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UNITED STATES |
SECURITIES AND EXCHANGE COMMISSION |
Washington, D.C. 20549 |
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FORM 8-K |
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Current Report |
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Pursuant to Section 13 or 15(d) of the |
Securities Exchange Act of 1934 |
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Date of Report (Date of earliest event reported): |
May 2, 2018 |
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Commission
File Number | | Exact Name of Registrant as Specified in its Charter, State of Incorporation,
Address of Principal Executive Offices and Telephone Number | | I.R.S. Employer
Identification
No. |
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001-32206 | | GREAT PLAINS ENERGY INCORPORATED | | 43-1916803 |
| | (A Missouri Corporation) | | |
| | 1200 Main Street | | |
| | Kansas City, Missouri 64105 | | |
| | (816) 556-2200 | | |
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| | NOT APPLICABLE | | |
(Former name or former address,
if changed since last report) |
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000-51873 | | KANSAS CITY POWER & LIGHT COMPANY | | 44-0308720 |
| | (A Missouri Corporation) | | |
| | 1200 Main Street | | |
| | Kansas City, Missouri 64105 | | |
| | (816) 556-2200 | | |
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| | NOT APPLICABLE | | |
| | (Former name or former address,
if changed since last report) | | |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act |
| (17 CFR 240.14d-2(b)) |
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[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act (§230.405 of this chapter) or Rule 12b-2 of the Exchange Act (§240.12b-2 of this chapter). |
| Emerging growth company ☐ |
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ |
This combined Current Report on Form 8-K is being provided by Great Plains Energy Incorporated (Great Plains Energy) and Kansas City Power & Light Company (KCP&L). KCP&L is a wholly-owned subsidiary of Great Plains Energy and represents a significant portion of its assets, liabilities, revenues, expenses and operations. Thus, all information contained in this report relates to, and is filed or furnished by, Great Plains Energy. Information that is specifically identified in this report as relating solely to Great Plains Energy, such as its financial statements and all information relating to Great Plains Energy’s other operations, businesses and subsidiaries, including KCP&L Greater Missouri Operations Company (GMO) does not relate to, and is not filed or furnished by, KCP&L. KCP&L makes no representation as to that information. Neither Great Plains Energy nor GMO has any obligation in respect of KCP&L’s debt securities and holders of such securities should not consider Great Plains Energy’s or GMO’s financial resources or results of operations in making a decision with respect to KCP&L’s debt securities. Similarly, KCP&L has no obligation in respect of securities of Great Plains Energy or GMO.
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Item 2.02 | Results of Operations and Financial Condition |
On May 2, 2018, Great Plains Energy issued a press release announcing its results for the first quarter ended March 31, 2018. A copy of the press release is attached as Exhibit 99.1.
The press release contains information regarding KCP&L. Accordingly, information in the press release relating to KCP&L is also being furnished on behalf of KCP&L.
The information under this Item 2.02 and in Exhibit 99.1 hereto is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended or otherwise subject to the liabilities of that section. The information under this Item 2.02 and Exhibit 99.1 hereto shall not be deemed incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, unless otherwise expressly indicated in such registration statement or other document.
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Item 5.04 | Temporary Suspension of Trading Under Registrant's Employee Benefit Plans. |
On May 2, 2018, in accordance with Section 306 of the Sarbanes-Oxley Act of 2002 and Rule 104 of Regulation BTR, Great Plains Energy sent a notice to its directors and executive officers notifying them of a blackout period that (a) Great Plains Energy intends to impose with respect to the Great Plains Energy common stock investment alternative (the Great Plains Energy Stock Fund) for the Great Plains Energy Incorporated 401(k) Savings Plan (the Great Plains Energy Plan) and (b) Westar Energy, Inc. (Westar) intends to impose with respect to the Westar Energy Stock Fund (the Westar Stock Fund) investment alternative in the Westar Energy, Inc. Employees’ 401(k) Savings Plan (the Westar Plan), in each case in connection with the closing of the anticipated Merger referred to below, and certain trading prohibitions that the directors and executive officers will be subject to during the blackout period.
As previously announced, pursuant to an Agreement and Plan of Merger (Merger Agreement) by and among Great Plains Energy, Westar, Monarch Energy Holding, Inc. (Monarch) and King Energy, Inc., a wholly owned subsidiary of Monarch (Merger Sub), and subject to the satisfaction or waiver of certain conditions, (a) Great Plains Energy will merge with and into Monarch with Monarch continuing as the surviving corporation and (b) Merger Sub will merge with and into Westar with Westar continuing as the surviving corporation and as a wholly owned subsidiary of Monarch (collectively, the Merger). Following the closing of the Merger, it is anticipated that (i) the Great Plains Energy Plan will be maintained for Great Plains Energy employees, but the Great Plains Energy Stock Fund investment alternative will be replaced with a Monarch common stock investment alternative, and (ii) the Westar Plan will be maintained for Westar employees, but the Westar Stock Fund investment alternative will be replaced with a Monarch common stock investment alternative. Upon the closing of the Merger, Great Plains Energy employees who currently have investments in the Great Plains Energy Stock Fund in the Great Plains Energy Plan and Westar employees who currently have investments in the Westar Stock Fund in the Westar Plan will each hold shares of Monarch common stock received as consideration in the Merger. As a result, after the closing of the Merger, the blackout to be imposed will also restrict the trading of Monarch common stock held pursuant to the Great Plains Energy Plan and the Westar Plan.
On May 1, 2018, Great Plains Energy received notice from the administrator of the Great Plains Energy Plan that several days prior to the closing of the Merger, the Great Plains Energy Stock Fund under the Great Plains Energy Plan will close to new investments and there will be a limited blackout period during which transactions in Great Plains Energy common stock held in the Great Plains Energy Stock Fund will not be permitted. Similarly, Westar has advised Great Plains Energy that Westar received notice from the administrator of the Westar Plan that several days prior to closing of the Merger, the Westar Stock Fund will close to new investments and there will be a limited blackout period during which transactions in the Westar Stock Fund will not be permitted. In each case, the blackout period is expected to commence several days prior to the closing of the Merger, and could last up to 14 days, including a period of time after the closing of the Merger. At this time, Great Plains Energy is unable to determine the closing date of the Merger and therefore the exact dates for the blackout period cannot be determined. A follow-up communication will be sent to the participants in the Great Plains Energy Plan as soon as the closing date is identified and the exact dates for the blackout period are known.
During the blackout period and for a period of two years after the ending date of the blackout period, holders of Great Plains Energy common stock and Monarch common stock and other interested parties may obtain information about the blackout period, including its actual beginning and ending dates, without charge, by sending a written request to:
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• | Prior to the closing of the Merger: Great Plains Energy Incorporated, 1200 Main Street, Kansas City, Missouri 64105, Attention: General Counsel or by calling 816-556-2335. |
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• | Following the closing of the Merger: Monarch Energy Holding, Inc., 1200 Main Street, Kansas City, Missouri 64105, Attention: General Counsel or by calling 816-556-2335. |
A copy of the notice that was sent by Great Plains Energy to its directors and executive officers is attached hereto as Exhibit 99.2 and is incorporated herein by reference.
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Item 9.01 | Financial Statements and Exhibits |
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(d) Exhibits | |
Exhibit No. | Description |
99.1 | |
99.2 | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized.
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| GREAT PLAINS ENERGY INCORPORATED |
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| /s/ Lori A. Wright |
| Lori A. Wright |
| Vice President – Corporate Planning, Investor Relations and Treasurer |
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| KANSAS CITY POWER & LIGHT COMPANY |
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| /s/ Lori A. Wright |
| Lori A. Wright |
| Vice President – Corporate Planning, Investor Relations and Treasurer |
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Date: May 2, 2018
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Exhibit Index |
Exhibit No. | Description |
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99.1 | |
99.2 | |
Exhibit
GREAT PLAINS ENERGY REPORTS SOLID FIRST QUARTER 2018 RESULTS
WESTAR MERGER ON TRACK TO CLOSE IN SECOND QUARTER
Kansas City, Mo. (May 2, 2018) - Great Plains Energy (NYSE: GXP) today announced first quarter 2018 earnings of $35.0 million or $0.16 per share of average common stock outstanding, compared with a first quarter 2017 loss of $24.7 million or $0.11 per share.
Great Plains Energy's adjusted earnings (non-GAAP) and adjusted earnings per share (non-GAAP) exclude certain costs, expenses, gains, losses and the per share dilutive effect of equity issuances resulting from the anticipated merger with Westar Energy and the previous plan to acquire Westar. Adjusted earnings (non-GAAP) and adjusted earnings per share (non-GAAP) were $29.4 million and $0.19, respectively, in the first quarter of 2018 compared with $19.9 million and $0.13, respectively, in the first quarter of 2017. Adjusted earnings (non-GAAP) and adjusted earnings per share (non-GAAP) are reconciled to GAAP earnings (loss) in the financial table included in this release.
“Our solid financial performance in the first quarter was driven by solid demand growth and cost management. Colder weather also contributed to results for the quarter,” said Terry Bassham, chairman and chief executive officer of Great Plains Energy.
Bassham continued, “Upon the approval of our constructive merger settlements in Kansas and Missouri, we will have the best opportunity to provide our retail electric customers substantial benefits, including tens of millions of dollars in bill credits and rate stability over the next several years. We remain on track to complete our pending merger with Westar Energy in the second quarter.”
Great Plains Energy First Quarter:
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GREAT PLAINS ENERGY INCORPORATED |
Consolidated Earnings (Loss) and Diluted Earnings (Loss) Per Share |
Three Months Ended March 31 |
(Unaudited) |
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| | | | Earnings (Loss) per Great |
| Earnings (Loss) | | Plains Energy Share |
| 2018 | 2017 | | 2018 | 2017 |
GAAP Earnings | (millions) | | | |
Electric Utility | $ | 28.0 |
| $ | 16.1 |
| | $ | 0.13 |
| $ | 0.07 |
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Other | 7.0 |
| (25.7 | ) | | 0.03 |
| (0.11 | ) |
Net income (loss) | 35.0 |
| (9.6 | ) | | 0.16 |
| (0.04 | ) |
Preferred dividends | — |
| (15.1 | ) | | — |
| (0.07 | ) |
Earnings (loss) available for common shareholders | $ | 35.0 |
| $ | (24.7 | ) | | $ | 0.16 |
| $ | (0.11 | ) |
Reconciliation of GAAP to Non-GAAP | | | | | |
Earnings (loss) available for common shareholders | $ | 35.0 |
| $ | (24.7 | ) | | $ | 0.16 |
| $ | (0.11 | ) |
Costs to achieve the anticipated merger with Westar: | | | | | |
Operating expenses, pre-tax (a) | 2.9 |
| 39.4 |
| | 0.02 |
| 0.25 |
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Financing, pre-tax (b) | — |
| 26.6 |
| | — |
| 0.17 |
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Mark-to-market impacts of interest rate swaps, pre-tax (c) | (7.0 | ) | (12.1 | ) | | (0.05 | ) | (0.08 | ) |
Interest income, pre-tax (d) | (3.5 | ) | (4.6 | ) | | (0.02 | ) | (0.03 | ) |
Income tax expense (benefit) (e) | 2.0 |
| (19.8 | ) | | 0.02 |
| (0.13 | ) |
Preferred stock (f) | — |
| 15.1 |
| | — |
| 0.10 |
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Impact of October 2016 share issuance (g) | n/a |
| n/a |
| | 0.06 |
| (0.04 | ) |
Adjusted Earnings (Non-GAAP) | $ | 29.4 |
| $ | 19.9 |
| | $ | 0.19 |
| $ | 0.13 |
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Average Shares Outstanding | | | | (millions) |
Shares used in calculating diluted earnings (loss) per share | | | | 216.0 |
| 215.3 |
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Adjustment for October 2016 share issuance (g) | | | | (60.5 | ) | (60.5 | ) |
Shares used in calculating adjusted earnings per share (Non-GAAP) |
| | 155.5 |
| 154.8 |
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(a) Reflects legal, advisory and consulting fees and certain severance expenses and are included in Costs to achieve the anticipated merger with Westar on the consolidated statements of comprehensive income (loss).
(b) Reflects fees for a bridge term loan facility and interest on Great Plains Energy's $4.3 billion senior notes and are included in Interest charges on the consolidated statements of comprehensive income (loss).
(c) Reflects the mark-to-market impacts of interest rate swaps and is included in Interest charges and Non-operating income on the consolidated statements of comprehensive income (loss).
(d) Reflects interest income earned on the proceeds from Great Plains Energy's October 2016 equity offerings and March 2017 issuance of $4.3 billion senior notes and is included in Non-operating income on the consolidated statements of comprehensive income (loss).
(e) Reflects an income tax effect calculated at a 25.74% statutory rate for 2018 and a 38.9% statutory rate for 2017, with the exception of certain non-deductible legal and financing fees.
(f) Reflects reductions to earnings available for common shareholders related to preferred stock dividend requirements for Great Plains Energy's Series B Preferred Stock and are included in Preferred stock dividend requirements on the consolidated statements of comprehensive income (loss).
(g) Reflects the average share impact of Great Plains Energy's issuance of 60.5 million shares of common stock in October 2016.
GAAP Earnings
On a per-share basis, the increase in first quarter 2018 GAAP earnings per share compared to the same period in 2017 was impacted by $0.21 of lower costs to achieve the anticipated merger with Westar Energy as detailed in the table above as well as the following items under the heading Adjusted Earnings (non-GAAP).
Adjusted Earnings (non-GAAP)
On a per-share basis, drivers for the increase in first quarter 2018 adjusted earnings (non-GAAP) compared to the same period in 2017 included the following:
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• | An approximate $0.07 increase from colder weather driven by a 27 percent increase in heating degree days compared to the first quarter of 2017; |
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• | An estimated $0.02 increase from an increase in weather-normalized retail demand; and |
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• | An approximate $0.03 increase in other items. |
These drivers were partially offset by a $0.06 decrease from the net impact of the lower federal income tax rate. This net impact is driven by a provision for rate refund for the income tax savings that are anticipated to be returned to customers partially offset by lower income tax expense.
Overall retail megawatt hour sales were up 7.3 percent in the first quarter 2018 compared to the 2017 period. The weather impact in the first quarter 2018, when compared to normal, was flat.
Adjusted Earnings (Non-GAAP)
In addition to earnings (loss) available for common shareholders and diluted earnings (loss) per common share, Great Plains Energy's management uses adjusted earnings (non-GAAP) and adjusted earnings per share (non-GAAP) to evaluate earnings and earnings per share without the impact of the anticipated merger with Westar Energy. Adjusted earnings (non-GAAP) and adjusted earnings per share (non-GAAP) exclude certain costs, expenses, gains, losses and the per share dilutive effect of equity issuances resulting from the anticipated merger and the previous plan to acquire Westar Energy. This information is intended to enhance an investor's overall understanding of results. Adjusted earnings (non-GAAP) and adjusted earnings per share (non-GAAP) are used internally to measure performance against budget and in reports for management and the Board of Directors of Great Plains Energy. Adjusted earnings (non-GAAP) and adjusted earnings per share (non-GAAP) are financial measures that are not calculated in accordance with GAAP and may not be comparable to other companies' presentations or more useful than the GAAP information.
Great Plains Energy will post its 2018 First Quarter Form 10-Q, as well as supplemental financial information related to the first quarter on its website, www.greatplainsenergy.com.
Earnings Webcast Information:
An earnings conference call and webcast is scheduled for 9:00 a.m. ET Thursday, May 3, 2018, to review the Company's 2018 first quarter earnings and operating results.
A live audio webcast of the conference call, presentation slides, supplemental financial information, and the earnings press release will be available on the investor relations page of Great Plains Energy's website at www.greatplainsenergy.com. The webcast will be accessible only in a “listen-only” mode.
The conference call may be accessible by dialing (888) 353-7071 (U.S./Canada) or (724) 498-4416 (international) five to ten minutes prior to the scheduled start time. The pass code is 5785138.
A replay and transcript of the call will be available later in the day by accessing the investor relations section of the Company's website. A telephonic replay of the conference call will also be available through May 10, 2018, by dialing (855) 859-2056 (U.S./Canada) or (404) 537-3406 (international). The pass code is 5785138.
About Great Plains Energy:
Headquartered in Kansas City, Mo., Great Plains Energy Incorporated (NYSE: GXP) is the holding company of Kansas City Power & Light Company and KCP&L Greater Missouri Operations Company, two of the leading regulated providers of electricity in the Midwest. Kansas City Power & Light Company and KCP&L Greater Missouri Operations Company use KCP&L as a brand name. More information about the companies is available on the Internet at: www.greatplainsenergy.com or www.kcpl.com.
Forward-Looking Statements:
Statements made in this release that are not based on historical facts are forward-looking, may involve risks and uncertainties, and are intended to be as of the date when made. Forward-looking statements include, but are not limited to, statements relating to the anticipated merger transaction of Great Plains Energy and Westar Energy, Inc.(Westar), including those that relate to the expected financial and operational benefits of the merger to the companies and their shareholders (including cost savings, operational efficiencies and the impact of the anticipated merger on earnings per share), the expected timing of closing, the outcome of regulatory proceedings, cost estimates of capital projects, dividend growth, share repurchases, balance sheet and credit ratings, rebates to customers, employee issues and other matters affecting future operations. In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Great Plains Energy and KCP&L are providing a number of important factors that could cause actual results to differ materially from the provided forward-looking information. These important factors include: future economic conditions in regional, national and international markets and their effects on sales, prices and costs; prices and availability of electricity in regional and national wholesale markets; market perception of the energy industry, Great Plains Energy, KCP&L and Westar; changes in business strategy, operations or development plans; the outcome of contract negotiations for goods and services; effects of current or proposed state and federal legislative and regulatory actions or developments, including, but not limited to, deregulation, re-regulation and restructuring of the electric utility industry; decisions of regulators regarding rates that the Companies can charge for electricity; adverse changes in applicable laws, regulations, rules, principles or practices governing tax, accounting and environmental matters including, but not limited to, air and water quality; financial market conditions and performance including, but not limited to, changes in interest rates and credit spreads and in availability and cost of capital and the effects on derivatives and hedges, nuclear decommissioning trust and pension plan assets and costs; impairments of long-lived assets or goodwill; credit ratings; inflation rates; effectiveness of risk management policies and procedures and the ability of counterparties to satisfy their contractual commitments; impact of terrorist acts, including, but not limited to, cyber terrorism; ability to carry out marketing and sales plans; weather conditions including, but not limited to, weather-related damage and their effects on sales, prices and costs; cost, availability, quality and deliverability of fuel; the inherent uncertainties in estimating the effects of weather, economic conditions and
other factors on customer consumption and financial results; ability to achieve generation goals and the occurrence and duration of planned and unplanned generation outages; delays in the anticipated in-service dates and cost increases of generation, transmission, distribution or other projects; Great Plains Energy's and Westar's ability to successfully manage and integrate their respective transmission joint ventures; the inherent risks associated with the ownership and operation of a nuclear facility including, but not limited to, environmental, health, safety, regulatory and financial risks; workforce risks, including, but not limited to, increased costs of retirement, health care and other benefits; the ability of Great Plains Energy and Westar to obtain the regulatory approvals necessary to complete the anticipated merger or the imposition of adverse conditions or costs in connection with obtaining regulatory approvals; the risk that a condition to the closing of the anticipated merger may not be satisfied or that the anticipated merger may fail to close; the outcome of any legal proceedings, regulatory proceedings or enforcement matters that may be instituted relating to the anticipated merger; the costs incurred to consummate the anticipated merger; the possibility that the expected value creation from the anticipated merger will not be realized, or will not be realized within the expected time period; difficulties related to the integration of the two companies; the credit ratings of the combined company following the anticipated merger; disruption from the anticipated merger making it more difficult to maintain relationships with customers, employees, regulators or suppliers; the diversion of management time and attention on the anticipated merger; and other risks and uncertainties.
This list of factors is not all-inclusive because it is not possible to predict all factors. Additional risks and uncertainties are detailed from time to time in Great Plains Energy's and KCP&L's quarterly reports on Form 10-Q and annual report on Form 10-K filed with the Securities and Exchange Commission. Each forward-looking statement speaks only as of the date of the particular statement. Great Plains Energy and KCP&L undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Great Plains Energy Contacts:
Investors: Calvin Girard, Senior Manager, Investor Relations, (816) 654-1777, calvin.girard@kcpl.com
Media: Katie McDonald, Senior Director, Corporate Communications, (816) 556-2365,
katie.mcdonald@kcpl.com
Exhibit
IMPORTANT NOTICE REGARDING BLACKOUT PERIOD AND
RESTRICTIONS ON YOUR RIGHTS TO TRADE
GREAT PLAINS ENERGY COMMON STOCK AND
MONARCH COMMON STOCK
DURING THE BLACKOUT PERIOD
To: All Directors and Executive Officers of Great Plains Energy Incorporated
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From: | Heather Humphrey, General Counsel |
Date: May 2, 2018
The purpose of this notice is to advise you that, in connection with the anticipated closing of the pending mergers of (a) Great Plains Energy Incorporated (Great Plains Energy) with and into Monarch Energy Holding, Inc. (Monarch) and (b) King Energy, Inc., a wholly owned subsidiary of Monarch, with and into Westar Energy, Inc. (Westar, and such mergers, collectively, the Merger), a limited blackout period will be imposed with respect to your trading of certain shares of Great Plains Energy common stock and Monarch common stock, in accordance with the federal securities laws.
Great Plains Energy has received notice from the administrator of the Great Plains Energy Incorporated 401(k) Savings Plan (the Great Plains Energy Plan) that several days prior to closing of the Merger, (a) the Great Plains Energy common stock investment alternative (the Great Plains Energy Stock Fund) for the Great Plains Energy Plan will close to new investments and (b) there will be a limited blackout period during which transactions in Great Plains Energy common stock held in the Great Plains Energy Plan will not be permitted. The blackout period is expected to commence several days prior to the closing of the Merger, and could last up to 14 days, including a period of time after the closing of the Merger.
Similarly, Westar has advised Great Plains Energy that Westar received notice from the administrator of the Westar Energy, Inc. Employees’ 401(k) Savings Plan (the Westar Plan) that several days prior to closing of the Merger, (a) the Westar Energy Stock Fund (the Westar Stock Fund) investment alternative in the Westar Plan will close to new investments and (b) there will be a limited blackout period during which transactions in the Westar Stock Fund will not be permitted. The blackout period is expected to commence several days prior to the closing of the Merger, and could last up to 14 days, including a period of time after the closing of the Merger. At this time, Great Plains Energy is unable to determine the closing date of the Merger and therefore the exact dates for the blackout period cannot be determined. A follow-up communication will be sent to you as soon as the closing date is identified and the exact dates for the blackout period are known.
Following the closing of the Merger, it is anticipated that (i) the Great Plains Energy Plan will be maintained for Great Plains Energy employees, but the Great Plains Energy Stock Fund investment alternative in the Great Plains Energy Plan will be replaced with a Monarch common stock investment alternative, and (ii) the Westar Plan will be maintained for Westar employees, but the Westar Plan’s Westar Stock Fund investment alternative will be replaced with a Monarch common stock investment alternative. Upon the closing of the Merger, Great Plains Energy employees who currently have investments in Great Plains Energy common stock in the Great Plains Energy Stock Fund and Westar employees who currently have investments in the Westar Stock Fund will each hold shares of Monarch common stock received as consideration in the
Merger. As a result, after the closing of the Merger, the blackout to be imposed will also restrict the trading of Monarch common stock held under the Great Plains Energy Plan and the Westar Plan.
As a director or executive officer of Great Plains Energy, this blackout with respect to the Great Plains Energy Plan has a direct impact on your ability to trade Great Plains Energy common stock. In addition, if you will be a director or executive officer of Monarch following the closing of the Merger, the blackout with respect to the Great Plains Energy Plan and the Westar Plan will further impact your ability to trade Monarch common stock following the closing of the Merger.
Under Securities and Exchange Commission (SEC) rules published pursuant to Section 306(a) of the Sarbanes-Oxley Act of 2002, a director or executive officer generally may not exercise stock options or trade employer securities (including derivative securities such as restricted stock units and deferred stock units) that were acquired in connection with his or her service as a director or executive officer during a blackout period applicable to a plan that holds employer securities, even if the options or securities are held outside the plan. Note that this restriction applies to both direct and indirect acquisitions and dispositions of any employer securities in which you have a pecuniary interest, including trades by family members and others closely related to you.
All shares of Great Plains Energy common stock held by you and, if you will be a director or executive officer of Monarch following the closing of the Merger, all shares of Monarch common stock held by you, will be presumed to be acquired in connection with your service as a director or executive officer of the applicable issuer, and, thus, subject to the trading restrictions, unless you can establish by specific identification that the stock was not acquired in connection with your service and this identification is consistent with the treatment of the stock for all other purposes related to the transaction (e.g., for tax purposes). The SEC rules provide a limited number of exemptions from the trading restrictions. Importantly, bona fide gifts are permitted during this time. If you would like more information regarding these exemptions, please contact Leah Huddleston at (816) 556-2158.
Violations of the trading restrictions will allow an issuer or a security holder acting on behalf of an issuer to bring an action to recover the profits realized by the director or executive officer. In addition, the SEC may bring an action, including civil injunction proceedings, cease-and-desist actions, civil penalties and all other remedies available to the SEC under the Securities Exchange Act of 1934, including, in some cases, criminal penalties.
Key Dates for Trading Prohibition in Great Plains Energy Incorporated Common Stock:
The blackout period is expected to commence several days prior to the closing of the Merger, and could last up to 14 days. At this time, Great Plains Energy is unable to determine the closing date of the Merger and therefore the exact dates for the blackout period cannot be determined. Great Plains Energy’s General Counsel will notify you when the blackout starts. While we anticipate a smooth transition, you will be notified in the unlikely event that an extension of the blackout is needed. Please contact Leah Huddleston at (816) 556-2158 with any questions you may have regarding this notice and to pre-clear any trades in Great Plains Energy common stock or Monarch common stock.
