Ernie Whiton is not a person who lets stock options lay around without getting some exercise.
The CFO at Zoll Medical Corp. (NSDQ:ZOLL) is preparing to sell off another large slice of his company stock, disclosing plans this week to offer up to 90,000 shares through a series of pre-arranged sales beginning next month.
Whiton joined the Chelmsford, Mass.-based maker of defibrillators in January 1999, following a six-year stint at Ionics Inc. (now part of General Electric) in Watertown, Mass. He earns $280,000 in annual salary and holds a total of 107,750 vested options to buy Zoll stock priced between $11.26 and $23.05 a share, awarded through Zoll’s long-term equity incentive compensation plan.
According to a Zoll press release, Whiton intends to sell at least 60,000 shares through a process known as a 10b5-1 sale. Named for the Securities & Exchange Commission rule that authorized it, a 10b5-1 sale allows company executives to liquidate large blocs of stock without running afoul of insider trading rules. The only catch is that the executive has to agree to sell the stock on pre-determined dates, rather than waiting for the stock to reach a specific price before selling.
At the current $27-per-share price for Zoll stock, Whiton would likely bank about $775,000 in net profit by exercising 60,000 of his options holdings, based on an average exercise price of $14.05 a share. He also could offer up to 30,000 additional shares — with an average exercise price of $20.63 each, according to Zoll proxy statements — depending on undisclosed “market conditions,” according to the press release.
Whiton previously used 10b5-1 sales to unload 68,500 shares over an 18-month period that began in October 2006. Those sales — using options exercised at a split-adjusted average of $12.08 a share — generated $1.3 million in net proceeds, or profits of $19.53 a share.