As filed with the Securities and Exchange Commission on August 25, 2000
Registration No. 333-58867
SECURITIES AND EXCHANGE COMMISSION
----------------------------------
POST EFFECTIVE AMENDMENT NO. 1
to
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
FRONTIER AIRLINES, INC.
(Exact name of registrant as specified in its charter)
Colorado 12015 East 46th Avenue 84-1256945
(State or other Denver, Colorado 80239 I.R.S. Employer
jurisdiction of (303) 371-7400 Identification No.)
incorporation or (Address, including zip code, and
organization) telephone number, including area
code, of registrant's principal
executive office)
Arthur T. Voss, Esq.
Vice President and General Counsel
12015 East 46th Avenue
Denver, Colorado 80239
(303) 371-7400
(Name, address, including zip code, and telephone number,
including area code, of agent for service of process)
----------------------------------
Copy to:
Douglas R. Wright, Esq.
Jeffrey A. Sherman, Esq.
Benjamin M. Chin, Esq.
Faegre & Benson LLP
370 Seventeenth Street, Suite 2500
Denver, Colorado 80202
(303) 592-9000
----------------------------------
Approximate date of commencement of proposed sale
to the public: From time to time after this
registration statement becomes effective.
----------------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box. [X]
<PAGE>
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box.[ ]
Calculation of Registration Fee
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
====================== =================== ========================= =========================== ===================
Title of securities Amount to Proposed maximum Proposed maximum aggregate Amount of
to be registered be registered offering price offering price(1) registration
per share(1) fee(2)
Common stock 3,132,329 shares $17.72 $55,504,869 $0.00
====================== =================== ========================= =========================== ===================
</TABLE>
1 Estimated pursuant to Rule 457(c) under the Securities Act of 1933,
solely for the purpose of calculating the registration fee based on the
average high and low sale prices per share of the registrant's common
stock on August 24, 2000 as reported on the Nasdaq National Market
System.
2 The registrant previously paid the registration fee when it originally
filed its registration statement on Form S-3 on July 10, 1998.
The registrant hereby amends this registration statement on the date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with section 8(a) of
the Securities Act or until this registration statement shall become effective
on the date as the commission, acting under section 8(a), may determine.
Explanatory Note
The registrant is not registering additional securities but is amending
its registration statement on Form S-3 filed on July 10, 1998 to reflect a
change in the plan of distribution described on pages 15 to 18. The 3,132,329
shares reflected on this amendment are the remaining unsold shares that were
part of the 7,452,930 shares previously registered on July 10, 1998.
2
<PAGE>
Subject to completion, dated August 25, 2000
Resale prospectus
FRONTIER AIRLINES, INC.
3,132,329 shares of common stock
(previously registered)
------------------
Frontier Airlines, Inc. We are a scheduled airline based in Denver,
12015 East 46th Avenue Colorado.
Denver, Colorado 80239
(303) 371-7400 This is a resale prospectus for stock
previously registered. The 3,132,329 shares
of common stock offered by this prospectus are
being sold by two of our shareholders. We will
not receive any proceeds from the sale of these
shares.
The offering
Per share Total
Offering price............................$17.72 $55,504,869
The offering price is based on recent prices of our common stock as quoted
on the Nasdaq National Market. There are no underwriters involved in this
offering.
Trading Symbol:
Nasdaq National Market - FRNT
-------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities, or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
See "Risk Factors" commencing on page 7 for a discussion of certain factors
that you should consider before purchasing our common stock.
Please see "Where You Can Find More Information" on page 13 for additional
information about us on file with the Securities and Exchange Commission.
-------------------------
August 25, 2000
3
<PAGE>
We have not authorized any dealer, salesperson, or other person to give
any information or represent anything not contained in this prospectus. You
should not rely on any unauthorized information. This prospectus does not offer
to sell or buy any shares in any jurisdiction in which it is unlawful. The
information in this prospectus is current as of the date on the cover.
Table of Contents
Page Page
Corporate Summary...........5 Use of Proceeds.....................19
Risk Factors................7 Legal Matters.......................19
Where You Can Find More Experts.............................19
Information.................13
Selling Shareholders........15 Indemnification of Officers
and Directors.......................20
Plan of Distribution........16
4
<PAGE>
CORPORATE SUMMARY
We are a scheduled airline based in Denver, Colorado. As of July 31,
2000, we operate routes linking our Denver hub to 21 cities in 17 states
spanning the nation from coast to coast. On November 1, 1998, we initiated
complimentary shuttle service between Boulder, Colorado and DIA. We currently
operate six daily round trip bus routes between Boulder and DIA. In addition to
implementing service to three new cities between April 1, 1999 and June 15,
2000, we also added additional flight frequencies in the following markets:
Baltimore, Dallas/Fort Worth, San Francisco and Seattle. We added Kansas City,
Missouri to our route system on June 15, 2000, and we will commence service to
Ronald Reagan International Airport in Washington, D.C. in September 2000 with
one daily non-stop round trip.
We were organized in February 1994, and we began flight operations in
July 1994 with two leased Boeing 737-200 jets. We have since expanded our fleet
to 25 leased jets, including seven Boeing 737-200s and 18 larger Boeing
737-300s. We currently use up to nine gates at our hub, Denver International
Airport ("DIA"), where we operate approximately 112 daily system flight
departures and arrivals.
The following table lists the cities we serve as of July 31, 2000, as
well as the dates we commenced service to those cities.
El Paso, Texas October 13, 1994
Albuquerque, New Mexico October 13, 1994
Omaha, Nebraska January 16, 1995
Chicago/Midway, Illinois September 25, 1995
Phoenix, Arizona September 25, 1995
Los Angeles, California November 3, 1995
Minneapolis/St. Paul, Minnesota November 13, 1995
Salt Lake City, Utah November 13. 1995
San Francisco, California November 17, 1995
Seattle, Washington May 1, 1996
Bloomington/Normal, Illinois January 6, 1997
Boston, Massachusetts September 16, 1997
Baltimore, Maryland November 16, 1997
New York/LaGuardia, New York December 3, 1997
San Diego, California July 23, 1998
Atlanta, Georgia December 17, 1998
Dallas/Fort Worth, Texas December 17, 1998
Las Vegas, Nevada December 17, 1998
Portland, Oregon June 14, 1999
Orlando, Florida September 9, 1999
Kansas City, Missouri June 15, 2000
5
<PAGE>
Our senior management team includes executives with substantial
experience in the airline industry, including several executives who occupied
similar positions at a former airline called Frontier Airlines. The former
Frontier Airlines served regional routes to and from Denver from 1950 to 1986.
There were various occasions when the former Frontier Airlines served most of
our current and intended markets with jet equipment from its Denver hub.
Our corporate offices are located at 12015 East 46th Avenue, Denver,
Colorado 80239. Our administrative office telephone number is 303-372-7400; our
reservations telephone number is 800-432-1359; and our world wide Web site is
www.frontierairlines.com.
6
<PAGE>
RISK FACTORS
This offering involves a high degree of risk. You should carefully
consider the risks described below and the other information in this prospectus
before deciding whether to invest in our common stock. While we have attempted
to identify all risks that are material to our business, additional risks that
we have not yet identified or that we currently think are immaterial may also
impair our business operations. The trading price of our common stock could
decline due to any of these risks, in which case you could lose all or part of
your investment. In assessing these risks, you should also refer to the other
information in this prospectus, including the consolidated financial statements
and related notes contained in our Form 10-K filed with the Securities and
Exchange Commission on June 30, 2000 and incorporated by reference.
We may not be able to obtain or secure new aircraft financing.
We have agreed to purchase various new Airbus A319 and A318 aircraft.
To complete the purchase of these aircraft, we must secure acceptable aircraft
financing, which we may not be able to obtain. The amount of financing required
will depend on the number of aircraft purchase options we exercise and the
amount of cash generated by operations before delivery of the aircraft. We are
exploring various financing alternatives, including, but not limited to,
domestic and foreign bank financing, public debt financing such as enhanced
equipment trust certificates, and leveraged lease arrangements. We expect to
develop a financing plan and implement that plan coincident with the delivery of
the first purchased aircraft in May 2001. There can be no guaranty that
financing will be available when required or on acceptable terms. The inability
to secure the financing could have a material adverse effect on us and result in
our inability to take delivery of Airbus aircraft that we have agreed to
purchase.
The airline industry is seasonal and cyclical resulting in unpredictable
liquidity and earnings.
Because the airline industry is seasonal and cyclical, our liquidity
and earnings will fluctuate and be unpredictable. Our operations primarily
depend on passenger travel demand and seasonal variations. Our weakest travel
periods are generally during the quarters ending in June and December. The
airline industry is also a highly cyclical business with substantial volatility.
Airlines frequently experience short-term cash requirements. These requirements
are caused by seasonal fluctuations in traffic, which often put a drain on cash
during off-peak periods, and various other factors, including price competition
from other airlines, national and international events, fuel prices, and general
economic conditions including inflation. Because a substantial portion of
airline travel is discretionary, our operating and financial results may be
negatively impacted by any downturn in national or regional economic conditions
in the United States, and particularly in Colorado. Airlines require substantial
liquidity to continue operating under most conditions. The airline industry also
has low operating profit margins and revenues that vary to a substantially
greater degree than do the related costs. Working capital deficits are not
uncommon in the airline industry since airlines typically have no product
inventories and ticket sales not yet flown are reflected as current liabilities.
Therefore, a significant shortfall from expected revenue levels could have a
material adverse effect on our operations.
7
<PAGE>
The increasing number of consolidations and alliances has increased competition,
and we may not be able to effectively compete.
Competition in the airline industry is constantly intensifying, which
could decrease our market share. The U.S. airline industry has consolidated in
recent years, and there are additional consolidations presently proposed.
Consolidations have enabled various carriers to expand their international
operations and increase their presence in the U.S. domestic market. In addition,
many major domestic carriers have formed alliances with domestic regional
carriers and foreign carriers. As a result, many of the carriers with which we
compete in our markets are larger and have substantially greater resources than
we have. Continuing developments in the industry will affect our ability to
compete in the various markets in which we operate.
We are in a high fixed cost business, and any unexpected decrease in revenues
could harm us.
The airline industry is characterized by fixed costs that are high in
relation to revenues. Accordingly, a shortfall from expected revenue levels can
have a material adverse effect on our profitability and liquidity.
Increases in fuel costs affect our operating costs and competitiveness.
We cannot predict our future cost and availability of fuel, which
affects our ability to compete. Fuel is a major component of our operating
expenses. Both the cost and availability of fuel are influenced by many economic
and political factors and events occurring throughout the world, and fuel costs
fluctuate widely. Fuel accounted for 36.7% of our total operating expenses for
the quarter ended June 30, 2000. Substantial sustained price increases have
prevailed during our fiscal year ended March 31, 2000 and have continued since
that date. The unavailability of adequate fuel supplies could have a material
adverse effect on our operations and profitability. Because newer aircraft are
more fuel efficient than our Boeing 737-200 aircraft, significant increases in
the price of jet fuel result in a higher increase in our total costs than those
of competitors using more fuel-efficient aircraft. In addition, larger airlines
may have a competitive advantage because they pay lower prices for fuel. We
intend generally to follow industry trends by raising fares in response to
significant fuel price increases. However, our ability to pass on increased fuel
costs through fare increases may be limited by economic and competitive
conditions.
8
<PAGE>
We are governed under federal regulations, and compliance with federal
regulations increases our costs and decreases our revenues.
Compliance with federal regulations increases our costs. Although we
have obtained the necessary authority from the U.S. Department of Transportation
and the Federal Aviation Administration ("FAA") to conduct flight operations, we
must maintain this authority by our continued compliance with applicable
statutes, rules, and regulations pertaining to the airline industry, including
any new rules and regulations that may be adopted in the future. We believe that
the Federal Aviation Administration officials strictly scrutinized small and
start-up airlines like ours thereby making us susceptible to regulatory demands
that can negatively impact our operations. We may not be able to continue to
comply with all present and future rules and regulations. In addition, we cannot
predict the costs of compliance with these regulations and the effect of
compliance on our profitability. We also expect substantial FAA scrutiny as we
transition from our Boeing fleet to an all Airbus fleet.
In May 1996 a relatively new domestic airline sustained an accident in
which one of its aircraft was destroyed and all persons on board were fatally
injured. In June 1996, that airline agreed at the FAA's request to cease all of
its flight operations. Although the FAA, after an intensive and lengthy
investigation, allowed that airline to resume its operations, should we
experience a similar accident, it is probable that there would be a material
adverse effect on our business and results of operations.
We experience high costs at Denver International Airport, which may impact our
results of operations.
We operate our flight hub from DIA where we experience high costs. DIA
opened in March 1995, and Stapleton International Airport was closed. Financed
through revenue bonds, DIA depends on landing fees, gate rentals, income from
airlines, the traveling public, and other fees to generate income to service its
debt and to support its operations. Our cost of operations at DIA will vary as
traffic increases or diminishes at that airport. We believe that our operating
costs at DIA substantially exceed those that other airlines incur at most hub
airports in other cities, which decreases our competitiveness.
We have a limited number of routes, which limits our market share and ability to
compete.
Because of our relatively small fleet size and limited number of
routes, we are at a competitive disadvantage compared to other airlines, such as
United Airlines, that can spread their operating costs across more equipment and
routes and retain connecting traffic (and revenue) within their much more
extensive route networks.
9
<PAGE>
We face intense competition and market dominance by United Airlines.
The airline industry is highly competitive, primarily due to the
effects of the Airline Deregulation Act of 1978 (the "Deregulation Act"), which
has substantially eliminated government authority to regulate domestic routes
and fares and has increased the ability of airlines to compete with respect to
flight frequencies and fares. We compete with United Airlines in our hub in
Denver, and we anticipate that we will compete principally with United Airlines
in our future market entries. United Airlines and its commuter affiliates are
the dominant carriers out of DIA accounting for approximately 72% of all
passenger boardings. United Airlines' dominance is demonstrated by the
bankruptcy of Western Pacific Airlines that only briefly operated at DIA from
July 1997 until February 1998. The future competitive activities of United
Airlines and other carriers may have a material adverse effect on our revenues
and results of operations. Most of our current and potential competitors have
significantly greater financial resources, larger route networks, and superior
market identity than we have.
We are dependent on Samuel D. Addoms, and we may not be able to adequately
replace the loss of him, which would harm our business and reputation.
We are dependent on the active participation of Samuel D. Addoms, our
president and chief executive officer. The loss of his services could materially
and adversely affect our business and future prospects. The loss of Mr. Addoms
could result in a loss of investor confidence and a reduction in our ability to
attract personnel and talent to the company. Mr. Addoms has been involved in the
airlines industry for the past seven years and managed various companies for 39
years. While we employ a number of key personnel, we are dependent on the
managerial services of Mr. Addoms. Additionally, we do not maintain key person
life insurance on Mr. Addoms or on any of our officers.
We could lose airport and gate access thereby decreasing our competitiveness.
We could encounter barriers to airport or airport gate access that
would deny or limit our access to the airports that we intend to utilize in the
future or that diminishes the desire or ability of potential customers to travel
between any of those cities. The number of gates also may be limited at some
airports, which could adversely affect our operations. These barriers may
materially adversely effect our business and competitiveness.
10
<PAGE>
Our maintenance expenses may be higher than we anticipate.
We may incur higher than anticipated maintenance expenses. Under our
aircraft lease agreements, we are required to bear all routine and major
maintenance expenses. Maintenance expenses comprise a significant portion of our
operating expenses. In addition, we are required periodically to take aircraft
out of service for heavy maintenance checks, which can adversely affect
revenues. We also may be required to comply with regulations and airworthiness
directives the Federal Aviation Administration ("FAA") issues, the cost of which
our aircraft lessors may only partially assume depending upon the magnitude of
the expense. Although we believe that our leased aircraft are currently in
compliance with all FAA issued Airworthiness Directives ("ADs"), there is a high
probability that additional ADs will be required in the future requiring
additional expense.
Our landing fees may increase because of local noise abatement procedures.
Compliance with local noise abatement procedures may lead to increased
landing fees. As a result of litigation and pressure from airport area
residents, airport operators have taken local actions over the years to reduce
aircraft noise. These actions have included regulations requiring aircraft to
meet prescribed decibel limits by designated dates, curfews during night time
hours, restrictions on frequency of aircraft operations, and various operational
procedures for noise abatement. The Airport Noise and Capacity Act of 1990
("ANCA") recognized the right of airport operators with special noise problems
to implement local noise abatement procedures as long as the procedures do not
interfere unreasonably with the interstate and foreign commerce of the national
air transportation system.
An agreement between the City and County of Denver and another county
adjacent to Denver specifies maximum aircraft noise levels at designated
monitoring points in the vicinity of DIA with significant payments payable by
Denver to the other county for each substantiated noise violation under the
agreement. DIA would pass on its costs for noise violations to us by increasing
our landing fees. Additionally, noise regulations could be enacted in the future
that would increase our expenses and have a material adverse effect on our
operations.
We have a limited number of aircraft, and any unexpected loss of any aircraft
could disrupt and harm our operations.
Because we have a limited number of aircraft, if any of our aircraft
unexpectedly is taken out of service, our operations may be disrupted. We
schedule all of our aircraft for regular passenger service and only maintain
limited spare aircraft capability should one or more aircraft be removed from
scheduled service for unplanned maintenance repairs or for other reasons. The
unplanned loss of use of one or more of our aircraft for a significant period of
time could have a materially adverse effect on our operations and operating
results. A replacement aircraft may not be available or we may not be able to
lease additional aircraft on satisfactory terms or when needed. The market for
leased aircraft fluctuates based on worldwide economic factors that we cannot
control.
11
<PAGE>
Our labor costs may increase.
We believe we operate with lower personnel costs than many established
airlines, principally due to lower base salaries and greater flexibility in the
utilization of personnel, but these costs may increase. We may not be able to
continue to realize these advantages over other air carriers for an extended
period of time. Our pilots are represented by an independent labor union, the
Frontier Airline Pilots Association, and our dispatchers are represented by the
Transport Workers Union. In addition since 1997, we have had union organizing
attempts that were defeated by our flight attendants, ramp service agents,
mechanics, and stock clerks, but future attempts may not be successful. The
collective bargaining agreement we have entered into with our pilots has
increased our labor and benefit costs effective in May 2000, and additional
unionization of our employees could increase our overall costs.
We have not paid dividends and do not expect to pay any in the foreseeable
future.
We have never declared or paid cash dividends on our common stock. We
currently intend to retain any future earnings to fund operations and to
continue development of our business and do not expect to pay any cash dividends
on our common stock in the foreseeable future.
Shares eligible for future sale could impact our stock price.
The market price of our common stock could be adversely impacted by the
availability of shares for future sale. The shares of common stock covered by
this prospectus will be registered and will be freely tradable by persons who
are not our affiliates without restriction or further registration under the
Securities Act of 1933 (the "Securities Act"). Substantially all of the other
outstanding shares of common stock, other than shares held by officers,
directors and other of our affiliates, are freely tradable. Shares of common
stock held by our affiliates are subject to limitations on the number of shares
that may be sold unless the sale of the shares is registered or is exempt from
registration under the Securities Act.
In addition, as of March 31, 2000 there were 1,752,979 options
outstanding or which may be exercised under our stock option plan. Sales of
these shares, depending on the volume, could adversely affect the trading prices
of the common stock.
12
<PAGE>
Our stock price has been volatile.
The price range of the common stock has varied widely. The price of the
common stock may be subject to significant fluctuation in the future. We cannot
predict the effect, if any, that sales of shares of common stock by the selling
shareholders, or the availability of such shares for sale, will have on the
market prices of our common stock prevailing from time to time. The possibility
that the selling shareholders may sell substantial amounts of shares in the
public market may adversely affect prevailing market prices for the common
stock. It could also impair our ability to raise capital through the sale of our
stock.
13
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
Our principal executive offices are located at 12015 East 46th Avenue,
Denver, Colorado 80239. Our telephone number is (303) 371-7400 and our world
wide website address is www.frontierairlines.com. We maintain an internet home
page. However, nothing on our internet home page should be considered as part of
this prospectus.
We have filed with the SEC a registration statement on Form S-3 to
register the common stock offered by this prospectus. However, this prospectus
does not contain all of the information contained in the registration statement
and the exhibits and schedules to the registration statement. We strongly
encourage you to carefully read the registration statement and the exhibits and
schedules to the registration statement. We also file annual, quarterly and
special reports, proxy statements and other information with the SEC.
You may read and copy all or any portion of the registration statement
or any other information we file at the SEC's public reference facilities at 450
Fifth Street, N.W., Washington, D.C. 20549, as well as at the SEC's regional
offices at 500 West Madison Street, Suite 140, Chicago, Illinois 60661 and 7
World Trade Center, Suite 1300, New York, New York 10048. You may also obtain
copies of such material from the SEC at prescribed rates by writing to the
public reference section of the SEC, 450 Fifth Street, N.W., Washington, D.C.
20549.
Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. Our SEC filings are also available to the public from
the SEC's website at www.sec.gov.
The SEC allows us to "incorporate by reference" the information
contained in documents that we file with them, which means that we can disclose
important information to you by referring you to those documents. The
information incorporated by reference is considered to be part of this
prospectus. Information in this prospectus supersedes information incorporated
by reference that we filed with the SEC before the date of this prospectus,
while information that we file later with the SEC will automatically update and
supersede this information. We incorporate by reference the documents listed
below and any future filings we will make with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 (the "Securities
Exchange Act") before the termination of the offer described in this prospectus:
1. Our quarterly report on Form 10-Q filed on August 4, 2000 for the quarter
ended June 30, 2000.
2. The Schedule 14A Information filed on July 27, 2000.
14
<PAGE>
3. Our annual report on Form 10-K filed on June 30, 2000 for the year ended
March 31, 2000.
4. A description of the stock purchase rights (Amendment No. 3) contained on
the amended registration statement on Form 8-A/A filed on October 14, 1999.
5. A description of the stock purchase rights (Amendment No. 2) dated December
5, 1997 contained on exhibit 4.4(b) on Form 10-K filed June 22, 1999.
6. A description of the stock purchase rights (Amendment No. 1) dated June 30,
1997 contained on exhibit 4.4(a) on Form 10-KSB filed July 14, 1997.
7. A description of the stock purchase rights dated February 20, 1997
contained on the registration statement on Form 8-A filed on March 12,
1997.
8. A description of our common stock contained in the registration statement
on Form 8-A filed on May 13, 1994.
You may request a copy of these filings, at no cost to you, by writing
or telephoning us at:
Frontier Airlines, Inc.
Attn: Arthur T. Voss
12015 E. 46th Avenue
Denver, CO 80239
Telephone: (303) 371-7400
Our common stock is quoted on the Nasdaq National Market under the
symbol FRNT. The last reported sales price of the common stock on the Nasdaq
National Market on August 24, 2000 was $17.75 per share. You may inspect reports
and other information concerning us at the offices of the National Association
of Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
You should rely only on the information incorporated by reference or
provided in this prospectus. We have authorized no one to provide you with
different information. You should not assume that the information in this
prospectus is accurate as of any date other than the date on the front of the
document.
15
<PAGE>
SELLING SHAREHOLDERS
The shares registered for sale under this prospectus are comprised of th
following:
o an aggregate of 2,402,400 shares issued to one institutional
purchaser, B III Capital Partners, L.P., in April 1998 plus 716,929
shares to be issued upon the exercise of warrants issued to the
institutional investor in April 1998; and
o 13,000 shares issued to one of our consultants, Daniel A. Hersh.
If we assume the exercise of the warrants, the shares registered under
this registration statement would represent approximately 17.5% of our issued
and outstanding common stock as of July 31, 2000.
The following list provides:
o the names of the selling shareholders;
o their affiliation or material relationship with us, if any during the
last three years;
o the amount of shares owned by each before this offering;
o the amount of shares being offered under this offering for each
selling shareholder's account; and
o the amount of shares held by each and (if 1% or more) the percentage
of the class owned by each selling shareholder after completion of
this offering.
Shares owned Shares owned
before this Shares after this
Name offering(1) offered (1) offering(2)
---- -------- ----------- -----------
B III Capital Partners, L.P.(3) 3,119,329 3,119,329 0
Daniel A. Hersh(4) 33,000 13,000 20,000
(1) These amounts include shares issuable upon exercise of warrants.
(2) Assumes that all of the shares being offered under this prospectus
will be sold.
(3) B III Capital Partners, L.P., a Delaware limited partnership ("B III")
is the owner of the shares. DDJ Capital III, LLC, a Delaware limited
liability company, is the general partner of B III, and DDJ Capital
Management, LLC, a Massachusetts limited liability company, is the
investment manager for B III. B III has the right to nominate two
members to our board of directors.
(4) Mr. Hersh is a consultant and provided marketing consulting services
to us during 1997 and 1998.
16
<PAGE>
PLAN OF DISTRIBUTION
The selling shareholders, or their pledgees, donees, transferees, or any
of their successors in interest, may sell the shares from time to time on any
stock exchange or automated interdealer quotation system on which the shares are
listed, in the over-the-counter market, in privately negotiated transactions or
otherwise, at fixed prices that may be changed, at market prices prevailing at
the time of sale, at prices related to prevailing market prices or at prices
otherwise negotiated. The selling shareholders may sell the shares by one or
more of the following methods, without limitation:
o block trades in which the broker or dealer so engaged will attempt to
sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;
o Purchases by a broker or dealer as principal and resale by the broker
or dealer for its own account under this prospectus;
o an exchange distribution in accordance with the rules of any stock
exchange on which the shares are listed;
o ordinary brokerage transactions and transactions in which the broker
solicits purchases; o privately negotiated transactions;
o short sales;
o through the writing of options on the shares, whether or not the
options are listed on an options exchange;
o one or more underwritten offerings on a firm commitment or best
efforts basis; and
o any combination of any of these methods of sale.
The selling shareholders may also transfer the shares by gift. We do
not know of any arrangements by the selling shareholders for the sale of any of
the shares.
The selling shareholders may engage brokers and dealers, and any
brokers or dealers may arrange for other brokers or dealers to participate in
effecting sales of the shares. These brokers, dealers, or underwriters may act
as principals, or as an agent of a selling shareholder. Broker-dealers may agree
with a selling shareholder to sell a specified number of the shares at a
stipulated price per security. If the broker-dealer is unable to sell securities
acting as agent for a selling shareholder, it may purchase as principal any
unsold shares at the stipulated price. Broker-dealers who acquire shares as
principals may thereafter resell the shares from time to time in transactions in
any stock exchange or automated interdealer quotation system on which the shares
are then listed, at prices and on terms then prevailing at the time of sale, at
prices related to the then-current market price or in negotiated transactions.
Broker-dealers may use block transactions and sales to and through
broker-dealers, including transactions of the nature described above. The
selling shareholders may also sell the shares in accordance with Rule 144 under
the Securities Act rather than under this prospectus, regardless of whether the
shares are covered by this prospectus.
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From time to time, one or more of the selling shareholders may pledge,
hypothecate or grant a security interest in some or all of the shares owned by
them. The pledgees, secured parties or persons to whom the shares have been
hypothecated will, upon foreclosure if there is a default, be deemed to be
selling shareholders. The number of a selling shareholder's shares offered under
this prospectus will decrease as and when it takes the actions. The plan of
distribution for that selling shareholder's shares will otherwise remain
unchanged. In addition, a selling shareholder may, from time to time, sell the
shares short, and, in those instances, this prospectus may be delivered in
connection with the short sales and the shares offered under this prospectus may
be used to cover short sales.
To the extent required under the Securities Act, the aggregate amount
of selling shareholders' shares being offered and the terms of the offering, the
names of any agents, brokers, dealers, or underwriters and any applicable
commission with respect to a particular offer will be provided in an
accompanying prospectus supplement. Any underwriters, dealers, brokers, or
agents participating in the distribution of the shares may receive compensation
in the form of underwriting discounts, concessions, commissions or fees from a
selling shareholder and/or purchasers of selling shareholders' shares of shares,
for whom they may act (which compensation as to a particular broker-dealer might
be in excess of customary commissions).
The selling shareholders and any underwriters, brokers, dealers, or
agents who participate in the distribution of the shares may be deemed to be
"underwriters" within the meaning of the Securities Act, and any discounts,
concessions, commissions, or fees received by them and any profit on the resale
of the shares sold by them may be deemed to be underwriting discounts and
commissions.
A selling shareholder may enter into hedging transactions with
broker-dealers and the broker-dealers may engage in short sales of the shares in
the course of hedging the positions they assume with that selling shareholder,
including, without limitation, in connection with distributions of the shares by
those broker-dealers. A selling shareholder may enter into option or other
transactions with broker-dealers that involve the delivery of the shares offered
in this prospectus to the broker-dealers, who may then resell or otherwise
transfer those shares. A selling shareholder may also loan or pledge the shares
offered in this prospectus to a broker-dealer and the broker-dealer may sell the
shares offered in this prospectus so loaned or upon a default may sell or
otherwise transfer the pledged shares offered in this prospectus.
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The selling shareholders and other persons participating in the sale or
distribution of the shares will be governed under applicable provisions of the
Securities Exchange Act and the rules and regulations thereunder, including
Regulation M. This regulation may limit the timing of purchases and sales of any
of the shares by the selling shareholders and any other person. The
anti-manipulation rules under the Securities Exchange Act may apply to sales of
shares in the market and to the activities of the selling shareholders and their
affiliates. Furthermore, Regulation M may restrict the ability of any person
engaged in the distribution of the shares to engage in market-making activities
with respect to the particular shares being distributed for a period of up to
five business days before the distribution. These restrictions may affect the
marketability of the shares and the ability of any person or entity to engage in
market-making activities with respect to the shares.
We have agreed to indemnify in some circumstances some of the selling
shareholders and some brokers, dealers, and agents who may be deemed to be
underwriters, if any, of the shares covered by the registration statement,
against some liabilities, including liabilities under the Securities Act. The
selling shareholders have agreed to indemnify us in some circumstances against
some liabilities, including liabilities under the Securities Act.
The shares offered in this prospectus were originally issued to the
selling shareholders under an exemption from the registration requirements of
the Securities Act. With respect to B III Capital Partners, L.P., we agreed to
register its shares under the Securities Act, and to keep the registration
statement of which this prospectus is a part effective until the earlier of (i)
the date on which the selling shareholders have sold all of the shares under the
registration statement or to someone who is not a selling shareholder under Rule
144 under the Securities Act, or (ii) April 24, 2002. We have agreed to pay all
expenses in connection with this offering, including the fees and expenses of
counsel to the selling shareholders, but not including underwriting discounts,
commissions, or transfer taxes relating to the sale of the shares.
We will not receive any proceeds from sales of any shares by the
selling shareholders.
We cannot ensure that the selling shareholders will sell all or any
portion of the shares offered in this registration statement.
Shares issuable upon exercise of the warrants held by some of the
selling shareholders will be issued directly by the Company to the selling
shareholders. No brokerage commission or similar fee will be paid in connection
with the issuance of these shares. We will bear all expenses in connection with
the registration of the shares covered by this prospectus.
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USE OF PROCEEDS
We will not receive any proceeds from the sale by the selling
shareholders of the shares offered in this prospectus. See "Selling
Shareholders."
One of the selling shareholders currently holds warrants to purchase
716,929 shares at an exercise price of $3.75 per share. If the selling
shareholder or its transferee exercises all of these warrants for 716,929
shares, the proceeds to us would be $2,688,483.70 and would be used for general
corporate purposes.
LEGAL MATTERS
Various legal matters regarding the legality of the shares offered in
this prospectus and the organization and existence of the company have been
passed upon for the company by Faegre & Benson LLP, Denver, Colorado.
EXPERTS
The financial statements of Frontier Airlines, Inc. as of March 31,
1999 and 2000, and for each of the years in the three-year period ended March
31, 2000, have been incorporated by reference in this prospectus and in the
registration statement in reliance upon the report of KPMG LLP, independent
certified public accountants, incorporated by reference in this prospectus, and
upon the authority of said firm as experts in accounting and auditing.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
The Colorado Business Corporation Act (the "Act") contains provisions
permitting and, in some situations, requiring Colorado corporations to provide
indemnification to their officers and directors for losses and litigation
expense incurred in connection with their service to the corporation. Our
articles and bylaws contain provisions requiring our indemnification of our
directors and officers and other persons acting in their corporate capacities.
The Act permits indemnification of a director of a Colorado corporation, in the
case of a third-party action, if the director:
o Conducted himself or herself in good faith,
o Reasonably believed that (a) in the case of conduct in his or her
official capacity, his or her conduct was in the corporation's best
interest, or (b) in all other cases, his or her conduct was not
opposed to the corporation's best interest, and
o In the case of any criminal proceeding, had no reasonable cause to
believe that his or her conduct was unlawful.
The Act further provides for mandatory indemnification of directors and
officers who are successful on the merits or otherwise in litigation. The
statute limits the indemnification that a corporation may provide to its
directors in a derivative action in which the director is held liable to the
corporation, or in any proceeding in which the director is held liable on the
basis of his improper receipt of a personal benefit.
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In addition, we may enter into agreements with our directors providing
contractually for indemnification consistent with the articles and bylaws.
Currently, we have no such agreements. The Act also authorizes us to purchase
insurance for our directors and officers insuring them against risks as to which
we may be unable lawfully to indemnify them. We have obtained limited insurance
coverage for our officers and directors as well as insurance coverage to
reimburse us for potential costs of our corporate indemnification of officers
and directors.
As far as exculpation or indemnification for liabilities arising under
the Securities Act may be permitted for directors and officers and controlling
persons, we have been advised that in the opinion of the Securities and Exchange
Commission such exculpation or indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other expenses of issuance and distribution.
------- -------------------------------------------
The following table details the various expenses payable in connection
with the sale and distribution of the securities being registered. All of the
amounts shown are estimated except for the Securities and Exchange Commission
registration fee.
Printing and mailing expenses $ 1,000.00
Legal fees and expenses $ 3,000.00
Accounting fees and expenses $ 2,500.00
----------
Total $ 6,500.00
Item 15. Indemnification of directors and officers.
------- -----------------------------------------
Our bylaws requires us to indemnify, to the fullest extent authorized
by applicable law, any person who is or is threatened to be made a party to any
civil, criminal, administrative, investigative, or other action or proceeding
instituted or threatened by reason of the fact that he is or was our director or
officer or is or was serving at our request as a director or officer of another
corporation, partnership, joint venture, trust, or other enterprise.
Our articles of incorporation provide that, to the fullest extent
permitted by Colorado law, our directors and officers shall not be liable to us
any of our shareholders for damages caused by a breach of fiduciary duty by the
director or officers.
Sections 7-109-102 and 103 of the Colorado Business Corporations Act
(the "Act") authorize the indemnification of directors and officers against
liability incurred by reason of being a director or officer and against expenses
(including attorney's fees) judgments, fines and amounts paid in settlement and
reasonably incurred in connection with any action seeking to establish
liability, in the case of third-party claims, if the officer or director acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and in the case of actions by or in the
right of the corporation, if the officer or director acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interest of
the corporation and if the officer or director shall not have been adjudged
liable to the corporation, unless a court otherwise determines. Indemnification
is also authorized with respect to any criminal action or proceeding where the
officer or director also had no reasonable cause to believe his conduct was
unlawful.
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The above discussion of the our articles of incorporation, bylaws and
the Act is only a summary and is qualified in its entirety by the full text of
each of the foregoing.
We carry director and officer liability insurance and company
reimbursement insurance that provides coverage, unless an exclusion applies, for
claims against our directors and officers.
Item 16. Exhibits.
Number Description
4.1(1) Specimen common stock certificate
4.3(a)(2) Form of warrant
4.3(b)(3) Rights Agreement
4.4(a)(4) Amendment to Rights Agreement (No. 1)
4.4(b)(5) Amendment to Rights Agreement (No. 2)
4.4(c)(6) Third Amendment to Rights Agreement
5.1 Opinion of Faegre & Benson LLP
23.1 Consent of KPMG LLP
23.2 Consent of Faegre & Benson LLP, included in Exhibit 5.1
(1) Incorporated by reference, attached as an exhibit of the same number to our
registration statement on Form SB-2 filed on April 25, 1994.
(2) Incorporated by reference, attached as exhibit 4.3 to our registration
statement on Form SB-2 filed on April 25, 1994.
(3) Incorporated by reference, attached as an exhibit to our registration
statement on Form 8-A filed on March 12, 1997.
(4) Incorporated by reference, attached as an exhibit of the same number to our
annual report on Form 10-KSB filed July 14, 1997.
(5) Incorporated by reference, attached as an exhibit of the same number to our
annual report on Form 10-K filed June 22, 1999.
(6) Incorporated by reference, attached as exhibit 4.4 to our amended
registration statement on Form 8-A/A filed on October 14, 1999.
Item 17. Undertakings.
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We hereby undertake:
(1) To file, during any period in which offers or sales are being made, a post-
effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act;
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(ii) to reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement.
(iii)To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
(4) That, for purposes of determining any liability under the Securities Act,
each filing of the registrant's annual report pursuant to section 13(a) or
section 15(d) of the Securities Exchange Act (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(5) To deliver or cause to be delivered with the prospectus, to each person to
whom the prospectus is sent or given, the latest annual report, to security
holders that is incorporated by reference in the prospectus and furnished
pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the
Securities Exchange Act; and, where interim financial information required to be
presented by Article 3 of Regulation S-X is not set forth in the prospectus, to
deliver, or cause to be delivered to each person to whom the prospectus is sent
or given, the latest quarterly report that is specifically incorporated by
reference in the prospectus to provide such interim financial information.
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(6) That, insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
hereby certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-3 and has duly caused this registration
statement and any amendment thereto to be signed on its behalf of the
undersigned, thereunto duly authorized, in the City of Denver, State of Colorado
on August 25, 2000.
FRONTIER AIRLINES, INC.
By: /s/ Samuel D. Addoms
------------------------
Samuel D. Addoms, Director and Chief Executive
Officer
By: /s/ Steve B. Warnecke
--------------------------
Steve B. Warnecke
Vice President and Chief Financial Officer
By: /s/ Elissa A. Potucek
-------------------------
Elissa A. Potucek
Vice President, Controller, Treasurer and Principal
Accounting Officer
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Date: August 25, 2000 /s/ William B. McNamara
-----------------------
William B. McNamara, Director
Date: August 25, 2000 /s/ Paul Stephen Dempsey
------------------------
Paul Stephen Dempsey, Director
Date: August 25, 2000 /s/ B. LaRae Orullian
---------------------
B. LaRae Orullian, Director
Date: August 25, 2000 /s/ D. Dale Browning
--------------------
D. Dale Browning, Director
Date: August 25, 2000 /s/ James B. Upchurch
---------------------
James B. Upchurch, Director
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Index to Exhibits
All exhibits are filed electronically unless incorporated by reference.
Number Description
4.1(1) Specimen common stock certificate
4.3(a)(2) Form of warrant
4.3(b)(3) Rights Agreement
4.4(a)(4) Amendment to Rights Agreement (No. 1)
4.4(b)(5) Amendment to Rights Agreement (No. 2)
4.4(c)(6) Third Amendment to Rights Agreement
5.1 Opinion of Faegre & Benson LLP
23.1 Consent of KPMG LLP
23.2 Consent of Faegre & Benson LLP, included in Exhibit 5.1
(1) Incorporated by reference, attached as an exhibit of the same number to our
registration statement on Form SB-2 filed on April 25, 1994.
(2) Incorporated by reference, attached as exhibit 4.3 to our registration
statement on Form SB-2 filed on April 25, 1994.
(3) Incorporated by reference, attached as an exhibit to our registration
statement on Form 8-A filed on March 12, 1997.
(4) Incorporated by reference, attached as an exhibit of the same number to our
annual report on Form 10-KSB filed July 14, 1997.
(5) Incorporated by reference, attached as an exhibit of the same number to our
annual report on Form 10-K filed June 22, 1999.
(6) Incorporated by reference, attached as exhibit 4.4 to our amended
registration statement on Form 8-A/A filed on October 14, 1999.
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