Frontier Airlines 2007 Annual Report Download - page 80

9. RELATED PARTY TRANSACTIONS
WexAir RJET LLC, which is owned by several investment funds managed by Wexford, previously held a majority interest in
our common stock. Currently, Wexford owns less than 1% of our common stock but one of our directors is a general partner of
Wexford and its affiliates. Wexford and its affiliates are actively engaged in the airline business. Conflicts of interest may in the future
arise between Wexford and its affiliates, on the one hand, and us, on the other hand, in a number of areas relating to our business and
our past and ongoing relationships.
Fees are paid to Wexford for administrative functions not performed by the Company. Fees incurred were
approximately $324 and $1,065 for the years ended December 31, 2006 and 2005, respectively. In addition, included in accrued
liabilities were $26 due to Wexford Capital as of December 31, 2006.
During 2007, the Company purchased from WexAir RJET LLC a total of 6,555,000 shares of its holdings in the Company’s
common stock, par value $.001 per share, at a weighted average price of $20.15 per share, for total consideration of $132,100. The
transactions were recorded as treasury stock on the Company’s consolidated balance sheet.
10. CAPITAL STOCK, STOCK OPTIONS AND WARRANTS
In March 2007, the Company purchased from WexAir RJET LLC 2,000,000 shares of its holdings in the Company’s
common stock, par value $.001 per share, at a price of $20.50 per share, for total consideration of $41,000. The transaction was
recorded as treasury stock on the Company’s consolidated balance sheet.
On August 28, 2007, the Company’s Board of Directors authorized the purchase of up to $100,000 of the Company’s
common stock. The buy-back program provided for the shares to be purchased on the open market or through privately-negotiated
transactions from time-to-time during the twelve month period following the authorization. Under the authorization, the timing and
amount of purchase would be based upon market conditions, securities law limitations and other factors. The stock buy-back program
did not obligate the Company to acquire any specific number of shares in any period, and could be modified, suspended, extended or
discontinued at any time without prior notice. The Company purchased 4,994,159 shares of which 4,555,000 were purchased from
WexAir LLC and the remainder were purchased on the open market at a weighted average stock price of $20.02 for total consideration
of $100,000. This authorization was closed in November 2007.
On December 14, 2007, the Company’s Board of Directors authorized the purchase of up to $100,000 of the Company’s
common stock. The shares will be purchased on the open market or through privately-negotiated transactions from time-to-time
during the twelve month period following the authorization. Under the authorization, the timing and amount of purchase would be
based upon market conditions, securities law limitations and other factors. The stock buy-back program does not obligate the
Company to acquire any specific number of shares in any period, and may be modified, suspended, extended or discontinued at any
time without prior notice. As of December 31, 2007, pursuant to this authorization, the Company purchased 72,735 shares on the open
market at a weighted average stock price of $19.42 for total consideration of $1,412. At December 31, 2007, the amount under this
authorization was $98,588.
At December 31, 2007, 2,710,818 shares of the Company’s 150,000,000 authorized shares were reserved for issuances under
the Equity Incentive Plans. At December 31, 2007, the number of securities remaining available for future issuance under equity
compensation plans was 3,728,000 shares.
Employee Stock Options
The 2002 Equity Incentive Plan provides for the granting of up to 2,180,000 shares of our common stock and as of December
31, 2007, 47,215 shares of the Company’s common stock remain available for issuance under the plan. The 2007 Equity Incentive
Plan provides for the granting of up to 5,000,000 shares of our common stock and as of December 31, 2007, 3,680,000 shares of the
Company’s common stock remain available for issuance under the plan. Stock options granted under these plans typically vest ratably
over the term of the employment agreements or 48 months and are granted with exercise prices equal to market prices on the date of
grant. The options normally expire ten years from the date of grant. Options are typically granted to officers and key employees
selected by the Compensation Committee of the Board of Directors.
In connection with employment agreements for certain key employees, the Company granted options to purchase shares of
the Company's common stock with exercise prices ranging from $7.83 to $20.27. These stock options vest ratably over the term of the
employment agreements or 48 months and are exercisable for five years following the vesting dates or ten years from the date of
grant.
Non-employee Director Stock Options
The Company also granted options for non-employee directors on the day prior to commencement of the Company’s initial
public offering under the 2002 Equity Incentive Plan at a price equal to the fair market value of the common stock on the date of the
grant. These Options vested over a 3 year period with 1/24 of the shares vesting monthly for the first 12 months and 1/48 of the shares
vesting monthly over the remaining 24 months. Additionally, non-employee directors are to receive 2,500 options on the first trading
day after each annual meeting of stockholders at which he or she is re-elected as a non-employee director. These options vest ratably
over 12 months of continuous service. The non-employee options are exercisable until 10 years from the date of grant.
Source: REPUBLIC AIRWAYS HOLDINGS INC, 10-K, February 21, 2008 Powered by Morningstar® Document Research℠