SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. 1)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
KNIGHT TRANSPORTATION, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the 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)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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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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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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NOTICE AND PROXY STATEMENT FOR
ANNUAL MEETING OF SHAREHOLDERS OF
KNIGHT TRANSPORTATION, INC.
TO BE HELD ON MAY 10, 2000
TO OUR SHAREHOLDERS:
You are cordially invited to attend the 2000 Annual Meeting of Shareholders
(the "Annual Meeting") of KNIGHT TRANSPORTATION, INC. (the "Company") to be held
at 10:00 A.M., Phoenix time, on May 10, 2000, at The Wigwam Resort Hotel, 300
East Wigwam Boulevard, Litchfield Park, Arizona 85340. The purpose of the Annual
Meeting is to:
1. Approve an amendment to the Company's Articles of Incorporation to
divide the Board of Directors of the Company into classes and to elect
Directors by class;
2. Elect eight (8) directors in two classes of four each, with one class
to serve for a term of one year and one class to serve for a term of
two years;
3. Approve and ratify the selection of Arthur Andersen LLP as the
Company's independent public accountants for 2000; and
4. Transact such other business as may properly come before the Annual
Meeting.
The Board of Directors has fixed the close of business on March 31, 2000,
as the Record Date for determining those shareholders who are entitled to
receive notice of and vote at the Annual Meeting or any adjournment of that
meeting. Shares of Common stock can be voted at the Annual Meeting only if the
holder is present at the Annual Meeting in person or by valid proxy. A copy of
the Company's 1999 Annual Report to Shareholders, which includes audited
consolidated financial statements, is enclosed.
YOUR VOTE IS IMPORTANT. TO ENSURE YOUR REPRESENTATION AT THE ANNUAL
MEETING, YOU ARE REQUESTED TO PROMPTLY DATE, SIGN AND RETURN THE ACCOMPANYING
PROXY IN THE ENCLOSED ENVELOPE.
By Order of the Board of Directors,
/s/ Clark A. Jenkins
Clark A. Jenkins,
Secretary
Phoenix, Arizona
April 6, 2000
KNIGHT TRANSPORTATION, INC.
5601 WEST BUCKEYE ROAD
PHOENIX, ARIZONA 85043
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies from the Shareholders of Knight Transportation, Inc. (the "Company") to
be voted at the Annual Meeting of Shareholders (the "Annual Meeting") to be held
on May 10, 2000. THE ENCLOSED PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
THE COMPANY. If not otherwise specified, all proxies received pursuant to this
solicitation will be voted FOR the amendment of the Company's Articles of
Incorporation, FOR the Nominees named below in the election of Directors, and
FOR the ratification of the selection of Arthur Andersen LLP as the Company's
independent public accountants for 2000. The Proxy Information Statement, proxy
card, and the Company's Annual Report on Form 10-K was first mailed on or about
April 6, 2000, to shareholders of record at the close of business on March 31,
2000 (the "Record Date").
Returning your Proxy now will not interfere with your right to attend the
Annual Meeting or to vote your shares personally at the Annual Meeting, if you
wish to do so. Shareholders who execute and return proxies may revoke them at
any time before they are exercised by giving written notice to the Secretary of
the Company at the address of the Company, by executing a subsequent proxy and
presenting it to the Secretary of the Company, or by attending the Annual
Meeting and voting in person.
The Company will bear the cost of solicitation of proxies, which will be
nominal and will include reimbursements for the charges and expenses of
brokerage firms and others for forwarding solicitation material to beneficial
owners of the outstanding common stock of the Company. Proxies will be solicited
by mail, and may be solicited personally by directors, officers or regular
employees of the Company, who will not be compensated for their services.
VOTING SECURITIES OUTSTANDING
As of March 27, 2000, there were 14,641,049 shares of the Company's Common
Stock, par value $0.01 per share (the "Common Stock"), issued and outstanding.
Only holders of record of Common Stock at the close of business on the Record
Date will be entitled to vote at the Annual Meeting, either in person or by
valid proxy. Ballots cast at the Annual Meeting will be counted by the Inspector
of Elections and the results of all ballots cast will be announced at the Annual
Meeting.
Except in the election of directors, shareholders are entitled to one (1)
vote for each share held of record on each matter of business to be considered
at the Annual Meeting. In the election of directors, cumulative voting is
required by law. See "REQUIRED MAJORITY," below. Abstentions will not be counted
in voting on any proposal. A broker non-vote is not counted for purposes of
approving matters to be acted upon at the Annual Meeting. A broker non-vote
occurs when a nominee holding voting shares for a beneficial owner does not vote
on a particular proposal because the nominee does not have discretionary voting
power with respect to the item and has not received voting instructions from the
beneficial owner.
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The information included in this Proxy Statement should be reviewed in
conjunction with the Consolidated Financial Statements, Notes to Consolidated
Financial Statements, Independent Public Accountants' Report and other
information included in the Company's 1999 Annual Report to Shareholders that
was mailed on or about April 6, 2000, with this Notice of Annual Meeting and
Information Statement, to all shareholders of record as of the Record Date.
REQUIRED MAJORITY, CUMULATIVE VOTING
Under the Constitution of the State of Arizona, each holder of Common Stock
has cumulative voting rights in electing directors of the Company. Under
cumulative voting, each shareholder, when electing directors, has the right to
cast as many votes in the aggregate as he has voting shares multiplied by the
number of directors to be elected. For example, if a shareholder has 100 shares
and four directors are to be elected, the shareholder may cast 400 votes. Each
shareholder may cast the whole number of votes, either in person or by proxy,
for one candidate or may distribute such votes among two or more candidates for
director. The nominees for director who receive the most votes will be elected.
If Proposal Number One is adopted by the shareholders and the Board of Directors
is divided into two separate classes of directors, under cumulative voting
rights provided by the Constitution of the State of Arizona, each shareholder,
when electing a class of directors, has the right to cast as many votes in the
aggregate as he has voting shares multiplied by the number of directors to be
elected in that class of directors. For example, if Proposal Number One is
adopted by the shareholders and if a shareholder has 100 shares and four
directors are to be elected as Class II Directors, the shareholder may cast 400
votes. Other matters submitted to shareholders for consideration and action at
the Annual Meeting must be approved by a simple majority vote of those shares
present in person or by proxy.
PROPOSAL NUMBER ONE
Proposal Number One recommends an amendment to the Company's Articles of
Incorporation that would divide the Board into two separate classes of directors
to allow for staggered terms of office. The Company's Articles of Incorporation
currently provide that all members will be elected to the Board annually for a
one-year term. The summary of Proposal Number One contained in this Proxy
Statement is qualified in its entirety by the description of the proposed
amendments to Articles of Incorporation set forth in Appendix A.
The Arizona Business Corporation Act provides that the Company's articles
of incorporation may permit the directors to be divided into classes provided
that there are at least three directors in each class. The Company's current
Articles of Incorporation do not contain any provisions dividing directors into
classes. The amendment to the Articles of Incorporation contained in Proposal
Number One initially provides for the two classes of directors, with each class
to be as nearly equal in number as reasonably possible. Upon their initial
election, the Class I Directors will hold office for a term expiring at the 2001
Annual Meeting of shareholders; and the Class II Directors will hold office for
a term expiring at the 2002 Annual Meeting of shareholders. Commencing with the
2001 Annual Meeting, shareholders will elect only one class of directors each
year, with each director so elected to hold office for a term expiring on the
second Annual Meeting of shareholders following his election. The same procedure
would be repeated each year, with the result that approximately one-half of the
whole Board of Directors would be elected in each year, until such time as the
Board is comprised of nine (9) or more directors. The proposed amendment to the
Company's Articles of Incorporation also requires that when the number of
directors equals nine (9) or more, the Board to be divided into three separate
classes of directors at the next annual meeting of shareholders. At that
meeting, shareholders will elect three classes of directors. The Board will
designate the directors to be in each class. Class I directors will be elected
for a one year term; Class II directors will be elected for a two year term; and
Class III directors will be elected for a three year term. As the term of each
class of directors expires that class will be elected for a three year term, so
that each year a class of directors will stand for election for a three year
term. Cumulative voting will apply in the election of directors. Under Proposal
Number One, the Board of Directors has the right to designate the directors
assigned to each class.
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The purpose of the amendment to the Articles of Incorporation is to
encourage potential acquirers of the Company to deal directly with the Board of
Directors by making it difficult to replace the entire Board of Directors at any
one annual meeting. The Board of Directors believes that, in certain situations,
a hostile `third party could acquire a block of the Company's stock and try to
gain control of the Company or attempt to realize a return on its investment
(e.g., through a "greenmail" transaction) without purchasing the remainder of
the Company's stock through a tender offer or through other means of
acquisition. Such a purchaser might attempt to force the Company to accept a
merger or restructuring or accept another proposal by launching a proxy contest
to unseat the Company's Board of Directors. Following a substantial accumulation
of the Company's stock , a hostile purchaser could seek representation on the
Company's Board of Directors to increase the likelihood that its proposal would
be adopted by the Board. By staggering the terms of the Directors, the proposed
amendment would prevent any hostile shareholder from gaining control of the
Board of Directors in any one election of the Directors. Consequently, it would
take a shareholder interested in obtaining control of the Board of Directors, at
least two elections to do so.
The Board of Directors believes that, if the amendments contained in
Proposal Number One are approved by shareholders, a potential hostile purchaser
will be forced to negotiate directly with the Board of Directors, and that the
Board of Directors will be in a better position to negotiate effectively with
that person and will more likely have the time and information necessary to
evaluate properly the merits of the proposal.
The Board of Directors also believes that Proposal Number One will provide
the Board a greater opportunity to protect shareholders' interests and to assure
continuity in the affairs and business strategies of the Company.
Proposal Number One may be characterized as an anti-takeover measure which,
if adopted, may tend to insulate management and make the accomplishment of
certain transactions involving a potential change of control of the Company more
difficult.
The Company's Articles of Incorporation currently provide that until May
2002, the consent of sixty seven percent (67%) majority of the Company's
shareholders is required to approve any offer to purchase substantially all of
the Company's assets or any plan of merger or consolidation pursuant to which
the outstanding common stock of the Company is converted into cash or other
consideration. This provision, which expires in May 2002, is an anti-takeover
measure that makes change of the control of the Company more difficult. The
Board of Directors believes that Proposal Number One will supplement the
protections provided by the current "Super Majority" shareholder approval
required by the Articles of Incorporation for a merger or sale of substantial
all the Company's assets.
Messrs. Randy Knight, Kevin P. Knight, Gary J. Knight and Keith T. Knight,
who collectively have voting power over approximately 55% of the Company's
issued and outstanding shares of Common Stock, have indicated that they will
vote their shares for Proposal Number One.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
PROPOSAL NUMBER ONE TO AMEND THE ARTICLES OF INCORPORATION TO CLASSIFY THE BOARD
OF DIRECTORS.
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PROPOSAL NUMBER TWO
ELECTION OF DIRECTORS
Subject to the adoption by the shareholders of the amendment to the
Company's Articles of Incorporation contained in Proposal Number One, the Board
of Directors has set the number of directors at eight and has nominated eight
persons for election to the Board with four directors to be Class I Directors
and four directors to be Class II Directors. Each of the nominees of management
of the Company for Director is currently a director of the Company whose current
term expires at the May, 2000 Annual Meeting.
At the 2000 Annual Meeting of shareholders, assuming the shareholders
approve the amendments contained in Proposal Number One, the Class I nominees
will be elected to hold office effective upon the filing of the amendment to the
Articles of Incorporation of the Company reflecting Proposal Number One with the
Arizona Corporation Commission until the 2001 Annual Meeting of shareholders;
the Class II nominees will be elected to hold office effective upon the filing
of the Articles of Amendment with the Arizona Corporation Commission until the
2002 Annual Meeting of shareholders. (See Proposal Number One, above, for a
description of procedures when the Board of Directors consists of nine (9) or
more directors).
If the amendments contained in Proposal Number One are not adopted by the
shareholders, all eight director nominees will be elected to hold office until
the 2001 Annual Meeting of shareholders.
NOMINEES FOR DIRECTOR
CLASS I DIRECTORS CLASS II DIRECTORS
(One-Year Initial Term) (Two-Year Initial Term)
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Clark Jenkins Donald A. Bliss
Keith Knight Kevin Knight
L. Randy Knight Gary Knight
Mark Scudder G.D. Madden
Messrs. Randy Knight, Kevin P. Knight, Gary J. Knight, and Keith T. Knight,
who collectively have voting power over approximately 55% of the issued and
outstanding shares of the Company's Common Stock, have indicated that they will
vote their shares for the election of all director nominees.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF
THE BOARD OF DIRECTOR NOMINEES.
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INFORMATION CONCERNING DIRECTORS AND NOMINEES
On July 31, 1999, Mr. Randy Knight retired as an officer of the Company and
as the Vice Chairman of the Board. Mr. Randy Knight will continue to serve as a
Director of the Company, if elected. The duties of Chairman of the Board were
assumed by Mr. Kevin Knight, the Company's Chief Executive Officer. On November
10, 1999, Mr. Mark Scudder was elected by the Board of Directors to fill a
vacancy on the Board. Mr. Scudder replaced Mr. Keith L. Turley, who resigned
from the Board in November 1999, for health reasons and passed away, in January
2000.
Information concerning the names, ages, positions, terms and business
experience of the Company's current directors and nominees for director is set
forth below.
NAME AGE POSITION AND OFFICES HELD
---- --- -------------------------
Donald A. Bliss(1) (3) 67 Director
Clark A. Jenkins 42 Executive Vice President-Finance,
Chief Financial Officer, Secretary, Director
Gary J. Knight(2) 48 President, Director
Keith T. Knight(2) 45 Executive Vice President, Director
Kevin P. Knight(1) (2) 43 Chairman of the Board, Chief Executive
Officer, Director
Randy Knight(2) 51 Director
G.D. Madden (1) 60 Director
Mark Scudder (3) 37 Director
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Executive officers of the Company serve at the will of the Board of Directors.
(1) Member of the Audit Committee.
(2) Randy Knight and Gary J. Knight are brothers and are cousins of Kevin P.
Knight and Keith T. Knight, who are also brothers.
(3) Member of the Compensation Committee.
BIOGRAPHICAL INFORMATION CONCERNING DIRECTORS AND EXECUTIVE OFFICERS OF THE
COMPANY
DONALD A. BLISS was elected to the Board of Directors of the Company in
February 1995. Until December 1994, Mr. Bliss was Vice President and Chief
Executive Officer of U.S. West Communications, a U.S. West company. Mr. Bliss
has also been a Director of Bank of America Arizona since 1988 and was a
Director of U.S. West Communications from 1987 to 1994. Mr. Bliss has been a
Director of Continental General since 1990 and a Director of Western-Southern
Insurance Company since April 1, 1998.
CLARK JENKINS joined the Company in 1990 and has served as the Company's
Secretary and Chief Financial Officer and a director since 1991. In March 1998,
Mr. Jenkins was appointed Executive Vice President-Finance for the Company. From
1986 to 1990, Mr. Jenkins was employed by Swift Transportation Co., Inc.
("Swift"), a long haul trucking company, as a Vice President of Finance. Prior
to his employment with Swift, Mr. Jenkins was employed as an accounting manager
by Flying J. Inc., a fully integrated oil and gas company.
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GARY J. KNIGHT has served as the Company's President since 1993, and has
been an officer and director of the Company since 1990. From 1975 until 1990,
Mr. Knight was employed by Swift, where he was an Executive Vice President.
KEITH T. KNIGHT has served as the Company's Executive Vice President since
1993, and has been an officer and director of the Company since 1990. From 1977
until 1990, Mr. Knight was employed by Swift, where he was a Vice President and
manager of Swift's Los Angeles terminal.
KEVIN P. KNIGHT has served as the Company's Chairman of the Board since May
1999, has served as the Company's Chief Executive Officer since 1993, and has
been an officer and director of the Company since 1990. From 1975 to 1984 and
again from 1986 to 1990, Mr. Knight was employed by Swift, where he was an
Executive Vice President and President of Cooper Motor Lines, Inc., a Swift
subsidiary.
RANDY KNIGHT has been a director of the Company since its inception in 1989
and is presently a consultant to the Company. Mr. Knight had served as an
officer of the Company since its inception in 1989 and he resigned as an officer
and Vice Chairman of the Board of Directors on July 31, 1999. Mr. Knight served
as Chairman of the Board from 1993 to July 1999. Mr. Knight currently serves as
a consultant to the Company. From 1985 to the present, Mr. Knight owns a 50%
interest in and serves as Chairman of Total Warehousing, Inc. ("Total
Warehousing"), a commercial warehousing and local transportation business
located in Phoenix, Arizona. Mr. Knight was employed by Swift or related
companies from 1969 to 1985, where he was a Vice President and shareholder.
G.D. MADDEN has served as a director of the Company since January 1997.
Since 1996, Mr. Madden has been President of Madden Partners, a consulting firm
he founded, which specializes in transportation technology and strategic issues.
Prior to founding Madden Partners, he was President and CEO of Innovative
Computing Corporation, a subsidiary of Westinghouse Electric Corporation. Mr.
Madden founded Innovative Computing Corporation (ICC) as a privately held
company, which grew to be the largest supplier of fully integrated management
information systems to the trucking industry. Mr. Madden sold ICC to
Westinghouse in 1990 and continued to serve as its President and CEO until 1996.
MARK SCUDDER was elected to the Board of Directors of the Company on
November 10, 1999. Mr. Scudder is a principal of Scudder Law Firm, P.C. Lincoln,
Nebraska and has been involved in the private practice of law since 1988. Mr.
Scudder is a member of the board of directors of Covenant Transportation, a
publicly held company, and of UMB Bank Nebraska, N.A., a banking subsidiary of
UMB Financial Corporation, a publicly traded, multi-bank holding company.
MEETINGS AND COMPENSATION OF THE BOARD OF DIRECTORS
BOARD OF DIRECTORS. During the year ended December 31, 1999, the Board of
Directors of the Company met on six occasions. Each of the directors attended
75% or more of the meetings of the Board of Directors and the meetings held by
all of the committees of the Board on which he served.
Directors who are not 10% shareholders or employees of the Company
("Independent Directors") receive annual compensation of $5,000, plus a fee of
$500 for attendance at each meeting of the Board of Directors, and a fee of $250
for committee meetings. Independent Directors appointed to the Board of
Directors also receive an automatic grant of a non-qualified stock option
("NSO") for a number of shares of Common Stock to be designated by the Board of
not fewer than 2,500 nor more than 5,000 shares. The exercise price of a NSO is
85% of the fair market value of the Company's stock as of the date of grant. The
option is forfeitable if a director resigns one year after election as a
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director. The Board of Directors has granted Donald A. Bliss, G.D. Madden, and
Mark Scudder, an NSO for 2,500 shares of the Company's Common Stock at original
exercise prices of $13.18, and $20.19, and $11.75 respectively.(1) Members of
the Board of Directors also have the option to accept shares of the Company's
Common Stock in lieu of director's fees. If this option is elected, the Company
issues Common Stock on February 15 and August 15 of each year in payment of
accrued director's fees for the preceding six month periods ending June 30 and
December 31, respectively, at the closing market price for such shares as of the
trading day prior to issuance.
Mr. Randy Knight, who is a director of the Company, also serves as a
consultant to the Company and receives $50,000 per year for his consulting
services. The consulting agreement with Mr. Knight is terminable at the election
of either party.
COMPENSATION COMMITTEE. The Compensation Committee of the Board of
Directors was created in November 1994, and for 1999 was composed of Donald A.
Bliss and G.D. Madden. Mr. Bliss served as chairman of the Committee for 1999.
The Compensation Committee met once during 1999. The Compensation Committee
reviews all aspects of compensation of executive officers of the Company and
makes recommendations on such matters to the full Board of Directors. The Report
of the Compensation Committee for 1999 is set forth below. The Compensation
Committee is composed entirely of Independent Directors who are not officers,
employees or 10% or greater shareholders of the Company. Only Independent
Directors are eligible to serve on the Compensation Committee. Effective as of
February 9, 2000, Mr. G.D. Madden resigned as a member of the Compensation
Committee and was elected a member of the Audit Committee. As of the same date,
Mr. Mark Scudder resigned as a member of the Audit Committee and was elected as
a member of the Compensation Committee.
AUDIT COMMITTEE. Until November 1999, the Audit Committee was composed of
Donald A. Bliss and Mr. Keith Turley. Mr. Mark Scudder replaced Mr. Turley as a
member of the Audit Committee in November 1999, when Mr. Keith Turley resigned
from the Audit Committee for health reasons. In February 2000, Mr. Scudder
resigned from the Audit Committee to join the Compensation Committee and Mr.
Madden was elected to the Audit Committee as Mr. Scudder's replacement. Mr.
Bliss served as chairman of the Audit Committee. The Audit Committee met three
times during 1999. The Audit Committee makes recommendations to the Board of
Directors concerning the selection of independent public accountants, reviews
the financial reports, earnings records, reports filed with the Securities and
Exchange Commission and consolidated financial statements and internal controls
of the Company, and considers such other matters in relation to the external and
internal audit and the financial affairs of the Company as may be necessary or
appropriate in order to facilitate accurate and timely financial reporting. The
Audit Committee also reviews proposals for major transactions. A majority of the
members of the Audit Committee are independent directors, as defined in the
NASDAQ Stock Market's Listing Rule 4200. Since 1994, the Audit Committee has
been operated pursuant to a written charter detailing its duties. The Company
anticipates that an additional Independent Director will be added to the Audit
Committee during 2000 in order to comply with the NASDAQ Stock Market Listing
Rules.
OTHER COMMITTEES. The Company does not maintain a standing nominating
committee or other committee performing a similar function.
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(1) The number of shares and exercise price of the NSO granted to Mr. Bliss and
Mr. Madden has been adjusted to reflect the Company's three for two stock
split, effectuated as a stock dividend on May 18, 1998. Mr. Bliss exercised
his NSO for 3,750 shares on September 1, 1999, at a per share exercise
price of $8.7834 (which price was adjusted to reflect the May 18, 1998,
three for two stock split).
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COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than 10% of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission ("SEC") and the National Association of Securities
Dealers Automated Quotation System ("NASDAQ") reports of ownership and changes
in ownership of Common Stock and other equity securities of the Company.
Officers, directors and greater than 10% beneficial owners are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file. Based solely upon a review of the copies of such reports furnished to the
Company, or written representations that no other reports were required, the
Company believes that during the 1999 fiscal year, all Section 16(a) filing
requirements applicable to its directors, executive officers and greater than
10% beneficial owners were complied with.
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EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The table which follows sets forth information concerning compensation for
the fiscal years ended December 31, 1999, 1998, and 1997 awarded to, earned by,
or paid to the Chief Executive Officer of the Company and the Company's five
most highly compensated executive officers, other than the Chief Executive
Officer, whose total annual salary and bonus exceeded $100,000 for the fiscal
year ended December 31, 1999 (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION
----------------------------------- ----------------------------------------------------
AWARDS PAYOUTS
-------------------- -----------------------------
RESTRICTED
NAME AND OTHER ANNUAL STOCK OPTIONS/ LTIP ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) AWARD(S)($) SARS(#) PAYOUTS($) COMPENSATION($)(1)
------------------ ---- --------- -------- --------------- ----------- ------- ---------- ------------------
Kevin P. Knight, 1999 250,000 0 0 0 0 0 2,220
Chairman, Chief 1998 252,229 0 0 0 0 0 2,300
Executive Officer 1997 250,000 0 0 0 0 0 2,225
Randy Knight, 1999 150,000(2) 0 3,019
Vice Chairman 1998 252,229 0 0 0 0 0 2,940
1997 250,000 0 0 0 0 0 3,805
Gary J. Knight,
President 1999 250,000 0 0 0 0 0 2,840
1998 252,229 0 0 0 0 0 2,540
1997 250,000 0 0 0 0 0 3,165
Keith T. Knight, 1999 250,000 0 0 0 0 0 2,460
Executive Vice 1998 252,229 0 0 0 0 0 2,300
President 1997 250,000 0 0 0 0 0 2,615
Clark A. Jenkins, 1999 115,000 45,000 0 0 3,000 0 625
Executive Vice 1998 115,000 20,000 0 0 0 0 625
President-Finance 1997 100,000 17,500 0 0 7,500 0 625
Chief Financial
Officer, Secretary
Bruce Beck, Jr., 1999 150,000 15,000 0 0 8,750 0 625
Vice President 1998 132,956 0 0 0 0 0 0
1997 55,385 0 0 0 3,750 0 0
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(1) In 1999, 1998 and 1997, compensation included in the category of "All Other
Compensation" for each of the Named Executive Officers included Company
contributions in the amount of $625, for each year, to the Knight
Transportation, Inc. 401(k) Plan. The balance of compensation included in
"All Other Compensation" represents the annual economic benefit derived
from a $2,000,000 split-dollar life insurance policy maintained for each of
the Knights during 1999, which will be refunded to the Company upon
termination of the policy.
(2) Randy Knight retired as an officer and Vice Chairman of the Company on July
31, 1999. Mr. Knight presently acts as a consultant to the Company for
which he receives a fee of $50,000 per year.
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The following table sets forth stock options granted to Named Executive
Officers in 1999.
OPTION GRANTS TO NAMED EXECUTIVE OFFICERS IN 1999 FISCAL YEAR
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE AT
INDIVIDUAL GRANTS
POTENTIAL REALIZABLE VALUE
PERCENT OF AT ASSUMED ANNUAL RATES OF
NUMBER OF TOTAL OPTIONS STOCK PRICE APPRECIATION
SECURITIES UNDER- GRANTED TO EXERCISE OR FOR OPTION TERM
LYING OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION --------------------------
NAME GRANTED (#) 1999 ($/SH) DATE 5% ($) 10% ($)
---- ----------- ---- ------ ---- ------ -------
Clark A. Jenkins 3,000 2% 17.00 3/22/09 $32,370 $ 82,050
Bruce Beck 8,750 5% 17.00 3/22/09 $94,412 $239,312
Except as set forth above, no stock appreciation rights (SARs) or options
were granted during the 1999 fiscal year to any of the Named Executive Officers.
The following table sets forth the information with respect to the exercise
of stock options during the fiscal year ended December 31, 1999.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND OPTION VALUES AS OF DECEMBER 31, 1998
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL YEAR END IN-THE-MONEY OPTIONS AT
SHARES 12/31/99(#) 1999 FISCAL YEAR END ($)
ACQUIRED ON VALUE -------------------------------- --------------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE(2,3) EXERCISABLE UNEXERCISABLE(2,4)
---- ------------ ------------ ----------- ----------------- ----------- ------------------
Clark A. Jenkins(1) 1000 $15,500 50,128 11,998 $422,555 $60,827
- ----------
(1) None of the other Named Executive Officers (Randy Knight, Kevin P. Knight,
Gary J. Knight, and Keith T. Knight) held any options during fiscal year
1999.
(2) All options have been adjusted to reflect the effect of the Company's
three-for-two stock split, effected as a stock dividend on May 18, 1998.
(3) Mr. Jenkins was granted an option for 52,500 shares in October 1994, at an
exercise price of $8.00 per share; an option for 7,500 shares on January 2,
1996, at an exercise price of $9.17 per share; an option for 3,000 shares
on January 2, 1997, at an exercise price of $12.67 per share; an option for
4,500 shares on December 18, 1997 at an exercise price of $15.50 per share
and an option for 3,000 shares on March 22, 1999, at an exercise price of
$17.00 per share. The 1994 option for 52,500 shares is currently
exercisable. With respect to the 1996 option for 7,500 shares, 5,000 shares
are currently exercisable and 2,500 shares are exercisable in January 2001.
With respect to Mr. Jenkins' January 1997 option for 3,000 shares, 1,000
shares are currently exercisable and an additional one-third becomes
exercisable in January of 2001 and January 2002. With respect to Mr.
Jenkins' December 1997 option for 4,500 shares, one-third becomes
exercisable in December 2000, and an additional one-third in December of
each subsequent year. With respect to Mr. Jenkins' March 1999 option for
3,000 shares, one-third becomes exercisable in March 2002 and an additional
one-third in March of each subsequent year. Pursuant to the terms of the
Company's Stock Option Plan, the exercise price for the stock options
granted Mr. Jenkins was adjusted (not re-priced) as a result of the
Company's May 1998 stock dividend.
(4) Based on a closing price of $17.125 of the Company's Common Stock on
December 31, 1999.
-11-
LONG TERM INCENTIVE PLAN.
Other than the Company's Stock Option Plan, in which the Named Executive
Officers, other than Mr. Clark Jenkins and Mr. Bruce Beck, do not participate,
the Company does not have a long-term incentive plan or a defined benefit plan,
the Company has never issued any stock appreciation rights.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION.
The 1999 Compensation Committee of the Board of Directors consisted of G.D.
Madden and Donald Bliss. Mr. Bliss served as Chairman of the Compensation
Committee. Members of the Compensation Committee are Independent Directors and
are not employees, officers, or 10% or greater shareholders of the Company. See
"CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS", below, for a description of
transactions between the Company and members of the Board of Directors or their
affiliates.
EMPLOYMENT AGREEMENTS.
The Company currently does not have any employment contracts, severance or
change-in-control agreements with any of its Named Executive Officers.
Upon Randy Knight's retirement as Chairman, the Company entered into a
Consulting Agreement with Randy Knight for $50,000 per year. The Consulting
Agreement is terminable at any time by either party. Presently, consulting
services are rendered by Randy Knight through a limited liability company
controlled by Mr. Knight.
STOCK OPTION PLAN
The Company adopted in 1994 and currently maintains a stock option plan
(the "Plan" or the "Stock Option Plan") to enable directors, executive officers
and certain key and critical line employees of the Company, including drivers
and other employees, to participate in the ownership of the Company. The Plan
was amended and restated during 1998 to authorize the grant of options for an
additional 525,000 shares of Common Stock under the Plan for a total of
1,500,000 shares of Common Stock, after giving effect to the Company's 1998
stock dividend. The Plan is designed to attract and retain directors, executive
officers, key employees and critical line employees of the Company, and to
provide long-term incentives to those persons. In authorizing stock grants under
the Plan, the Compensation Committee has sought to align the interests of
employees with the Company's shareholders and has sought to make stock grants to
those key employees and operating personnel whose performance is important to
the Company's success. As of December 31, 1999, the Company had granted options
to purchase 981,673 shares of its Common Stock and had reserved 518,327 shares
of Common Stock for the issuance of future stock options and grants.
401(k) PLAN.
The Company also sponsors a 401(k) Plan (the "401(k) Plan"). The 401(k)
Plan is a profit sharing plan that permits voluntary employee contributions on a
pre-tax basis under section 401(k) of the Internal Revenue Code. Under the
401(k) Plan, a participant may elect to defer a portion of his compensation and
have the Company contribute a portion of his compensation to the 401(k) Plan.
-12-
The Company makes a discretionary matching contribution. For 1999, the Company's
contribution was $625 per participant. The Plan's assets are held and managed by
an independent trustee. Under the 401(k) Plan, eligible employees have the right
to direct the investment of employee and employer contributions among several
mutual funds. The Plan also allows Participants to direct the trustee to
purchase shares of the Company's stock on the open market. Senior executives of
the Company and certain key employees are not permitted to participate in this
aspect of the Plan.
Amounts contributed by the Company for a participant will vest over five
years and will be held in trust until distributed pursuant to the terms of the
401(k) Plan. An employee of the Company is eligible to participate in the 401(k)
Plan if he has attained age 19 and completed 1,000 hours of service within a 12
month period. Distributions from participant accounts will not be permitted
before age 59-1/2, except in the event of death, disability, certain financial
hardships or separation from service.
COMPENSATION COMMITTEE REPORT AND PERFORMANCE GRAPH
THE COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION, AND THE
PERFORMANCE GRAPH THAT FOLLOW SHALL NOT BE DEEMED TO BE INCORPORATED BY
REFERENCE INTO ANY FILING MADE BY THE COMPANY UNDER THE SECURITIES ACT OF 1933
OR THE SECURITIES EXCHANGE ACT OF 1934, NOTWITHSTANDING ANY GENERAL STATEMENT
CONTAINED IN ANY SUCH FILING INCORPORATING THIS PROXY STATEMENT BY REFERENCE,
EXCEPT TO THE EXTENT THE COMPANY INCORPORATES SUCH REPORT AND GRAPH BY SPECIFIC
REFERENCE.
The Compensation Committee of the Board of Directors has furnished the
following Report on Executive Compensation:
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Under the supervision of the Compensation Committee of the Board of
Directors, the Board of Directors reviews the compensation of the Company's
executive officers annually. The compensation program for the Company's
executive officers is administered in accordance with a pay-for-performance
philosophy to link executive compensation with the values, objectives, business
strategy, management incentives, and financial performance of the Company.
Because the four most senior executive officers of the Company each have
substantial holdings of the Company's Common Stock, corporate performance
directly affects these executive officers. The Committee believes that stock
ownership by the Company's most senior executive officers aligns the interests
of management with the interests of shareholders in the enhancing of shareholder
value. With the exception of Mr. Clark Jenkins, Chief Financial Officer and
Secretary, and Mr. Bruce Beck, Vice President, each of whom, is eligible for
stock options and bonus awards, the Company's executive officers are compensated
with a base salary only, with no bonus or short or long term incentives. With
respect to Mr. Jenkins and other executive officers without substantial holdings
of the Company's Common Stock, the objectives of the Company's compensation
program are to align, through the grant of stock options, executive and
shareholder long-term interests by creating a strong and direct link between
executive pay and shareholder return. The Company's stock option program is
intended to enable executives to develop and maintain a significant, long-term
stock ownership position in the Company's Common Stock. The Committee believes
that the Stock Option Plan is an effective tool for accomplishing this
objective.
In reviewing base salaries of senior management for 1999 and salary
compensation for 1999-2000, including the salary of Mr. Kevin P. Knight, the
Company's Chief Executive Officer, the Compensation Committee reviewed and
considered (i) compensation information disclosed by similarly-sized publicly
-13-
held truckload motor carriers; (ii) the financial performance of the Company, as
well as the role and contribution of the particular executive with respect to
such performance; (iii) non-financial performance related to the individual
executive's contributions; and (iv) the particular executive's stock holdings.
The Compensation Committee believes that the annual salaries of the
Company's Chief Executive Officer and other executive officers are reasonable
compared to similarly situated executives of other truckload motor carriers.
However, the salaries of the Companies Named Executive Officers, other than Mr.
Beck and Mr. Jenkins have not been adequately adjusted and, consequently, the
Committee is recommending an adjustment be made, effective in May 2000, to take
into account cost of living increases not previously recognized.
COMPENSATION COMMITTEE
Donald A. Bliss, Chairman
G. D. Madden, Member
February 10, 2000
-14-
STOCK PERFORMANCE GRAPH
The graph below compares cumulative total returns of the Company, the
NASDAQ Stock Market and the NASDAQ Trucking and Transportation Stocks Indices
(the "Peer Group") from December 31, 1995 to December 31, 1999. The graph
assumes that $100 of the Company's Common Stock was purchased on December 31,
1995, at a price of $13.75 per share and all dividends were reinvested. The
Company has paid no dividends on its Common Stock since its inception and does
not expect to do so in the foreseeable future. There is no assurance that the
Company's stock performance will continue into the future with the same or
similar trends depicted in the graph below. The Company makes no predictions as
to the future performance of its stock.
[BAR CHART]
Index Description 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
----------------- -------- -------- -------- -------- --------
Knight Transportation, Inc. 100.00 138.18 201.81 291.13 186.31
NASDAQ Stock Market 100.00 123.04 150.76 212.44 383.79
NASDAQ Trucking & 100.00 110.39 141.29 127.11 135.75
Transportation Stocks
Index (the "Peer Group")
-15-
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
COMPANY'S PURCHASE AND LEASE OF PROPERTIES
The Company's headquarters and principal place of business is located at
5601 West Buckeye Road, Phoenix, Arizona, on approximately 43 acres. The Company
owns approximately 35 acres and, as of December 31, 1999, leased approximately 8
acres from Randy Knight, a director and principal shareholder of the Company.
The property leased by the Company from Randy Knight includes terminal and
operating facilities. Total payments of approximately $84,600 were made by the
Company to, or on behalf of, Total Warehousing and Randy Knight for the year
ended December 31, 1999. Randy Knight owns a 50 percent interest in Total
Warehousing; the balance is owned by an unaffiliated party.
Under the original lease between the Company and Randy Knight, the base
rent was $4,828 per month for the initial three years of the lease. On September
1, 1997, the lease was amended and the Company increased the acreage leased from
Randy Knight by approximately 1.4 acres; the base rent was also increased to
$5,923 per month, effective as of September 1, 1997. Under the amended lease,
base rent for terminal space is calculated at $.00515 per square foot per month
and for office space at $.1236 per square foot per month. Under the lease, base
rent increases by 3% on the third anniversary of the commencement date, the
first day of each option term, and the third anniversary of the commencement
date of each option term. In March 1999, the first renewal option was exercised
and the monthly payment was increased to $6,100. In addition to base rent, the
lease requires the Company to pay its share of all expenses, utilities, taxes
and other charges. Under the lease, the Company and Total Warehousing will
continue to use portions of the premises jointly. The Company has granted Randy
Knight access and utility easements over its owned and leased properties. The
purchase and lease agreements between the Company and Randy Knight include
cross-indemnities relating to liabilities and expenses arising from the use and
occupancy of the property by the parties to the agreements.
Randy Knight retired as an officer of the Company on July 31, 1999, and
since then has acted as a consultant to the Company for which services he
receives $50,000.00 per year. The consulting agreement is terminable at the will
of either party. The Board of Directors has approved this arrangement.
The Company paid approximately $90,000 during 1999 for certain of its key
employees' life insurance premiums. The total premiums paid are included in
other assets in the consolidated balance sheet attached to Form 10-K. The life
insurance policies provide for cash distributions to the beneficiaries of the
policyholders upon death of the key employee. The Company is entitled to receive
the total premiums paid out on the policies at distribution prior to any
beneficiary distributions.
The Company and Total Warehousing have periodically jointly purchased
insurance and other products and services and have shared other costs relating
to the operation of their businesses. Costs have been allocated consistently
with their respective use of the product or service. In addition, the Company
and Total Warehousing from time to time provide services to each other. Total
Warehousing provided general warehousing services to the Company and was paid
$9,400 by the Company for the year ended December 31, 1999.
-16-
KNGT INVESTMENT
The Company periodically examines investment opportunities in areas
related to the truckload carrier business. The Company's investment strategy is
to add to shareholder value by investing in industry related businesses that
will assist the Company in strengthening its overall position in the
transportation industry, minimize the Company's exposure to start-up risk and
provide the Company with an opportunity to realize a substantial return on its
investment. In April 1999, the Company acquired a 17% interest in KNGT
Logistics, Inc. ("KNGT"), with the intent of investing in the non-asset
transportation business. The Company's investment in KNGT was approved by a
majority of the Company's Independent Directors. The Company holds non-voting
Class A Preferred Stock which is preferred in the event of liquidation,
dissolution sale or merger and with respect to dividends over all other classes
of stock, including stock held by other members of the Knight family. The
Company has preferential rights in the event KNGT issues additional shares and
limited voting rights with respect to merger, consolidation, sale of
substantially all of KNGT's assets, and certain other major corporate events.
The Company, through a limited liability company, has agreed to lend up to a
maximum of $935,000 to KNGT pursuant to a promissory note to fund start-up
costs. The note is convertible into KNGT's Class A Preferred Stock and is
secured by a lien on KNGT's assets. Other investors in KNGT include Randy,
Kevin, Gary and Keith Knight, who collectively own 43% of KNGT's issued and
outstanding stock and through the same limited liability company affiliate may
lend up to a maximum of $4,565,000 to KNGT pursuant to a promissory note
convertible into KNGT's Class B Preferred Stock to fund KNGT's start-up costs.
The loans to KNGT made by the Company and the Knights are on a parity basis with
regard to security. The Company's investment has been structured to limit its
exposure to KNGT start-up losses and business risk.
TRANSACTIONS WITH AFFILIATES
The Company has adopted a policy that transactions with affiliated persons
or entities will be on terms no less favorable to the Company than those that
could be obtained from unaffiliated third parties on an arm's length basis, and
that any such transaction must be reviewed by the Company's Independent
Directors.
CERTAIN BUSINESS RELATIONSHIPS
During 1999, the Company retained the Scudder Law Firm, P.C. to perform
certain legal services on its behalf. Mr. Mark Scudder, a member of the
Company's Board of Directors, is a member of the Scudder Law Firm and performed
legal services on behalf of the Company. The Company intends to use the services
of the Scudder Law Firm during 2000.
(Intentionally Left Blank)
-17-
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth, as of March 27, 2000, the number and
percentage of outstanding shares of Company Common Stock beneficially owned by
each person known by the Company to beneficially own more than 5% of such stock,
by each Director and Named Executive Officer of the Company, and by all
directors and executive officers of the Company as a group.
Name and Address of Amount and Nature of Percent of
Beneficial Owner(1) Beneficial Ownership Class
------------------- -------------------- -----
Donald A. Bliss(2) 5,929 *
Clark A. Jenkins(3) 54,164 *
Gary J. Knight(4) 2,078,512 14.20%
Keith T. Knight(5) 2,037,012 13.91%
Kevin P. Knight(6) 2,029,512 13.86%
L. Randy Knight(7) 2,002,887 13.68%
G.D. Madden(8) 4,429 *
Mark Scudder(9) 3,400 *
William Blair & Company, L.L.C.(10) 978,275 6.68%
Wasatch Advisors, Inc.(11) 1,080,670 7.38%
Perkins, Wolf, McDonnell & Company(12) 885,800 6.05%
All directors and executive officers
as a group (eight persons) 8,215,845 56.12%
- ----------
(1) The address of each officer and director is 5601 West Buckeye Road,
Phoenix, Arizona 85043. The address of William Blair & Company, L.L.C.
("William Blair") is 222 West Adams Street, Chicago, Illinois 60606. All
information provided with respect to William Blair is based solely upon the
Company's review of a Schedule 13G filed by William Blair with the
Securities and Exchange Commission on February 28, 2000. The address of
Wasatch Advisors, Inc. ("Wasatch") is 150 Social Hall Avenue, Salt Lake
City, Utah 84111. All information provided with respect to Wasatch is based
solely upon the Company's review of a Schedule 13G, filed by Wasatch with
the Securities and Exchange Commission on February 14, 2000. The address of
Perkins, Wolf, McDonnell & Company ("Perkins") is 53 West Jackson Blvd.,
Suite 722, Chicago, Illinois 60604. All information provided with respect
to Perkins is based solely upon the Company's review of a Schedule 13G
filed by Perkins with the Securities and Exchange Commission on February
14, 2000.
(2) Includes 5,929 shares beneficially owned by Donald A. Bliss over which he
exercises sole voting and investment powers under a Revocable Trust
Agreement.
(3) Includes 1,036 shares of Common Stock and 53,128 subject to options
currently exercisable or exercisable within 60 days. Mr. Jenkins also holds
options to acquire an additional 12,000 shares that are not exercisable
within the next 60 days, and which are not included within the amount shown
in this Security Ownership of Certain Beneficial Owners and Management
Table.
-18-
(4) Includes 2,076,262 shares beneficially owned by Gary J. Knight over which
he exercises sole voting and investment power as a Trustee under a
Revocable Trust Agreement dated May 19, 1993, and 2,250 shares owned by
three minor children who share the same household.
(5) Includes 2,034,762 shares beneficially owned by Keith T. Knight over which
he and his wife, Fawna Knight, exercise sole voting and investment power as
Trustees under a Revocable Trust Agreement dated March 13, 1995, and 2,250
shares owned by three minor children who share the same household.
(6) Includes 1,996,312 shares beneficially owned by Kevin P. Knight over which
he and his wife, Sydney Knight, exercise sole voting and investment power
as Trustees under a Revocable Trust Agreement dated March 25, 1994, 30,000
shares held by Kevin P. and Sydney B. Knight Family Foundation over which
Kevin P. Knight and his wife, Sydney Knight, as officers of the Foundation,
exercise sole voting and investment power on behalf of the Foundation; and
3,200 shares owned by four minor children, who share the same household.
(7) Includes 1,549,787 shares beneficially owned by L. Randy Knight over which
he exercises sole voting and investment power as a Trustee under a
Revocable Trust Agreement dated April 1, 1993; 450,000 shares held by a
limited liability company for which Mr. Knight acts as manager and whose
members include Mr. Knight and trusts for the benefit of his four children;
and 3,100 shares owned by a child who shares the same household and over
which Mr. Knight exercises voting power.
(8) Includes 3,750 shares that G.D. Madden has the right to acquire through the
exercise of a stock option.
(9) Includes 2,500 shares that Mark Scudder has the right to acquire through
the exercise of a stock option.
(10) William Blair & Company, L.L.C. has sole voting power over 299,955 shares
and sole dispositive power over 978,275 shares. It has shared voting power
and shared dispositive power over no shares. William Blair & Company
Investment Management Services, a department of William Blair & Company
L.L.C., serves as an investment advisor. William Blair & Company, L.L.C. is
the owner of record and discloses beneficial ownership of 978,275 shares.
The foregoing is based solely on information provided by Form 13G, filed by
William Blair & Company, L.L.C. with the Securities and Exchange Commission
on February 28, 2000.
(11) Wasatch Advisors, Inc. has sole voting power over 1,080,670 shares and sole
dispositive power over 1,080,670 shares. It has shared voting power and
shared dispositive power over no shares. Wasatch Advisors, Inc. is the
owner of record and discloses beneficial ownership of such shares. The
foregoing is based solely on information provided by Form 13G, filed by
Wasatch Advisors, Inc. with the Securities and Exchange Commission on
February 14, 2000.
(12) Perkins, Wolf, McDonnell & Company has sole voting power and full
dispositive power over no shares. It has shared voting power and shared
dispositive power over 885,800 shares. Perkins, Wolf, McDonnell & Company
is the owner of record and discloses beneficial ownership of such shares.
The foregoing is based solely on information provided by Form 13G, filed by
Perkins, Wolf, McDonnell & Company with the Securities and Exchange
Commission on February 14, 2000.
* Represents less than 1% of the Company's outstanding Common Stock.
-19-
PROPOSAL NUMBER THREE
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
RATIFICATION OF APPOINTMENT OF ARTHUR ANDERSEN LLP
Arthur Andersen LLP, independent public accountants ("Arthur Andersen") was
the principal accounting firm used by the Company during the fiscal year ended
December 31, 1999. Arthur Andersen has served as the Company's independent
public accountant since 1994. The Board of Directors has appointed Arthur
Andersen as the principal independent accounting firm to be used by the Company
during the current fiscal year. A representative of Arthur Andersen is expected
to be present at the Annual Meeting with an opportunity to make a statement if
such representative desires to do so, and is expected to respond to appropriate
questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
APPOINTMENT OF ARTHUR ANDERSEN.
SHAREHOLDER PROPOSALS
The Board of Directors will consider proposals from shareholders for
nominations of directors to be elected at the 2001 Annual Meeting of
shareholders that are made in writing to the Secretary of the Company, are
received at least ninety (90) days prior to the 2001 Annual Meeting, and contain
sufficient background information concerning the nominee to enable a proper
judgment to be made as to his or her qualifications, as more fully provided in
the Company's Articles of Incorporation and Bylaws.
Proposals of shareholders as to other matters intended to be presented at
the 2001 Annual Meeting must be received by the Company by December 6, 2000, to
be considered for inclusion in the Company's Proxy Statement and form of proxy
relating to such Meeting. Proposals should be mailed via certified mail, return
receipt requested, and addressed to Clark A. Jenkins, Secretary, Knight
Transportation, Inc., 5601 West Buckeye Road, Phoenix, Arizona 85043.
OTHER MATTERS
The Board of Directors does not intend to present at the Annual Meeting any
matters other than those described herein and does not presently know of any
matters that will be presented by other parties.
KNIGHT TRANSPORTATION, INC.
By: Kevin P. Knight
Chairman of the Board and
Chief Executive Officer
-20-
APPENDIX A
PROPOSED AMENDMENTS TO THE
ARTICLES OF INCORPORATION OF KNIGHT TRANSPORTATION, INC.
The Board of Directors of Knight Transportation, Inc. (the "Company") has
approved the following First Amendment to Company's Amended and Restated
Articles of Incorporation, as filed with the Arizona Corporation Commission on
August 31, 1994, for submission to shareholders of the Company for their
consideration and action:
1. Article VII of the Articles of Incorporation of the Corporation is
amended by the addition of the following paragraphs:
(D) Notwithstanding anything contained in Article VII, paragraphs (A),
(B), or (C) of these Articles of Incorporation, commencing with the May 2000
annual meeting of shareholders, the Corporation's directors shall be divided
into two classes (Class I and Class II), with the number of directors in each
class to be as nearly equal as reasonably possible. The initial terms of office
for the Class I and Class II directors elected at the May 2000 annual meeting of
the shareholders shall be as follows:
(1) Class I directors shall be elected to serve, for a term
commencing with their election at the May 2000 annual meeting of shareholders
and expiring on the conclusion of the 2001 annual meeting of shareholders; and
(2) Class II directors shall be elected to serve for a term
commencing with their election at the May 2000 annual meeting of shareholders
and expiring on the conclusion of the 2002 annual meeting of shareholders.
Commencing with the 2001 annual meeting of shareholders and
continuing at each annual meeting of shareholders thereafter, a director elected
in a class to succeed a director in that class whose term has expired shall be
elected to serve until the conclusion of the second succeeding Annual Meeting of
shareholders from the date of such director's election or until such director's
successor shall has been duly elected and qualified. The system of cumulative
voting shall be applied to the election of directors within each class of
directors.
(E) Notwithstanding anything contained in Paragraphs (A), (C) or (D)
of Article VII of these Articles of Incorporation, but subject to the provisions
of Paragraph (F), if the number of the Corporation's directors equals nine (9)
or more, the Corporation's Board of Directors shall be divided into three
classes of directors (Class I, Class II and Class III) at the next annual
meeting of Shareholders at which any director stands for election, and all of
the directors of the Corporation shall stand for election at such meeting,
notwithstanding the fact that a director's term may not have expired. There
shall not be less than three directors in each class, and the number of
directors in each class to be as nearly equal as reasonably possible. The
initial terms of office for the Class I, Class II and Class III directors
elected at the first annual meeting of shareholders in which there are three
classes of directors shall be as follows:
(1) Class I directors shall be elected to serve, for a one (1)
year term commencing with their election at the annual meeting of shareholders
and expiring on the conclusion of the next succeeding annual meeting of
Shareholders;
(2) Class II directors shall be elected to serve for a two (2)
year term commencing with their election at the annual meeting of shareholders
and expiring on the conclusion of the second succeeding annual meeting of
shareholders; and
(3) Class III directors shall be elected to serve for a three (3)
term commencing with their election at the annual meeting of shareholders and
expiring on the conclusion of the second succeeding annual meeting of
shareholders
Beginning with the first annual meeting of shareholders following the first
election of Class I, Class II and Class III directors under this Paragraph (E),
and continuing at each annual meeting of shareholders thereafter, each director
elected in a class shall be elected to serve for a term ending with the
conclusion of the third succeeding annual meeting of shareholders after the date
of such director's election.
(F) The system of cumulative voting shall be applied to the election
of directors within each class of directors. The Board of Directors shall
designate the class to which each director is assigned.
(G) Newly created directorships resulting from any increase in the
number of authorized directors, vacancies arising from a director's resignation
or removal, or directorships eliminated as a result of a decrease in the number
of authorized directors shall be apportioned by the Board of Directors among the
Class I and Class II directors (and Class III directors, at such time as the
Corporation's directors consist of nine (9) or more members) as nearly equally
as reasonably possible; provided, however, that no decrease in the number of
authorized directors shall shorten the term or effect the removal of any
incumbent director.
2. The First Amendment to the Amended and Restated Articles of
Incorporation of the Corporation, as filed with the Arizona Corporation
Commission on August 31, 1994, shall become effective upon filing of such First
Amendment with the Arizona Corporation Commission; provided that terms of each
class of directors shall run from the dates stated in such First Amendment.
-21-
KNIGHT TRANSPORTATION, INC.
5601 WEST BUCKEYE ROAD
PHOENIX, ARIZONA 85043
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR ANNUAL MEETING OF
SHAREHOLDERS Wednesday, May 10, 2000, 10:00 A.M., Phoenix time
By executing this proxy the shareholder constitutes and appoints the Chairman
and Chief Executive Officer, Kevin P. Knight, and the Secretary and the
Executive Vice President-Finance, Clark A. Jenkins, and each of them, as proxies
for the undersigned, (or if only one proxy is present, that one shall have all
power granted here) with full power of substitution, who may by a majority of
such proxies represent the shareholder and vote all shares of Common Stock which
the shareholder is entitled to vote at the Annual Meeting of the Shareholders of
Knight Transportation, Inc. to be held on May 10, 2000, at 10:00 a.m., Phoenix
Time, The Wigwam Resort Hotel, 300 East Wigwam Boulevard, Arizona 85340, or at
any adjournment thereof, on all matters set forth in the Notice and Proxy
Statement for Annual Meeting dated May 10, 2000.
1. PROPOSAL NO. 1: Proposal to Amend the Company's Articles of Incorporation
to classify the Board of Directors of the Company.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. PROPOSAL No. 2: Proposal to Elect Directors.
NOMINEES
01-Clark Jenkins*, 02-L. Randy Knight*, 03-Keith Knight*, 04-Mark
Scudder*, 05-Donald A. Bliss**, 06-Gary Knight**, 07-Kevin Knight**,
08-G.D. Madden**, 09-Donald A. Bliss***, 10-Clark A. Jenkins***,
11-Kevin Knight***, 12-G.D. Madden***, 13-Mark Scudder***, 14-L. Randy
Knight***, 15-Keith Knight***, 16-Gary Knight***
KEY TO ABBREVIATIONS:
* - To elect for one-year term if Proposal Number One is approved.
** - To elect for two-year term if Proposal Number one is approved.
*** - To elect for one-year term if Proposal Number One is not approved.
[ ] VOTE for all Nominees listed above.
[ ] WITHHOLD authorization to vote for all Nominees listed
above.
[ ] WITHHOLD authorization to vote for any individual Nominee,
write number of Nominee(s) below:
3. PROPOSAL NO. 3: Proposal to ratify and approve the selection of Arthur
Andersen LLP, as the Company's independent accountant for 2000.
[ ] FOR APPROVAL of Arthur Andersen LLP.
[ ] AGAINST APPROVAL of Arthur Andersen LLP.
[ ] ABSTAIN
In their discretion, the proxies are also authorized to vote upon such matters
as may properly come before the Annual Meeting or any adjournments thereof.
Signature(s) Date
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NOTE: Please sign name exactly as it appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
The shareholder acknowledges receipt of the Notice and Proxy Statement dated
April 6, 2000, grants authority to any of said proxies, or their substitutes, to
act in the absence of others, with all the powers which the shareholder would
possess if personally present at such meeting, and hereby ratifies and confirms
all that said proxies, or their substitutes, may lawfully do in the
undersigned's name, place and stead.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF KNIGHT
TRANSPORTATION, INC. AND THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN
ACCORDANCE WITH YOUR INSTRUCTIONS. IF NO CHOICE IS SPECIFIED BY YOU, THIS PROXY
WILL BE VOTED FOR PROPOSAL NUMBER ONE, FOR THE ELECTION OF NOMINEES NAMED IN
PROPOSAL NUMBER TWO, AND FOR PROPOSAL NUMBER THREE.
Please mark, sign, date and return the Proxy Card promptly, using the enclosed
envelope, which requires no postage when mailed in the United States.
Please sign above exactly as your name appears. When shares are held by joint
tenants, both shall sign. When signing as attorney, executor, administrator,
trustee or guardian, please give your full title as such. If a corporation,
please sign in full the corporate name by the president or other authorized
officer. If a partnership, please sign in partnership name by an authorized
person.