aggregate number of authorized shares of such class, increase or decrease the
par value of the shares of such class, or alter or change the powers,
preferences or special rights of the shares of such class so as to affect them
adversely."

RECORD DATE. Stockholders of record as of the close of business on February 2,
2004, will be entitled to vote at the Meeting.


<PAGE>

QUORUM. The required quorum for the transaction of business at the Meeting is a
majority of the votes eligible to be cast by holders of record of the Common
Stock, Class A Common Stock and Class B Common Stock as of the close of business
on the record date. If a stockholder withholds his or her vote for the election
of directors or abstains from voting on the other proposals to be considered at
the Meeting, the shares owned by such stockholder will be considered to be
present at the Meeting for purposes of establishing the presence or absence of
a quorum for the transaction of business. If a broker indicates on the form of
proxy that he or she does not have discretionary authority as to certain shares
to vote on any proposal, those shares will also be considered to be present at
the Meeting for purposes of establishing the presence or the absence of a quorum
for the transaction of business.

REQUIRED VOTE. The affirmative vote of a plurality of the votes cast at the
Meeting will be required to elect the directors of the Company. Because
directors are elected by a plurality vote, abstentions and withheld votes have
no impact in the election of directors once a quorum is established.

The affirmative vote of a majority of the votes cast at the Meeting will be
required to approve the proposal with respect to the appointment of the
Company's independent auditors. Abstentions will be considered as votes cast
with respect to such proposal and will have the same effect as a vote against
the proposal.

The affirmative vote of a majority of the outstanding Common Stock, Class A
Common Stock and Class B Common Stock, voting as separate classes, will be
required to approve the proposal to amend the Company's Certificate of
Incorporation to increase its authorized shares. Because of this requirement,
abstentions and broker non-votes on such proposal will have the same effect as a
vote against the proposal.

CERTAIN SIGNIFICANT STOCKHOLDERS. Stanford R. Ovshinsky and his wife, Dr. Iris
M. Ovshinsky (who are executive officers, directors and founders of the Company)
are record owners of 153,420 and 65,601 shares (or approximately 69.8% and
29.8%), respectively, of the outstanding shares of Class A Common Stock, with
the balance of the outstanding shares (892 shares) owned by members of their
family. Mr. and Dr. Ovshinsky also own of record 19,749 shares of Common Stock.
In addition, Mr. Ovshinsky has the right to vote 126,500 shares of Common Stock
(the "Sanoh Shares") owned by Sanoh Industrial Co., Ltd. ("Sanoh") under the
terms of an agreement dated November 3, 1992 between the Company and Sanoh. Mr.
and Dr. Ovshinsky have advised the Company that they intend to vote FOR each of
the proposals set forth in the accompanying Notice of Meeting of Stockholders.

Robert C. Stempel (Chairman and Chief Executive Officerof the Company) is
entitled to all voting rights with respect to 430,000 shares, or 100%, of the
outstanding shares of Class B Common Stock awarded to Mr. Stempel on January 15,
1999, under a Restricted Stock Agreement. Mr. Stempel also owns of record 61,404
shares of Common Stock. Mr. Stempel has advised the Company that he intends to
vote FOR each of the proposals set forth in the accompanying Notice of Meeting
of Stockholders.

Pursuant to a Stock Purchase Agreement dated as of May 1, 2000, TRMI Holdings
Inc. (TRMI), a unit of ChevronTexaco Corporation, has agreed that (i) so long as
it beneficially owns an aggregate of 5% of ECD's Common Stock and (ii) so long
as Mr. and Dr. Ovshinsky are the beneficial owners of Class A Common Stock, or
Mr. Stempel is the beneficial owner of Class B Common Stock, ChevronTexaco will
vote its shares of ECD Common Stock in accordance with the votes cast by the
holders of Class A Common Stock (prior to its conversion) or Class B Common
Stock (after conversion of the Class A Common Stock). As of February 2, 2004,

                                       2
<PAGE>

ChevronTexaco owns 4,376,633 shares of ECD Common Stock, which will be voted in
the same manner as Mr. and Dr. Ovshinsky vote their shares of Class A Common
Stock.

The directors and officers of the Company other than Mr. and Dr. Ovshinsky and
Mr. Stempel together hold 82,225 shares of ECD Common Stock. They have advised
the Company that they intend to vote FOR each of the proposals set forth in the
accompanying Notice of Meeting of Stockholders.

As a result of the foregoing, the Company anticipates that at least 10,445,536
votes will be cast in favor of items presented to all stockholders voting as a
single class (approximately 34.33% of the entire single class). As to the item
submitted for class voting, the Company anticipates that at least 4,540,011
votes by the holders of ECD Common Stock (approximately 18.51% of that separate
class) and 100% of the votes of the Class A Common Stock and the Class B Common
Stock will be cast for approval.

VOTING OF PROXIES. All shares represented by signed proxies received at or prior
to the Meeting from stockholders of record as of the close of business on
February 2, 2004 will be voted at the Meeting. Unless a stockholder specifies
otherwise, all proxies will be voted FOR each of the proposals set forth in the
accompanying Notice of Meeting of Stockholders.

VOTING BY TELEPHONE OR INTERNET. Stockholders of record (those who hold stock in
their own name) may vote their shares over the telephone or Internet as follows:

      By telephone: If you have a touch-tone phone, call 1-877-PRX-VOTE
                    (1-877-779-8683) toll free. You will be asked to enter your
                    Voter Control Number located on your Proxy Card. Then
                    follow the instructions.

      By Internet:  If you have an e-mail and Internet access, go to
                    http://www.eproxyvote.com/ener. You will be asked to enter
                    your Voter Control Number located on your Proxy Card. Then
                    follow the instructions.

If you have your shares in "street name," you must vote your shares in the
manner prescribed by your broker or nominee. Your broker or nominee has enclosed
or provided a voting instruction form for you to use in directing the broker or
nominee how to vote your shares.

VOTING IN PERSON. If you plan to attend the meeting and wish to vote in person,
we will give you a ballot at the meeting. However, if your shares are held in
the name of your broker, bank or other nominee, you must bring an account
statement or letter from the nominee indicating that you are the beneficial
owner of the shares on February 2, 2004, the record date for voting.

REVOCATION OF PROXIES.  You may revoke your proxy before it is voted by:

      o   submitting a new proxy with a later date, including a proxy
          given by telephone or over the Internet;

      o   notifying the Company's Secretary in writing before the meeting
          that you have revoked your proxy; or

      o   voting in person at the Meeting.

                                       3
<PAGE>

                                   ITEM NO. 1

                              ELECTION OF DIRECTORS

Upon recommendation of the Compensation and Nominating Committee, the Board has
nominated for election at the meeting a slate of seven nominees, all of whom are
currently serving on the Board. Mrs. Nancy M. Bacon, Senior Vice President, and
Mr. James R. Metzger, Executive Vice President and Chief Operating Officer,
current members of the Board of Directors, are not standing for reelection at
this meeting in order that a majority of the members of the Board are
independent in accordance with applicable rules of the Nasdaq Stock Market, Inc.

The directors are to be elected to serve until the next annual meeting of
stockholders and until their successors are duly elected and qualified. In the
unanticipated event that any nominee for director should become unavailable, it
is intended that all proxies will be voted for such substitute nominee as may be
designated by the Board of Directors. The affirmative vote of a plurality of the
votes cast at the Meeting will be required to elect the directors.

Information concerning the nominees for election as directors, including the
year each nominee first became a director, is set forth on the following pages.


                               ---------------


THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR ALL SEVEN
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS.


Current Directors Nominated for Reelection:

<TABLE>
<CAPTION>

                         Director
                          of the
                         Company                                Principal Occupation and
         Name             Since          Office                   Business Experience
----------------------   --------   ----------------   ------------------------------------------
<S>                      <C>        <C>                <C>

Stanford R. Ovshinsky    1960       President,         Mr. Ovshinsky, 81, the founder, President
                                    Chief              and Chief Technology Officer of ECD, has
                                    Technology         been an executive officer and director
                                    Officer and        of ECD since its inception in 1960.  Mr.
                                    Director           Ovshinsky is the principal inventor of ECD's
                                                       technologies.  He also serves as the chief
                                                       executive officer and a director of Ovonic
                                                       Battery Company, Inc.; chief executive officer
                                                       and chairman of United Solar Ovonic Corp. and
                                                       United Solar Ovonic LLC; president of Ovonic Fuel
                                                       Cell Company LLC; president and member of the Management
                                                       Committees of Texaco Ovonic Hydrogen Systems LLC;
                                                       a member of the Management Committee of Texaco
                                                       Ovonic Battery Systems LLC; chairman and director
                                                       of Ovonyx, Inc.; a member of the Alliance Board of
                                                       Ovonic Media, LLC; and co-chairman of the board of
                                                       directors of Sovlux Co., Ltd. Mr. Ovshinsky is the
                                                       husband of Dr. Iris M. Ovshinsky.

</TABLE>

                                       4
<PAGE>

<TABLE>
<CAPTION>
<S>                      <C>        <C>                <C>

Iris M. Ovshinsky        1960       Vice President     Dr. Ovshinsky, 76, co-founder and Vice
                                    and Director       President of ECD, has been an executive
                                                       officer and director of ECD since its
                                                       inception in 1960.  Dr. Ovshinsky also
                                                       serves as a director of Ovonic Battery.
                                                       Dr. Ovshinsky is the wife of Stanford R.
                                                       Ovshinsky.

Robert C. Stempel        1995       Chairman of the    Mr. Stempel, 70, is Chairman of the Board and
                                    Board, Chief       Chief Executive Officer of ECD.  Prior to his
                                    Executive          election as a director in December 1955, Mr. Stempel
                                    Officer and        served as senior business and technical advisor to
                                    Director           Mr. Ovshinsky.  He is also the chairman of Ovonic
                                                       Battery; a director of United Solar Ovonic Corp.
                                                       and United Solar Ovonic LLC; vice chairman and
                                                       director of Ovonyx; a member of the Management
                                                       Committee of Texaco Ovonic Hydrogen Systems and
                                                       Texaco Ovonic Battery Systems and a member of the
                                                       Alliance Board of Ovonic Media. From 1990 until
                                                       his retirement in 1992, he was the chairman and
                                                       chief executive officer of General Motors Corporation;
                                                       prior to serving as chairman, he was GM's president
                                                       since 1987.  He is a director of Southwall
                                                       Technologies, Inc. and serves as chairman of its
                                                       Audit Committee.

Umberto Colombo          1995       Director           Professor Colombo, 76, is Chairman of the
                                                       Scientific Councils of the ENI Enrico Mattei
                                                       Foundation and of the Instituto Per l'Ambiente
                                                       in Italy.  He was chairman of the Italian
                                                       National Agency for New Technology, Energy and
                                                       the Environment until 1993 and then served as
                                                       Minister of Universities and Scientific and
                                                       Technological Research in the Italian Government
                                                       until 1994.  Professor Colombo is a member of
                                                       the board of directors of several Italian-based
                                                       public companies.  He is also active as a
                                                       consultant in international science and
                                                       technology policy institutions related to
                                                       economic growth.

                                       5

<PAGE>


Walter J. McCarthy, Jr.  1995       Director           Mr. McCarthy, 78, until his retirement in 1990,
                                                       was the chairman and chief executive officer
                                                       of Detroit Edison Company.  Prior to his election
                                                       to the ECD Board, he served as a consultant to
                                                       ECD.  Mr. McCarthy also served as a director and
                                                       a member of the Audit Committee of Comerica Bank,
                                                       Federal-Mogul Corporation and Perry Drug Company.
                                                       He is a member of the National Academy of
                                                       Engineering.  Mr. McCarthy serves as chairman of
                                                       the Compensation and Nominating Committee and is
                                                       on the Audit Committee of the ECD Board.

Florence I. Metz         1995       Director           Dr. Metz, 74, until her retirement in 1996, held
                                                       various executive positions with Inland Steel:
                                                       General Manager, New Ventures, Inland Steel Company
                                                       (1989-1991); General Manager, New Ventures, Inland
                                                       Steel Industries (1991-1992) and Advanced Graphite
                                                       Technologies (1992-1993); Program Manager for
                                                       Business and Strategic Planning at Inland Steel
                                                       (1993-1996).  Dr. Metz also serves on the Board of
                                                       Directors of Ovonic Battery and is on the Audit
                                                       Committee and the Compensation and Nominating
                                                       Committee of the ECD Board.

Stanley K. Stynes        1977       Director           Dr. Stynes, 72, was Dean, College of Engineering
                                                       at Wayne State University from 1970 to August 1985,
                                                       and a professor of engineering at Wayne State
                                                       University from 1985 until his retirement in 1992.
                                                       He has been involved in various administrative,
                                                       teaching, research and related activities.  Dr.
                                                       Stynes serves as chairman of the Audit Committee.
</TABLE>


                          BOARD MEETINGS AND COMMITTEES

During the fiscal year ended June 30, 2003, the Board of Directors held six
meetings. Each director attended at least 75% of the meetings of the Board and
the committees on which he or she served as a member. The Company encourages all
Board members to attend annual meeting of stockholders. All but one of our
directors attended the 2002 annual meeting of stockholders.

The Board of Directors has two committees: an Audit Committee and a Compensation
and Nominating Committee.

Each of the committees has authority to engage legal counsel or other experts or
consultants as it deems appropriate to carry out its responsibilities. The Board
of Directors has determined that each member of each committee meets the
applicable laws and regulations regarding "independence" and that each member is
free of any relationship that would interfere with his or her individual
exercise of independent judgment.


                                       6


<PAGE>

AUDIT COMMITTEE. The Audit Committee, composed of Dr. Stanley K. Stynes
(Chairman), Mr. Walter J. McCarthy, Jr. and Dr. Florence Metz, held six meeting
during fiscal 2003. The Audit Committee assists the Board of Directors in its
oversight of the quality and integrity of the accounting, auditing, and
reporting practices of the Company. The Audit Committee's role includes
discussing with management the Company's processes to manage business and
financial risk, and for compliance with significant applicable legal, ethical,
and regulatory requirements. The Audit Committee is responsible for the
appointment, replacement, compensation, and oversight of the independent auditor
engaged to prepare or issue audit reports on the financial statements of ECD.
The Audit Committee relies on the expertise and knowledge of management, the
director of risk management and internal audit and the independent auditor in
carrying out its oversight responsibilities. The specific responsibilities in
carrying out the Audit Committee's oversight role are delineated in the Audit
Committee Charter, which is attached as Exhibit A to this Proxy Statement. The
Board of Directors has determined that Mr. McCarthy is the Audit Committee
financial expert. If the nominees for director are elected at the Meeting, the
Audit Committee will consist of Dr. Stynes, Mr. McCarthy and Dr. Metz. These
members meet applicable rules of the Nasdaq Stock Market, Inc. for independence
of Audit Committee members and have sufficient knowledge in financial and
auditing matters to serve on the Committee.

COMPENSATION AND NOMINATING COMMITTEE. Effective July 17, 2003, ECD management
recommended and the Board of Directors approved the restructuring of the
Compensation Committee to include the functions of a nominating committee and
renaming it the Compensation and Nominating Committee. The Compensation and
Nominating Committee is composed of Mr. McCarthy (Chairman) and Dr. Metz, both
independent outside directors. Neither of the Compensation and Nominating
Committee members is or was during the last fiscal year an officer or employee
of ECD or any of its subsidiaries, or had any business relationship with ECD or
any of its subsidiaries. The Compensation and Nominating Committee met three
times during fiscal 2003.

The Compensation and Nominating Committee is responsible for administering the
policies which govern both the compensation of executive officers and ECD's
stock option plans. The Compensation and Nominating Committee meets several
times during the year to review recommendations from management regarding stock
options and compensation. Compensation and stock option recommendations are
based upon performance, current compensation, stock option ownership, and years
of service to ECD. ECD does not have a formal bonus program for executives,
although it has awarded bonuses to its executives from time to time.

The Compensation and Nominating Committee is responsible for (1) identifying
individuals qualified to become Board members; (2) recommending to the Board
director nominees for election or reelection at each annual meeting of
stockholders; and (3) establishing compensation policies which govern both the
annual compensation of and grants of stock options to the senior executive
officers of the Company and its wholly and/or majority owned subsidiaries and
the Company's directors. The specific responsibilities and functions of the
Compensation and Nominating Committee are delineated in the Compensation and
Nominating Committee charter, which is available on ECD's website at
www.ovonic.com.

BOARD INDEPENDENCE. The Board of Directors has determined affirmatively that if
the nominees for director are elected at the Meeting, a majority of the members
of the Board will meet the standards for independence set forth in applicable
rules of the Nasdaq Stock Market, Inc.

                                       7

<PAGE>

NOMINATING DIRECTORS. The Compensation and Nominating Committee identifies
nominees for directors from various sources, including third-party consultants,
to assist in identifying and evaluating potential nominees. The Committee has
specified the following minimum qualifications that it believes must be met by
a nominee for a position on the Board:

      O   have the highest personal and professional ethics and integrity and
          whose values are compatible with the Company's values;

      O   have had experiences and achievements that have given them the
          ability to exercise good business judgment;

      O   can make significant contributions to the Company's success;

      O   have the ability to provide wise, informed and thoughtful counsel
          to top management on a range of issues;

      O   are willing to devote the necessary time to the work of the
          Board and its committees;

      O   understand and meet their responsibilities to the Company's
          stockholders including the duty of care (making informed decisions)
          and the duty of loyalty (maintaining confidentiality and avoiding
          conflicts of interest); and

      O   backgrounds that provide a portfolio of experience and knowledge
          commensurate with the Company's needs.

The Committee will consider persons recommended by the stockholders in the same
manner as a Committee-recommended nominee. Notice of proposed stockholder
nominations for director must be delivered to the Secretary of the Company not
less than 120 days prior to any meeting at which directors are to be elected.
Nominations must include (i) as to each nominee, all information required to be
disclosed in solicitation of proxies for elections of directors pursuant to
Regulation 14A under the Securities Exchange Act of 1934, (ii) the name and
address of the stockholder giving the notice, (iii) a representation that the
stockholder is a holder of the Company's Common Stock and intends to appear at
the meeting to make the nomination, (iv) a description of all arrangements or
understandings among the stockholder and the nominee; and (v) the written
consent of each nominee to serve as a director if so elected.

CODE OF ETHICS. A copy of our Code of Business Conduct and Ethics, which applies
to our chief executive officer, chief financial officer and all of our
employees, can be found on our website at www.ovonic.com.

COMMUNICATING WITH DIRECTORS. Stockholders may contact any of our directors or
our Board as a group by writing to them c/o the Corporate Secretary, Energy
Conversion Devices, Inc., 2956 Waterview Drive, Rochester Hills, MI 48309. All
communications will be received, processed and forwarded to the directors by the
Corporate Secretary. You will receive a written acknowledgement from the
Corporate Secretary upon receipt of your communication if you include a return
address.


                            COMPENSATION OF DIRECTORS

Officers of ECD who serve on ECD's Board do not receive compensation for their
services as a director. The other directors of the Company are issued
approximately $5,000 per year in ECD Common Stock based on the closing price of
the Common Stock on the first business day of

                                       8
<PAGE>

each year and are paid $1,000 for attendance at each Board meeting and each
Compensation and Nominating Committee meeting (in person or via telephone
conference call). Directors serving on the Audit Committee are paid $2,000 for
attendance (in person or via telephone conference call) at each meeting.
Directors who are not employed by the Company are also reimbursed for all
expenses incurred for the purpose of attending board of directors and committee
meetings, including airfare, mileage, parking, transportation and hotel. During
the year ended June 30, 2003, Messrs. Colombo, McCarthy and Stynes and Dr. Metz
each received options to purchase 5,000 shares of ECD Common Stock at $10.40
per share under the terms of ECD's 2000 Non-Qualified Stock Option Plan.


                             AUDIT COMMITTEE REPORT

The Audit Committee is comprised of three directors, all of whom are independent
directors as defined under applicable rules of the Nasdaq Stock Market, Inc.

In accordance with its written charter adopted by the Board of Directors, the
Audit Committee assists the Board of Directors in fulfilling its responsibility
for oversight of the quality and integrity of our accounting, auditing, and
financial reporting practices. The Audit Committee reviews the Company's
financial reporting process on behalf of the Board. Management has the primary
responsibility for the financial statements and the reporting process. The
Company's independent auditors are responsible for performing an audit in
accordance with auditing standards generally accepted in the United States of
America to obtain reasonable assurance that the Company's consolidated financial
statements are free from material misstatement and expressing an opinion on the
conformity of the financial statements with accounting principles generally
accepted in the United States of America. The recently appointed Director of
Risk Management and Internal Audit is responsible to the Audit Committee and the
Board for testing the integrity of the financial accounting and reporting
control systems and such other matters as the Audit Committee and the Board
determine. During fiscal year 2003, the Audit Committee met six times with
management and ECD's independent auditors and discussed the interim financial
information contained in each quarterly earnings report prior to public release.

In discharging its oversight responsibility as to the audit process, the Audit
Committee obtained from the independent auditors a formal written statement
describing all relationships between the auditors and ECD that might bear on the
auditors' independence consistent with Independence Standards Board Standard No.
1, "Independence Discussions with Audit Committees," discussed with the auditors
any relationships that may impact their objectivity and independence and
satisfied itself as to the auditors' independence. The Audit Committee also
discussed with management and independent auditors the quality and adequacy of
ECD's internal controls. The Audit Committee reviewed with ECD's independent
auditors their audit plans, audit scope, and identification of audit risks.

The Audit Committee discussed and reviewed with the independent auditors all
communications required by generally accepted auditing standards, including
those described in Statement on Auditing Standards No. 61, as amended,
"Communication with Audit Committees," and, with and without management present,
discussed and reviewed the results of the independent auditors' examination of
the consolidated financial statements.

                                       9
<PAGE>

The Audit Committee reviewed with management and the independent auditors the
audited financial statements of ECD as of and for the fiscal year ended June 30,
2003. Management represented to the Audit Committee that the Company's
consolidated financial statements were prepared in accordance with generally
accepted accounting principles in the United States of America, and the Audit
Committee has reviewed and discussed the consolidated financial statements
with management, the internal auditor and the independent auditors.

Based on the above-mentioned reviews and discussions with management and the
independent auditors, the Audit Committee recommended to the Board of Directors
that the audited consolidated financial statements be included in ECD's Annual
Report on Form 10-K for the fiscal year ended June 30, 2003, for filing with the
Securities and Exchange Commission.

                                          AUDIT COMMITTEE
                                          Stanley K. Stynes, Chairman
                                          Walter J. McCarthy Jr.
                                          Florence I. Metz


INDEPENDENT AUDITOR FEES. The following table presents aggregate fees for
professional audit services rendered by Deloitte & Touche LLP ("Deloitte"), the
Company's former independent auditors, for the fiscal years ended June 30, 2003
and 2002, and fees billed for other services rendered by Deloitte during those
periods.

                                             2003             2002
                                         ------------     ------------

         Audit Fees(1)                    $  953,000       $  374,000
         Audit-Related Fees(2)                67,000           82,000
         Tax Fees(3)                          45,000           11,000
         All Other Fees(4)                    26,000           42,000
                                          ----------       ----------
         Total Fees                       $1,091,000       $  509,000
                                          ==========       ==========

   ---------------
      (1)  Audit Fees -- These are fees for professional services performed by
           Deloitte for the audit of the Company's annual financial statements
           and review of financial statements included in the Company's 10-Q
           filings, and services that are normally provided in connection with
           statutory and regulatory filings or engagements.

      (2)  Audit-Related Fees -- These are fees which, if incurred and billed,
           would be for the assurance and related services performed by Deloitte
           that are reasonably related to the performance of the audit or review
           of the Company's financial statements.

      (3)  Tax Fees -- These are fees which, if incurred and billed, would be
           for professional services performed by Deloitte with respect to tax
           compliance, tax advice and tax planning.

      (4)  All Other Fees -- These are fees for permissible work performed by
           Deloitte that does not meet the above categories. For 2002 and 2003,
           this consists of consulting services for improving controls and
           efficiency of the Company's procurement process.

During fiscal year 2003, the Audit Committee approved all audit and non-audit
services provided to the Company by Deloitte prior to management engaging
Deloitte for that purpose. The Committee's current practice is to consider for
pre-approval annually all audit and non-audit

                                       10
<PAGE>

services proposed to be provided by our independent auditors for the fiscal
year. In accordance with the Committee's current policy, additional fees related
to audit services proposed to beprovided within the scope of the approved
engagement may be approved by management, so long as the fees for such
additional services are consistent with historical experience, and are reported
to the Audit Committee at the next regularly scheduled Committee meeting.
Additional fees for other proposed audit related or non-audit services (not
within the scope of the approved engagement) may be considered and, if
appropriate, approved by the Chairman of the Audit Committee if such additional
fees constitute five percent or less of the approved budget, otherwise the Audit
Committee must approve all additional audit related and non-audit services to be
performed by the independent auditor. The Audit Committee has considered that
the provision of non-audit services rendered by Deloitte was compatible with
maintaining Deloitte's independence.

The Audit Committee pre-approves all audit and non-audit services provided by
the independent auditors prior to the engagement of the independent auditors
with respect to such services. The Chairman of the Audit Committee has been
delegated the authority by the Committee to pre-approve the engagement of the
independent auditors when the entire Committee is unable to do so. The Chairman
must report all such pre-approvals to the entire Audit Committee at the next
committee meeting.


                         CHANGES IN INDEPENDENT AUDITORS

On October 29, 2003, the Audit Committee was advised by Deloitte that it
declined to stand for reelection as the Company's independent auditors, and on
October 30, 2003 we received a letter from Deloitte confirming "that the
client-auditor relationship between Energy Conversion Devices, Inc. (Commission
File No. 1-8403) and Deloitte & Touche LLP has
ceased."

The audit report of Deloitte on our consolidated financial statements as of, and
for the year ended June 30, 2002, dated September 27, 2002 ("2002 Audit Report")
did not contain any adverse opinion or disclaimer of opinion, nor was it
qualified or modified as to uncertainty, audit scope or accounting principles.

The audit report of Deloitte on our consolidated financial statements as of, and
for the year ended June 30, 2003, dated October 21, 2003 ("2003 Audit Report")
did not contain any adverse opinion or disclaimer of opinion, nor was it
qualified or modified as to uncertainty, audit scope or accounting principles
except that the 2003 Audit Report expressed an unqualified opinion and included
explanatory paragraphs concerning (i) substantial doubt about the Company's
ability to continue as a going concern and (ii) effective July 1, 2002, we
changed our method of accounting for goodwill and other intangible assets to
conform to Statement of Financial Accounting Standards No. 142, Goodwill and
Other Intangible Assets.

The cessation of the client-auditor relationship between us and Deloitte was not
recommended or approved by our Board of Directors or the Audit Committee.

In connection with the audits of our two most recent fiscal years ended June 30,
2003 and 2002 and for the period July 1, 2003 through October 30, 2003, we had
no disagreements with Deloitte on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of Deloitte, would have
caused them to make reference to the subject matter of the disagreements in
connection with their reports on our consolidated financial statements.

                                       11
<PAGE>

In connection with the audits of our two most recent fiscal years ended June 30,
2003 and 2002 and for the period July 1, 2003 through October 30, 2003, there
were no "reportable events" as that term is defined in Item 304(a)(1)(v) of
Regulation S-K. Except that, as discussed in Item 9A of our Form 10-K for the
year ended June 30, 2003 in connection with its audit of our consolidated
financial statements for the year ended June 30, 2003, Deloitte has advised us
of certain internal control matters that Deloitte believes are "reportable
conditions" under standards adopted by the American Institute of Certified
Public Accountants.

As of June 30, 2003, an evaluation was carried out under the supervision and
with the participation of our management, including our Chief Executive Officer
and Chief Financial Officer, of the effectiveness of the design and operation of
our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d -
15(e) under the Securities Exchange Act of 1934). Based upon that evaluation,
the Chief Executive Officer and Chief Financial Officer concluded that, with the
exception of the items listed below, the design and operation of these
disclosure controls and procedures were effective for gathering, analyzing and
disclosing information required to be disclosed in connection with the filing of
our Annual Report on Form 10-K for the year ended June 30, 2003.

In reviewing our internal controls, it was identified that the policies and
procedures regarding employee conduct and acceptable business practices,
including expense reporting and personal use of Company assets, were not well
documented and did not adequately communicate our expectations regarding these
matters. The Company appointed a Director of Risk Management and Internal Audit
in September 2003 who is responsible for leading the assessment of our internal
controls and recommending any required changes. Additionally, we have retained
outside professional advisors to assist in the evaluation of existing disclosure
controls and procedures and provide recommendations for improvement.

Recent filings of the Company's Annual Reports on Form 10-K have been filed in a
timely manner. However, we were not able to meet the filing deadline for the
most recent Form 10-K because we lacked the resources to address the financial
reporting related to significant and complex business transactions entered into
in fiscal year 2003. The Company intends to evaluate its resources and make
appropriate changes to provide sufficient resources and time to prepare, and
provide for reviews by management, the Audit Committee and the Board of
Directors, and file periodic reports within the time periods specified in the
SEC's rules and regulations.

Deloitte have advised the Company that the above matters represent "reportable
conditions" under standards established by the American Institute of Certified
Public Accountants. However, Deloitte also advised us that they believe that
none of these conditions are material weaknesses.

Since the date of the evaluation, there have been no significant changes to the
Company's disclosure controls and procedures or significant changes in other
factors that could affect our disclosure controls and procedures. However, as
noted above, the Company has taken, and is continuing to take, certain actions
designed to enhance its disclosure controls and procedures.

On November 14, 2003, the Audit Committee of the Board of Directors engaged the
public accounting firm of Grant Thornton LLP as the Company's independent
auditors.

                                       12

<PAGE>

                                   ITEM NO. 2

             APPROVAL OF THE APPOINTMENT OF INDEPENDENT AUDITORS

Upon the recommendation of the Audit Committee, the Board of Directors has
appointed Grant Thornton as independent auditors for the Company to audit its
consolidated financial statements for the fiscal year ending June 30, 2004 and
to perform audit-related services. Such services include review of periodic
reports and registration statements filed by the Company with the Securities and
Exchange Commission and consultation in connection with various accounting and
financial reporting matters. Grant Thornton will also perform audit services for
certain of the Company's joint ventures and limited non-audit services for the
Company.

The Board of Directors has directed that the appointment of Grant Thornton be
submitted to the stockholders for approval. The affirmative vote of a majority
of the votes cast at the Meeting will be required to approve such appointment.
If the stockholders should not approve such appointment, the Audit Committee and
the Board of Directors would reconsider the appointment.

Representatives of both Deloitte and Grant Thornton will be present at the
Meeting and available to respond to appropriate questions. They will also be
given the opportunity to make a statement if they desire to do so.


                               ---------------


THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE APPROVAL OF
THE APPOINTMENT OF GRANT THORNTON AS INDEPENDENT AUDITORS.

                                       13

<PAGE>


                                    ITEM NO. 3

          PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION
             TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON
                        STOCK FROM 30,000,000 TO 50,000,000

At the meeting, the stockholders of the Company will be asked to consider and
act upon a proposal (the "Common Stock Proposal") to amend Article FOURTH of the
Company's Certificate of Incorporation to increase the number of authorized
shares of the Company's Common Stock from 30,000,000 to 50,000,000.

As more fully described below, the purpose of the Common Stock Proposal is to
enable the Company to honor exercises of all currently existing options or other
rights to acquire shares of Common Stock and to make available additional shares
of Common Stock for future corporate transactions. Such additional shares may be
used by the Company for stock issuances in the future if the Company determines
to enter into strategic joint ventures or collaborative business arrangements,
to seek additional equity financing or to establish additional employee or
director equity compensation plans or arrangements. Other than for shares needed
to honor currently existing options or other rights to acquire shares, the
Company has no present commitment to issue the additional shares of Common Stock
to be authorized pursuant to the Common Stock Proposal.  The Company is,
however, exploring additional financing alternatives.

As indicated below, the Board of Directors strongly believes that the Common
Stock Proposal is in the best interests of the Company and its stockholders.
Under Delaware law and the Company's Certificate of Incorporation, the Common
Stock Proposal must be approved by both the Board of Directors and the holders
of a majority of the Company's outstanding Class A Common, Class B Common Stock
and Common Stock, voting as separate classes. Because of this requirement,
abstentions and broker non-votes on such proposal will have the same effect as a
vote against the proposal. The Board of Directors approved the Common Stock
Proposal on December 15, 2003.

If the Common Stock Proposal is adopted by the stockholders, the Company will
file a Certificate of Amendment with the Delaware Secretary of State amending
the Company's Certificate of Incorporation in accordance with the Common Stock
Proposal. The text of Article FOURTH, as it is proposed to be amended, is set
forth in Exhibit B to this Proxy Statement.

BACKGROUND. Under the Company's Certificate of Incorporation as presently in
effect, the Company has 30,000,000 shares of authorized Common Stock. As of the
mailing date of this Proxy Statement, 24,523,001 shares of the Company's Common
Stock were issued and outstanding and 4,510,880 shares were reserved for
issuance upon the exercise of outstanding stock options, warrants and
convertible securities. In addition, there are stock options and warrants
outstanding that are exercisable for an aggregate of 5,077,324 shares of Common
Stock for which shares have not been reserved.

As part of a recent purchase of the Company's securities consisting of 3,266,254
units (each unit consisting of one share of Common Stock plus one warrant to
acquire one share of Common Stock) in November 2003 and January 2004 by Fidelity
Capital Trust: Fidelity Capital Appreciation Fund, Heimdall Investments Ltd. and
CCM Master Qualified Fund, Ltd., the Company agreed that it would submit the
Common Stock Proposal to the stockholders for consideration and approval.
Messrs. Ovshinsky and Stempel and Dr. Ovshinsky have agreed with the Company to
refrain from exercising options to acquire an aggregate of 600,000 shares

                                       14
<PAGE>

of Common Stock until the earlier of (a) the date the Common Stock Proposal is
approved by stockholders, or (b) December 31, 2004. Additionally, the Board of
Directors of the Company has suspended the grant of additional stock options
pursuant to the Company's existing stock option plans until the approval of the
Common Stock Proposal by stockholders.

Pursuant to the Stock Purchase Agreement dated as of May 1, 2000 by and between
the Company and TRMI Holdings Inc. (TRMI), a unit of ChevronTexaco Corporation,
TRMI was granted certain notice and preemptive rights in connection with future
sales by the Company of any shares of its capital stock.

On November 5, 2003, TRMI waived its notice and preemptive rights to allow for
the Company's sale of up to 3,345,000 shares of its Common Stock and warrants to
acquire up to an additional 3,345,000 shares of Common Stock. This waiver does
not apply to any future sales by the Company of any shares of its capital stock.

Nevertheless, if all of the holders of these options, warrants and convertible
securities exercised their rights to acquire shares of Common Stock, the Company
would be unable to honor all such exercises.

PURPOSE OF THE COMMON STOCK PROPOSAL. The immediate purpose of the Common Stock
Proposal is to make available a sufficient number of shares of Common Stock to
permit the Company to honor an exercise or conversion of all existing options,
warrants and convertible securities, if the holders elected to do so.

The Company may in the future enter into strategic joint venture or other
collaborative business arrangements with licensees, suppliers, distributors and
other parties with whom the Company does business. Certain such transactions
could involve an equity investment in the Company or the issuance of stock
options, warrants or other securities convertible into or exercisable or
exchangeable for shares of Common Stock. The Company may also in the future
undertake additional equity financing through a public offering or private
placement of Common Stock or other securities, including debt securities,
convertible into or exercisable or exchangeable for shares of Common Stock. The
authorization of additional shares of Common Stock pursuant to the Common Stock
Proposal will permit the Company to seek such additional equity financing when
and if market conditions are advantageous without the delay and uncertainty
inherent in obtaining future stockholder approval for the authorization of
additional shares of Common Stock in order to permit such financing. For
example, the cost, prior notice requirement and delay involved in obtaining
shareholder approval at the time that a transaction may become desirable could
make it difficult or impossible to effect the transaction. The additional
shares of Common Stock, together with other authorized and unissued shares,
generally would be available for issuance without any requirement for further
shareholder approval, unless shareholder action is required by applicable law
or by the rules of the stock exchange on which the Company's securities may then
be listed.

EFFECT OF CHANGE. One of the effects of the Common Stock Proposal, if adopted,
however, may also be to enable the Board of Directors to render it more
difficult to, or discourage an attempt to, obtain control of the Company by
means of a merger, tender offer, proxy contest or otherwise, and thereby protect
the continuity of present management. The Board of Directors would, unless
prohibited by applicable law, have additional shares of Common Stock available
to effect transactions (including private placements) in which the number of the
Company's outstanding shares would be increased and would thereby dilute the
interest of any party attempting to gain control of the Company. Such action,
however, could discourage an

                                       15
<PAGE>

acquisition of the Company which stockholders other than TRMI might view as
desirable. In addition, since the Company's stockholders have no preemptive
rights to purchase additional shares of Common Stock issued, the issuance of
such shares could dilute the interests of current stockholders of the Company.

                               ---------------


THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE COMMON
STOCK PROPOSAL.

                                       16
<PAGE>

                 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                     MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Equity Compensation Plan Information

The following table sets forth aggregate information regarding grants under all
equity compensation plans of ECD as of February 2, 2004.

<TABLE>
<CAPTION>
                                     Number of                            Number of securities
                                  securities to be                        remaining available
                                    issued upon      Weighted-average     for future issuance
                                  exercise of out-   exercise price of    under equity compen-
                                    standing op-        outstanding      sation plans (excluding
                                  tions, warrants    options, warrants   securities reflected in
         Plan category              and rights          and rights             1st column)
-------------------------------   ----------------   -----------------   -----------------------
<S>                                  <C>                  <C>                   <C>

Equity compensation plans
approved by security holders(1)      3,096,008            $16.90                (2)

Equity compensation plans not
approved by security holders           359,749(3)(4)      $10.17                (4)(5)

Total                                3,455,757            $16.20                (2)(4)(5)
                                     =========
</TABLE>

   ---------------
      (1)  These plans consist of the 1987 Stock Option and Incentive Plan, the
           1995 Non-Qualified Stock Option Plan and the 2000 Non-Qualified Stock
           Option Plan.

      (2)  In October 2003, in order to make available additional shares to
           complete a proposed equity financing, our Board of Directors approved
           the suspension of all future stock option grants under our existing
           plans until such time when our stockholders approve an amendment to
           Article Four of our Certificate of Incorporation to increase the
           number of authorized shares. As of February 2, 2004, there were
           1,211,070 securities remaining available for future issuances under
           our equity compensation plans approved by security holders.

      (3)  Of the 359,749 shares issuable upon exercise, options to acquire
           221,499 and 138,250 shares were issued to Mr. and Dr. Ovshinsky,
           respectively, pursuant to Stock Option Agreements dated November 1993
           which are subject to periodic anti-dilution protection adjustments
           based on changes in the number of outstanding shares of our common
           stock. Under those Stock Option Agreements, if we issue any equity
           securities, other than pursuant to the exercise of options by Mr. and
           Dr. Ovshinsky under their respective Stock Option Agreements, we are
           obligated to grant to Mr. and Dr. Ovshinsky additional options
           covering sufficient additional shares of our common stock so that
           their respective proportionate equity interest in ECD as of November
           1993 is maintained on a fully-diluted basis. Such adjustments are
           calculated quarterly as of the last day of each of our fiscal
           quarters and coincident with significant issuances of our common
           stock.

      (4)  In October 2003, in order to make available additional shares to
           complete a proposed equity financing, our Board of Directors approved
           our entering into an agreement with Mr. and Dr. Ovshinsky for the
           suspension of their rights to exercise 180,000 and 120,000 shares,
           respectively, granted to them pursuant to Stock Option Agreements
           dated November 1993 until the earlier of (i) the date that we file an
           amendment to our Certificate

                                       17
<PAGE>

           of Incorporation following stockholder approval to increase the
           number of authorized shares, or (ii) December 31, 2004. Mr. and Dr.
           Ovshinsky also have agreed to the temporary postponement of the
           anti-dilution provision (see Note 3 above) under their respective
           Stock Option Agreements.

      (5)  In October 2003, in order to make available additional shares to
           complete a proposed equity financing, our Board of Directors
           approved our entering into an agreement with Mr. Stempel for the
           suspension of his rights to exercise 300,000 shares granted to him
           pursuant to Stock Option Agreement dated January 1999 until the
           earlier of (i) the date that we file an amendment to our Certificate
           of Incorporation following stockholder approval to increase the
           number of authorized shares, or (ii) December 31, 2004.

Security Ownership of Certain Beneficial Owners and Management

                              Class A Common Stock

Mr. Stanford R. Ovshinsky and his wife, Dr. Iris M. Ovshinsky (executive
officers, directors and founders of ECD), own of record 153,420 shares and
65,601 shares, respectively (or approximately 69.8% and 29.8%, respectively), of
the outstanding shares of Class A Common Stock. Such shares are owned directly
or indirectly through certain trusts of which Mr. and Dr. Ovshinsky are
co-trustees. Common Stock is entitled to one vote per share and each share of
Class A Common Stock is entitled to 25 votes per share. Class A Common Stock is
convertible into Common Stock on a share-for-share basis at any time and from
time to time at the option of the holders, and will be deemed to be converted
into Common Stock on a share-for-share basis on September 30, 2005. Under
applicable Delaware law, the September 30, 2005 mandatory conversion date may be
extended in the future from time to time with approval of ECD's stockholders
voting together as a single class.

As of February 2, 2004, Mr. Ovshinsky also had the right to vote 126,500 shares
of Common Stock (Sanoh Shares) owned by Sanoh Industrial Co., Ltd. (Sanoh) under
the terms of an agreement dated as of November 3, 1992 between ECD and Sanoh
which, together with the Class A Common Stock and 19,749 shares of Common Stock
Mr. and Dr. Ovshinsky own, give Mr. and Dr. Ovshinsky voting control over shares
representing approximately 18.46% of the combined voting power of ECD's
outstanding stock.

ChevronTexaco has agreed that (i) so long as it beneficially owns an aggregate
of 5% of our common stock and (ii) so long as Mr. and Dr. Ovshinsky are the
beneficial owners of Class A common stock, or Mr. Stempel is the beneficial
owner of Class B common stock, ChevronTexaco will vote its shares of our common
stock in accordance with the votes cast by the holders of Class A common stock
(prior to its conversion) or Class B common stock (after conversion of the Class
A common stock).

The following table sets forth, as of February 2, 2004, information concerning
the beneficial ownership of Class A Common Stock by each director and all
executive officers and directors of ECD as a group. All shares are owned
directly except as otherwise indicated. Under the rules of the Securities and
Exchange Commission, Stanford R. Ovshinsky and Iris M. Ovshinsky may each be
considered to beneficially own the shares held by the other.

                                       18

<PAGE>

                              Class A
                            Common Stock     Total Number of
       Name of              Beneficially         Shares           Percentage of
   Beneficial Owner         Owned(1)(2)     Beneficially Owned        Class
-----------------------    -------------    ------------------    -------------

Stanford R. Ovshinsky         153,420            153,420              69.8%

Iris M. Ovshinsky              65,601             65,601              29.8%

All other executive
officers and directors
as a group (9 persons)          --                 --                  --
                             ---------          ---------            -------
Total                         219,021            219,021              99.6%
                             =========          =========            =======
   ---------------
      (1)  The balance of the 219,913 shares of Class A Common Stock
           outstanding, 892 shares, or approximately 0.4%, are owned by other
           members of Mr. and Dr. Ovshinsky's family. Neither Mr. nor Dr.
           Ovshinsky has voting or investment power with respect to such
           shares.

      (2)  On November 10, 1995, the Compensation Committee recommended, and
           the Board of Directors approved, an amendment to Mr. and Dr.
           Ovshinsky's Stock Option Agreements dated November 18, 1993 (the
           "Agreements") to permit Mr. and Dr. Ovshinsky to exercise a portion
           (126,082 and 84,055 shares, respectively) of their existing Common
           Stock option for Class A Common Stock on the same terms and
           conditions as provided in the Agreements.  The shares of Class A
           Common Stock issuable upon exercise of the options under the
           Agreements, as amended, are not included in the number of shares
           indicated in the above table, but are included in the shares of
           Common Stock beneficially owned by Mr. and Dr. Ovshinsky (see table
           of beneficial ownership of Common Stock).

                              Class B Common Stock

Mr. Robert C. Stempel owns all of the 430,000 authorized shares of Class B
Common Stock were awarded to Mr. Robert C. Stempel pursuant to the terms of
a Restricted Stock Agreement dated as of January 15, 1999 between the Company
and Mr. Stempel.

The terms of the Class B Common Stock are substantially similar to those of the
Company's Class A Common Stock. The principal difference between the Class A
Common Stock and the Class B Common Stock is with respect to voting rights. Each
share of Class B Common Stock currently entitles the holder to one vote on all
matters to be voted upon by the Company's stockholders. However, each share of
Class B Common Stock will become entitled to 25 votes as of the first date upon
which all of the outstanding shares of Class A Common Stock have been converted
into Common Stock and no shares of Class A Common Stock are outstanding. The
preferential voting rights of the Class B Common Stock, if triggered, will
expire on September 30, 2005.

The Class B Common Stock will be convertible into Common Stock on a
share-for-share basis at any time at the option of the holder. In addition, the
Class B Common Stock will be deemed to be converted into Common Stock on
September 30, 2005. The Company's amended Certificate of Incorporation provides
that the foregoing September 30, 2005 mandatory conversion date may be extended
in the future with the approval of the Company's stockholders voting together as
a single class.

                                       19
<PAGE>

ChevronTexaco has agreed that (i) so long as it beneficially owns an aggregate
of 5% of our common stock and (ii) so long as Mr. and Dr. Ovshinsky are the
beneficial owners of Class A common stock, or Mr. Stempel is the beneficial
owner of Class B common stock, ChevronTexaco will vote its shares of our common
stock in accordance with the votes cast by the holders of Class A common stock
(prior to its conversion) or Class B common stock (after conversion of the Class
A common stock).

                               Common Stock

DIRECTORS AND EXECUTIVE OFFICERS. The following table sets forth, as of
February 2, 2004, information concerning the beneficial ownership of Common
Stock by each director and executive officer and for all directors and executive
officers of the Company as a group. All shares are owned directly except as
otherwise indicated.



                                         Amount and Nature of      Percentage
       Name of Beneficial Owner         Beneficial Ownership(1)    of Class(2)
  ----------------------------------    -----------------------    -----------

     Robert C. Stempel                        891,404  (3)            3.52%
     Stanford R. Ovshinsky                    804,616  (4)            3.19%
     Iris M. Ovshinsky                        424,248  (5)            1.70%
     Nancy M. Bacon                           247,215  (6)            1.00%
     Hellmut Fritzsche                         30,250  (7)              *
     Stephan W.  Zumsteg                       30,000  (8)              *
     Walter J. McCarthy, Jr.                   20,708  (9)              *
     James R.  Metzger                         19,974 (10)              *
     Stanley K. Stynes                         19,589 (11)              *
     Florence I. Metz                          17,405 (12)              *
     Umberto Colombo                           15,672 (13)              *
     All executive officers and
     directors as a group (11 persons)      2,521,081                 9.42%
                                            =========
   ---------------
          *   Less than 1%.

         (1)  Under the rules and regulations of the Securities and Exchange
              Commission, a person is deemed to be the beneficial owner of a
              security if that person has the right to acquire beneficial
              ownership of such security within sixty days, whether through the
              exercise of options or warrants or through the conversion of
              another security.

         (2)  Under the rules and regulations of the Securities and Exchange
              Commission, shares of Common Stock issuable upon exercise of
              options and warrants or upon conversion of securities which are
              deemed to be beneficially owned by the holder thereof (see
              Note (1) above) are deemed to be outstanding for the purpose of
              computing the percentage of outstanding securities of the class
              owned by such person but are not deemed to be outstanding for the
              purpose of computing the percentage of the class owned by any
              other person.

                                       20
<PAGE>

         (3)  Includes 430,000 shares of Class B Common Stock and 400,000 shares
              represented by options exercisable within 60 days. In October
              2003, in order to make available additional shares to complete a
              proposed equity financing, our Board of Directors approved our
              entering into an agreement with Mr. Stempel for the suspension of
              his rights to exercise 300,000 shares granted to him pursuant to
              Stock Option Agreement dated January 1999 until the earlier of
              (i) the date that we file an amendment to our Certificate of
              Incorporation following stockholder approval to increase the
              number of authorized shares, or (ii) December 31, 2004.  The
              300,000 shares are not included in the number of shares indicated
              in the above table.

         (4)  Includes 512,456 shares represented by options exercisable within
              60 days, the 126,500 Sanoh Shares over which Mr. Ovshinsky has
              voting power and 153,420 shares of Class A Common Stock which are
              convertible into Common Stock. Under the rules and regulations of
              the Securities and Exchange Commission, Mr. Ovshinsky may be
              deemed a beneficial owner of the shares of Common Stock and
              Class A Common Stock owned by his wife, Iris M. Ovshinsky. Such
              shares are not reflected in Mr. Ovshinsky's share ownership in
              this table.  In October 2003, in order to make available
              additional shares to complete a proposed equity financing, our
              Board of Directors approved our entering into an agreement with
              Mr. Ovshinsky for the suspension of his rights to exercise
              180,000 shares granted to him pursuant to Stock Option Agreements
              dated November 1993 until the earlier of (i) the date that we
              file an amendment to our Certificate of Incorporation following
              stockholder approval to increase the number of authorized shares,
              or (ii) December 31, 2004. Mr. Ovshinsky also has agreed to the
              temporary postponement of the anti-dilution provision under his
              Stock Option Agreements. The 180,000 shares are not included in
              the number of shares indicated in the above table.

         (5)  Includes 351,138 shares represented by options exercisable within
              60 days and 65,601 shares of Class A Common Stock which are
              convertible into Common Stock. Under the rules and regulations of
              the Securities and Exchange Commission, Dr. Ovshinsky may be
              deemed a beneficial owner of the shares of Common Stock and
              Class A Common Stock owned by her husband, Stanford R. Ovshinsky.
              Such shares are not reflected in Dr. Ovshinsky's share ownership
              in this table. In October 2003, in order to make available
              additional shares to complete a proposed equity financing, our
              Board of Directors approved our entering into an agreement with
              Dr. Ovshinsky for the suspension of her rights to exercise
              120,000 shares granted to her pursuant to Stock Option Agreements
              dated November 1993 until the earlier of (i) the date that we
              file an amendment to our Certificate of Incorporation following
              stockholder approval to increase the number of authorized shares,
              or (ii) December 31, 2004. Dr. Ovshinsky also has agreed to the
              temporary postponement of the anti-dilution provision under her
              Stock Option Agreements. The 120,000 shares are not included in
              the number of shares in the above table.

         (6)  Includes 222,200 shares represented by options exercisable within
              60 days.

         (7)  Includes 20,388 shares represented by options exercisable within
              60 days.

         (8)  Includes 28,000 shares represented by options exercisable within
              60 days.

         (9)  Includes 6,000 shares represented by options exercisable within
              60 days.

        (10)  Includes 16,000 shares represented by options exercisable within
              60 days.

        (11)  Includes 6,000 shares represented by options exercisable within
              60 days.

        (12)  Includes 9,000 shares represented by options exercisable within
              60 days.

        (13)  Includes 11,000 shares represented by options exercisable within
              60 days.

                                       21
<PAGE>

 PRINCIPAL SHAREHOLDERS. The following table sets forth, as of February 2, 2004,
 to the knowledge of the Company, the beneficial holders of more than 5% of the
 Company's Common Stock (see footnotes for calculation used to determine
 "percentage of class" category):


           Name and Address of           Amount and Nature of    Percentage of
            Beneficial Holder            Beneficial Ownership       Class(1)
    ----------------------------------   --------------------   ---------------
    TRMI Holdings Inc. (ChevronTexaco)
    6001 Bollinger Canyon Road
    San Ramon, California 94583              4,376,633 (2)           17.39%

    Fidelity Capital Trust:
    Fidelity Capital Appreciation Fund
    82 Devonshire Street, E31C               2,519,132 (3)            9.77%
    Boston, Massachusetts 02109

    Heimdall Investments Ltd.
    C/o HBK Investments L.P.                 1,834,573 (4)            7.09%
    300 Crescent Court - Suite 700
    Dallas, Texas 75201

    CCM Master Qualified Fund, Ltd.
    C/o Coghill Capital Management, L.L.C.   1,971,195 (5)            7.82%
    One North Wacker Drive - Suite 4350
    Chicago, Illinois 60606

   ---------------
         (1)  Under the rules and regulations of the Securities and Exchange
              Commission, shares of Common Stock issuable upon exercise of
              options and warrants or upon conversion of securities which are
              deemed to be beneficially owned by the holder thereof are deemed
              to be outstanding for the purpose of computing the percentage of
              outstanding securities of the class owned by such person, but are
              not deemed to be outstanding for the purpose of computing the
              percentage of the class owned by any other person.

         (2)  Pursuant to the Stock Purchase Agreement dated as of May 1, 2000,
              TRMI Holdings Inc., a unit of ChevronTexaco, has agreed that (i)
              so long as it beneficially owns an aggregate of 5% of ECD's
              Common Stock and (ii) so long as Mr. and Dr. Ovshinsky are the
              beneficial owners of Class A Common Stock, or Mr. Stempel is the
              beneficial owner of Class B Common Stock, ChevronTexaco will vote
              its ECD Common Stock in accordance with the votes cast by the
              holders of Class A Common Stock (prior to its conversion) or
              Class B Common Stock (after conversion of the Class A Common
              Stock). TRMI Holdings' percentage of class is computed based on
              23,947,533 shares of Common Stock outstanding, 219,913 shares of
              Class A Common Stock outstanding and 430,000 shares of Class B
              Common Stock outstanding.

         (3)  Consists of 1,259,566 outstanding shares of common stock and
              1,259,566 shares of common stock issuable upon exercise of
              currently exercisable warrants. Excludes 200,000 shares owned by
              Fidelity Management & Research Company.

         (4)  Consists of 496,781 outstanding shares of common stock and
              1,337,792 shares of common stock issuable upon exercise of
              currently exercisable warrants. HBK Investments L.P. may be
              deemed to have sole voting power and sole dispositive power over
              the shares held by Heimdall Investments Ltd. pursuant to an
              Investment Management Agreement between HBK Investments L.P. and
              Heimdall Investments Ltd.

                                       22
<PAGE>

         (5)  Consists of 1,302,299 outstanding shares of common stock and
              668,896 shares of common stock issuable upon exercise of
              currently exercisable warrants. Coghill Capital Management, L.L.C.
              and Clint D. Coghill, through their control of CCM Master
              Qualified Fund, Ltd., have shared voting and dispositive power
              over these shares.


                               EXECUTIVE OFFICERS

      The executive officers of the Company are as follows:

                                                                Served as an
                                                                  Executive
                                                             Officer or Director
          Name            Age              Office                   Since
 ----------------------   ----   --------------------------  -------------------
 Stanford R. Ovshinsky     81    President, Chief Technology       1960 (1)
                                 Officer and Director

 Iris M. Ovshinsky         76    Vice President and Director       1960 (1)

 Robert C. Stempel         70    Chairman of the Board, Chief      1995
                                 Executive Officer and Director

 James R. Metzger          56    Executive Vice President and      2002
                                 Chief Operating Officer

 Nancy M. Bacon            57    Senior Vice President             1976

 Hellmut Fritzsche         77    Vice President                    1969

 Stephan W. Zumsteg        57    Vice President and Chief          1997
                                 Financial Officer

   ---------------
         (1)  The predecessor of ECD was originally founded in 1960. The
              present corporation was incorporated in 1964 and is the successor
              by merger of the predecessor corporation.


See "Item No. 1, Election of Directors" for  information  relating to Stanford
R. Ovshinsky, Iris M. Ovshinsky and Robert C. Stempel.

James R. Metzger joined ECD as Vice Chairman in November 2002.  In February
2003, he was named ECD's Chief Operating Officer.  He was named Executive
Vice President in February 2004 with responsibility for the day-to-day
operations of ECD.  He has served on ECD's Board of Directors since July 2000.
Prior to his retirement from ChevronTexaco on March 1, 2002 following the merger
of Chevron and Texaco on October 9, 2001, he was Vice President and Chief
Technology Officer at Texaco Inc.

                                       23
<PAGE>


Mrs. Bacon joined ECD in 1976 as Vice President of Finance and Treasurer and was
named Senior Vice President in 1993.  She has served on ECD's Board of Directors
since 1977.  Mrs. Bacon also serves as a director of United Solar Ovonic Corp.,
United Solar Ovonic LLC and Sovlux.

Hellmut Fritzsche was a professor of physics at the University of Chicago from
1957 until his retirement in 1996. He was chairman of the Department of Physics
at the University of Chicago until 1986. Dr. Fritzsche has been one of our vice
presidents since 1965, acting on a part-time basis, chiefly in our research and
product development activities. He serves on the board of directors of United
Solar Ovonic Corp.

Stephan W. Zumsteg joined ECD in March 1997. He was elected treasurer in April
1997 and vice president and chief financial officer in February 2001. Mr.
Zumsteg also serves as treasurer of Ovonic Battery, Ovonic Fuel Cell and Texaco
Ovonic Hydrogen Systems.


                        COMPLIANCE WITH SECTION 16(A) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and officers to file with the Securities and Exchange Commission
reports of ownership and changes in ownership with respect to the securities of
the Company and its affiliates and to furnish copies of these reports to the
Company. Based on a review of these reports and written representations from the
Company's directors and officers regarding the necessity of filing a report, the
Company believes that during fiscal year ended June 30, 2003, all filing
requirements were met on a timely basis.

                                       24
<PAGE>


                             EXECUTIVE COMPENSATION

The following table sets forth the compensation paid to ECD's Chief Executive
Officer and the next four most highly compensated executive officers for the
fiscal years ended June 30, 2003, 2002 and 2001.


                          SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>

                             Annual  Compensation                 Long-Term Compensation
                           ------------------------    --------------------------------------------
                                                                      Options
        Name and            Fiscal                                  (Number of        All Other
   Principal Position       Year(1)      Salary(2)       Bonus        Shares)      Compensation(3)
 ----------------------    ---------    -----------    ---------   -------------   ---------------
<S>                          <C>         <C>            <C>          <C>              <C>

 Stanford R. Ovshinsky,      2003        $ 367,668                    40,000          $ 10,781
 President and Chief         2002        $ 349,713      $ 24,076      44,530(4)       $ 12,362
 Technology Officer          2001        $ 334,408                   118,239(5)       $ 10,361

 Iris M. Ovshinsky,          2003        $ 314,727                    25,000          $ 13,562
 Vice President              2002        $ 299,730                    29,687(4)       $ 12,362
                             2001        $ 284,636                    82,160(5)       $ 10,361

 Robert C. Stempel,          2003        $ 300,019                    40,000          $  4,191
 Chief Executive Officer     2002        $ 294,247                    25,000          $  4,191
 and Chairman(6)             2001        $ 270,004                   100,000          $  4,191

 Nancy M. Bacon,             2003        $ 289,441                    30,000          $ 10,322
 Senior Vice                 2002        $ 275,017                    12,000          $  8,942
 President                   2001        $ 264,243                    60,000          $  6,041


 Subhash K. Dhar,            2003        $ 280,779                    25,000          $  9,407
 President and Chief         2002        $ 274,241                    10,000          $  8,111
 Operating Officer,          2001        $ 247,703                    50,000          $  5,528
 Ovonic Battery(7)

   ---------------
</TABLE>

                                       27
<PAGE>

         (1)  ECD's fiscal year is July 1 to June 30. ECD's 2003 fiscal year
              ended June 30, 2003.

         (2)  Amounts shown include compensation deferred under ECD's 401 (k)
              Plan.  In light of our cost-containment initiatives, the salaries
              of the named executives were reduced by 10 percent effective
              September 1, 2003.

         (3)  "All Other Compensation" is comprised of (i) contributions made
              by us to the accounts of each of Mr. Ovshinsky, Dr. Ovshinsky,
              Mrs. Bacon and Mr. Dhar under our 401(k) Plan in the amount of
              $8,000, $6,800 and $4,800 with respect to calendar year ended
              December 31, 2002, 2001 and 2000 and (ii) the dollar value of
              any life insurance premiums paid by us in the fiscal years ended
              June 30, 2003 and 2002 and calendar year ended December 31, 2000
              with respect to term-life insurance for the benefit of each of
              the named executives as follows: Mr. Ovshinsky $2,781, $5,562 and
              $5,561; Dr. Ovshinsky $5,562, $5,562 and $5,561; Mr. Stempel
              $4,191 (all three years); Mrs. Bacon $2,322, $2,142 and $1,241;
              Mr. Dhar $1,407, $1,311 and $728.  Under the 401(k) Plan, which
              is a qualified defined-

                                       25
<PAGE>


              contribution plan, we make matching contributions periodically on
              behalf of the participants.  Effective October 2000, the Board of
              Directors approved employer matching contribution in the amount of
              100% of the first 2% and 50% of the  next 4% of each such
              participant's contributions.  These matching contributions were
              limited to 4% of a participant's salary, up to $200,000, for
              calendar year 2002, 4% of salary, up to $170,000, for calendar
              year 2001 and 3% of salary, up to $160,000, for calendar year
              2000.  Mr. Stempel does not participate in our 401(k) Plan.

         (4)  The stock options were issued to Mr. and Dr. Ovshinsky pursuant
              to Stock Option Agreements dated November 1993 which are subject
              to periodic antidilution protection adjustments based on changes
              in the number of outstanding shares of our common stock.  Under
              these Stock Option Agreements, if we issue any equity securities,
              other than pursuant to the exercise of options by Mr. and Dr.
              Ovshinsky under their respective Stock Option Agreements, we are
              obligated to grant to Mr. and Dr. Ovshinsky additional options
              covering sufficient additional shares of our common stock so that
              their respective proportionate equity interest is maintained on
              a fully-diluted basis.  Such adjustments are calculated quarterly
              as of the last day of each of our fiscal quarters and coincident
              with significant issuances of our common stock.  See Note H of
              Notes to Consolidated Financial Statements for the Three Years
              Ended June 30, 2003.

         (5)  In fiscal year 2001, of the stock options issued to Mr. and Dr.
              Ovshinsky in the amount of 118,239 shares and 82,160 shares,
              respectively, 18,239 shares (Mr. Ovshinsky) and 12,160 shares
              (Dr. Ovshinsky) were issued pursuant to Stock Option Agreements
              dated November 1993 which are subject to periodic antidilution
              protection adjustments based on changes in the number of
              outstanding shares of our common stock.  The balance of the stock
              options issued to Mr. and Dr. Ovshinsky (100,000 shares and
              70,000 shares, respectively) were granted under the 2000
              Non-Qualified Stock Option Plan.

         (6)  See "Security Ownership of Certain Beneficial Owners and
              Management" for a description of Class B common stock awarded to
              Mr. Stempel under a Restricted Stock Agreement dated January 15,
              1999.  All shares of restricted stock will be deemed to vest if
              Mr. Stempel is serving as one of our directors and officers on
              September 30, 2005 or upon the occurrence of a change in control
              of ECD.

         (7)  Mr. Dhar departed ECD in November 2003.

                                       26
<PAGE>

                        OPTION GRANTS IN LAST FISCAL YEAR

The following table sets forth all options granted to the named executive
officers during the fiscal year ended June 30, 2003.
<TABLE>
<CAPTION>
                                                                                       Potential Realizable
                                                                                         Value at Assumed
                                                                                       Annual Rates of Stock
                                                                                       Price Appreciation for
                                                Individual Grants                          Option Term(1)
                            ------------------------------------------------------   --------------------------
                             Number of       Percent
                             Securities      of Total
                             Underlying      Options       Exercise
                              Options       Granted to     of Base
                              Granted       Employees       Price      Expiration
       Name                     (#)       in Fiscal Year    ($/Sh)        Date           5%          10%
 -----------------------    -----------   --------------   --------   ------------   ----------   ----------
  <S>                         <C>              <C>          <C>        <C>            <C>          <C>

  Stanford R. Ovshinsky       40,000           6.27%        $10.40     11/08/2012     $261,620     $662,997

  Robert C. Stempel           40,000           6.27%        $10.40     11/08/2012     $261,620     $662,997

  Nancy M. Bacon              30,000           4.70%        $10.40     11/08/2012     $196,215     $497,248

  Iris M. Ovshinsky           25,000           3.92%        $10.40     11/08/2012     $163,513     $414,373

  Subhash K. Dhar(2)          25,000           3.92%        $10.40     11/08/2012     $163,513     $414,373

   ---------------
</TABLE>
         (1)  The potential realizable value amounts shown illustrate the
              values that might be realized upon exercise immediately prior
              to the expiration of their term using 5% and 10% appreciation
              rates as required to be used in this table by the Securities
              and Exchange Commission, compounded annually, and are not
              intended to forecast possible future appreciation, if any, of
              the Company's stock price. Additionally, these values do not
              take into consideration the provisions of the options providing
              for nontransferability or termination of the options following
              termination of employment.

         (2)  Mr. Dhar departed ECD in November 2003.

                                       27

<PAGE>

                    AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
                          FISCAL YEAR END OPTION VALUES

The following table sets forth all stock options exercised by the named
executives during the fiscal year ended June 30, 2003, and the number and value
of unexercised options held by the named executive officers at fiscal year end.

<TABLE>
<CAPTION>
                                                               Number of Securities
                                  Shares                      Underlying Unexercised       Value of Unexercised
                                 Acquired        Value         Options at Fiscal          in-the-Money Options
                                on Exercise     Realized           Year End                at Fiscal Year End
           Name                     (#)           ($)       Exercisable/Unexercisable   Exercisable/Unexercisable
 --------------------------    -------------   ----------   -------------------------   -------------------------
  <S>                                <C>           <C>           <C>                               <C>
  Robert C. Stempel(1)               _             _             656,500/87,500                    $0/$0

  Stanford R. Ovshinsky(2)           _             _             656,456/80,000                    $0/$0

  Iris M. Ovshinsky(3)               _             _             447,138/53,000                    $0/$0

  Nancy M. Bacon(4)                  _             _             194,600/57,600                    $0/$0

  Subhash K. Dhar(5)                 _             _              81,040/48,000                    $0/$0
</TABLE>
      ---------------

         (1)  Mr. Stempel's exercisable and unexercisable options are
              exercisable at a weighted average price of $14.09 and $17.10 per
              share, respectively.

         (2)  Mr. Ovshinsky's exercisable and unexercisable options are
              exercisable at a weighted average price of $14.61 and $16.51 per
              share, respectively.

         (3)  Dr. Ovshinsky's exercisable and unexercisable options are
              exercisable at a weighted average price of $14.70 and $16.90 per
              share, respectively.

         (4)  Mrs. Bacon's exercisable and unexercisable options are exercisable
              at a weighted average price of $15.42 and $16.30 per share,
              respectively.

         (5)  Mr. Dhar's exercisable and unexercisable options are exercisable
              at a weighted average price of $19.50 and $16.30 per share,
              respectively.  As a result of his departure from ECD in November
              2003, Mr. Dhar's exercisable and unexercisable options will
              expire according to the terms of the respective plans pursuant to
              which they were granted.


                              EMPLOYMENT AGREEMENTS

On September 2, 1993, Mr. Ovshinsky entered into separate employment agreements
with each of ECD and Ovonic Battery in order to define clearly his duties and
compensation arrangements and to provide to each company the benefits of his
management efforts and future inventions. The initial term of each employment
agreement was six years. In February 1999, the boards of directors of ECD and
Ovonic Battery renewed each of Mr. Ovshinsky's employment agreements for an
additional term ending September 30, 2005. Mr. Ovshinsky's employment agreement
with ECD provides for an annual salary of not less than $100,000, while his
agreement with Ovonic Battery provides for an annual salary of not less than
$150,000. Both agreements provide for annual increases to reflect increases in
the cost of living, discretionary annual increases and an annual bonus equal to
1% of our pre-tax income (excluding Ovonic Battery) and 1% of the operating
income of Ovonic Battery.  Mr. Ovshinsky's annual salary increases are

                                       28
<PAGE>

determined based upon increases in the cost of living as determined by the
Compensation and Nominating Committee using as a guide the percentage increase
in the Consumer Price Index for the Detroit-metropolitan area published by the
Bureau of Labor Statistics. In recognition and acknowledgement of Mr.
Ovshinsky's invaluable contributions, the Compensation and Nominating Committee
determined that Mr. Ovshinsky's salary increase in fiscal years 2003, 2002 and
2001 should be above the nominal cost-of-living increase.

Mr. Ovshinsky's employment agreement with Ovonic Battery additionally contains a
power of attorney and proxy from ECD providing Mr. Ovshinsky with the right to
vote the shares of Ovonic Battery held by ECD following a change in control of
us. For purposes of the agreement, change in control means (i) any sale, lease,
exchange or other transfer of all or substantially all of our assets; (ii) the
approval by our stockholders of any plan or proposal of our liquidation or
dissolution; (iii) the consummation of any consolidation or merger of us in
which we are not the surviving or continuing corporation; (iv) the acquisition
by any person of 30% or more of the combined voting power of our then
outstanding securities having the right to vote for the election of directors;
(v) changes in the constitution of the majority of our Board of Directors; (vi)
the holders of our Class A common stock ceasing to be entitled to exercise their
preferential voting rights other than as provided in our charter and (vii)
bankruptcy. In the event of mental or physical disability or death of Mr.
Ovshinsky, the foregoing power of attorney and proxy will be exercised by Dr.
Ovshinsky.

Pursuant to his employment agreement with Ovonic Battery, Mr. Ovshinsky was
granted stock options, exercisable at a price of $16,129 per share, to purchase
186 shares (adjusted from a price of $50,000 per share to purchase 60 shares
pursuant to the anti-dilution provisions of the option agreement) of Ovonic
Battery's common stock, representing approximately 6% of Ovonic Battery's
outstanding common stock. The Ovonic Battery stock options vested on a quarterly
basis over six years commencing with the quarter beginning October 1, 1993, and
are now fully vested.

In February 1998, our Compensation and Nominating Committee recommended and our
Board of Directors approved an Employment Agreement between ECD and Dr.
Ovshinsky. The purpose of the Employment Agreement is to clearly define Dr.
Ovshinsky's duties and compensation arrangements. The Employment Agreement also
provides for ECD to have the benefits of Dr. Ovshinsky's services as a
consultant to us following the termination of her active employment for
consulting fees equal to 50% of the salary payable to Dr. Ovshinsky at the date
of the termination of her active employment. Dr. Ovshinsky has the right to
retire at any time during her services as a consultant and receive retirement
benefits equal to the consulting fees for the remainder of Dr. Ovshinsky's life.

The initial term of Dr. Ovshinsky's employment period was until September 2,
1999 and is automatically renewed for successive one-year periods unless
terminated by Dr. Ovshinsky or ECD upon 120 days' notice in advance of the
renewal date. Dr. Ovshinsky's employment agreement provides for an annual salary
of not less than $250,000, annual increases to reflect increases in the cost of
living and discretionary annual increases.

On January 15, 1999, we entered into an Executive Employment Agreement with Mr.
Stempel and a Restricted Stock Agreement awarding Mr. Stempel 430,000 shares of
Class B common stock. The Executive Employment Agreement provides that Mr.
Stempel will be employed by ECD for a term ending September 30, 2005.
During the term of his employment, Mr. Stempel will be entitled to receive
an annual salary as determined from time to time. The Executive Employment
Agreement also provides for discretionary bonuses based on Mr. Stempel's

                                       29
<PAGE>

individual performance and our financial performance. The Executive Employment
Agreement also requires us to provide Mr. Stempel with non-wage benefits of the
type provided generally by us to our senior executive officers.

The Executive Employment Agreement permits Mr. Stempel to retire as one of our
officers and employees and will permit him to resign his employment at any time
in the event he becomes subject to any mental or physical disability which, in
the good faith determination of Mr. Stempel, materially impairs his ability to
perform his regular duties as our officer. The Executive Employment Agreement
permits us to terminate Mr. Stempel's employment upon the occurrence of certain
defined events, including the material breach by Mr. Stempel of certain
non-competition and confidentiality covenants contained in the Executive
Employment Agreement, his conviction of certain criminal acts or his gross
dereliction or malfeasance of his duties as one of our officers and employees
(other than as a result of his death or mental or physical disability).

Mr. Stempel's entitlement to compensation and benefits under the Executive
Employment Agreement will generally cease effective upon the date of the
termination of his employment, except that we will be required to continue to
provide Mr. Stempel and his spouse with medical, disability and life insurance
coverage for the remainder of their lives or until the date they secure
comparable coverage provided by another employer.


                      COMPENSATION AND NOMINATING COMMITTEE REPORT ON
                              COMPENSATION MATTERS

Effective July 17, 2003, our management recommended and the Board of Directors
approved the restructuring of the Compensation Committee to include the
functions of a nominating committee and renaming it the Compensation and
Nominating Committee.  The Compensation and Nominating Committee is composed
of Mr. McCarthy (Chairman) and Dr. Metz.

The Compensation and Nominating Committee is responsible for administering the
policies which govern both annual compensation of executive officers and our
stock option plans. The Compensation and Nominating Committee meets several
times during the year to review recommendations from management regarding stock
options and compensation. Compensation and stock option recommendations are
based upon performance, current compensation, stock option ownership, and years
of service to us. We do not have a formal bonus program for executives, although
we have awarded bonuses to our executives from time to time.

The Compensation and Nominating Committee also assists in identifying and
recommending qualified individuals to serve on our Board of Directors and
proposes a slate of nominees for election at the annual meeting of stockholders.

The Compensation and Nominating Committee considers our financial position and
other factors in determining the compensation of our executive officers. These
factors include remaining competitive within the relevant hiring market -
whether scientific, managerial or otherwise - so as to enable us to attract and
retain high quality employees, and, where appropriate, linking a component of
compensation to the performance of our common stock, such as by a granting of
stock option or similar equity-based compensation, to instill ownership thinking
and align the employees' and stockholders' objectives. We have been successful
at

                                       30
<PAGE>

recruiting and retaining and motivating executives who are highly talented,
performance-focused and entrepreneurial.

SALARY AND BONUS. Salary is paid for ongoing performance. During our fiscal year
2003, the Compensation and Nominating Committee determined that we had achieved
several important scientific and business milestones. The Committee also
concluded that the achievement of these milestones had not yet been fully
reflected in our financial results. However, the Compensation and Nominating
Committee determined that it was advisable to raise executive base salaries. We
do not have a formal bonus program for executives. There were no bonuses awarded
to our executives for the fiscal year ended June 30, 2003.

In light of our cost-containment initiatives, the salaries of senior executives
were reduced by 10 percent effective September 1, 2003.

STOCK OPTIONS. The Compensation and Nominating Committee considers stock options
to be an extremely effective incentive for executive officers and other
employees. Such options also encourage executives to remain with us because they
vest over a period of years. During fiscal year 2003, the Compensation and
Nominating Committee approved the grant of stock options to senior executives.
The number of stock options granted to our five most highly paid executive
officers is described in "Executive Compensation."

Our employees and our majority-owned subsidiaries also participate in the
broad-based stock option program.

CHIEF EXECUTIVE OFFICER COMPENSATION (FISCAL YEAR 2003). In September 1993, Mr.
Ovshinsky entered into separate employment agreements with each of ECD and
Ovonic Battery. The purpose of these agreements, which provide for the payment
to Mr. Ovshinsky of an annual salary of not less than $250,000 by us and by
Ovonic Battery, was to define clearly Mr. Ovshinsky's duties and compensation
arrangements and to provide to each company the benefits of his management
efforts and future inventions. See "Management -- Employment Agreements." Mr.
Ovshinsky's compensation for fiscal year 2003 was determined in accordance with
his Employment Agreements with ECD and Ovonic Battery and included a
discretionary increase above the nominal cost-of-living increase. Mr. Ovshinsky
did not receive a bonus during fiscal year 2003.

                                   COMPENSATION AND NOMINATING COMMITTEE
                                   Walter J. McCarthy, Jr.
                                   Florence I. Metz

                                       31

<PAGE>

                                PERFORMANCE GRAPH

The line graph below compares the cumulative total stockholder return on our
common stock over a five-year period with the return on the Nasdaq Stock Market
-- U.S. Index and the Russell 2000 Index.



<TABLE>
<CAPTION>
                                                                  Cumulative Total Return
                                         -------------------------------------------------------------------
                                            6/98       6/99       6/00       6/01       6/02       6/03
     <S>                                    <C>        <C>        <C>        <C>        <C>        <C>
     ENERGY CONVERSION DEVICES, INC.        100.00     102.58     261.94     289.03     161.96      97.03
     NASDAQ STOCK MARKET (U.S.)             100.00     143.67     212.43     115.46      78.65      87.33
     RUSSELL 2000                           100.00     101.50     116.04     116.80     106.67     104.92

</TABLE>

The total return with respect to Nasdaq Stock Market -- U.S. Index and the
Russell 2000 Index assumes that $100 was invested on June 30, 1998, including
reinvestment of dividends.

We have not paid any cash dividends in the past and do not expect to pay any in
the foreseeable future.

The Report of the Compensation and Nominating Committee on Executive
Compensation and the Performance Graph are not deemed to be filed with the
Securities and Exchange Commission under the Securities Act of 1933, as amended,
or Securities Exchange Act of 1934, as amended, or incorporated by reference in
any documents so filed.

                                       32

<PAGE>

                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

TRMI (CHEVRONTEXACO). Pursuant to our Stock Purchase Agreement with TRMI dated
as of May 1, 2000, ChevronTexaco, through its TRMI unit, purchased a 20% equity
stake in our common stock for $67.4 million. As part of this Stock Purchase
Agreement, ChevronTexaco received rights to purchase additional shares of our
common stock or our other equity securities.

So long as ChevronTexaco owns more than 5% of our common stock and in the event
we issue additional equity securities other than to ChevronTexaco, ChevronTexaco
has the right to purchase additional equity securities in order for
ChevronTexaco to maintain its same proportionate interest in our common stock as
ChevronTexaco held prior to the issuance of the additional equity securities. If
ChevronTexaco elects to purchase our common stock, the purchase price will be
the average of the closing price on the Nasdaq Stock Market of our common stock
as reported in The Wall Street Journal for the five trading days prior to the
closing date of the sale multiplied by the number of shares of our common stock
which ChevronTexaco is entitled to purchase. If ChevronTexaco does not exercise
its right to purchase additional equity securities within 15 days after delivery
of a notice from us, ChevronTexaco's right to purchase such additional equity
securities which are the subject of the notice will terminate. ChevronTexaco
waived its purchase rights in connection with our recent offering of shares of
common stock and stock purchase warrants to institutional investors.
Donald L. Paul, Vice President and Chief Technology Officer of ChevronTexaco,
and Greg M. Vesey, President of ChevronTexaco Technology Ventures, served as
directors of ECD from 2001 through September 2003. ChevronTexaco is entitled to
designate one nominee to our Board of Directors for so long as it owns more than
5% of our common stock and is entitled to designate two nominees, or one-fifth
of the number of directors on our Board of Directors then serving, for so long
as ChevronTexaco owns 10% of our common stock. There presently are no
ChevronTexaco designated nominees serving on our Board of Directors.

OVONIC FUEL CELL COMPANY. Effective as of December 31, 2002, we purchased the
50% interest of ChevronTexaco in Texaco Ovonic Fuel Cell Company. The company is
now owned 100% by ECD and has been renamed Ovonic Fuel Cell Company. Stanford R.
Ovshinsky serves as president of Ovonic Fuel Cell Company and, until December
31, 2002, served as a member of the Management Committee of Texaco Ovonic Fuel
Cell Company. Until December 31, 2002, Robert C. Stempel served on the
Management Committee of Texaco Ovonic Fuel Cell Company. Mr. Vesey, one of our
former directors, served on the Management Committee of Texaco Ovonic Fuel Cell
Company until December 31, 2002. For the years ended June 30, 2003, 2002 and
2001, we recorded revenues of $4,022,000, $8,887,000 and $8,831,000,
respectively, from Texaco Ovonic Fuel Cell for product development services.
For the period subsequent to December 31, 2002, we have not recorded revenues
from Ovonic Fuel Cell Company and do not expect to record revenues from Ovonic
Fuel Cell Company for the fiscal year ending June 30, 2004.

TEXACO OVONIC HYDROGEN SYSTEMS. Mr. Ovshinsky and Mr. Stempel are members of the
Management Committee of Texaco Ovonic Hydrogen Systems. Mr. Ovshinsky serves as
president of Texaco Ovonic Hydrogen Systems. Mr. Vesey, one of our former
directors, is a member of the Management Committee of Texaco Ovonic Hydrogen
Systems. We own 50% of Texaco Ovonic Hydrogen Systems. For the years ended June
30, 2003, 2002 and 2001, we recorded revenues of $13,651,000, $18,581,000 and
$11,818,000, respectively, from Texaco Ovonic Hydrogen Systems, primarily for
market development and advanced product


                                       33
<PAGE>

development work.  For the fiscal year ending June 30, 2004, we expect to
record approximately 10 million in revenue.

TEXACO OVONIC BATTERY SYSTEMS. Mr. Ovshinsky and Mr. Stempel are members of the
Management Committee of Texaco Ovonic Battery Systems. Mr. Vesey, one of our
former directors, is a member of the Management Committee of Texaco Ovonic
Battery Systems. Ovonic Battery owns 50% of Texaco Ovonic Battery Systems. For
the year ended June 30, 2003 and 2002, Ovonic Battery recorded revenues of
$12,367,000 and $16,315,000 from Texaco Ovonic Battery Systems, primarily for
advanced product development and market development work. For the fiscal year
ending June 30, 2004, we expect to record approximately 5 million in revenue.

OVONYX. Mr. Ovshinsky is chairman and a director of Ovonyx. Mr. Stempel is vice
chairman and a director of Ovonyx. We currently own 41.7% of Ovonyx. We recorded
revenues from Ovonyx of $162,000, $215,000 and $382,000 for the years ended June
30, 2003, 2002 and 2001, respectively, representing services performed for its
operations, which commenced on January 15, 1999. We made a capital contribution
of $1,000,000 to Ovonyx in the year ended June 30, 2003 in exchange for
technology previously contributed by us to Ovonyx and an exclusive royalty-
bearing license.  We expect to record approximately $140,000 in revenue from
Ovonyx for the fiscal year ending June 30, 2004.

OVONIC MEDIA. Mr. Ovshinsky and Mr. Stempel are members of the Alliance Board of
Ovonic Media. We have a 49% interest in this joint venture. For the years ended
June 30, 2003, 2002 and 2001, we had revenues of $615,000, $1,923,000 and
$2,298,000, respectively, from Ovonic Media for providing product development
services. We recorded no revenues from Ovonic Media since June 30, 2003 and do
not expect to record any revenues from Ovonic Media for the fiscal year ending
June 30, 2004.

UNITED SOLAR OVONIC LLC. This entity was formed on April 11, 2000 as Bekaert ECD
Solar Systems LLC. 60% of the membership interest was owned by Bekaert
Corporation and the remaining 40% was and continues to be owned by United Solar
Ovonic Corp. (formerly known as United Solar Systems Corp.). From April 11, 2000
to May 14, 2003, when we acquired Bekaert's 60% interest, the financial
statements of United Solar Ovonic LLC were not included in our consolidated
financial statements. Beginning May 15, 2003, we consolidated the financial
statements of United Solar Ovonic LLC within our own financial statements. For
the years ended June 30, 2003, 2002 and 2001, we recorded revenues from United
Solar Ovonic LLC of $6,267,000, $10,121,000 and $9,948,000, respectively, for
product sales.

SOUTHWALL. Mr. Stempel is a member of the board of directors of Southwall. For
the years ended June 30, 2003, 2002 and 2001, we had revenues of $223,000,
$9,000 and $30,000, respectively, from Southwall under a contract to build
large-area deposition equipment. The completed equipment was shipped to
Southwall in July 2000. We recorded no revenues from Southwall since June 30,
2003 and do not expect to record any revenues from Southwall for the fiscal year
ending June 30, 2004.

OTHER ARRANGEMENTS. Herbert Ovshinsky, Mr. Ovshinsky's brother, is employed by
us as Director of the Production Technology and Machine Building Division
working principally in the design of manufacturing equipment. He received
$200,012 in salary during the year ended June 30, 2003.

                                       34
<PAGE>

Benjamin Ovshinsky, Mr. Ovshinsky's son, is employed by us as our business
representative for the Western United States. He received compensation of
$82,044 during the year ended June 30, 2003.

HKO Media, Inc., owned by Harvey Ovshinsky, Mr. Ovshinsky's son, performed
video production services on behalf of us. HKO Media, Inc. was paid $343,479
by us for its services during the fiscal year ended June 30, 2003.

                             ADDITIONAL INFORMATION

COST OF SOLICITATION. The cost of solicitation will be borne by the Company. In
addition to solicitation by mail, directors, officers and other employees of the
Company may solicit proxies personally or by telephone or other means of
communication. Arrangements may be made with brokerage houses and other
custodians, nominees and fiduciaries to forward, at the expense of the Company,
copies of the proxy materials to the beneficial owners of shares held of record
by such persons. The Company also intends to hire Morrow & Co., at an
anticipated cost of approximately $6,000 plus out-of-pocket expenses, to assist
it in the solicitation of proxies personally, by telephone, or by other means.

OTHER ACTION AT THE MEETING. The Company's management, at the time hereof, does
not know of any other matter to be presented which is a proper subject for
action by the stockholders at the Meeting. If any other matters shall properly
come before the Meeting, the shares represented by a properly executed proxy
will be voted in accordance with the judgment of the persons named on the proxy.

STOCKHOLDER PROPOSALS FOR 2004 ANNUAL MEETING. Proposals of stockholders
intended to be presented at the Company's next annual meeting of stockholders,
presently expected to be held on November 18, 2004, must be received by the
Company no later than July 20, 2004 in order for those proposals to be included
in the proxy materials for the meeting.


                               ---------------


Stockholders are urged to send in their proxies without delay.


                                          By Order of the Board of Directors


                                          /S/Ghazaleh Koefod
                                          -----------------------------
                                          Ghazaleh Koefod
                                          Secretary


February 19, 2004


                                       35

<PAGE>

                                    EXHIBIT A

                         CHARTER OF THE AUDIT COMMITTEE

Purpose
-------

The Audit Committee is appointed by the Board to assist the Board in monitoring
(1) the integrity of the financial statements of the Company, (2) the
independent public accounting firm's qualifications and independence, (3) the
performance of the Company's internal audit function and independent public
accountants, and (4) the compliance by the Company with legal and regulatory
requirements.

The Audit Committee shall prepare the report required by the rules of the
Securities and Exchange Commission to be included in the Company's annual proxy
statement.

COMMITTEE MEMBERSHIP

The Audit Committee shall consist of no fewer than three members of the Board of
Directors. The members of the Audit Committee shall meet the independence and
experience requirements of the NASDAQ Stock Market, Inc. ("NASDAQ") and
applicable Federal law.

The members of the Audit Committee shall be appointed by the Board on the
recommendation of the Compensation and Nominating Committee. Audit Committee
members shall serve until their successor shall be duly elected and qualified or
their earlier resignation or removal.

COMMITTEE AUTHORITY AND RESPONSIBILITIES

The Audit Committee shall have the sole authority to appoint or replace the
independent public accountants (subject, if applicable, to shareholder
ratification), and shall pre-approve all audit engagement fees and terms and all
significant non-audit engagements with the independent public accountants. The
Audit Committee shall consult with management but shall not delegate these
responsibilities.

The Audit Committee shall meet as often as it determines is necessary or
advisable, but not less frequently than quarterly. The Audit Committee may form
and delegate authority to subcommittees when appropriate.

The Audit Committee shall have the authority, to the extent it deems necessary
or appropriate, to retain special legal, accounting or other consultants to
advise the Committee. The Audit Committee may request any officer or employee of
the Company or the Company's outside counsel or independent public accountants
to attend a meeting of the Committee or to meet with any members of, or
consultants to, the Committee. The Audit Committee shall meet with management,
the Director of Corporate Risk Management and Internal Audit and the independent
public accountants in separate executive sessions at least quarterly. The Audit
Committee may also, to the extent it deems necessary or appropriate, meet with
the Company's investment bankers or financial analysts who follow the Company.

The Audit Committee shall make regular reports to the Board. The Audit Committee
shall review and reassess the adequacy of this Charter annually and recommend
any proposed changes to the Board for approval. The Audit Committee shall
annually review the Audit Committee's own performance.

                                       A - 1
<PAGE>


The Audit Committee, to the extent it deems necessary or appropriate, shall:

      FINANCIAL STATEMENT AND DISCLOSURE MATTERS

1.    Review and discuss with management and the independent public accountants
      the annual audited financial statements, including disclosures made in
      management's discussion and analysis, and recommend to the Board whether
      the audited financial statements should be included in the Company's Form
      10-K.

2.    Review and discuss with management and the independent public accountants
      the Company's quarterly financial statements, including disclosures made
      in management's discussion and analysis and the results of the independent
      public accountants' reviews of the quarterly financial statements, prior
      to the filing of its Form 10-Q.

3.    Discuss with management and the independent public accountants significant
      financial reporting issues and judgments made in connection with the
      preparation of the Company's financial statements, including any
      significant changes in the Company's selection or application of
      accounting principles, any major issues as to the adequacy of the
      Company's internal controls, any special audit steps adopted in light of
      material control deficiencies, the development, selection and disclosure
      of critical accounting estimates, and analyses of the effect of
      alternative assumptions, estimates or GAAP methods on the Company's
      financial statements.

4.    Discuss with management the Company's earnings press releases, including
      the use of "pro forma" or "adjusted" non-GAAP information, and financial
      information and earnings guidance.

5.    Discuss with management and the independent public accountants the effect
      of regulatory and accounting initiatives as well as off-balance sheet
      structures on the Company's financial statements.

6.    Discuss with management the Company's major financial risk exposures and
      the steps management has taken to monitor and control such exposures,
      including the Company's risk assessment and risk management policies.

7.    In connection with each periodic report of the Company, review
      management's disclosure to the Committee required under ss.302 of the
      Sarbanes-Oxley Act with respect to the Company's disclosure and internal
      controls, and the content of the CEO and CFO certifications required by
      ss.302 and ss.906 of the Act.

8.    Review the Company's programs for compliance with the financial disclosure
      requirements of applicable law.

9.    Review with management, the Director of Corporate Risk Management and
      Internal Audit and the independent public accountants the Company's
      processes to maintain an adequate system of internal controls.

10.   Discuss with the independent public accountants the matters required to be
      discussed by Statement on Auditing Standards No. 61 relating to the
      conduct of the audit. In particular, discuss:

                                       A - 2
<PAGE>


      a) The adoption of, or changes to, the Company's significant auditing and
         accounting principles and practices as suggested by the independent
         public accountants, Director of Corporate Risk Management and Internal
         Audit or management.

      b) The management letter provided by the independent public accountants
         and the Company's response to that letter.

      c) Any difficulties encountered in the course of the audit work, including
         any restrictions on the scope of activities or access to requested
         information, and any significant disagreements with management.

      OVERSIGHT OF THE COMPANY'S RELATIONSHIP WITH THE INDEPENDENT PUBLIC
      ACCOUNTANTS

11.   Review the experience and qualifications of the senior members of the
      independent public accounting team.

12.   Obtain and review a report from the independent public accountants at
      least annually regarding (a) the public accounting firm's internal quality
      control procedures, (b) any material issues raised by the most recent
      quality control review, or peer review, of the firm, or by any inquiry or
      investigation by governmental or professional authorities within the
      preceding five years respecting one or more independent audits carried
      out by the firm, (c) any steps taken to deal with any such issues, and (d)
      all relationships between the independent public accountants and the
      Company.  Evaluate the qualifications, performance and independence of the
      independent public accountants, including considering whether the public
      accounting firm's quality controls are adequate and whether the provision
      of non-audit services is compatible with maintaining the public
      accountant's independence, taking into account the opinions of management
      and the Director of Corporate Risk Management and Internal Audit.  The
      Audit Committee shall present its conclusions to the Board and, if so
      determined by the Audit Committee, recommend that the Board take
      additional action to satisfy itself of the qualifications, performance
      and independence of the public accountant.

13.   Recommend to the Board policies for the Company's hiring of employees or
      former employees of the independent public accountants who were engaged on
      the Company's account.

14.   Meet with the independent public accountants prior to the audit to discuss
      the planning and staffing of the audit.

      Oversight of the Company's Internal Audit Function

15.   Review and approve the appointment and replacement of the Company's
      Director of Corporate Risk Management and Internal Audit.

16.   Review the significant reports to management prepared by the Director of
      Corporate Risk Management and Internal Audit and management's responses.

17.   Discuss with the independent public accountant the responsibilities of the
      Director of Corporate Risk Management and Internal Audit, budget and
      staffing and any recommended changes in the planned scope of the internal
      audit.

                                       A - 3
<PAGE>


      COMPLIANCE OVERSIGHT RESPONSIBILITIES

18.   Obtain from the independent public accountants assurance that Section 10A
      of the Securities Exchange Act of 1934 has not been implicated.

19.   Obtain reports from management, the Company's Director of Corporate Risk
      Management and Internal Audit and the independent public accountants that
      the Company and its subsidiary are in conformity with applicable legal
      requirements and the Company's Code of Business Conduct and Ethics. Advise
      the Board with respect to the Company's policies and procedures regarding
      compliance with applicable laws and regulations and with the Company's
      Code of Business Conduct and Ethics.

20.   Approve all related-party transactions entered into by the Company.

21.   Establish procedures for the receipt, retention and treatment of
      complaints received by the Company regarding accounting, internal
      accounting controls or auditing matters that ensure that such complaints
      are treated as confidential and anonymous.

22.   Discuss with management and the independent public accountants any
      correspondence with regulators or governmental agencies and any employee
      complaints or published reports, which raise material issues regarding the
      Company's financial statements or accounting policies.

23.   Discuss with the Company's General Counsel legal matters that may have a
      material impact on the financial statements or the Company's compliance
      policies.

24.   Reassess the Charter at least annually and present to the Board for its
      formal review and approval any proposed changes.

25.   Perform such other duties and responsibilities as may be assigned to the
      Audit Committee by law, the Company's charter or bylaws or the Board.

Limitation of Audit Committee's Role
------------------------------------

While the Audit Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Audit Committee to plan or conduct audits or
to determine that the Company's financial statements and disclosures are
complete and accurate and are in accordance with generally accepted accounting
principles and applicable rules and regulations. These are the responsibilities
of management and the independent public accountants.


                                      A - 4
<PAGE>


                                    EXHIBIT B

                PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION
                   TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON
                       STOCK FROM 30,000,000 TO 50,000,000


The first sentence of Article FOURTH is to be modified to read as follows:


FOURTH: The total number of shares of all classes of stock which the Corporation
shall have authority to issue is 50,930,000 shares, of which 500,000 shares
shall be Class A Common Stock of a par value of one cent ($.01) per share,
430,000 shall be Class B Common Stock of a par value of one cent ($.01) per
share, and 50,000,000 shares shall be Common Stock of a par value of one cent
($.01) per share.


                                       B - 1

<PAGE>

                             MAP TO SITE OF ANNUAL MEETING















                                                                   ECVCM-PS-03
<PAGE>


                         ENERGY CONVERSION DEVICES, INC.

Dear Stockholder,

Please take note of the important information enclosed with this Proxy Ballot.
The matters you are asked to vote upon are discussed in detail in the enclosed
proxy materials.

Your vote counts, and you are strongly encouraged to exercise your right to vote
your shares.

Please mark the boxes on the proxy card to indicate how your shares will be
voted. Then sign the card, detach it and return your proxy vote in the enclosed
postage paid envelope.

Your vote must be received prior to the Annual Meeting of Stockholders, March
18, 2004.

Thank you in advance for your prompt consideration of these matters.

Sincerely,

Energy Conversion Devices, Inc.



                                   DETACH HERE


                         ENERGY CONVERSION DEVICES, INC.

               PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS


The undersigned hereby appoints ROGER JOHN LESINSKI and GHAZALEH KOEFOD and
each of them, with power of substitution, and in place of each, in case of
substitution, his or her substitute, the attorneys and proxies for and on behalf
of the undersigned to attend the Annual Meeting of Stockholders (the "Meeting")
of ENERGY CONVERSION DEVICES, INC. (the "Company") to be held at Michigan State
University Management Education Center, 811 West Square Lake Road, Troy,
Michigan, on March 18, 2004 at 10:00 a.m. (EST) and any and all adjournments
thereof, and to cast the number of votes the undersigned would be entitled to
vote if then personally present. The undersigned instructs such proxies to vote
as specified on this card.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR ALL NOMINEES FOR DIRECTORS AND FOR PROPOSALS 2 AND 3 AS DESCRIBED IN
THE ACCOMPANYING PROXY STATEMENT.

The Board of Directors of the Company recommends a vote FOR Proposals 1, 2
and 3.


PLEASE VOTE, DATE AND SIGN ON REVERSE AN RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.


Please sign this Proxy exactly as your name(s) appear(s) on the books of the
Company. Joint owners should each sign personally.  Trustees and other
fiduciaries should indicate the capacity in which they sign, and where more
than one name appears, a majority must sign. If a corporation, this signature
should be that of an authorized officer who should state his or her title.


 HAS YOUR ADDRESS CHANGED?                  DO YOU HAVE ANY COMMENTS?

 -----------------------------------        -----------------------------------

 -----------------------------------        -----------------------------------


<PAGE>


ENERGY CONVERSION DEVICES, INC.
C/O EQUISERVE TRUST COMPANY N.A.
P.O. BOX 8694
EDISON, NJ 08818-8694





            Your vote is important. Please vote immediately.


        Vote-by-Internet                       Vote-by-Telephone

 Log on to the Internet and go to      OR      Call toll-free
 http://www.eproxyvote.com/ener                1-877-PRX-VOTE (1-877-779-8683)
 --------------------------------              -------------------------------

 If you vote over the Internet or by telephone, please do not mail your card.



                                   DETACH HERE

<TABLE>
<CAPTION>

 [X] PLEASE MARK VOTES
     AS IN THIS EXAMPLE

                                                             ----------------------------------------------------------
 1. Election of Directors.                                   ENERGY CONVERSION DEVICES, INC.
     Nominees as Directors                                   ----------------------------------------------------------
                                                                                                 For   Against  Abstain
<S>                                                          <C>                                 <C>   <C>      <C>
 (01) Stanford R. Ovshinsky, (02) Iris M. Ovshinsky,         2. Proposal to approve the          [ ]   [ ]      [ ]
 (03) Robert C. Stempel, (04) Umberto Colombo,                  appointment of Grant Thornton LLP
 (05) Walter J. McCarthy, Jr., (06) Florence I. Metz and        as independent auditors for the
 (07) Stanley K. Stynes                                         fiscal year ending June 30, 2004.

 For all [ ]    [ ]  Withhold All                            3. Proposal to consider and approve [ ]   [ ]      [ ]
                                                                the amendment to the Company's
 For all Except [ ]  --------------------------------------     Certificate of Incorporation to
                     For all nominees except as noted above     increase the Company's authorized
                                                                shares by 20,000,000.

                                                             4. In their discretion, the Proxies are
                                                                authorized to vote upon such other business
                                                                as may properly come before the meeting.


                                                             Mark box at right if an address change or          [ ]
                                                             comment has been noted on the reverse side
                                                             of this card.

                                                             Mark box at right if you plan to attend the        [ ]
                                                             the Annual Meeting.

                                                             Please be sure to sign and date this Proxy.


 Signature: ------------------------- Date: ---------------  Signature: ------------------------- Date: ---------------

</TABLE>
<PAGE>

