<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): February 20, 1996
FRONTIER AIRLINES, INC
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Colorado 0-4877 84-1256945
- --------------------------------------------------------------------------------
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
12015 E. 46th Avenue
Denver, CO 80239
- --------------------------------------------------------------------------------
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code (303) 371-7400
------------------------------
Not Applicable
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
ITEM 5 OTHER EVENTS
- ------ ------------
DESCRIPTION OF SECURITIES TO BE REGISTERED
- ------------------------------------------
On February 20, 1997, the Board of Directors of Frontier Airlines, Inc.
(the "Company") declared a dividend distribution of one right (a "Right") for
each outstanding share of the Company's no par value common stock ("Common
Stock") to shareholders of record at the close of business on March 15, 1997.
Except as described below, each Right, when exercisable, entitles the registered
holder to purchase from the Company one share of the Company's Common Stock, at
a purchase price of $17.50 per share (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and American Securities
Transfer & Trust, Inc., as Rights Agent. The following is a general description
only and is subject to the detailed terms and conditions of the Rights
Agreement. A copy of the Rights Agreement, including the form of Rights
Certificate and the Summary of Rights to be provided to shareholders of the
Company, is being filed with the Securities and Exchange Commission as an
Exhibit to the Company's Registration Statement on Form 8-A and is incorporated
herein by reference.
Initially, the Rights will be attached to all Common Stock certificates
representing shares then outstanding, and no separate Rights Certificates will
be distributed. The Rights will separate from the Common Stock and a
Distribution Date will occur upon the earlier of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons other
than the Company, its subsidiaries or any person receiving newly-issued shares
of Common Stock directly from the Company or indirectly via an underwriter in
connection with a public offering by the Company (an "Acquiring Person") has
acquired, or obtained the right to acquire, beneficial ownership of 20% or more
of the outstanding shares of Common Stock (the "Stock Acquisition Date"), or
(ii) 10 business days following the commencement of a tender offer or exchange
offer that would result in a person or group beneficially owning 20% or more of
such outstanding shares of Common Stock. Until the Distribution Date, (i) the
Rights will be evidenced by the Common Stock certificates and will be
transferred with and only with such Common Stock certificates, (ii) new Common
Stock certificates issued after March 15, 1997 will contain a notation
incorporating the Rights Agreement by reference and (iii) the surrender for
transfer of any certificates for Common Stock will also constitute the transfer
of the Rights associated with the Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on February 20, 2007, unless earlier redeemed or
exchanged by the Company as described below.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of the Common Stock as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as otherwise
<PAGE>
determined by the Board of Directors, only shares of Common Stock issued prior
to the Distribution Date will be issued with Rights.
If any person becomes an Acquiring Person other than pursuant to a
Qualifying Offer (as defined below), each holder of a Right will thereafter have
the right to receive, upon exercise, Common Stock (or, in certain circumstances,
cash, property or other securities of the Company) having a value equal to two
times the exercise price of the Right. The Rights Agreement contains an
exemption for any issuance of Common Stock by the Company directly to any person
(for example, in a private placement or an acquisition by the Company in which
Common Stock is used as consideration) or indirectly via an underwriter in
connection with a public offering by the Company, even if that person would
become the beneficial owner of 20% or more of the Common Stock, provided that
such person does not acquire any additional shares of Common Stock.
Notwithstanding any of the foregoing, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by any
Acquiring Person will be null and void. However, Rights are not exercisable in
any event until such time as the Rights are no longer redeemable by the Company
as set forth below.
A "Qualifying Offer" means a tender offer or exchange offer for all
outstanding shares of Common Stock at a price and on terms determined by at
least a majority of the Continuing Directors (as defined below) who are not
officers or employees of the Company and who are not related (as specified in
the Rights Agreement) to the Person making such offer, to be fair to and in the
best interests of the Company and its shareholders.
If at any time following the Stock Acquisition Date (i) the Company is
acquired in a merger or other business combination transaction in which the
Common Stock is changed or exchanged or in which the Company is not the
surviving corporation (other than a merger that follows a Qualifying Offer and
satisfies certain other requirements), or (ii) 50% or more of the Company's
assets or earning power is sold or transferred, each holder of a Right (except
Rights that have been previously voided as set forth above) shall thereafter
have the right to receive, upon exercise, common stock of the acquiring company
having a value equal to two times the exercise price of the Right. The events
set forth in this paragraph and in the second preceding paragraph are referred
to as the "Triggering Events."
The Purchase Price payable, and the number of shares of Common Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Common
Stock, (ii) if holders of the Common Stock are granted certain rights or
warrants to subscribe for Common Stock or convertible securities at less than
the current market price of the Common Stock, or (iii) upon the distribution to
holders of the Common Stock of evidences of indebtedness or assets (excluding
regular quarterly cash dividends) or of subscription rights or warrants (other
than those referred to above).
<PAGE>
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional shares will be issued and, in lieu thereof, an adjustment
in cash will be made based on the market price of the Common Stock on the last
trading date prior to the date of exercise.
At any time until ten days following the Stock Acquisition Date, the
Company may redeem the Rights in whole, but not in part, at a price of $.01 per
Right (payable in cash, Common Stock or other consideration deemed appropriate
by the Board of Directors). Under certain circumstances set forth in the Rights
Agreement, the decision to redeem shall require the concurrence of a majority of
the Continuing Directors. Immediately upon the action of the Board of Directors
ordering redemption of the Rights or at such other time as may be specified by
the Board when it orders redemption, with, where required, the concurrence of
the Continuing Directors, the Rights will terminate and the only right of the
holders of Rights will be to receive the $.01 redemption price.
The term "Continuing Directors" means any member of the Board of Directors
of the Company who was a member of the Board prior to the Stock Acquisition
Date, and any person who is subsequently elected to the Board if such person is
recommended or approved by a majority of the Continuing Directors, but shall not
include an Acquiring Person, or an affiliate or associate of an Acquiring
Person, or any representative of the foregoing entities.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to shareholders or to the Company, shareholders may, depending upon
the circumstances, recognize taxable income if the Rights become exercisable for
Common Stock (or other consideration) of the Company or for common stock of the
acquiring company as set forth above.
Other than those provisions relating to the principal economic terms of the
Rights, any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the Rights Agreement may be amended by the Board (in certain
circumstances, with the concurrence of the Continuing Directors) in order to
cure any ambiguity, to make changes that do not adversely affect the interests
of holders of Rights (excluding the interests of any Acquiring Person), or to
shorten or lengthen any time period under the Rights Agreement; provided,
--------
however, that no amendment to adjust the time period governing redemption shall
be made at a time when the Rights are not redeemable.
As of February 20, 1997, there were 8,844,375 shares of Common Stock
outstanding and 2,639,750 shares of Common Stock reserved for issuance under
outstanding warrants and options to purchase Common Stock. Each outstanding
share of Common Stock on March 15, 1997 will receive one Right.
<PAGE>
CERTAIN ANTI-TAKEOVER EFFECTS
- -----------------------------
The Rights approved by the Board are designed to protect and maximize the
value of the outstanding equity interests in the Company in the event of an
unsolicited attempt by an acquiror to take over the Company, in a manner or on
terms not approved by the Board of Directors. Takeover attempts frequently
include coercive tactics to deprive a corporation's Board of Directors and its
shareholders of any real opportunity to determine the destiny of the
corporation. The Rights have been declared by the Board in order to deter such
tactics, including a gradual accumulation of shares in the open market of a 20%
or greater position to be followed by a merger or a partial or two-tier tender
offer that does not treat all shareholders equally. These tactics unfairly
pressure shareholders, squeeze them out of their investment without giving them
any real choice and deprive them of the full value of their shares.
The Rights are not intended to prevent a takeover of the Company and will
not do so. The Rights are not exercisable in the event of a Qualifying Offer,
as described above. The Rights may be redeemed by the Company at $.01 per Right
within ten days (or such later date as may be determined by a majority of the
Continuing Directors) after the accumulation of 20% or more of the Company's
shares by a single acquiror or group. Accordingly, the Rights should not
preclude any merger or business combination approved by the Board of Directors.
Issuance of the Rights does not in any way weaken the financial strength of
the Company or interfere with its business plans. The issuance of the Rights
has no immediate dilutive effect, will not affect reported earnings per share,
should not be taxable to the Company or to its shareholders and will not change
the way in which the Company's shares are presently traded. The Company's Board
of Directors believes that the Rights represent a sound and reasonable means of
addressing the complex issues of corporate policy created by the current
takeover environment.
However, the Rights may have the effect of rendering more difficult or
discouraging an acquisition of the Company deemed undesirable by the Board of
Directors. The Rights will cause substantial dilution to a person or group that
attempts to acquire the Company on terms or in a manner not approved by the
Company's Board of Directors, except pursuant to an offer conditioned upon the
negation, purchase or redemption of the Rights.
ITEM 7 FINANCIAL STATEMENTS AND EXHIBITS
- ------ ---------------------------------
(c) Exhibits
--------
4. Rights Agreement, dated as of February 20, 1997, between
Frontier Airlines, Inc. and American Securities Transfer &
Trust, Inc., including the form of Rights Certificate and the
Summary of Rights attached thereto as Exhibits A and B,
respectively, incorporated by reference to Frontier Airlines,
Inc. Registration Statement on Form 8-A dated March 12, 1997.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FRONTIER AIRLINES, INC.
Date: March 11, 1997 By: \s\ ARTHUR T. VOSS
-----------------------------
Arthur T. Voss, Vice President
