Sunday, February 14, 2016

Empire District executives buy thousands of shares just before sale announcement

(This post has been updated to provide links to the SEC filings on Empire District Electric company stock purchases. The 8K filing mentioned in the final three paragraphs is a separate matter, but still helps clarify the possibilities for company executives when the sale is completed.) 

In the four days before the announcement that Canadian company Algonquin had entered into a deal to buy Empire District Electric Company for $2.4 billion and pay $34 per share, top Empire executives bought thousands of shares of time-vested restricted stock, according to documents filed with the Securities and Exchange Commission.

The purchases were for $29.53 per share, according to the documents.

CEO Bradley Beecher bought 4,441 shares on February 8 and 9,474 shares three days earlier. Beecher now owns 37,576 shares).

Others purchasing stock included the following:

CFO Laurie Delano- 1,726 shares on Feb 8, 3,677 shares on February 5. Delano owns 14,218 shares.

Vice President, Chief Operating Officer/Gas Ron Gatz- 1,799 shares on February 8, 3,864 shares on February 5.

Vice President Energy Supply Blake Mertens- 879 shares on February 8, 1,859 shares on February 5. Mertens owns 4,694 shares.

Vice President , Chief Operating Officer Electricity Kelly Walters- 1,497 shares February 8.

An 8K filing Friday with the Securities and Exchange Commission indicates that Empire District Electric Company's top officials have the option of receiving lump sum cash payments for their stock when the deal goes through:

On February 9, 2016, in connection with the approval of the Agreement and Plan of Merger dated as of February 9, 2016, by and between The Empire District Electric Company (the “Company”), Liberty Utilities (Central) Co. and Liberty Sub Corp. (the “Merger Agreement”), the Compensation Committee of the Company’s Board of Directors approved the amendment of outstanding performance-based restricted stock awards granted under The Empire District Electric Company 2006 Stock Incentive Plan and The Empire District Company 2015 Stock Incentive Plan, including performance-based restricted stock awards that were granted to the Company’s named executive officers.

Under the amendment, the outstanding performance-based restricted stock awards granted to each named executive officer are amended, effective upon and subject to the occurrence of the merger under the Merger Agreement, to provide that, as of the effective time under the Merger Agreement, each award will be cancelled and converted into the right to receive a lump-sum cash payment, payable in accordance with the Merger Agreement, equal to the product of (i) the merger consideration under the Merger Agreement, multiplied by (ii) the total number of shares of the Company’s common stock that would be earned for performance at target for the relevant performance period.


Anonymous said...


Anonymous said...

Something STINKS here........ True company people :(
Nice Job Empire!!

Anonymous said...

These ridiculous people should be ashamed of themselves. This is exactly what's wrong with corporate Amercia. Empire wants to raise my rates every single year. All you executives can go to hel!

Anonymous said...

Did you or anyone who has commented actually read the 8K? That is the accelerated vesting and release of performance based stock incentives triggered by the sale of the company. "Purchase" is not an accurate description. Your article implies that they were acting on insider information and violating securities law.

Anonymous said...

Half a dozen of one, 6 of another. It matters not whether the board granted this issuance of stock to these executives or they acted alone on insider information in the open market. They, and they alone benefited from this action, if the deal goes through, and it is by no means a done deal.

As far a Hell is concerned, EDE went to Hell about 15 years ago. The writing as to defined benefits payable, ect, has been on the wall at least that long and no one, not one CEO at Empire could figure a way to sustain the company, other than to grease the wheels on the state level with annual hikes in usage cost and user fees.

Whomever ends up with EDE has a tough road ahead of them because their customer base is angry. Angry as Hell!

Anonymous said...

If they would have sold to Walmart or Menards rates would fall and the electricity could be imported instead of polluting our good old USA air.

Anonymous said...

The customers are powerless, except for possibly living off the grid. EDE executives did what many of us would do. The power of money is all encompassing .

Anonymous said...

Its the public perception that is what matters here. Its was a piss poor choice of these executives to do this. No matter if it was legal....the public perception screams wrong doing.

Anonymous said...

Re 820p

That is the point, they didn't buy the shares and the company didn't give them new shares. These were shares already given to them as performance incentives in the past. The meger just accelerated the vesting. They didn't net any extra money. This whole thread is much ado about nothing.

The pension isn't going away.

Utility rates are set by the state's respective PSC's. It is a long drawn out process that involves determing what is a fair ROE for using investor funds to pay for capital projects. When federal mandates require capital investments then rates are going to go up. This isn't an Empire thing this is how the industry operates.

Implying the company wasn't sustainable ignores the significant premium that was paid for the stock.

Dusty Roads said...

Any of us in the same position would have done the same thing,,,,,Cha Ching

Anonymous said...

Unsustainable business models have been built, bought and sold in the private sector for decades! EDE’s real silver lining is in its model. It is a bastard son of sorts, in that it is regulated (joke) and at the same time is a publicly traded monopoly in SW Missouri. Very sweet deal until the public outrage forces deregulation!
It is time to deregulate all the electric monopolies! If I can be done for telephony it can surely be done for local utilities.
Deregulation of telephony along with technological advancements has saved consumers a great deal of money that would have otherwise been spent by MaBell (EDE) as CEO stock incentives, and multi-million dollar silver parachutes! Consumers also have a CHOICE!
I no longer want to spend any money with EDE. I want a choice in my provider and I hope thousands of others will do what I am going to do and write everyone on the local and state level demanding…a choice.

Anonymous said...

Utility deregulation is a facade, very little actually changes. It worked so well in California I can't understand why it hasn't caught on.