Two top execs cash in 4M in stock options

Some of the stock options needed to be cashed before they expired.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
WEATHERSFIELD -- Two senior executives at the parent company of RMI Titanium Co. recently cashed in about 4 million worth of stock options.
Despite the moves, Timothy Rupert, company president, and John Odle, executive vice president, still believe Weathersfield-based RTI International Metals will continue to perform well, said Richard Leone, a company spokesman.
Options allow a person to buy stock at a predetermined price and sell it at market prices, which could be much higher.
On Nov. 28, Rupert sold 31,000 shares of RTI stock for about 2.2 million, according to Yahoo! Finance. The prices of the shares sold ranged from 71.14 to 71.74 a share.
Rupert acquired the shares the same day by exercising options granted by RTI.
The prices of the options ranged from 10.22 to 25.56 a share.
Yahoo! didn't provide a value for the acquisition.
At the midpoint of those values, the options would have been acquired for about 555,000.
On Nov. 29, Odle sold 34,000 shares of stock for about 2.5 million. The prices of those shares ranged from 74.25 to 75 a share.
Odle acquired 24,000 of those shares the same day at a price of 10.22, based on his stock option agreement.
The cost of exercising those options was about 245,000.
Explanation
The selling of shares is sometimes seen by investors as a sign that executives don't have faith in a company's future.
Leone said that wasn't the case in these transactions and that Rupert and Odle had legitimate reasons for exercising their options.
The board issues about two-thirds of the executives' compensation in stock awards and stock options, so the executives have the right to cash in the options, Leone said.
"It's like uncashed paychecks waiting to be cashed," he said.
Also, some of the options exercised by Rupert and Odle were going to expire. T
hey have 10 years to exercise them after they are awarded.
In Odle's case, exercising the options is partly related to his wanting to diversify his investment portfolio, Leone said. Odle will turn 65 next year and has informed the organization that he plans to retire, he said.
Rupert, however, still has a large percentage of his net worth in RTI stock, Leone said.
In 2005, Rupert earned a salary and bonus of about 874,000, while Odle's total pay was about 506,000.
Rupert last year received 15,000 stock options, while Odle received 10,000. All of them can be exercised after a vesting period at 21.50.
The executives also receive stock awards as part of their compensation. Last year, Rupert received stock that was worth 537,500 when it was granted, and Odle was granted stock worth 215,000.
RTI stock closed Monday at 76.34, down 2.02. The stock has shot up from about 37 a year ago because of a strong demand for titanium from aircraft makers.
shilling@vindy.com