Frontier Airlines 2005 Annual Report Download - page 101

Download and view the complete annual report

Please find page 101 of the 2005 Frontier Airlines annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 154

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154

Warrants
In connection with the Delta code-share agreement, the Company has issued warrants to purchase shares of its common stock related
to the code-share agreement.
The warrants, net of amounts surrendered in December 2004, are fully vested and exercisable as follows:
Issued Number
of Shares Exercise Price Exercise Period
June 2002 825,000 $ 12.50(1) June 2012
June 2004 825,000 12.35(1) May 2014
February 2003 396,000 13.00 February 2013
October 2003 165,000 12.35 October 2013
March 2004 264,000 12.35 March 2014
December 2004 960,000 11.60 December
2014
3,435,000
(1) The exercise price is subject to downward adjustment, if the Company issues additional shares of common stock in certain
instances.
In December 2004, the Company and Delta agreed to reduce the amounts of all warrants issued pursuant to the Chautauqua
code-share agreement by 45%, which reduced deferred warrant charges and warrant equity by $6,756. Amortization of deferred
warrant charges were $372, $800 and $359 for the years ended December 31, 2005, 2004 and 2003, respectively.
The Company records deferred warrant charges on the measurement date based upon an option pricing model that considered
continuous compounding of dividends and dilution using an estimated fair value of the Company’s common stock on the grant date,
an estimated dividend yield, a risk-free interest rate commensurate with the warrant term, volatility of 40% and an expected life of 10
years.
-63-
Source: REPUBLIC AIRWAYS HOLDINGS INC, 10-K, February 27, 2006 Powered by Morningstar® Document Research℠