SCHEDULE 14A
(Rule 14a-101)
Information Required in Proxy Statement
I. SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement (definitive proxy to be filed on or about July 30, 2001)
[ ] Confidential, for Use of Commission Only (as permitted by Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant toss. 240.14a-11(c) orss. 240.14a-12
FRONTIER AIRLINES, INC.
---------------------------
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11,
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it was determined):
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5) Total fee paid:
[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule
and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
FRONTIER AIRLINES, INC.
7001 Tower Road
Denver, CO 80249-7312
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
----------------------
TO THE SHAREHOLDERS OF FRONTIER AIRLINES, INC.:
The 2001 annual meeting of shareholders of Frontier Airlines, Inc., a Colorado corporation, will be held on
Thursday, September 6, 2001 at 9:30 a.m. local time at the Doubletree Hotel, 3203 Quebec Street, Denver, Colorado for the following
purposes:
1. To consider and vote upon a proposal to elect Samuel D. Addoms, D. Dale Browning, Paul S. Dempsey, William B. McNamara,
B. LaRae Orullian, Jeff S. Potter, and James B. Upchurch to the Company's Board of Directors;
2. To consider and vote upon a proposal to amend the Company's Restated Articles of Incorporation in order to increase the
number of authorized shares of common stock.
3. To transact any other business which properly comes before the meeting or any adjournment.
All shareholders of record on the Company's transfer books as of the close of business on July 20, 2001 are entitled
to vote at the meeting. A complete list of shareholders entitled to vote at the annual meeting will be available for examination by
any Company shareholder at 7001 Tower Road, Denver, Colorado 80249-7312 for purposes germane to the annual meeting, during normal
business hours from July 30, 2001 until the annual meeting.
We invite you to be present at the meeting and look forward to seeing you there. However, if you cannot attend
please read the attached proxy statement carefully and SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD AUTHORIZING
REPRESENTATIVES OF THE COMPANY'S MANAGEMENT TO VOTE ON YOUR BEHALF AT THE MEETING.
By order of the Board of Directors
July 30, 2001 FRONTIER AIRLINES, INC.
/s/
Arthur T. Voss
Secretary
FRONTIER AIRLINES, INC.
7001 Tower Road
Denver, CO 80249-7312
PROXY STATEMENT
This proxy statement and accompanying proxy card support a proxy solicitation on behalf of the Board of Directors of
Frontier Airlines, Inc. (the "Company") for use at the September 6, 2001 annual meeting of shareholders and at any adjournment of
that meeting. This proxy statement and form of proxy, together with the Company's Annual Report on Form 10-K, will be sent by mail
to shareholders beginning approximately July 30, 2001.
The proxy card, when properly signed, dated and returned to the Company, will be voted by the proxies at the annual
meeting as directed. Proxy cards returned without direction about business to be transacted at the meeting will be voted in favor of
the election of Samuel D. Addoms, D. Dale Browning, Paul S. Dempsey, William B. McNamara, B. LaRae Orullian, Jeff S. Potter and
James B. Upchurch to the Board of Directors of the Company, and will be voted in favor of the amendment to the Company's Restated
Articles of Incorporation. The proxies will use their best judgment regarding other matters that properly come before the meeting.
The Company is not aware of any matters, other then those discussed in this proxy statement, which will be presented at the meeting.
The Company can conduct business at the meeting only if holders of a majority of the total outstanding shares of
common stock entitled to vote are present, either in person or by proxy. Abstentions will be counted in determining whether a quorum
has been reached. Broker-dealer non-votes will also be counted for quorum purposes. Assuming a quorum exists, the affirmative vote
of a majority of the shares present and entitled to vote, excluding abstentions, is necessary to elect directors, to amend the
Company's Restated Articles of Incorporation as proposed, and to approve any other matters to be voted on.
Under Securities and Exchange Commission rules, boxes are provided on the proxy card for shareholders to mark if
they wish either to vote "for," or to "withhold authority" for all director nominees. To withhold authority to vote for any
individual nominee, the shareholder may strike a line through the nominee's name on the proxy card.
REVOCABILITY OF PROXY
Execution of the enclosed form of proxy will not affect a shareholder's right to attend the meeting and vote in
person. Any shareholder giving a proxy may revoke it at any time before it is exercised by attending the meeting and voting in
person or by providing notice of revocation to the corporate secretary of the Company at the address set forth above. Shareholders
may vote all their eligible shares if they are personally present at the meeting. When a shareholder votes at the meeting, his or
her vote will revoke any proxy previously granted by the shareholder.
EXPENSE AND MANNER OF SOLICITATION
In addition to solicitation by mail, proxies may be solicited in person or by telephone or telegram by directors and
officers of the Company who will not receive compensation for their soliciting activities. Brokers and other nominees will solicit
proxies or authorizations from beneficial owners and will be reimbursed for their reasonable expenses of forwarding proxy material to
beneficial owners. The Company will bear all of the costs of the solicitation.
VOTING SECURITIES AND PRINCIPAL HOLDERS
As of July 20, 2001, the record date, 28,344,602 shares of the Company's common stock were outstanding and
entitled to vote at the meeting. Each share may cast one vote on each separate matter of business properly brought before the
meeting. Only shareholders of record at the close of business on July 20, 2001 may vote.
The following table sets forth certain information regarding beneficial ownership of the Company's common stock as
of July 20, 2001 by: (i) each director and nominee for director of the Company; (ii) each named executive officer listed in the
Executive Compensation Table; (iii) all directors and executive officers as a group; and (iv) persons to the knowledge of the Company
that beneficially own more than five percent of the Company's outstanding common stock
Shares Beneficially Percentage of
Name and Address of Beneficial Owner Owned Ownership (1)
- ------------------------------------ ----- -------------
Directors and Executive Officers:
- ---------------------------------
Samuel D. Addoms 394,500 (2) 1.4%
7001 Tower Road
Denver, CO 80249-7312
Paul S. Dempsey 130,500 (3) *
7001 Tower Road
Denver, CO 80249-7312
B. LaRae Orullian 42,225 (4) *
7001 Tower Road
Denver, CO 80249-7312
William B. McNamara 22,500 (5) *
7001 Tower Road
Denver, CO 80249-7312
D. Dale Browning 45,000 *
7001 Tower Road
Denver, CO 80249-7312
James B. Upchurch 88,500 (6) *
7001 Tower Road
Denver, CO 80249-7312
60,176(7) *
Steve B. Warnecke
7001 Tower Road
Denver, Co 80249-7312
39,764(8) *
Jimmie P. Wyche
7001 Tower Road
Denver, CO 80249-7312
77,552(9) *
Arthur T. Voss
7001 Tower Road
Denver, CO 80249-7312
81,790(10) *
Elissa A. Potucek
7001 Tower Road
Denver, CO 80249-7312
18,257(11) *
Ann E. Block
7001 Tower Road
Denver, CO 80249-7312
31,522(12) *
Jeff S. Potter
7001 Tower Road
Denver, CO 80249-7312
All directors and executive officers 1,071,894 (14) 3.8%
as a group (17 persons) (13)
Five Percent and Greater Shareholders:
- -------------------------------------
B III Capital Partners, L.P. (15) 2,505,043 (16) 8.8%
141 Linden Street, Suite 4
Wellesley, MA 02482
- ---------------------------------------------------------------------------------------------------------------------------------------
* Less than 1%
(1) Unless otherwise indicated, the Company believes that all persons named in the table have sole voting and investment power
with respect to all shares of common stock beneficially owned by them. A person is deemed to be the beneficial owner of
securities that can be acquired by such person within 60 days from the date of filing of this proxy statement upon the
exercise of options, warrants or convertible securities that are held by such person (but not those held by any other
person). This table assumes a base of 28,344,602 shares of common stock outstanding as of the date of this proxy
statement, before any consideration is given to other outstanding options, warrants or convertible securities.
(2) Includes 198,750 shares held under option, all of which are currently exercisable, and 4,900 vested shares allocated under
the Company's Employee Stock Ownership Plan ("ESOP").
(3) Includes 120,000 shares held under option, all of which are currently exercisable.
(4) Includes 7,500 shares held under option, all of which are currently exercisable.
(5) Includes 17,500 shares held under option, all of which are currently exercisable.
(6) Includes 45,000 shares held under option, all of which are currently exercisable.
(7) Includes 12,000 shares held under option, all of which are currently exercisable, and 124 vested shares allocated under the
ESOP. Mr. Warnecke resigned on June 30, 2001.
(8) Includes 35,501 shares held under option, all of which are currently exercisable, and 4,263 vested shares allocated under
the ESOP. Mr. Wyche retired on June 22, 2001.
(9) Includes 38,406 shares held under option, all of which are currently exercisable, and 4,146 vested shares allocated under
the ESOP.
(10) Includes 52,750 shares held under option, all of which are currently exercisable, and 3,215 vested ESOP shares.
(11) Includes 18,000 shares held under option, all of which are currently exercisable, and 257 vested shares allocated under the
ESOP.
(12) Includes 4,022 vested shares allocated under the ESOP.
(13) One executive officer retired and another resigned in June 2001. The number of shares of the Company's common stock owned
by these former officers and included in the table is 99,940.
(14) Includes 584,407 shares held under option by the Company's directors and executive officers which are exercisable within 60
days, and 21,535 vested shares allocated under the ESOP.
(15) DDJ Capital III, LLC is the general partner of, and DDJ Capital Management, LLC is the investment manager for, B III Capital
Partners, L.P., and may be deemed to be the beneficial owners of such shares.
(16) Includes warrants to purchase 525,000 shares of common stock, all of which are currently exercisable. Information with
respect to B III Capital Partners, L.P., DDJ Capital III, LLC, and DDJ Capital Management, LLC is based on Amendment No. 19
to Schedule 13D dated March 21, 2001, as filed with the Securities and Exchange Commission.
DIRECTORS AND EXECUTIVE OFFICERS
The following table contains the name, age and position with the Company of each executive officer as of July 20,
2001, each director of the Company, and each nominee for director of the Company. Their respective backgrounds are described
following the table. Each of the officers devotes his or her full-time efforts to the affairs of the Company.
Name Age Position
---- --- --------
Samuel D. Addoms 61 President, Chief Executive Officer, and Chief
Financial Officer; Director
Jeff S. Potter 41 Executive Vice President and Chief Operating Officer;
Director
Ann E. Block 51 Vice President - Human Resources and Flight Services
Michael J. Bowers 44 Vice President - Customer Service and Station
Operations
Elise R. Eberwein 36 Vice President - Communications
William F. McKinney 62 Vice President - Flight Operations
Sean E. Menke 32 Vice President - Market Planning
Elissa A. Potucek 44 Vice President, Controller and Treasurer
William C. Schaudt 58 Vice President - Maintenance and Engineering
Arthur T. Voss 59 Vice President - Administration and General Counsel;
Secretary
Paul S. Dempsey 50 Director
B. LaRae Orullian 68 Director
William B. McNamara 68 Director
D. Dale Browning 63 Director
James B. Upchurch 42 Director
Samuel D. Addoms is President, Chief Executive Officer, and Chief Financial Officer and a director of the Company,
having earlier served as Executive Vice President, Treasurer and a director of the Company during its early development in 1993
through September 1994 when he was elected to the position of President. He was elected Chief Executive Officer effective January 1,
1995, and assumed the position of Chief Financial Officer upon resignation of the Company's prior Chief Financial Officer on June 30,
2001. Before commencing his involvement in the development of the Company in 1993, he was associated with some 15 firms for the
previous 11 years, either as an officer, director or consultant. These include Gelco Corporation, Connecting Point of America and
Communications World, Inc. His 40 years of management experience include positions as President and Vice President-Finance of
Monfort of Colorado, President of the Denver National Bank and Vice President of the Continental Illinois National Bank in Chicago.
Jeff S. Potter has been Executive Vice President, Chief Operating Officer and a Director of the Company since May
2001. Before re-joining the Company, he served as Chief Executive Officer of Vanguard Airlines from May 2000 to April 2001. Prior
to working for Vanguard Airlines he was Vice President of Marketing for the Company from 1995 to April 2000. He has over 18 years of
airline and airline related experience, including regional director of commercial marketing for McDonnell Douglas Corporation and
various positions with Pacific Southwest Airlines, Continental Airlines, Northwest Airlines, and the former Frontier Airlines.
Ann E. Block has been Vice President-Human Resources since March 1999 and Vice President-Human Resources and Flight
Services since June 2000. Before joining the Company she served as Director-Human Resources Strategy and Services for BlueCross
BlueShield of Colorado. From 1981 to 1996, she served in various capacities with Public Service Company of Colorado. From
1996-1997, she served as Director-Total Compensation for HR Source, Inc.
Michael J. Bowers has been Vice President-Customer Service and Stations Operations since August 2000. From October
1990 until August 2000 he held the position of Director, Customer Services for Horizon Air. Prior to that he was the Customer
Service Manager at several stations for Alaska Airlines.
Elise R. Eberwein has served as Vice President-Communications of the Company since June 2000. Prior to this
appointment, she served as Director-Corporate Communications since joining the Company in 1998. From 1997 through 1998, she served
as Director-Corporate Communications for Western Pacific Airlines. Between 1986 and 1997, she served in various positions with Trans
World Airlines, Inc., including Director, Communication Support Services, Sales Promotion Manager, In-Flight Services New Hire
Supervisor, Flight Service Manager and Flight Attendant.
William F. McKinney has served as Vice President Flight Operations since April 2001. Prior to coming to the Company
he was Vice President-Operations for Vanguard Airlines, a position he held from March 1996 to April 2001. Prior to Vanguard Airlines
he held a variety of positions with Trans World Airlines ranging from pilot to General Manager-Flying, Western Region (Chief Pilot),
from 1967 to 1996.
Sean E. Menke has served as Vice President-Market Planning of the Company since June 2000. Prior to this
appointment and since joining the Company in January 1999, he served as Director-Planning and Scheduling. He joined Frontier
Airlines from United Airlines, where he served as Senior Planner, Domestic Scheduling. From 1995 through 1998, he was employed by
Western Pacific Airlines as Director, Planning and Manager of Economic Analysis. Between 1992 and 1995, he held various positions
with America West Airlines, including Senior Analyst, Market Development; Economic Analyst and Customer Service Supervisor.
Elissa A. Potucek has been Controller/Treasurer of the Company since June 1995 and Vice President since September
1996. From 1991 to 1995 she was Controller of Richardson Operating Company and Richardson Production Company, an oil and gas company
based in Denver, Colorado. She served from 1990 to 1991 as Controller of Coral Companies, Inc., Denver, Colorado, having earlier held
accounting positions with US West Paging, Inc. (1988-1989), Denver, Colorado, and KPMG Peat Marwick LLP (1985-1988), Denver, Colorado.
William C. Schaudt has been Vice President-Maintenance and Engineering of the Company since July 2000. From 1997 to
2000 he served as Manager Narrow Body, Quality Assurance for American Airlines in Tulsa, Oklahoma. Prior to that position he held a
number of key maintenance positions with American Airlines between August 1967 and July 2000 including Manager of Maintenance &
Engineering Training, Manager of Station & Vendor Surveillance and Manager of Field Quality Assurance.
Arthur T. Voss has been Vice President-Administration, General Counsel and Secretary of the Company since September
1995 and Vice President, General Counsel and Secretary of the Company since its inception in February 1994. From 1991 to 1996, Mr.
Voss was the Vice President-Legal of Professional Fee Examiners, Inc., a professional fee auditing firm based in Denver, Colorado.
He was Vice President-Legal of Aeronautics Leasing, Inc., an aircraft leasing firm based in Golden, Colorado, from 1990 to 1991.
From 1986 to 1989 he served as Vice President and General Counsel of Aspen Airways, Inc. He held various management positions in the
Legal Department of the former Frontier Airlines, Inc. from 1971 to 1985, most recently as Associate General Counsel.
Paul S. Dempsey has been a director of the Company since July 1994 and Vice Chairman of the Board of Directors since
1996. He is Professor of Law and Director of the Transportation Law Program at the University of Denver, College of Law, Denver,
Colorado, having been associated with that institution since 1979. He served as Legal Advisor to the Chairman, U.S. Interstate
Commerce Commission, in 1981 and 1982; Attorney-Advisor to the former Civil Aeronautics Board's Office of General Counsel, and its
Bureau of Pricing and Domestic Aviation, 1977-1979; and Attorney-Advisor to the Interstate Commerce Commission's Office of
Proceedings, 1975-1977. Dr. Dempsey holds the following degrees: A.B.J., J.D., University of Georgia; LL.M., George Washington
University; and D.C.L., McGill University. A Fulbright Scholar, he has authored in excess of 50 law review articles, numerous
editorials for the news media and various books on topics relating to air transportation.
B. LaRae Orullian has been a director of the Company since July 1994 and Chair of the Board of Directors since
September 1995. A long time banker, she is Vice Chair of the Board of Guaranty Bank, a Denver, Colorado based commercial bank, and a
director of The Guaranty Corporation, a bank holding company. She also serves on the Board of Anthem Blue Cross/Blue Shield doing
business in several states throughout the United States, headquartered in Indiana. She is a member of the Boards of four other
companies in Colorado and Utah. She is past National President and former Chair of Girl Scouts of the USA, and currently is First
Vice Chair of the World Board of Girl Guides and Girl Scouts, based in London, England. Among numerous business and civic
activities, currently she is Chair of the 2001 Easter Seal Campaign and sits on the Colorado Supreme Court Disciplinary Hearing Board.
William B. McNamara has been a director of the Company since May 1996. A retired 35-year airline executive
specializing in financial management, he most recently served with Continental Airlines, Inc. (1987 to 1994) as Vice
President-Finance. From 1983 to 1987 he was Staff Vice President-Finance with New York Air, Inc. Before that he served in a
succession of positions with Trans World Airlines, Inc., for 22 years including service as Staff Vice President-Marketing
Administration.
D. Dale Browning has been a director of the Company since July 1996. A long-term bank and bank card executive, he
has served since 1995 as President and Chief Executive Office of ProCard, Inc., Golden, Colorado, and from 1993 to 1995 as a Senior
Consultant to Visa International. He was President and Chief Executive Officer of the Colorado National Bank of Denver from 1986
through 1993, having concurrently served as Vice Chairman and Chief Operating Officer of Colorado National Bankshares and as Chief
Executive Officer of Rocky Mountain BankCard System. In 1982 he founded Plus System, Inc., an international automatic teller machine
network, and served as President of that company until 1993. Mr. Browning has served as a director of Central States Indemnity
Company of Omaha since 1995.
James B. Upchurch has been a director of the Company since October 1998. Mr. Upchurch is the President and Chief
Executive Officer of Libra Mezzanine Partners, L.P., Libra Mezzanine Partners II and II-A, L.P. and Libra Capital Partners, L.P. He
actively manages the investing and lending of approximately $260 million of capital committed to these partnerships. Mr. Upchurch is
also a member of the Board of CampGroup, LLC, and Consolidated Fire Protection, LLC.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's directors, certain officers and persons
holding 10% of the Company's common stock to file reports with the Securities and Exchange Commission regarding their ownership and
regarding their acquisitions and dispositions of the Company's common stock. Based solely on its review of the copies of such forms
it has received, or written representations from certain reporting persons, the Company believes that during the fiscal year ended
March 31, 2001 all filing requirements applicable to its executive officers, directors and greater than 10% beneficial owners were
complied with.
Meetings of the Board of Directors
The Company's Board of Directors met five times in the fiscal year ended March 31, 2001. All members of the Board of
Directors were in attendance at these meetings except for Messrs. Dempsey and Browning and Ms. Orullian, each of whom attended four
meetings.
Committees
The Company's Board of Directors has an Audit Committee, a Compensation Committee, and a Nominating Committee.
On May 24, 2000, the Board of Directors adopted an Audit Committee Charter, a copy of which is attached to this
proxy statement as Appendix I. The duties of the Audit Committee are to (a) monitor the integrity of the Company's financial
reporting process and systems of internal control regarding finance, accounting and legal compliance; (b) monitor the independence
and performance of the Company's independent auditors and internal auditing department; and (c) provide an avenue of communication
among the independent auditors, management, the internal auditing department, and the Board of Directors. During the fiscal year
ended March 31, 2001, the members of the Audit Committee were B. LaRae Orullian, Paul S. Dempsey, William B. McNamara, D. Dale
Browning, and James B. Upchurch, each of whom is an "independent director" as defined in Nasdaq Rule 4200(a)(14). The Audit
Committee met four times during the fiscal year.
The duties of the Compensation Committee include recommending to the Board of Directors the compensation to be
provided to the executive officers of the Company and the grant of stock options to eligible individuals under the Company's stock
option plan. During the fiscal year ended March 31, 2001, the members of the Compensation Committee were B. LaRae Orullian, Paul S.
Dempsey, William B. McNamara, D. Dale Browning, and James B. Upchurch. The Compensation Committee did not separately meet during the
fiscal year, as its functions were preformed by action of the entire Board of Directors.
On May 24, 2000, the Board of Directors appointed a Nominating Committee consisting of Samuel D. Addoms, B. LaRae
Orullion, William B. McNamara and D. Dale Browning. The functions performed by the Nominating Committee include the recommendation
to the Board of Directors of nominees to be proposed for election to the Board at annual meetings of shareholders and at other
appropriate times, determination of the size of the Board of Directors, and the qualifications warranting appointment as a director.
The Nominating Committee will also consider candidates for election as directors recommended by shareholders of the Company. During
the fiscal year ended March 31, 2001, the members of the Nominating Committee were Samuel D. Addoms, B. LaRae Orullion, William B.
McNamara and D. Dale Browning. The Nominating Committee did not separately meet during the fiscal year, as its functions were
performed by action of the entire Board of Directors.
Report of the Audit Committee
The Audit Committee oversees the Company's financial reporting process on behalf of the Board of Directors.
Management has the primary responsibility for the financial statements and the reporting process, including the systems of internal
controls of the Company. In fulfilling its oversight responsibilities, the Committee reviewed the audited financial statements in
the Annual Report with management including a discussion of the quality and acceptability of the accounting principles, the
reasonableness of significant judgments, and the clarity of disclosures in the financial statements. In addressing the quality of
management's accounting judgments, members of the Committee asked for management's representations that the audited financial
statements of the Company have been prepared in conformity with generally accepted accounting principles, and have expressed to both
management and the auditors their general preference for conservative policies when a range of accounting options is available.
In its meetings with representatives of the independent auditors, the Committee asks them to address, and discusses
their responses to several questions that the Committee believes are particularly relevant to its oversight. These questions include:
-Are there any significant accounting judgments made by management in preparing the financial statements that would
have been made differently had the auditors themselves prepared and been responsible for the financial statements?
-Based on the auditors' experience, and their knowledge of the Company, do the Company's financial statements fairly
present to investors, with clarity and completeness, the Company's financial position and performance for the
reporting period in accordance with generally accepted accounting principles and U.S. Securities and Exchange
Commission disclosure requirements?
-Based on the auditors' experience, and their knowledge of the Company, has the Company implemented internal
controls and internal audit procedures that are appropriate for the Company?
The Committee reviewed with the independent auditors, who are responsible for expressing an opinion on the
conformity of the audited financial statements with generally accepted accounting principles, their judgements as to the quality and
the acceptability of the Company's accounting principles and such other matters as are required to be discussed with the Committee
under Statement on Auditing Standards No. 61. In addition, the Committee has discussed with the independent auditors the auditors'
independence from management and the Company, including matters in the written disclosures required by the Independence Standards
Board Standard No. 1, Independent Discussions with Audit Committees, and considered the compatibility of non-audit services with the
auditors' independence.
The Committee also discussed with the Company's independent auditors, with and without management present, the
overall scope and plans for their respective audits. The Committee met with the independent auditors to discuss the results of their
examinations, their evaluations of the Company's internal controls, and the overall quality and the acceptability of the Company's
financial reporting.
In reliance on the reviews and discussions referred to above, the Committee recommended to the Board of Directors,
and the Board has approved, that the audited financial statements be included in the Annual Report on Form 10-K for the fiscal year
ended March 31, 2001 for filing with the Securities and Exchange Commission.
AUDIT COMMITTEE
B. LaRae Orullian D. Dale Browning
Paul S. Dempsey William B. McNamara
James B. Upchurch
EXECUTIVE COMPENSATION
The following table summarizes the cash and noncash compensation awarded to, earned by or paid to the Chief
Executive Officer of the Company and other executive officers of the Company in the fiscal years ended March 31, 2001, 2000, and 1999
who had total salary and bonus exceeding $100,000.
Annual Compensation
Long Term
Compensation
Securities
Other Annual Underlying
Name Compensation Options/
and Principal ($)(1) SARs
Position Year Salary ($) Bonus($) Granted # (4)
Samuel D. Addoms, 2001 225,000 191,313 13,632 0
Chief Executive Officer 2000 172,508 87,415 6,245 0
1999 103,304 69,542 4,074 100,000
Steve B. Warnecke (2) 2001 140,000 83,234 12,447 13,500
2000 77,500 39,272 1,402 28,000
1999 0 0 0 0
Jimmie P. Wyche (3) 2001 125,000 73,782 9,379 0
2000 109,000 55,234 4,364 0
1999 82,455 55,623 3,427 45,000
Arthur T. Voss 2001 125,000 73,782 9,377 0
2000 108,769 55,117 5,129 0
1999 76,455 51,572 3,173 75,000
Elissa A. Potucek 2001 115,000 67,481 4,481 0
2000 108,769 55,117 5,366 0
1999 76,455 51,572 3,173 60,000
Ann E. Block 2001 115,000 67,481 4,481 0
2000 95,008 48,144 3,123 45,000
1999 1,038 0 0 45,000
(1) Other annual compensation represents (i) shares contributed to the executive officers' accounts in the Company's Employee
Stock Ownership Plan ("ESOP") as of December 31 of each of the years indicated; and (ii) the Company's contributions to the
executive officers' 401(k) accounts as of December 31 of each of the years indicated.
As of March 31, 2001 the respective officers' ESOP accounts held the following number of shares of common stock with
corresponding values based on the closing price of the common stock on that date: Mr. Addoms - 4,900 shares valued at $
59,724; Mr. Warnecke - 624 shares valued at $ 7,613; Mr. Wyche - 4,263 shares valued at $ 51,966; Mr. Voss - 4,146 shares
valued at $ 50,533; Ms. Potucek - 3,215 shares valued at $ 39,190; Ms. Block - 644 shares valued at $7,852. All of the
foregoing individuals are 100% vested in their ESOP accounts, except for Mr. Warnecke and Ms. Block, who are 20% and 40%
vested, respectively.
For the calendar year ended December 31, 2000 the Company made cash contributions to the executive officers' 401(k) accounts
as follows: Mr. Addoms - $ 2,631; Mr. Warnecke - $ 3,375; Mr. Wyche - $ 1,551; Mr. Voss - $ 1,549; Ms. Potucek - $ 1,489;
Ms. Block - $ 4,481.
(2) Mr. Warnecke resigned his employment as an officer of the Company on June 30, 2001.
(3) Mr. Wyche retired as an officer of the Company on June 22, 2001.
(4) Adjusted to give effect to a fifty percent common stock dividend paid by the Company in March 2001. Mr. Warnecke's options
reflect those which he is or will be entitled to exercise notwithstanding his resignation.
Option/SAR Grants in Last Fiscal Year
During the fiscal year ended March 31, 2001 the Company granted options to purchase 45,000 shares of its common
stock to each of Steve B. Warnecke and Ann E. Block, exercisable in five equal annual installments. Mr. Warnecke's exercise price
for this stock option grant is $8.834 per share and Ms. Block's exercise price is $8.547 per share. As a result of his resignation
of employment with the Company on June 30, 2001, Mr. Warnecke is entitled to exercise a maximum of 13,500 options with respect to
this grant, exercisable until December 31, 2002.
Number of Percent of
Securities Total Option/ Exercise or Potential Realizable Value at
Underlying SARs Granted Base Price Assumed Annual Rates of Stock Price
Option/SARs To Employees ($/S#) Expiration Date Appreciation for Options Term
Name Granted (#) In Fiscal Year
5% ($) 10% ($)
Steve B. Warnecke 13,500 3.2% 8.834 12/31/02 14,950 32,400
Ann E. Block 45,000 10.6% 8.547 5/23/10 241,650 612,450
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option Values
The following table sets forth certain information regarding options exercised during the fiscal year ended
March 31, 2001, adjusted to give effect to a fifty percent common stock dividend paid by the Company in March 2001, by the Chief
Executive Officer and other executive officers of the Company named in the table above.
Number of Securities
Shares Value Underlying Unexercised Value of Unexercised
Acquired on Realized Options at March 31, 2001 In-The-Money Options at March 31,
Name Exercise (#) ($)(1) (#) 2001 ($)(1)
Exercisable Unexercisable Exercisable Unexercisable
Samuel D. Addoms -0- -0- 246,750 90,000 2,557,807 609,390
Steve B. Warnecke (2) -0- -0- 12,000 29,500 43,692 103,535
Jimmie P. Wyche (2) -0- -0- 35,501 27,000 300,178 182,817
Arthur T. Voss 105,000 1,208,455 73,406 45,000 659,805 304,695
Elissa A. Potucek 3,750 38,205 53,250 48,000 501,507 260,016
Ann E. Block 9,000 55,692 9,000 72,000 55,692 330,921
(1) Based on the closing price of the Company's common stock on the Nasdaq National Market of $12.188 per share on March 30,
2001.
(2) Mr. Warnecke resigned his employment as an officer of the Company on June 30, 2001 and Mr. Wyche retired on June 22, 2001.
Director Compensation
For the year ended March 31, 2001, the Company paid each director who is not a Company employee $20,000 for serving
in that capacity and the Company has agreed to pay each such director $20,000 for serving in such capacity for the Company's fiscal
year beginning April 1, 2001 and ending March 31, 2002. Directors who are also employees of the Company receive no additional
compensation for serving as directors. The Company reimburses all of its directors for travel and out-of-pocket expenses in
connection with their attendance at meetings of the Board of Directors and Committees on which they serve, and permits them to fly
without charge on the Company's scheduled flights. The Company's outside directors are also eligible to receive stock options under
the Company's 1994 Stock Option Plan. During the fiscal year ended March 31, 2001, the Company granted Mr. Upchurch an option to
purchase 15,000 shares of the Company's common stock at an exercise price of $13.587 per share.
Samuel D. Addoms Severance Agreement
During the fiscal year ended March 31, 1999, the Company entered into a termination agreement with Samuel D. Addoms,
the President and Chief Executive Officer of the Company. The termination agreement provides that if Mr. Addoms' employment is
terminated involuntarily, by resignation with the consent of the Company's Board of Directors, or by disability or death, he shall
receive (a) two years' salary, (b) $50,000 per year for the period beginning on the second anniversary of his termination and ending
on his 65th birthday, (c) a warrant to purchase 100,000 shares of common stock, and (d) certain other travel and insurance
perquisites. In connection with such termination agreement, Mr. Addoms has agreed to provide consulting services to the Company and
not to become employed by any competitor of the Company, each during the period beginning on his termination and ending on his 65th
birthday.
Compensation Committee Interlocks and Insider Participation
During the fiscal year ended March 31, 2001, the Company's Compensation Committee consisted of Ms. Orullian and
Messrs. Dempsey, McNamara, Browning, and Upchurch.
Report of the Compensation Committee on Executive Compensation
Overall Policy
Salary compensation of the Company's executive officers is determined by the Compensation Committee in conjunction
with the Company's entire Board of Directors. The Committee's consideration of and decisions regarding executive compensation are
guided by a number of factors described below. The objectives of the Company's total executive compensation package are to attract
and retain executive talent, to provide an economic framework to motivate the Company's executives to achieve goals consistent with
the Company's business strategy, to provide an identity between executive and shareholder interests through stock options and to
provide a compensation package that recognizes an executive's individual results and contributions in addition to the Company's
overall business results.
Salaries
The key elements of the Company's executive compensation consist of salary, stock options, and bonuses. The
Compensation Committee, in conjunction with the Company's entire Board of Directors, determines salary levels of officers and
employee stock option awards. Because the Compensation Committee did not intend to target the base salary levels in effect for the
executive officers at a designated percentile of the salary levels in effect for other companies in the airline industry, there is no
meaningful correlation between the Company's salary levels and the rates of base salary in effect for those companies which are taken
into account in the Peer Group Index utilized for purposes of the stock price performance graph which follows this report.
Salaries for executive officers are determined by evaluating the responsibilities of the position held and the
experience of the individual, and by reference to the competitive marketplace for executive talent, including a comparison of
salaries for comparable positions at other airlines.
The salary levels of the executive officers of the Company for the next fiscal year are generally established by the
Compensation Committee at fiscal year-end and are reviewed and approved by the entire Board of Directors. Specific individual
performance and overall corporate or business segment performance are reviewed in determining the compensation level of each
individual officer.
Mr. Addoms' base salary as Chief Executive Officer for the fiscal year ending March 31, 2002 is $235,000 per annum.
The Compensation Committee believes that Mr. Addoms' base salary for prior years was substantially below that of similarly situated
executives in the airline industry. The Compensation Committee believes that Mr. Addoms' current annual salary is comparable to or
below the annual salaries for similarly situated executives within the airline industry.
Bonuses
The Company paid bonuses to its executive officers in fiscal 2001. The Compensation Committee and Board of
Directors approved these bonuses due to the continuing improved financial performance of the Company. The Board of Directors agreed,
upon attainment by the Company for the fiscal year of pre-tax income of approximately $55.7 million (the "Performance Goal"), to pay
the Company's President and Chief Executive Officer a bonus equal to 75% of his base salary for the fiscal year and to pay the
Company's other executive officers a bonus equal to 50% of their respective base salaries for the fiscal year. In addition, the Board
of Directors authorized the payment to the Company's executive officers of an amount equal to one percent of the pre-tax income in
excess of the Performance Goal, which amount was distributed among the executive officers in proportion to their base salaries for
the fiscal year.
COMPENSATION COMMITTEE
B. LaRae Orullian D. Dale Browning
Paul S. Dempsey William B. McNamara
James B. Upchurch
Performance Graph
The following graph shows the cumulative total shareholder return on the Company's common stock compared to the
cumulative total return of two other indices: (i) The Nasdaq Market Index of U.S. Companies, and (ii) the Peer Group Index of
similar line-of-business companies as chosen by the Company, consisting of Midway Airlines Corp., AirTran Holdings, Inc. (formerly
Valujet Airlines, Inc.), and Vanguard Airlines, Inc. (the "Peer Group"). Each member of the Peer Group's stock is listed on the
Nasdaq National Market or the Nasdaq SmallCap Market. The time period graphed is the period from March 31, 1996 through March 31,
2001.
COMPANY/INDEX/MARKET 03/29/96 03/31/97 03/31/98 03/31/99 03/31/00 03/30/01
Frontier Airlines, Inc. 100.00 116.67 56.25 62.50 164.58 197.92
Peer Group Index (3) 100.00 205.13 60.51 57.43 34.78 29.68
NASDAQ Market Index 100.00 134.51 150.48 227.41 297.18 547.25
(1) Assumes $100 invested on March 29, 1996 in the Company's common stock, the Nasdaq Market Index and the Peer Group Index of
similar line-of-business companies.
(2) Total shareholder return assumes reinvestment of dividends.
(3) The Peer Group Index used in the Company's 1997 Proxy Statement included Western Pacific Airlines, Inc., which filed for
bankruptcy in 1997 and whose stock is no longer publicly traded. The 1997 Proxy Statement Peer Group Index also included
Airways Corporation, the parent company of AirTran Holdings, Inc. (then AirTran Airlines, Inc., and formerly ValuJet
Airlines, Inc.). The stock of Airways Corporation is no longer publicly traded. The Peer Group Index used in the Company's
1998 Proxy Statement included Reno Air, Inc. Reno Air, Inc. is no longer used as a member of the Peer Group Index and has
been replaced by Midway Airlines Corp. Because Reno Air, Inc. was purchased by American Airlines, Reno Air, Inc. is no
longer a national carrier.
PROPOSAL 1
ELECTION OF THE BOARD OF DIRECTORS
The Board of Directors of the Company has nominated Samuel D. Addoms, D. Dale Browning, Paul S. Dempsey, William B.
McNamara, B. LaRae Orullian, Jeff S. Potter, and James B. Upchurch for election to the Board of Directors. Each of these nominees is
a member of the existing Board of Directors and, with the exception of Mr. Potter, was elected to the Board of Directors at the
Company's 2000 Annual Meeting of Shareholders. The Board of Directors appointed Mr. Potter in May 2001.
A proposal to elect Samuel D. Addoms, D. Dale Browning, Paul S. Dempsey, William B. McNamara, B. LaRae Orullian,
Jeff S. Potter, and James B. Upchurch to the Board of Directors of the Company will be presented to the shareholders at the annual
meeting.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE ELECTION OF SAMUEL D.
ADDOMS, D. DALE BROWNING, PAUL S. DEMPSEY, WILLIAM B. MCNAMARA, B. LARAE ORULLIAN, JEFF S. POTTER, AND JAMES B. UPCHURCH TO THE
COMPANY'S BOARD OF DIRECTORS. IF NO DIRECTION IS GIVEN WHEN THE DULY EXECUTED PROXY CARD ENCLOSED HEREWITH IS RETURNED, ALL SHARES
COVERED BY SUCH PROXY WILL BE VOTED FOR ALL NOMINEES.
PROPOSAL 2
AMENDMENT TO THE ARTICLES OF INCORPORATION
On May 30, 2001, the Company's Board of Directors unanimously approved a proposed amendment to the Company's
Restated Articles of Incorporation to increase the number of authorized shares of the Company's common stock from 40,000,000, the
number currently authorized, to 100,000,000. If a sufficient number of shares of common stock are voted in favor of the proposal,
the shareholders will be deemed to have adopted the resolutions attached hereto as Appendix II, and the Company will file articles of
amendment to the Restated Articles of Incorporation of the Company reflecting the changes as shown in the resolutions.
As of July 20, 2001, 28,344,602 shares of the Company's common stock were outstanding and 3,046,694 have been
reserved for issuance upon exercise of options or warrants to purchase common stock. This leaves a total of 8,608,704 shares
available for issuance for other purposes. The Board of Directors believes that by increasing the number of authorized shares of
common stock as proposed, the Company will be afforded additional flexibility to raise monies for working capital and other
requirements through the potential sale of other issuances of common stock in the future.
Because the Company could issue a significant number of shares in connection with future financings, it is possible
that a change of control of the Company could occur. However, management believes that most of the shares sold in any financing
would be sold to a number of different purchasers, which would mean that such purchasers would have to act in concert in order to
effect a change in control. Additionally, under the terms of a Shareholder Rights Agreement adopted by the Company in 1997, or
otherwise, the ability to issue additional shares of common stock could also be used to delay, defer or prevent an unsolicited tender
offer or takeover proposal regarding the Company. There are at present no specific understandings, arrangements or agreements with
respect to any future financings, acquisitions, or other transactions that would require the Company to issue any new shares of its
common stock to be authorized by the proposed amendment to the Restated Articles of Incorporation.
If the proposal to increase the authorized number of shares of common stock is approved, the Company does not intend
to seek further authorization from its shareholders to issue shares of authorized but unissued common stock unless, in the Company's
opinion, such approval is required or advisable. It is possible that such an issuance of authorized but unissued shares could cause
a change in control of the Company without shareholder approval first being sought. No holder of the Company's common stock has any
preemptive or similar right to acquire or subscribe for additional unissued or treasury shares of the Company's common stock, or any
other securities of any class, or rights, warrants or options to purchase common stock.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE PROPOSED AMENDMENT TO THE
RESTATED ARTICLES OF INCORPORATION TO INCREASE THE AUTHORIZED SHARES OF COMMON STOCK. THE AFFIRMATIVE VOTE OF A MAJORITY OF THE
SHARES OF THE COMPANY'S COMMON STOCK REPRESENTED AT THE MEETING AND ENTITLED TO VOTE IS NECESSARY FOR THE APPROVAL OF THE PROPOSED
AMENDMENT TO THE RESTATED ARTICLES OF INCORPORATION TO INCREASE THE AUTHORIZED SHARES OF COMMON STOCK. IF NO DIRECTION IS GIVEN WHEN
THE DULY EXECUTED PROXY CARD ENCLOSED HEREWITH IS RETURNED, ALL SHARES COVERED BY SUCH PROXY WILL BE VOTED FOR THE PROPOSED AMENDMENT.
SHAREHOLDER PROPOSALS
Shareholders are entitled to submit proposals on matters appropriate for shareholder action consistent with
regulations of the Securities and Exchange Commission and the Company's bylaws. Should a shareholder wish to have a proposal appear
in the Company's proxy statement for next year's annual meeting, under the regulations of the Securities and Exchange Commission it
must be received by the Company's corporate secretary at 7001 Tower Road, Denver, Colorado 80249-7312 on or before April 2, 2002.
INDEPENDENT PUBLIC ACCOUNTANTS
KPMG LLP has acted as independent public accountants for the Company continuously since 1994. A representative of
KPMG LLP will be present at the annual meeting and will have the opportunity to make a statement if he or she desires to do so and
will be available to respond to appropriate questions.
KPMG LLP was selected by the Board of Directors to perform the audit function for fiscal year 2001. No independent
public accountant has yet been selected to perform the audit function for fiscal year 2002. It is expected that the Board of
Directors will make such selection at its annual meeting to be held in September 2001, or subsequent thereto.
Audit Fees, Financial Information Systems Design and Implementation Fees and All Other Fees
KPMG LLP billed the Company an aggregate of $150,000 in fees for professional services rendered for the audit of the
Company's annual financial statements, and for review of the Company's Form 10-K for the fiscal year ended March 31,2001 and Forms 10-Q
filed by the Company during the fiscal year. KPMG LLP also billed the Company $132,000 for other services for that fiscal year.
OTHER BUSINESS
All items of business to be brought before the meeting are set forth in this proxy statement. Management knows of
no other business to be presented. If other matters of business not presently known to management are properly raised at the
meeting, the proxies will vote on the matters in accordance with their best judgment.
NOTE: SHAREHOLDERS ARE REQUESTED TO SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD, USING THE ENCLOSED POSTAGE
PREPAID ENVELOPE.
PROXY FRONTIER AIRLINES, INC. PROXY
7001 Tower Road
Denver, CO 80249-7312
This Proxy is Solicited on Behalf of the Board of Directors.
The undersigned hereby appoints Samuel D. Addoms, Jeff S. Potter, and Arthur T. Voss, or any of them, as Proxies, each with
the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated below, all the shares of common stock
of Frontier Airlines, Inc. held of record by the undersigned on July 20, 2001, at the annual meeting of shareholders to be held on
September 6, 2001, or any adjournment thereof.
The Board of Directors Recommends a vote "FOR" all nominees in Item 1
Item 1 - ELECTION OF DIRECTORS
|_| FOR all nominees |_| WITHHOLD AUTHORITY for all nominees
INSTRUCTION: To withhold authority to vote for any individual nominee, strike a line through the nominee's name in the list below.
Samuel D. Addoms D. Dale Browning Paul S.Dempsey Jeff S. Potter
William B. McNamara B. LaRae Orullian James B. Upchurch
The Board of Directors Recommends a vote "FOR" the proposed amendment in Item 2
Item 2 - AMENDMENT TO THE RESTATED ARTICLES OF INCORPORATION TO INCREASE AUTHORIZED SHARES OF COMMON STOCK TO 100,000,000 SHARES
|_| FOR the amendment |_| AGAINST the amendment |_| ABSTAIN
The shares represented by this proxy will be voted as directed by the shareholder. If no direction is given when the duly executed proxy is
returned, such shares will be voted "FOR all nominees" in Item 1 and "FOR the amendment" in Item 2.
PLEASE DATE AND SIGN ON REVERSE SIDE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.
**********************************************
In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting or any
adjournment thereof. This proxy when properly executed will be voted in the manner directed herein by the undersigned shareholder.
Please sign, date and return the proxy promptly, using the enclosed envelope.
Date
------------------------------------------------------------------------------
Signature
-------------------------------------------------------------------------
Signature
if held jointly
-------------------------------------------------------------------
Please sign exactly as name appears. When shares are held by joint tenants,
both should sign. When signing as attorney, as executor, administrator,
trustee or guardian, please give full title as such. If a corporation,
pleas sign in full corporate name by President or other authorized officer.
If a partnership, please sign in partnership name by authorized person.
APPENDIX I
FRONTIER AIRLINES, INC.
Audit Committee Charter
-----------------------
(As of May 24, 2000)
Purpose
- -------
There shall be an Audit Committee (the "Committee") of the Board of Directors of Frontier Airlines, Inc., a Colorado
corporation (the "Company").
The Committee is appointed by the Board of Directors to assist the Board in fulfilling its oversight responsibilities. The
Committee shall have responsibility to oversee the Company's management and independent auditors in regard to corporate accounting
and financial reporting. The Committee has the authority to conduct any investigation it deems appropriate, with full access to all
books and records, facilities, personnel and outside advisors of the Company. The Committee is empowered to retain outside counsel,
auditors or other experts in its discretion. The Committee's primary duties and responsibilities are to:
a) monitor the integrity of the Company's financial reporting process and systems of internal control regarding
finance, accounting and legal compliance;
b) monitor the independence and performance of the Company's independent auditors and internal auditing department; and
c) provide an avenue of communication among the independent auditors, management, the internal auditing department, and
the Board of Directors.
Organization
- ------------
The Committee shall consist of at least three directors. Each director appointed to the Committee shall:
a) not be disqualified from being an "independent director" within the meaning of Rule 4200 of the NASD Manual, and
shall have no relationship with the Company which, in the opinion of the Board, would interfere with the exercise of
independent judgment; and
b) shall have a basic understanding of finance and accounting and be able to read and understand fundamental financial
statements, including the Company's balance sheet, income statement and cash flow statement.
At least one member of the Committee shall have past employment experience in finance or accounting, requisite professional
certification in accounting, or any other comparable experience or background, which results in the member's financial sophistication.
The Committee by majority vote shall select a Chair who shall serve as such until his or her resignation, removal or
election of a successor.
Responsibilities
- ----------------
The Committee recognizes that the preparation of the Company's financial statements and other financial information is the
responsibility of the Company's management and that auditing, or conducting limited reviews, of those financial statements and other
financial information is the responsibility of the Company's independent auditors. The Committee's responsibility is to oversee the
financial reporting process.
The Committee shall meet at least annually, or more frequently as needs dictate. At least annually and otherwise as deemed
appropriate by the Chair or a majority of the Committee, the Committee shall meet privately, in executive session with management,
the independent auditors, and the internal auditors.
The Company's management, and its independent auditors, in the exercise of their responsibilities, acquire greater knowledge
and more detailed information about the Company and its financial affairs than the members of the Committee. Consequently, the
Committee is not responsible for providing any expert or other special assurance as to the Company's financial statements and other
financial information or any professional certification as to the independent auditors' work, including without limitation their
reports on and limited reviews of, the Company's financial statements and other financial information.
In carrying out its oversight responsibilities, the Committee shall:
a) review and reassess the adequacy of this Audit Committee Charter annually;
b) require that the independent auditors provide the Committee with a formal written statement delineating all
relationships between the independent auditors and the Company, consistent with Independence Standards Board
Standard No. 1, and discuss with the independent auditors their independence;
c) actively engage in a dialogue with the independent auditors regarding any disclosed relationships or services that
may impact the objectivity and independence of the independent auditors;
d) take, or recommend that the full Board take, appropriate action to oversee the independence of the independent
auditors;
e) review the independent auditors' audit plan, including a discussion of scope and general audit approach;
f) review and consider the matters required to be discussed by Statement on Auditing Standards No. 61 with the
independent auditors and management;
g) consider the independent auditors' judgments about the quality and appropriateness of the Company's accounting
principles as applied in its financial reporting;
h) review and discuss the Company's audited financial statements that are to be included in the Company's Form 10-K
with the independent auditors and management and determine whether to recommend to the Board of Directors that the
financial statements be included in the Company's Form 10-K for filing with the Securities and Exchange Commission;
i) in consultation with the management and independent auditors, consider the integrity of the Company's financial
reporting process and controls. Discuss significant financial risk exposures and the steps management has taken to
monitor, control and report such exposures. Review significant findings prepared by the independent auditors
together with management's responses; and
j) review, or the Committee's Chair shall review, any matters identified by the independent auditors pursuant to
Statement on Auditing Standards No. 71 regarding the Company's interim financial statements. Any such review shall
occur prior to the filing of such interim financial statements on the Company's Form 10-Q.
The independent auditors are ultimately accountable to the Board and the Committee, as representatives of the shareholders.
The Board and the Committee have ultimate authority and responsibility to select, nominate, evaluate and, where appropriate, replace
the independent auditors and, if and when appropriate or required, to propose the independent auditors for ratification by the
shareholders in any proxy statement.
APPENDIX II
FRONTIER AIRLINES, INC.,
a Colorado corporation
FORM OF SHAREHOLDERS RESOLUTION
AMENDING THE
RESTATED ARTICLES OF INCORPORATION
WHEREAS, the Board of Directors (the "Board") of Frontier Airlines, Inc. (the "Company") has recommended that the Company
amend its Restated Articles of Incorporation (the "Articles of Incorporation") for the purpose of increasing the number of authorized
shares of the Company's common stock, no par value per share (the "Common Stock") from 40,000,000 shares to 100,000,000 shares; and
WHEREAS, the Board has directed that the proposed amendment to the Articles of Incorporation be presented to the
shareholders of the Company for their consideration and approval at the 2001 annual meeting of shareholders, to be held September 6,
2001.
THEREFORE, BE IT RESOLVED, that, as recommended by the Board, the shareholders of the Company do hereby approve the
amendment to the Articles of Incorporation, and the filing and recording of Articles of Amendment and all other instruments and
documents which the proper officers of the Company deem necessary, appropriate or convenient to effectuate the amendment of the
Company's Articles of Incorporation; and
FURTHER RESOLVED, that Article 2.1. of the Articles of Incorporation is hereby amended in its entirety to read as follows:
a. Authorized Capital. The total number of shares that the Corporation will have authority to issue is
-------------------
one-hundred-one million (101,000,000), of which one-hundred million (100,000,000) shares will be common
stock, without par value and one million (1,000,000) shares will be preferred stock without par value.
