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FRONTEER DIRECTORY COMPANY, INC.
STATEMENT PURSUANT TO RULE 14F-1
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
REORGANIZATION TRANSACTION
On April 26, 1995, Fronteer Directory Company, Inc. ("Registrant") entered
into a Plan of Reorganization and Exchange Agreement ("Agreement") with RAFCO,
Ltd., a Nevada corporation ("RAFCO"), 1700 Lincoln Street, 32nd Floor, Denver,
Colorado. Under this Agreement, the Registrant acquired all of the assets of
RAFCO in exchange for the Registrant's assumption of the liabilities of RAFCO
and the Registrant's issuance of 7,223,871 shares of the Registrant's $0.01 par
value common stock ("Common Stock") and the Registrant's issuance of 87,500
shares of its $0.10 par value Series A Voting Cumulative Preferred Stock
("Preferred Stock"). After such acquisition, RAFCO dissolved and will distribute
the Registrant's Common Stock and Preferred Stock to the 20 shareholders of
RAFCO, including Robert A. Fitzner, Jr. who will receive 4,784,705 shares of
Common Stock and 5,000 shares of Preferred Stock of the Registrant. Such shares
issued to Mr. Fitzner will constitute 37.9% of the outstanding voting stock of
the Registrant. Section 8.0 of the Agreement provides that after the Registrant
complies with Rule 14f-1 under the Securities Exchange Act of 1934, as amended
("Rule 14f-1"), the directors of the Registrant other than Dennis W. Olson will
resign as directors of the Registrant and the remaining director of the
Registrant will appoint Robert A. Fitzner, Jr. and Robert L. Long as directors
of the Registrant to fill two of the vacancies created by such resignations. In
the Agreement, the Registrant agreed to take all actions necessary to comply
with Rule 14f-1. As a result of the planned change in a majority of the
Registrant's directors, the Registrant is required to provide to each of its
stockholders the information required by Rule 14f-1. Such information is being
provided in this Statement. The information pertaining to the new directors has
been provided by such directors. Mr. Fitzner, who will own 37.9% of the
outstanding voting stock of the Registrant and who will become a director of the
Registrant, may be deemed to be in a control relationship with the Registrant.
OWNERSHIP OF OUTSTANDING VOTING SECURITIES
The following table sets forth as of April 26, 1995, and as adjusted for
the consummation of the transaction with RAFCO, the number of shares of the
Registrant's Common Stock and Preferred Stock owned by each person who owned of
record, or was known to own beneficially, more than 5% of the Registrant's
outstanding shares of Common Stock; sets forth the number of shares of the
Registrant's Common Stock and Preferred Stock beneficially owned by each of the
Registrant's current directors and officers and persons who are to become
directors of the Registrant under the Agreement; and sets forth the number of
shares of the Registrant's Common Stock beneficially owned by the Registrant's
current directors and officers as a group.
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<TABLE>
<CAPTION>
PERCENT OF CLASS
-----------------------------------------
NAME OF AMOUNT AND NATURE OF BEFORE RAFCO AFTER RAFCO
BENEFICIAL OWNER BENEFICIAL OWNERSHIP TRANSACTION(4) TRANSACTION(5)
---------------- -------------------- -------------- --------------
<S> <C> <C> <C>
Dennis W. Olson(1)(2) 575,219 Direct(6) 12.5 5.3
106,471 Indirect(8)
Marlow E. Lindblom(1) 442,500 Direct 9.4 4.0
66,369 Indirect(8)
Roland Haux(1) 427,500 Direct 9.0 3.8
60,480 Indirect(8)
Larry Myers(1) 218,188 Direct(6) 5.2 2.2
60,000 Indirect(8)
Larry Scott(1) 83,334 Direct 2.9 1.2
74,524 Indirect(8)
Theodore Becker(1) 40,000 Direct .7 .3
Richard Flurer(1) 40,000 Direct .7 .3
All Current Officers and Directors as a 1,826,671 Direct 38.7 16.9
group (7 persons) 367,844 Indirect
Robert A. Fitzner, Jr.(2) 4,789,705 Direct - 0 - 37.9
1700 Lincoln St., 32nd Floor
Denver, CO 80203
Robert L. Long(2) 525,000 Direct 11.1 4.7
1700 Lincoln St., 32nd Flr., 78,125 Indirect(7)
Denver, CO 80203
Kanouff Corporation(3) 1,558,078 Direct - 0 - 12.3
1610 Wynkoop St., #200,
Denver, CO 80202
<FN>
-----------------------------
(1) Current director of the Registrant.
(2) Directors of the Registrant after compliance with Rule 14f-1.
(3) Patricia M. Kanouff, 2525 E. Cedar Avenue, Denver, CO 80209, is the
president and sole director and shareholder of Kanouff Corporation.
(4) Based upon 5,334,190 shares of Common Stock of the Registrant issued and
outstanding.
(5) Based upon 12,558,061 shares of Common Stock and 87,500 shares of
Preferred Stock, or a total of 12,645,561 shares of voting stock of the
Registrant issued and outstanding.
(6) See footnote (1) on page 1 of Proxy Statement dated January 20, 1995.
(7) Mr. Long holds a currently exercisable option to acquire these shares.
(8) Includes currently exercisable option to acquire 100,000 shares held by
Mr. Olson and a currently exercisable option to acquire 60,000 shares held
by Messrs. Lindblom, Haux, Myers, and Scott.
</TABLE>
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CERTAIN INFORMATION PERTAINING
TO MANAGEMENT
After compliance with Rule 14f-1, Robert A. Fitzner, Jr. and Robert L. Long
will become directors of the Registrant and Dennis W. Olson will remain a
director of the Registrant. The following provides certain information
pertaining to Messrs. Fitzner, Long, and Olson.
Dennis W. Olson, age 54, has been the president and a director of
the Registrant since 1977.
Robert A. Fitzner, Jr., age 49, has been president, chief
executive officer, and the director of RAF Financial Corporation
("RAF") since 1986. As of April 26, 1995, RAF became a wholly owned
subsidiary of the Registrant. RAF is engaged in the financial services
industry and its business consists of providing securities transaction
clearing services for other broker dealers on a fully disclosed basis,
providing retail securities brokerage and investment services, trading
fixed income and equity securities, providing investment banking
services to corporate and municipal clients, managing and
participating in underwriting of corporate and municipal securities,
and distributing mutual fund shares. RAF is registered as a broker
dealer with the Securities and Exchange Commission, is a member of the
National Association of Securities Dealers, Inc. and the Boston Stock
Exchange, is an associate member of the American Stock Exchange, and
is registered as a securities broker dealer in all 50 states. RAF is a
member of the Securities Investor Protection Corporation ("SIPC") and
other regulatory and trade organizations.
Robert L. Long, age 62, is senior vice president and managing
director of the corporate finance division of RAF. Mr. Long has been
an officer and employee of RAF since 1990, and he was employed as an
account executive and/or corporate finance officer with several
securities brokerage firms at various times from 1969 to 1990.
None of the foregoing persons is a director of any other company with a
class of securities registered pursuant to Section 12 of the Securities Exchange
Act of 1934, as amended, or subject to the requirements of Section 15(d) of such
Act or of any company registered as an investment company under the Investment
Company Act of 1940, as amended.
The executive officers of the Registrant are normally appointed annually at
the first meeting of the Registrant's board of directors held after each annual
meeting of shareholders. Each executive officer holds office until his or her
resignation or until he or she is removed in the manner provided by the
Registrant's bylaws. When Messrs. Olson, Fitzner, and Long become the three
directors of the Registrant they will select the executive officers of the
Registrant. It is not currently known who will be selected as the executive
officers of the Registrant. The following is information pertaining to the
current executive officers of the Registrant:
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NAME OF EXECUTIVE
OFFICER AND POSITION PRINCIPAL OCCUPATION FOR
IN REGISTRANT AGE OFFICER SINCE LAST FIVE YEARS
- ---------------------- --- ------------- --------------------------------
Dennis W. Olson 55 1977 President of the Registrant
Marlow E. Lindblom 55 1977 Vice President of the Registrant
Roland Haux 60 1977 Secretary Treasurer of the
Registrant
Larry Scott 47 1992 Vice President of Sales for the
Registrant since 1992, General
Sales Manager for the Registrant
from 1990 to 1992, and Field
Sales Manager for the Registrant
from 1985 to 1990.
There is no arrangement or understanding between any of the foregoing
persons and any other person pursuant to which such person was selected as an
executive officer of the Registrant and there are no family relationships
between any of the current or planned directors of the Registrant.
Based solely upon a review of the Forms 3 and 4 and any amendments thereto
furnished to the Registrant during the Registrant's fiscal year ended September
30, 1994, and during the subsequent period from October 1, 1994 to April 25,
1995 ("Subsequent Period"), and Forms 5 and amendments thereto furnished to the
Registrant with respect to the fiscal year ended September 30, 1994, during the
Registrant's fiscal year ended September 30, 1994, or during the Subsequent
Period, the following persons who were directors, officers, and/or beneficial
owners of 10% of the Registrant's outstanding Common Stock during such fiscal
year or during the Subsequent Period filed late reports or failed to file
Reports on Forms 3, 4, or 5: Marlow E. Lindblom filed one Form 4 Report late.
During the fiscal year ended September 30, 1994, and during the Subsequent
Period, the directors of the Registrant had four and five directors meetings,
respectively, which includes meetings held by and evidenced by consent directors
minutes signed by all directors. None of the directors of the Registrant failed
to attend at least 75% of such meetings or failed to attend at least 75% of the
meetings of committees of the board of directors on which they served as
members.
The board of directors of the Registrant has established an Incentive Stock
Option Plan Committee, which met once during fiscal 1994 and did not meet during
the Subsequent Period; and a Compensation Committee, which met once during
fiscal 1994 and once during the Subsequent Period. The board of directors has
not established an audit or a nominating committee.
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EXECUTIVE COMPENSATION
Enclosed is a copy of the Registrant's proxy statement dated January 20,
1995 ("Proxy Statement"). This Proxy Statement includes information concerning
compensation paid by the Registrant during its last three fiscal years to the
president of the Registrant and all other executive officers whose total annual
salary and bonus exceeded $100,000 during the Registrant's last fiscal year
ending September 30, 1994. The Proxy Statement also includes a description of
the standard arrangements pursuant to which directors of the Registrant are
compensated for services provided as directors of the Registrant.
EMPLOYMENT CONTRACTS
Legally effective as of January 1, 1995, the Registrant entered into
employment agreements with its president, Dennis W. Olson, its vice president,
Marlow E. Lindblom, its secretary treasurer, Roland Haux, and its vice president
of sales, Larry Scott. Each of these employment agreements is for a term of
three years ending January 1, 1998; provides for the annual compensation and
benefits of each such employee; provides that upon full disability each such
employee will be entitled to full salary for three months and one half salary
for six months; provides that the employment agreement shall be binding upon any
successor to the Registrant; and provides that upon the expiration of the
employment agreement the Registrant shall be required, at the option of the
employee, to purchase from such employee up to 500,000 shares of the
Registrant's Common Stock at $1.00 per share.
CERTAIN TRANSACTIONS
Robert A. Fitzner, Jr. will become a director of the Registrant. On April
26, 1995, the Registrant engaged in a reorganization transaction with RAFCO
which is described in the first paragraph of this Rule 14f-1 Statement. As a
result of such reorganization transaction, Mr. Fitzner received 4,784,705 shares
of the Registrant's Common Stock and 5,000 shares of the Registrant's Preferred
Stock. As a result of such reorganization transaction, the Registrant assumed
the obligation to Mr. Fitzner on a 10% senior subordinated note due December 31,
2003 in the amount of $50,000. As a result of such reorganization transaction,
the Registrant will issue 2,500 shares of Preferred Stock to Earlene E. Fitzner,
Mr. Fitzner's mother, and the Registrant has assumed the obligation to pay a 10%
senior subordinated note due December 31, 2003 in the principal amount of
$150,000 to Mr. Fitzner's mother and has assumed the obligation to pay a 10%
senior subordinated note due December 31, 2003 in the principal amount of
$50,000 to Mr. Fitzner's father, Robert A. Fitzner, Sr.
Robert L. Long will become a director of the Registrant. During 1992, the
Registrant entered into an investment banking agreement with RAF Financial
Corporation ("RAF"). As of April 26, 1995, RAF became a wholly owned subsidiary
of the Registrant. One of the terms of Mr. Long's employment by RAF is that he
will receive a percentage of any investment banking fees received by RAF. Under
the investment banking agreement, the Registrant would be obligated to pay a fee
to RAF as a result of the reorganization transaction between the Registrant and
RAFCO which is described in the first paragraph of this Rule 14f-1 Statement. As
a wholly owned subsidiary of the Registrant, RAF has agreed to waive its portion
of any such investment banking fee. On April 26, 1995, the Registrant agreed to
pay a merger and acquisition fee to Mr. Long in an amount to be determined by
negotiation
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within a reasonable time after April 26, 1995. Dennis W. Olson, Robert A.
Fitzner, Jr., and Robert L. Long will negotiate the amount of such fee which
amount has not been determined as of the date of this Rule 14f-1 Statement.
Dennis W. Olson, Marlow E. Lindblom, Roland Haux, and Larry Scott are
currently officers and directors of the Registrant and Mr. Olson will continue
as a director of the Registrant. On April 27, 1995, the Registrant entered into
an agreement to sell certain of its assets to Telecom * USA Publishing Company
("Telecom"). Pursuant to this agreement, Messrs. Olson, Lindblom, Haux, Scott
and certain other employees of the Registrant, are obligated to personally enter
agreements not to compete with Telecom. As compensation for these noncompetition
agreements, Telecom has agreed to pay $250,000 to Olson, $170,000 to Lindblom,
$140,000 to Haux, and $80,000 to Scott. On April 27, 1995, the Registrant
granted an option to Telecom to purchase additional assets of the Registrant.
This option is exercisable for a period of two years beginning on June 1, 1997.
If Telecom exercises this option, Messrs. Olson, Lindblom, Haux, Scott, and
certain other employees of the Registrant, will be obligated to enter into
additional noncompete agreement with Telecom and will be paid additional amounts
in consideration for such noncompete agreements. The amount of such
noncompetition payments will not be determined until after Telecom exercises its
option.
On March 22, 1995, Marlow E. Lindblom exercised a stock option and
purchased 20,000 shares of Common stock of the Registrant at $0.54 per share,
and on April 28, 1995, Roland Haux exercised a stock option and purchased 70,000
shares of Common Stock of the Registrant at $0.58 per share. The Registrant has
repaid the following loans to officers and directors: Dennis W. Olson was repaid
$20,000 on April 18, 1995; Marlow E. Lindblom was repaid $10,000 on March 21,
1995; and Roland Haux was repaid $40,000 on April 27, 1995.
FRONTEER DIRECTORY COMPANY, INC.
5\4\95\JPK\G:\Fronteer\Rule14f.STT
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