SCHEDULE 14A INFORMATION
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
[X] Preliminary Proxy Statement [ ] Confidential, For Use of the
[ ] 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
SWIFT TRANSPORTATION CO., 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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SWIFT TRANSPORTATION CO., INC.
2200 SOUTH 75TH AVENUE
PHOENIX, ARIZONA 85043
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 23, 2002
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To Our Stockholders:
The 2002 Annual Meeting of Stockholders of Swift Transportation Co., Inc.
will be held at our headquarters at 2200 South 75th Avenue, Phoenix, Arizona
85043, on May 23, 2002, beginning at 10:00 a.m. local time. At the Annual
Meeting, stockholders will act on the following matters:
* Election of two Class III directors, each for a term of three years;
* Amendment of Swift's Articles of Incorporation to increase the number
of shares of Common Stock authorized for issuance from 150,000,000 to
200,000,000;
* Amendment of the 1999 Stock Option Plan to authorize an additional
3,000,000 shares of Common Stock for issuance thereunder; and
* Any other matters that properly come before the Annual Meeting or any
adjournment or postponement thereof. Management is presently aware of
no other business to come before the Annual Meeting.
Each outstanding share of Swift Common Stock entitles the holder of record
at the close of business on April 10, 2002, to receive notice of and to vote at
the Annual Meeting or any adjournment or postponement thereof. Shares of Common
Stock can be voted at the Annual Meeting only if the holder is present in person
or by valid proxy. We have enclosed a copy of our 2001 Annual Report to
Stockholders, which includes certified financial statements, and our Proxy
Statement. Management cordially invites you to attend the Annual Meeting.
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IF YOU PLAN TO ATTEND:
PLEASE NOTE THAT SPACE LIMITATIONS MAKE IT NECESSARY TO LIMIT ATTENDANCE TO
STOCKHOLDERS AND ONE GUEST. REGISTRATION AND SEATING WILL BEGIN AT 9:00 A.M.
COMPLIMENTARY PARKING IS AVAILABLE AT OUR OFFICES. STOCKHOLDERS HOLDING STOCK IN
BROKERAGE ACCOUNTS ("STREET NAME" HOLDERS) WILL NEED TO BRING A COPY OF A
BROKERAGE STATEMENT REFLECTING STOCK OWNERSHIP AS OF THE RECORD DATE. CAMERAS,
RECORDING DEVICES AND OTHER ELECTRONIC DEVICES WILL NOT BE PERMITTED AT THE
MEETING.
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By Order of the Board of Directors
Jerry Moyes
Phoenix, Arizona CHAIRMAN OF THE BOARD, PRESIDENT AND
April __, 2002 CHIEF EXECUTIVE OFFICER
IMPORTANT
PLEASE MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS
POSSIBLE IN THE ENCLOSED POSTAGE-PAID ENVELOPE. YOUR VOTE IS IMPORTANT, SO
PLEASE ACT TODAY!
TABLE OF CONTENTS
Page
ABOUT THE MEETING..............................................................1
What is the purpose of the annual meeting?................................1
Who is entitled to vote?..................................................1
Who can attend the meeting?...............................................1
What constitutes a quorum?................................................1
How do I vote?............................................................2
What if I vote and then change my mind?...................................2
What are the Board's recommendations?.....................................2
What vote is required to approve each item?...............................2
Who will bear the costs of this proxy solicitation?......................3
BOARD OF DIRECTORS.............................................................4
What is the makeup of the Board of Directors?.............................4
Are there any directors who are not standing for re-election?.............4
Election of Directors (Proposal No. 1)...............................4
Continuing Directors.................................................5
Continuing Directors.................................................5
How are non-employee directors compensated?...............................6
Are employees of Swift Transportation paid additional compensation
for service as a director?..............................................6
How often did the Board meet during fiscal 2001?..........................6
What committees has the Board established?................................7
Compensation Committee....................................................7
Audit Committee...........................................................7
Report of the Audit Committee.............................................7
EXECUTIVE OFFICERS OF SWIFT....................................................9
EXECUTIVE COMPENSATION........................................................10
Summary Compensation Table...............................................10
Options/SAR Grants in Last Fiscal Year...................................11
Aggregated Option/SAR Exercises In Last Fiscal Year
and Fiscal Year-End Option/SAR Values..................................12
Employment and Change of Control Agreements..............................13
Report of the Compensation Committee on Executive Compensation...........14
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION...................17
STOCK PRICE PERFORMANCE GRAPH.................................................18
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.......................18
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT...................19
CERTAIN TRANSACTIONS AND RELATIONSHIPS........................................21
AMENDMENT TO ARTICLES OF INCORPORATION (Proposal No. 2).......................22
AMENDMENT TO 1999 STOCK OPTION PLAN (Proposal No. 3)..........................23
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS.....................................26
STOCKHOLDER PROPOSALS AND NOMINATIONS.........................................26
OTHER MATTERS.................................................................27
ANNEX A: AMENDED AND RESTATED ARTICLES OF INCORPORATION......................A-1
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SWIFT TRANSPORTATION CO., INC.
2200 SOUTH 75TH AVENUE
PHOENIX, ARIZONA 85043
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PROXY STATEMENT
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This Proxy Statement contains information related to the 2002 Annual
Meeting of Stockholders (the "Annual Meeting") of Swift Transportation Co., Inc.
to be held on May 23, 2002, at 10:00 a.m. local time, at our headquarters
located at 2200 South 75th Avenue, Phoenix, Arizona 85043, or at such other time
and place to which the Annual Meeting may be adjourned or postponed. THE
ENCLOSED PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF SWIFT TRANSPORTATION.
The proxy materials relating to the Annual Meeting are first being mailed to
stockholders entitled to vote at the meeting on or about April 26, 2002.
ABOUT THE MEETING
WHAT IS THE PURPOSE OF THE ANNUAL MEETING?
At the Annual Meeting, stockholders will act upon the matters outlined in
the accompanying Notice of Annual Meeting of Stockholders. In addition,
management will report on the performance of Swift during fiscal 2001 and
respond to questions from stockholders.
WHO IS ENTITLED TO VOTE?
Only stockholders of record at the close of business on April 10, 2002 (the
"Record Date"), are entitled to receive notice of the Annual Meeting and to vote
the shares of Common Stock that they held on that date at the Annual Meeting, or
any postponement or adjournment of the Annual Meeting. Each outstanding share
entitles its holder to cast one vote on each matter to be voted upon.
WHO CAN ATTEND THE ANNUAL MEETING?
All stockholders as of the close of business on the Record Date, or their
duly appointed proxies, may attend the Annual Meeting, and each may be
accompanied by one guest. Registration and seating will begin at 9:00 a.m.
Cameras, recording devices and other electronic devices will not be permitted at
the Annual Meeting.
Please note that if you hold your shares in "street name" (that is, through
a broker or other nominee), you will need to bring a copy of a brokerage
statement reflecting your stock ownership as of the Record Date and check in at
the registration desk at the Annual Meeting.
WHAT CONSTITUTES A QUORUM?
The presence at the meeting, in person or by proxy, of the holders of a
majority of the shares of Common Stock outstanding on the Record Date will
constitute a quorum, permitting Swift to conduct its business at the Annual
Meeting. As of the Record Date, 86,385,870 shares of Common Stock were
outstanding. Proxies received but marked as abstentions and broker non-votes
will be included in the calculation of the number of shares considered to be
present at the Annual Meeting.
HOW DO I VOTE?
You can vote on matters to come before the Annual Meeting in two ways:
1. You can attend the Annual Meeting and cast your vote in person; or
2. You can vote by completing, dating and signing the enclosed proxy card
and returning it in the enclosed postage-paid envelope. If you do so,
you will authorize the individuals named on the proxy card, referred
to as the proxies, to vote your shares according to your instructions
or, if you provide no instructions, according to the recommendation of
the Board of Directors.
WHAT IF I VOTE AND THEN CHANGE MY MIND?
You may revoke your proxy at any time before it is exercised by:
* sending written notice of revocation to the Secretary of Swift at P.O.
Box 29243, Phoenix, Arizona, 85038-9243; or
* sending in another duly executed proxy bearing a later date; or
* attending the Annual Meeting and casting your vote in person.
Your last vote will be the vote that is counted.
WHAT ARE THE BOARD'S RECOMMENDATIONS?
The Board recommends that you vote FOR election of the nominated slate of
directors (see page 4), FOR approval of the proposed amendment to Swift's
Articles of Incorporation (see page 22), and FOR approval of the proposed
amendment to the 1999 Stock Option Plan (see page 23). Unless you give other
instructions on your proxy card, the persons named as proxy holders on the proxy
card will vote in accordance with the Board's recommendation. With respect to
any other matter that properly comes before the meeting, the proxy holders will
vote as recommended by the Board of Directors or, if no recommendation is given,
in their own discretion.
WHAT VOTE IS REQUIRED TO APPROVE EACH ITEM?
ELECTION OF DIRECTORS. The two nominees who receive the most votes will be
elected to the Board of Directors. A properly executed proxy marked "WITHHOLD
AUTHORITY" with respect to the election of one or more directors will not be
voted with respect to the director or directors indicated, although it will be
counted for purposes of determining whether there is a quorum. A broker
"non-vote" (DISCUSSED BELOW) will also have no effect on the outcome since only
a plurality of votes actually cast is required to elect a director.
PROPOSED AMENDMENT TO ARTICLES OF INCORPORATION. The proposed amendment to
the Articles of Incorporation to increase the number of shares of Common Stock
authorized for issuance requires the affirmative vote of the holders of a
majority of the issued and outstanding shares of Common Stock entitled to vote
at the Annual Meeting. A properly executed proxy marked "ABSTAIN" with respect
to the proposed amendment to the Articles of Incorporation will not be voted.
Accordingly, an abstention will have the effect of a negative vote. Similarly, a
broker non-vote (DISCUSSED BELOW) will have the same effect as a vote against
the proposed amendment to the Articles of Incorporation.
2
PROPOSED AMENDMENT TO THE 1999 STOCK OPTION PLAN AND OTHER ITEMS. For each
other item, including the proposed amendment to the 1999 Stock Option Plan, the
affirmative vote of the holders of a majority of the shares represented in
person or by proxy at the Annual Meeting and entitled to vote thereat will be
required for approval; provided, however, that if the shares of stock so
represented are less than the number required to constitute a quorum, the
affirmative vote must be such as would constitute a majority if a quorum were
present. A properly executed proxy marked "ABSTAIN" or a "broker non-vote"
(DISCUSSED BELOW) will not be counted as a vote "for" or "against" any such
item.
EFFECT OF BROKER NON-VOTES. If your shares are held in "street name"
through a broker or other nominee, your broker or nominee may not be permitted
to exercise voting discretion under certain circumstances. Brokers have the
authority under Nasdaq rules to vote customers' unvoted shares on certain
"routine" matters, including the election of directors. When a broker votes its
customers' unvoted shares, the shares are counted for purposes of establishing a
quorum. At the Annual Meeting, these shares will be counted as voted by the
broker in the election of directors, but will not be counted as voted for any
"non-routine" matters to be voted on.
WHO WILL BEAR THE COSTS OF THIS PROXY SOLICITATION?
We will bear the cost of solicitation of proxies. This includes the charges
and expenses of brokerage firms and others for forwarding solicitation material
to beneficial owners of our outstanding Common Stock. We may solicit proxies by
mail, personal interview, telephone or telegraph.
3
BOARD OF DIRECTORS
THIS SECTION GIVES BIOGRAPHICAL INFORMATION ABOUT OUR DIRECTORS AND
DESCRIBES THEIR MEMBERSHIP ON BOARD COMMITTEES, THEIR ATTENDANCE AT MEETINGS AND
THEIR COMPENSATION.
WHAT IS THE MAKEUP OF THE BOARD OF DIRECTORS?
The Board presently consists of eight members. The directors are divided
into three classes, with each class serving for a three-year period. The
stockholders elect approximately one-third of the Board of Directors each year.
There are currently three Class I directors, three Class II directors, and two
Class III directors.
ARE THERE ANY DIRECTORS WHO ARE NOT STANDING FOR RE-ELECTION?
No.
ELECTION OF DIRECTORS (PROPOSAL NO. 1)
FOR TERM EXPIRING AT 2005 ANNUAL MEETING
CLASS III
The Board of Directors has nominated William F. Riley III and Lou A.
Edwards for election to Class III at the Annual Meeting. Each nominee will be
elected to serve until the 2005 Annual Meeting of Stockholders or until his
successor shall have been duly elected and qualified or his resignation or
removal, whichever first occurs.
Each of the nominees has consented to serve a three-year term. If any of
them should become unavailable to serve as a director, the Board may designate a
substitute nominee. In that case, the persons named as proxies will vote for the
substitute nominee designated by the Board.
Nominees standing for election are:
WILLIAM F. RILEY III, 55 DIRECTOR SINCE 1990
WILLIAM F. RILEY III has served as the Senior Executive Vice President of
Swift since January 2000. Mr. Riley has served as Swift's Chief Financial
Officer and Secretary since March 1990, at which time he was named an Executive
Vice President. Mr. Riley also has served as a Director on the Swift Board since
March 1990. In addition, Mr. Riley has acted as a Vice President of Swift
Leasing Co., Inc. and Cooper Motor Lines since May 1986 and April 1988,
respectively. Prior to joining Swift in February 1986, Mr. Riley was employed by
Armour Food Co. from 1978 to January 1986, serving in various transportation and
distributions assignments, principally as Manager of Business Planning of Armour
Food Express, its truckload motor carrier.
LOU A. EDWARDS, 88 DIRECTOR SINCE 1990
LOU A. EDWARDS has served as a Director of Swift since May 1990. Mr.
Edwards is a retired president of a truck dealership and has 40 years of
experience in the trucking industry. Mr. Edwards also is a member of the board
of directors of Simon Transportation Services Inc., a publicly traded trucking
company providing nationwide, predominantly temperature controlled
transportation services for major shippers. Simon Transportation Services filed
for protection under Chapter 11 of the United States Bankruptcy Code on February
25, 2002.
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THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR ELECTION OF EACH OF THE
DIRECTOR NOMINEES.
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4
CONTINUING DIRECTORS
FOR TERM EXPIRING AT 2004 ANNUAL MEETING
CLASS II
The following Class II directors were elected at our 2001 Annual Meeting
for terms ending in 2004:
JERRY MOYES, 58 DIRECTOR SINCE 1984
JERRY MOYES has served as the Chairman of the Board, President and Chief
Executive Officer of Swift since 1984. Mr. Moyes joined Swift in 1966 as a Vice
President and served in that capacity until 1984. Mr. Moyes was President of the
Arizona Motor Transport Association from 1987 to 1988. Mr. Moyes also serves as
Chairman of the Board of Simon Transportation Services Inc., a publicly traded
trucking company providing nationwide, predominantly temperature controlled
transportation services for major shippers. Simon Transportation Services filed
for protection under Chapter 11 of the United States Bankruptcy Code on February
25, 2002.
ALPHONSE E. FREI, 63 DIRECTOR SINCE 1990
ALPHONSE E. FREI has served as a Director of Swift since May 1990. Mr. Frei
has served as the Chief Operating Officer of Autom Company, a wholesale and
retail distributor of religious products, since May 1999. Mr. Frei served in
various capacities, including Chief Financial Officer, with America West
Airlines from 1983 to 1994 and served as a director of America West Airlines
from 1986 to September 1993. Mr. Frei has served in various executive capacities
or as a consultant to a number of business organizations.
MICHAEL S. STARNES, 57 DIRECTOR SINCE 2001
MICHAEL S. STARNES has served as a Director of Swift since June 2001. Since
1978, Mr. Starnes has served as a director and the President and Chief Executive
Officer of our subsidiary M.S. Carriers, Inc., a major truckload carrier we
acquired through a merger in June 2001. Mr. Starnes also has served as a
director of RFS Hotel Investors, Inc. since 1992, Mid-America Apartment
Communities since 1996 and Union Planters Corporation since 2001.
CONTINUING DIRECTORS
FOR TERM EXPIRING AT 2003 ANNUAL MEETING
CLASS I
The following Class I directors were elected at our 2000 Annual Meeting for
terms ending in 2003 (with the exception of Edward A. Labry, III, who was
elected at our 2001 Annual Meeting for a term ending in 2003):
RODNEY K. SARTOR, 47 DIRECTOR SINCE 1990
RODNEY K. SARTOR has served as an Executive Vice President and a Director
of Swift since May 1990. Mr. Sartor joined Swift in May 1979. He served as
Director of Operations from May 1982 until August 1988 and as a Regional Vice
President from August 1988 until May 1990.
5
EARL H. SCUDDER, 59 DIRECTOR SINCE 1993
EARL H. SCUDDER has served as a Director of Swift since May 1993. Mr.
Scudder has been President of Scudder Law Firm, P.C., L.L.O. in Lincoln,
Nebraska since February 1990, and has engaged in the private practice of law
since 1966. Mr. Scudder served as a director of Heartland Express, Inc. a
publicly traded trucking company, from 1986 until 1996. In addition, Mr. Scudder
served as a director of Simon Transportation Services Inc., a publicly traded
trucking company providing nationwide, predominantly temperature controlled
transportation services for major shippers, from 2000 until 2001. Simon
Transportation Services filed for protection under Chapter 11 of the United
States Bankruptcy Code on February 25, 2002.
EDWARD A. LABRY, III, 39 DIRECTOR SINCE 2001
EDWARD A. LABRY, III, has served as a Director of Swift since June 2001.
Mr. Labry is the President and a member of the board of directors of Concord
EFS, Inc., positions he has held since 1994 and 1993, respectively. He has
served on the board of directors of M.S. Carriers since September 1999.
HOW ARE NON-EMPLOYEE DIRECTORS COMPENSATED?
Swift directors who are employees do not receive additional compensation
for their service as directors. In 2001, non-employee directors were paid an
annual retainer of $3,000 for their service as directors and received $500 for
attending each board meeting and each committee meeting that was not held on the
same date as a board meeting. Beginning in 2002, non-employee directors will be
paid an annual retainer of $20,000 and receive $1,500 for each board meeting and
committee meeting that they attend. Under our Non-Employee Director Stock Option
Plan, each non-employee director also receives an option to purchase 5,000
shares of Common Stock every fifth year. These option grants vest and become
exercisable over four years beginning on the date of grant, permitting the
holder to purchase shares at 85% of their fair market value on the date of
grant, which was $11.10 in the case of options granted to Mssrs. Edwards, Frei
and Scudder in 2000 and $16.37 in the case of options granted to Mr. Labry in
2001. Unless earlier terminated, forfeited or surrendered pursuant to the plan,
each option granted will expire on the sixth anniversary date of the grant. Both
employee and non-employee directors are reimbursed for reasonable travel and
related expenses incurred in connection with their service on the board and
board committees.
ARE EMPLOYEES OF SWIFT TRANSPORTATION PAID ADDITIONAL COMPENSATION FOR SERVICE
AS A DIRECTOR?
No. We do, however, reimburse them for travel and other related expenses.
HOW OFTEN DID THE BOARD MEET DURING FISCAL 2001?
The Board of Directors held 4 meetings during fiscal 2001. Each of Swift's
Directors attended at least 75% of the Board and committee meetings to which the
Director was assigned.
6
WHAT COMMITTEES HAS THE BOARD ESTABLISHED?
The Board of Directors has standing Compensation and Audit Committees. We
do not maintain a standing nominating committee or other committee performing
similar functions. The function of nominating directors is carried out by the
entire Board of Directors. Our Bylaws, however, provide a procedure for you to
recommend candidates for director at an annual meeting. For more information,
see page 26 under "Stockholder Proposals and Nominations."
NAME COMPENSATION COMMITTEE AUDIT COMMITTEE
---- ---------------------- ---------------
Jerry C. Moyes X
Alphonse E. Frei X X
Lou A. Edwards X X
Edward A. Labry, III X
COMPENSATION COMMITTEE 1 MEETING IN FISCAL YEAR 2001
The Compensation Committee reviews and recommends compensation of executive
officers and administers Swift's stock option plans.
AUDIT COMMITTEE 2 MEETINGS IN FISCAL YEAR 2001
The audit committee makes recommendations regarding the selection of
Swift's independent auditors and receives and accepts the independent auditor's
report. In addition, the audit committee oversees the audit and non-audit
activities of the independent accountants. The audit committee meets with the
independent auditors to ensure that the scope of their activities has not been
restricted and that adequate responses to their recommendations have been
received. In addition, the audit committee may be called upon to review certain
proposals for major transactions.
REPORT OF THE AUDIT COMMITTEE
THE FOLLOWING REPORT OF THE AUDIT COMMITTEE DOES NOT CONSTITUTE SOLICITING
MATERIAL AND SHOULD NOT BE DEEMED FILED OR INCORPORATED BY REFERENCE INTO ANY
OTHER FILING BY SWIFT UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES
EXCHANGE ACT OF 1934, EXCEPT TO THE EXTENT SWIFT SPECIFICALLY INCORPORATES THIS
REPORT.
Effective January 31, 2000, the SEC adopted new rules and amendments to
current rules relating to the disclosure of information about companies' audit
committees. In large part, the new rules are based on recommendations made by
the Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit
Committees. The new rules require that, for all votes of stockholders occurring
after December 15, 2000, the proxy statement must contain a report of the audit
committee addressing several issues identified in the rules. In addition, the
SEC recommends that audit committees adopt written charters. Any such charter
must be included as an attachment to the proxy statement at least once every
three years. Our Audit Committee adopted a charter on June 7, 2000, which was
included as Annex E to the joint proxy statement/prospectus filed by Swift on
May 11, 2001 pursuant to Rule 424(b)(3) under the Securities Act of 1933, as
amended.
7
Our audit committee currently consists of three directors, each of whom are
independent directors. Consistent with Nasdaq's independent director and audit
committee listing standards, as amended on December 14, 1999, a director will
not be considered "independent" if, among other things he has:
* been employed by the corporation or its affiliates in the current or
past three years; accepted any compensation from the corporation or
its affiliates in excess of $60,000 during the previous fiscal year
(except for board service, retirement plan benefits, or
non-discretionary compensation);
* an immediate family member who is, or has been in the past three
years, employed by the corporation or its affiliates as an executive
officer;
* been a partner, controlling stockholder or an executive officer of any
for-profit business to which the corporation made, or from which it
received, payments (other than those which arise solely from
investments in the corporation's securities) that exceed five percent
of the organization's consolidated gross revenues for that year, or
$200,000, whichever is more, in any of the past three years; or
* been employed as an executive of another entity when any of the
company's executives serve on that entity's compensation committee.
The audit committee has reviewed and discussed the audited financial
statements for fiscal year 2001 with management and with the independent
auditors. Specifically, the audit committee has discussed with the independent
auditors the matters required to be discussed by SAS 61 (Codification of
Statements on Auditing Standards, AU Section 380), which includes, among other
things:
* methods used to account for significant unusual transactions;
* the effect of significant accounting policies in controversial or
emerging areas for which there is a lack of authoritative guidance or
consensus;
* the process used by management in formulating particularly sensitive
accounting estimates and the basis for the auditor's conclusions
regarding the reasonableness of those estimates; and
* disagreements with management over the application of accounting
principles, the basis for management's accounting estimates, and the
disclosures in the financial statements.
The audit committee has received the written disclosures and the letter
from our independent accountants, KPMG LLP, required by Independence Standards
Board Standard No. 1, Independence Discussion with Audit Committees.
Additionally, the audit committee has discussed with KPMG the issue of its
independence as it relates to us.
Based on its review of the audited financial statements and the various
discussions noted above, the audit committee recommended to Swift's board of
directors that the audited financial statements be included in our Annual Report
on Form 10-K for the fiscal year ended December 31, 2001.
Alphonse E. Frei
Lou A. Edwards
Edward A. Labry, III
8
EXECUTIVE OFFICERS OF SWIFT
The table below sets forth, as of March 31, 2002, certain information
concerning our executive officers.
NAME AGE POSITION
- ---- --- --------
Jerry Moyes 58 President and Chief Executive Officer--Swift
Transportation Co., Inc.
William F. Riley III 55 Senior Executive Vice President, Chief
Financial Officer and Secretary--Swift
Transportation Co., Inc.
Rodney K. Sartor 47 Executive Vice President--Swift
Transportation Co., Inc.
Patrick J. Farley 57 Executive Vice President--Swift
TransportationCo., Inc.
Kevin H. Jensen 47 Executive Vice President--Swift
Transportation Co., Inc.
Michael S. Starnes 57 President and Chief Executive Officer--M.S.
Carriers, Inc.
M. J. Barrow 57 Senior Vice President of Finance and
Administration, Chief Financial Officer,
Secretary and Treasurer --M.S. Carriers, Inc.
James W. Welch 58 Senior Vice President of Marketing--M.S.
Carriers, Inc.
Except for the employment agreements Swift entered with Mssrs. Starnes,
Barrow and Welch in connection with its merger with M.S. Carriers, Swift does
not have fixed term employment contracts with its executive officers. The terms
of these employment agreements are summarized below under "Employment and
Termination Agreements."
PATRICK J. FARLEY became an Executive Vice President of Swift and was named
as one of its executive officers in May 1997. Mr. Farley joined Swift in October
1989 and served as Vice President of Western Sales prior to his promotion to
Executive Vice President in May 1997.
KEVIN H. JENSEN has served as an Executive Vice President of Swift since
December 1994, and was named an executive officer of Swift in October 1996. Mr.
Jensen joined Swift in December 1986 and served the Company in various
capacities, including Director of Operations - Eastern Division and Vice
President - Eastern Division, prior to his promotion to Executive Vice President
in December 1994.
M. J. BARROW has served as the Senior Vice President of Finance and
Administration of M.S. Carriers, Inc. since May 1989. Mr. Barrow joined M.S.
Carriers in 1982 as its Treasurer and Controller and was shortly thereafter
named Vice President of Finance. In February 1986, Mr. Barrow was appointed to
the positions of Secretary and Chief Financial Officer of M.S. Carriers. Mr.
Barrow has served as a director of M.S. Carriers since 1982.
JAMES W. WELCH has served as the Senior Vice President of Marketing of M.S.
Carriers since May 1989. Mr. Welch joined M.S. Carriers as a Vice President of
Sales in 1982 and served in that capacity until his promotion to Senior Vice
President of Marketing in May 1989. Mr. Welch has served as a director of M.S.
Carriers since 1982.
For biographical information regarding Mssrs. Moyes, Riley, Sartor, and
Starnes, see "Board of Directors" above.
9
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The table below sets forth information concerning the annual and long-term
compensation for services rendered in all capacities to Swift during the three
fiscal years ended December 31, 2001, of those persons who were, at December 31,
2001, (i) our Chief Executive Officer and (ii) our four other most highly
compensated executive officers (collectively, the "Named Executive Officers").
LONG-TERM COMPENSATION
-------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
-------------------------------------------- ------------------------ ----------
SECURITIES
RESTRICTED UNDERLYING ALL OTHER
NAME AND OTHER ANNUAL STOCK OPTIONS/ LTIP COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) AWARD(S)($) SARS PAYOUTS($) ($)(1)
- ------------------ ---- --------- -------- --------------- ----------- ---------- ---------- ------------
JERRY C. MOYES .......... 2001 $400,000 $261,532 $153,845
Chairman of the Board of 2000 $400,000 $261,532 $154,377
Directors, President and 1999 $270,371 $391,161 $164,231
Chief Executive Officer
WILLIAM F. RILEY III ... 2001 $250,000 $275,000 $ 14,210
Chief Financial Officer 2000 $250,000 $275,000 $ 14,060
and Senior Executive 1999 $162,225 $362,775 $ 23,280
Vice-President
RODNEY K. SARTOR ........ 2001 $200,000 $150,000 $ 10,025
Executive Vice-President 2000 $200,000 $150,000 $ 10,025
1999 $162,225 $187,775 $ 19,525
KEVIN H. JENSEN ......... 2001 $200,000 $150,000 $ 7,000
Executive Vice President 2000 $200,000 $150,000 $ 7,000
1999 $162,225 $187,775 $ 16,500
PATRICK J. FARLEY ....... 2001 $200,000 $150,000 $ 7,000
Executive Vice President 2000 $200,000 $150,000 $ 7,000
1999 $162,225 $187,775 $ 16,500
- ----------
(1) "All Other Compensation" for each of the Named Officers includes Swift's
contributions in the amount of $7,000 for 2001, $7,000 for 2000, and
$16,500 for 1999, pursuant to the Swift Transportation Co., Inc. Retirement
Plan, a 401(k) profit sharing plan (the "401(k) Plan"). The balance of
compensation included in "All Other Compensation" for Mr. Moyes during each
of the identified periods represents Swift payments of premiums under two
term life insurance policies with a combined face amount of $20 million for
the benefit of Mr. Moyes and his spouse. The aggregate annual premiums paid
by Swift under these polices were $146,845 $147,377 and $147,731 in 2001,
2000 and 1999, respectively. Swift's purpose in procuring and maintaining
these policies is to ensure that, in the event of the Moyes' deaths, their
estate would be able to satisfy estate taxes without having to sell a large
block of Swift Common Stock, which might adversely affect the market for
the Common Stock. The balance of compensation included in "All Other
Compensation" for Mssrs. Riley and Sartor during each of the identified
periods represents Swift payments of term life and disability insurance
premiums on behalf of Mssrs. Riley and Sartor. The amount of such insurance
premiums paid on behalf of Mr. Riley during 2001, 2000 and 1999 was $7,210,
$7,060, and $6,780, respectively. The amount of such insurance premiums
paid on behalf of Mr. Sartor during each of 2001, 2000 and 1999 was $3,025.
10
Swift does not pay such premiums for Mr. Jensen or Mr. Farley. In addition
to the amounts in the Summary Compensation Table above, Swift made
contingent deposits of $608,864 in 2001 and $507,387 in 2000 to an
investment account on behalf of Mr. Riley pursuant to a Nonqualified
Deferred Compensation Agreement.
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
NONE
11
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
The table below sets forth information with respect to the exercise of
stock options during the fiscal year ended December 31, 2001, by the Named
Executive Officers. Other than Swift's 401(k) Plan and Mr. Riley's Deferred
Compensation Agreement, Swift does not have a long-term incentive plan or a
defined benefit or actuarial plan and has never issued any stock appreciation
rights. The number of options and the option exercise price reflect:
* a 3-for-2 stock split treated as a dividend, effected on November 18,
1993, of one share of Common Stock for every two shares of Common
Stock outstanding;
* a 2-for-1 stock split treated as a dividend of one share of Common
Stock for each share outstanding effected on November 18, 1994;
* a 3-for-2 stock split treated as a dividend, effected on March 12,
1998, of one share of Common Stock for every two shares of Common
Stock outstanding; and
* a 3-for-2 stock split treated as a dividend, effected on April 10,
1999, of one share of Common Stock for every two shares of Common
Stock outstanding.
VALUE OF UNEXERCISED
SHARES NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED ON OPTIONS AT FISCAL YEAR END(#) AT FISCAL YEAR END ($)
EXERCISE VALUE REALIZED ----------------------------- ---------------------------------
NAME (#)(1) ($)(2) EXERCISABLE UNEXERCISABLE EXERCISABLE(3) UNEXERCISABLE(3)
- ---- ------ -------- ----------- ------------- -------------- ----------------
Jerry Moyes -- -- -- -- -- --
President & Chief Executive
Officer(4)
William F. Riley III -- -- 75,000 37,500 $862,500 $ 431,250
Executive Vice President &
Chief Financial Officer(5)
Rodney K. Sartor -- -- -- 100,000 -- $1,041,000
Executive Vice President(6)
Kevin H. Jensen -- -- 36,000 283,000 $645,480 $3,220,170
Executive Vice President(7)
Patrick J. Farley 40,500 $629,670 3,600 150,400 $ 51,579 $1,609,769
Executive Vice President(8)
- ----------
(1) Represents shares of Common Stock acquired pursuant to exercise of options
under Swift's 1990 Stock Option Plan. The exercise price for such shares
was $1.54.
(2) Based on the $17.09 last reported sale price of Swift Common Stock on April
19, 2001.
(3) Based on the $21.51 last reported sales price of Swift Common Stock on
December 31, 2001.
(4) Mr. Moyes has not been awarded any stock options and is not eligible to
participate in Swift's Stock Option Plan or Employee Stock Purchase Plan.
See "Compensation Committee Report on Executive Compensation" below.
(5) In 1997 Mr. Riley was granted options to purchase 112,500 shares at $10.01
per share. One-third of the shares underlying such options first became
exercisable in April 2000. Thereafter, one-third of the options become
exercisable in each successive year. These options will terminate in April
2007.
12
(6) In 2000, Mr. Sartor was granted options to purchase 100,000 shares at
$11.10 per share. Beginning June 2003, 50,000 options begin vesting at a
rate of one-third per year. The remaining 50,000 options begin vesting on
June 7, 2005 at a rate of one-fifth per year. These options will terminate
in June 2010.
(7) Mr. Jensen was granted options in 1992, 1994, 1997, and 1998 covering
67,500, 45,000, 90,000, and 75,000 shares of Swift's Common Stock,
respectively. The exercise price for each of Mr. Jensen's options is $3.15,
$4.87, $10.01 (as to 45,000 shares subject to options granted in 1997) and
$10.39 (as to 45,000 shares subject to options granted in 1997), and
$10.02, respectively. One-fifth of each such option grant becomes
exercisable on the fifth anniversary of the grant and one-fifth of each
such grant becomes exercisable in each successive year thereafter. In 2000,
Mr. Jensen was granted options to purchase 100,000 shares at $11.10 per
share. Beginning June 2003, 50,000 options begin vesting at a rate of
one-third per year. The remaining 50,000 options begin vesting on June 7,
2005 at a rate of one-fifth per year. All of Mr. Jensen's options terminate
on the ten year anniversary of the date of grant.
(8) Mr. Farley was granted options in 1991, January 1995, December 1995, April
1997, and July 1997 covering 67,500, 5,625, 3,375, 22,500, and 22,500
shares of Swift's Common Stock, respectively. The respective exercise
prices for such grants were $1.54, $8.12, $5.62, $10.01, and $11.17.
One-fifth of each such option grant becomes exercisable on the fifth
anniversary of the grant and one-fifth of each such grant becomes
exercisable in each successive year thereafter. In 2000, Mr. Farley was
granted options to purchase 100,000 shares at $11.10 per share. Beginning
June 2003, 50,000 options begin vesting at a rate of one-third per year.
The remaining 50,000 options begin vesting on June 7, 2005 at a rate of
one-fifth per year. All of Mr. Farley's options terminate on the ten year
anniversary of the date of grant.
EMPLOYMENT AND CHANGE OF CONTROL AGREEMENTS
Swift currently does not have any employment contracts or severance
agreements with any of the Named Executive Officers. Swift has a deferred
compensation agreement with Mr. Riley, the contribution to which is described in
footnote (1) to the Summary Compensation Table. In addition, in connection with
our merger with M.S. Carriers, Inc. in June 2001, we entered into employment
agreements with Michael S. Starnes, M.J. Barrow, and James W. Welch.
Under Mr. Starnes' employment agreement, he will serve as the top executive
officer of our M.S. Carriers subsidiary for a period commencing on June 29, 2001
and ending on June 29, 2004. During his employment term, Mr. Starnes will be
paid an annual base salary of $325,000 and will receive a minimum annual bonus
of $175,000. Pursuant to Mr. Starnes' employment agreement, Swift will pay
premiums under a split dollar life insurance policy until April 7, 2011, when
Mr. Starnes attains the age of 65. A trust established by Mr. Starnes owns this
policy and his beneficiary will be entitled to the benefits, after repaying the
premiums advanced. Mr. Starnes' employment agreement also provides that he will
be entitled to participate in employee benefit plans of Swift that generally
apply to comparable employees of Swift.
The employment agreements for Mssrs. Barrow and Welch each provide for a
five-year term, an annual base salary of $200,000, and a minimum annual bonus of
$150,000. Until termination of employment, Swift will keep in force existing
split dollar life insurance policies on the lives of Messrs. Barrow and Welch
and provide each of them with an additional $1 million term life insurance
policy. In addition, Messrs. Barrow and Welch are entitled to participate in
employee benefit plans of Swift that generally apply to comparable employees of
Swift.
In the event that Swift sells all or substantially all of its assets, or
merges with or into another corporation, stock options outstanding are required
to be assumed or equivalent options are required to be substituted by such
successor corporation or a parent or subsidiary of such successor corporation,
unless Swift's Board of Directors determines, in the exercise of its sole
discretion and in lieu of such assumption or substitution, that the option
holder shall have the right to exercise his or her option, including shares as
13
to which such option would not otherwise be exercisable. If the Board makes
options fully exercisable in lieu of assumption or substitution in the event of
a merger or sale of assets, the Board must notify the option holder that the
option is fully exercisable for a period of thirty (30) days from the date of
such notice (but not later than the expiration of the term of the option) and
the option will terminate upon the expiration of such period.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
THE FOLLOWING REPORT OF THE COMPENSATION COMMITTEE DOES NOT CONSTITUTE
SOLICITING MATERIAL AND SHOULD NOT BE DEEMED FILED OR INCORPORATED BY REFERENCE
INTO ANY OTHER FILING BY SWIFT UNDER THE SECURITIES ACT OF 1933 OR THE
SECURITIES EXCHANGE ACT OF 1934, EXCEPT TO THE EXTENT SWIFT SPECIFICALLY
INCORPORATES THIS REPORT.
The Compensation Committee has furnished the following report on executive
compensation for fiscal 2001.
SWIFT'S GENERAL PHILOSOPHY ON EXECUTIVE COMPENSATION. Swift's compensation
program for executive officers consists of three key elements:
* a base salary;
* a performance-based annual bonus; and
* long-term incentives in the form of stock option grants.
Certain executives also participate in various other benefit plans, including
medical plans and a 401(k) plan, which are generally available to all employees
of Swift Transportation.
The compensation committee believes that this three-part approach best
serves the interests of Swift and its stockholders. As described more fully
below, each element of Swift's executive compensation program has a somewhat
different purpose.
The three-part approach enables Swift to meet the requirements of the
competitive environment in which it operates, while ensuring that executive
officers are compensated in a way that advances both the short- and long-term
interests of the stockholders. Under this approach, compensation for these
officers was ultimately based upon:
* the compensation committee's assessment of the executive officers'
performance;
* the continuing demand for superior executive talent;
* Swift's overall performance both individually as a company and as
compared to its peers; and
* Swift's future objectives and challenges.
Swift's philosophy is to pay base salaries to executives that reward these
executives for ongoing performance throughout the year and that enable Swift to
attract, motivate and retain highly qualified executives. The annual bonus
program is designed to reward executives for performance and is based primarily
on Swift's financial results. Stock option grants give executives an opportunity
to obtain equity in Swift and, because options result in minimal or no rewards
if Swift's stock price does not appreciate but provide substantial rewards to
executives if Swift's stock price appreciates, also provide an incentive for
14
outstanding performance in the long term. The board believes that this mix of
short- and long-term compensation components provides a balanced approach that
enables Swift to attract and retain experienced executives, rewards such
executives for their individual and collective contribution to the profitability
of Swift, and ensures that the incentives of Swift's executives are aligned with
the best interests of its stockholders.
The board's decisions concerning the specific fiscal 2001 compensation
elements for individual executive officers, including the Chief Executive
Officer, were made within this broad framework and in light of each executive
officer's level of responsibility, performance, current salary and prior-year
bonus and other compensation awards. As noted below, the board's specific
decisions involving fiscal 2001 executive officer compensation were ultimately
based upon the board's judgment regarding the individual executive officer's
performance, potential future contributions, and whether each payment or award
would provide an appropriate reward and incentive for such officer to sustain
and enhance Swift's long-term performance. A more detailed breakdown of the
compensation committee's decisions with respect to each of the three key
elements of Swift's executive compensation program follows.
BASE SALARY. In setting base salaries of senior management for 2001,
including the salary of Jerry Moyes, Swift's Chief Executive Officer, the
compensation committee reviewed and considered:
* compensation information disclosed by similar publicly held truckload
motor carriers (all of which carriers are included in the Nasdaq
Trucking and Transportation Stocks Index);
* the financial performance of Swift, as well as the role and
contribution of the particular executive with respect to such
performance; and
* nonfinancial performance related to the individual executive's
contributions.
The compensation committee believes that the annual salaries of Swift's
Chief Executive Officer, Senior Executive Vice President and its Executive Vice
Presidents are at or slightly below median level salaries of executives
performing in similar positions at other publicly held truckload motor carriers
of comparable size. However, the committee believes that, when the base salary
and annual bonus for Swift's executives are aggregated, its compensation package
is competitive with those provided to similarly situated executives in the
truckload motor carrier industry. The committee has taken particular note of
management's success in growing Swift in terms of revenue, balanced against a
reduction in net earnings caused by increased operating costs, primarily
resulting from higher fuel costs impacting the industry generally, and other
factors.
ANNUAL BONUSES. The compensation committee annually considers the award of
bonus compensation to executive officers as additional compensation based upon
individual and Company financial performance. Company financial performance is
measured by review of a variety of factors, including earnings per share,
operating ratios, revenue growth, and size and performance relative to similarly
situated trucking industry competitors. The compensation committee evaluates
individual performance based upon contribution to financial performance goals
and review of other qualitative and quantitative factors. Accordingly, in years
in which Swift's performance goals are exceeded, bonus compensation will tend to
be higher. The compensation committee believes that this policy properly
motivates the executive officers to perform to the greatest extent of their
abilities to generate the highest attainable profits for Swift and to achieve
increased stockholder value.
STOCK OPTIONS. Swift believes that it is important for executives to have
an equity stake in Swift in order to encourage them to focus on long-term
prospects. Toward this end, Swift makes option grants to the Senior Executive
Vice President and Executive Vice Presidents from time to time pursuant to the
15
Plan. In making option grants to the Senior Executive Vice President and
Executive Vice Presidents, the compensation committee evaluates the individual
officer's past and expected future contributions to Swift's achievement of its
long-term performance goals. Because Jerry Moyes is the largest beneficial
stockholder of Swift, the compensation committee has not awarded any stock
options to Mr. Moyes, and Mr. Moyes is not eligible to participate in Swift's
stock option plan or Employee Stock Purchase Plan.
COMPENSATION OF SWIFT'S CHIEF EXECUTIVE OFFICER. The two members of the
compensation committee other than Mr. Moyes evaluate the Chief Executive
Officer's performance and recommend his salary and bonus to the board of
directors. As noted above, due to Mr. Moyes' substantial stock ownership of
Swift, the committee has not included stock options as a component of Mr. Moyes'
overall compensation. Due in part to this omission of option grants, and
primarily due to his significant contributions to Swift and Swift's dependence
on Mr. Moyes, Mr. Moyes' base salary is set significantly above the base
salaries for the other executive officers. The committee believes that Mr.
Moyes' total compensation is appropriate compared to the total compensation paid
to CEOs of comparable publicly held truckload motor carriers, especially in
light of Swift's operating results and the increase in stockholder value over
time.
Jerry Moyes
Lou A. Edwards
Alphonse E. Frei
16
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors consists of Jerry C.
Moyes, Alphonse E. Frei and Lou A. Edwards. Mr. Moyes also serves as the
President and Chief Executive Officer of the Swift.
Interstate Equipment Leasing, Inc., a corporation wholly-owned by Jerry
Moyes, leases tractors to some of Swift's owner operators. In connection with
this program, during 2001 Swift acquired new tractors and sold them to
Interstate Leasing for $27.6 million and recognized fee income of $1.0 million.
During 2001, Swift also sold used revenue equipment to Interstate Leasing
totaling $20,000 and recognized a loss of $1,000. At December 31, 2001, nothing
was owed to Swift for this equipment.
In addition, Interstate Leasing operates as a fleet operator for Swift.
During 2001, Swift paid $26.8 million to Interstate Leasing for purchased
transportation services. At December 31, 2001, $376,000 was owed by Swift for
these transportation services. Also, Swift was paid $3.6 million by Interstate
Leasing and paid $104,000 to Interstate Leasing for various services, including
training. At December 31, 2001, $741,000 was owed to Swift and nothing was owed
by Swift for these services.
Swift Aviation Services, Inc., a corporation wholly-owned by Jerry Moyes,
provides air transportation services to Swift. Such services totaled $860,000
for the year ended December 31, 2001. At December 31, 2001, $60,000 was owed to
Swift Aviation for air transportation services.
Jerry Moyes acquired a significant ownership interest in Central Freight
Lines, Inc. during 1997. Swift provides transportation and other services to
Central Freight Lines and other entities owned by Mr. Moyes and recognized $11.2
million in operating revenue therefrom in 2001. At December 31, 2001, $986,000
was owed to Swift for these services. In addition, Swift paid $492,000 to
Central Freight Lines for facilities rental during the year ended December 31,
2001.
Swift provides transportation, repair and other services to Simon
Transportation Services, Inc., a publicly traded trucking company which is
majority owned by Jerry Moyes. Swift recognized $944,000 in revenues from these
services in 2001. At December 31, 2001, $102,000 was owed to Swift for these
services.
All of the foregoing arrangements were approved by the independent members
of the Board of Directors.
17
STOCK PRICE PERFORMANCE GRAPH
The graph below compares cumulative total return of the Company, the Nasdaq
Stock Market (U.S.) Index and the Nasdaq Trucking and Transportation Stocks
Index from December 31, 1996 to December 31, 2001. The graph assumes that $100
was invested on December 31, 1996, and any dividends were reinvested.
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG
SWIFT TRANSPORTATION CORPORATION, THE NASDAQ STOCK INDEX
AND THE NASDAQ TRUCKING AND TRANSPORTATION STOCKS INDEX
12/31/96 12/31/97 12/31/98 12/31/99 12/31/00 12/31/01
-------- -------- -------- -------- -------- --------
Swift Transportation 100 137.772 178.935 168.757 189.707 205.955
NASDQ Stock Market (US) 100 122.476 172.68 320.894 193.012 153.152
Trucking & Transportation Index 100 128.15 115.792 111.53 101.378 119.991
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our officers and
directors, and persons who own more than 10% of our Common Stock, to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission ("SEC"). Officers, directors and greater than 10% stockholders are
required by SEC regulation to furnish us with copies of all Section 16(a) forms
they file. Based solely upon a review of the copies of such forms furnished to
us, or written representations that no Forms 5 were required, we believe that
during our preceding fiscal year all Section 16(a) filing requirements
applicable to our officers, directors and greater than 10% beneficial owners
were complied with, except Mssrs. Starnes, Labry, Barrow and Welch did not
timely report their acquisition of Swift Common Stock in connection with the
merger of Swift and M.S. Carriers. Each of Mssrs. Starnes, Labry, Barrow and
Welch reported their acquisition of Swift Common Stock in subsequent filings.
18
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth, as of March 31, 2002, the number and
percentage of outstanding shares of Common Stock beneficially owned by each
person known by us to beneficially own more than 5% of such stock, by each
director and Named Executive Officer of Swift and by all directors and executive
officers of Swift as a group.
Shares
Name and Address of Beneficial Owner(1) Beneficially Owned Percent Owned
- --------------------------------------- ------------------ -------------
Jerry Moyes 19,175,067(2) 22.20%
Ronald G. Moyes 9,018,353(2) 10.44%
William F. Riley III 418,272(3) *
Rodney K. Sartor 28,279 *
Lou A. Edwards 298,625(4) *
Alphonse E. Frei 7,875(5) *
Earl H. Scudder, Jr. 23,950(6) *
Kevin H. Jensen 34,505(7) *
Patrick J. Farley 13,545(8) *
Michael S. Starnes 4,724,560(9) 5.46%
Edward A. Labry, III 18,850(10) *
FMR Corporation 12,779,529 14.79%
Taunus Corporation, DB Alex Brown LLC 4,620,253 5.35%
All Directors and Named
Officers as a group (10 persons) 28.56%
- ----------
* Represents less than 1% of the Company's outstanding Common Stock.
(1) The address of each officer, director and Ronald G. Moyes is 2200 South
75th Avenue, Phoenix, Arizona 85043. The address of FMR Corporation is 82
Devonshire Street, Boston, Massachusetts 02109. The address for the Taunus
Corporation is 31 West 52nd Street, New York, New York and the address for
its subsidiary DB Alex Brown, LLC is 130 Liberty Street, New York, New York
10006. Information with respect to FMR Corporation, the Taunus Corporation
and DB Alex Brown is based upon statements on Schedule 13Gs filed by such
entities with the Securities and Exchange Commission.
(2) The shares beneficially owned by Jerry Moyes are held by him, as follows:
(i) 18,648,817 shares are held as a co-trustee of the Jerry and Vickie
Moyes Family Trust, (ii) 33,750 shares are held by VJM Investments, LLC, a
limited liability company in which Mr. Moyes has controlling interest, and
(iii) 492,500 shares are held by SME Industries, Inc. of which Jerry Moyes
is the majority shareholder. The shares shown for Jerry Moyes do not
include the 9,018,353 shares held by (i) the Moyes Children's Limited
Partnership, the sole general partner of which is Ronald Moyes, who has
19
sole investment and voting power over the limited partnership and (ii)
seven irrevocable trusts for the benefit of six children of Jerry and
Vickie Moyes and by an irrevocable trust for the benefit of Jerry and
Vickie Moyes and six of their children, the sole trustee of each of which
is Ronald Moyes, who has sole investment and voting power over the shares
held by the trusts. The Moyes Children's Limited Partnership has pledged
1,300,000 shares to an unaffiliated third party under a variable prepaid
forward contract dated May 8, 2001. The contract has a period of three
years. At the expiration of the contract, the partnership must deliver an
agreed settlement amount, which may be paid in cash, shares, or a
combination of the two. The shares shown for Jerry Moyes also do not
include 360,000 shares held by an irrevocable trust for the children of
Jerry and Vickie Moyes, the sole trustee of which is Gerald F. Ehrlich, who
has sole investment and voting power. Of the shares held by the Jerry and
Vickie Moyes Family Trust and the Moyes Children's Limited Partnership,
18,490,340 and 8,995,832 shares, respectively, have been pledged to secure
loans with lending institutions.
(3) Includes options to purchase 112,500 shares exercisable within 60 days, and
excludes 2,700 shares held by Mr. Riley's spouse.
(4) Includes options to purchase 2,000 shares exercisable within 60 days.
(5) Includes options to purchase 2,000 shares exercisable within 60 days.
(6) Includes options to purchase 6,750 shares exercisable within 60 days, and
excludes 8,700 shares owned by Mr. Scudder's spouse.
(7) Includes options to purchase 9,000 shares exercisable within 60 days.
(8) Includes options to purchase 9,225 shares exercisable within 60 days.
(9) Includes options to purchase 153,000 shares exercisable within 60 days. Mr.
Starnes has pledged 1,500,000 shares to an unaffiliated third party under
two separate variable prepaid forward contracts entered on November 9, 2001
and March 28, 2002. The contracts expire on March 6, 2003 and March 28,
2004, respectively. At the expiration of the contracts, Mr. Starnes must
deliver an agreed settlement amount, which may be paid in shares or cash.
(10) Includes options to purchase 4,400 shares exercisable within 60 days.
20
CERTAIN TRANSACTIONS AND RELATIONSHIPS
During 2001, Swift incurred fees for legal services to Scudder Law Firm in
the amount of approximately $337,000. Earl H. Scudder, a director of Swift, is
the President and a member of Scudder Law Firm.
During 2001, Swift purchased $466,000 of refrigeration units from Thermo
King West, a corporation owned by William F. Riley III.
Edward A. Labry, III is the President of Concord EFS, Inc., which provides
financial services to Swift. Such services totaled $381,000 in 2001. At December
31, 2001, nothing was owed by Swift for these services.
In 2001, M.S. Carriers agreed to sell its interest in an aircraft to its
president Michael S. Starnes, who is a current member of Swift's Board of
Directors. The sale price was $3,240,000 and M.S. Carriers recognized a loss of
$430,000 on the sale.
Swift believes that the terms of the foregoing transactions were as
favorable to Swift as those which would have been available from an independent
third party. See "Compensation Committee Interlocks and Insider Participation"
above for a description of certain transactions between the Company and members
of the Compensation Committee.
21
AMENDMENT TO SWIFT'S ARTICLES OF INCORPORATION
TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK
AUTHORIZED FOR ISSUANCE
(PROPOSAL NO. 2)
The Board of Directors has determined that it is in the best interests of
Swift and its stockholders to amend the Swift's Articles of Incorporation to
increase the authorized number of shares of Common Stock from 150,000,000 to
200,000,000 (the "Proposed Articles of Incorporation Amendment"). If Swift's
stockholders approve the Proposed Articles of Incorporation Amendment, the
Company will be authorized to issue a total of 201,000,000 shares of capital
stock: 200,000,000 shares of Common Stock and 1,000,000 shares of Preferred
Stock.
If the Company's stockholders approve the Proposed Articles of
Incorporation Amendment, it will become effective upon filing of a Certificate
of Amendment to Swift's Articles of Incorporation with the Secretary of State of
Nevada. A copy of the Swift's Amended and Restated Articles of Incorporation
reflecting the adoption of the Proposed Articles of Incorporation Amendment is
attached hereto as Annex A.
PURPOSE AND EFFECTS OF THE PROPOSED ARTICLES OF INCORPORATION AMENDMENT
The objective of the increase in the authorized number of shares of Common
Stock is to ensure that Swift has sufficient shares available for business needs
and activities as they arise. Such future activities may include, without
limitation, effecting stock splits or dividends, effecting additional
financings, providing equity incentives to employees, officers or directors, or
establishing strategic relationships with corporate partners. The additional
shares also may be issued to acquire or invest in other businesses.
On the Record Date, there were 86,385,870 shares of Common Stock issued and
outstanding. The issuance of additional shares of Common Stock would decrease
the proportionate equity interest of Swift's current stockholders and, depending
on the price paid for such additional shares, could result in dilution to
Swift's current stockholders. If issued, the additional shares of Common Stock
would have rights identical to the currently outstanding shares of Common Stock.
Adoption of the Proposed Articles of Incorporation Amendment would not affect
the rights of Swift's current stockholders, except for effects incidental to
authorizing an increase in the number of authorized shares of Common Stock.
If Swift's stockholders approve the Proposed Articles of Incorporation
Amendment, the Board of Directors may cause the issuance of additional shares of
Common Stock without further vote of the stockholders. Current holders of Common
Stock do not have preemptive or similar rights, which means that current
stockholders do not have a prior right to purchase any new issue of capital
stock of Swift in order to maintain their proportionate ownership level. Other
than existing stock options and warrants, Swift currently has no commitments to
issue additional shares of Common Stock, although it is continually exploring
potential acquisitions and financing possibilities, which could lead to the
issuance of additional shares at any time.
There currently are no shares of Preferred Stock outstanding.
22
REQUIRED VOTE
The Proposed Articles of Incorporation Amendment requires the affirmative
vote of the holders of a majority of the issued and outstanding shares of Common
Stock entitled to vote at the Annual Meeting.
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR APPROVAL OF THE
ADOPTION OF THE PROPOSED AMENDMENT TO THE ARTICLES OF INCORPORATION.
- --------------------------------------------------------------------------------
AMENDMENT TO SWIFT 1999 STOCK OPTION PLAN
(PROPOSAL NO. 3)
GENERAL
At the Annual Meeting, the Company will seek stockholder approval of an
amendment (the "Proposed Plan Amendment") to the Swift Transportation Co., Inc.
1999 Stock Option Plan (the "Plan") to increase the number of shares authorized
for issuance thereunder from 4,250,000 to 7,250,000. The Plan provides employees
with an incentive to actively direct and contribute to the Swift's growth by
enabling them to acquire a proprietary interest in the company. Swift's Board of
Directors has approved the Proposed Plan Amendment and has directed that the
Proposed Plan Amendment be submitted as a proposal for stockholder approval at
the Annual Meeting. The Plan was originally adopted in 1999.
CURRENT PLAN PROVISIONS
The Plan authorizes grants of incentive stock options ("ISOs") and
non-qualified stock options ("NQSOs") to employees of the Company. All of the
Company's employees, except Jerry Moyes, are eligible to participate in the
Plan.
The Board of Directors believes that use of stock options authorized under
the Plan is beneficial to Swift as a means of promoting the success and
enhancing the value of the company by linking the personal interests of its
employees and others to those of its stockholders and by providing employees and
others with an incentive for outstanding performance. These incentives also
provide Swift flexibility in its ability to attract and retain the services of
employees and others upon whose judgment, interest and special effort the
successful conduct of Swift's operation is largely dependent.
The Plan is administered by the Board of Directors or a committee appointed
by the Board consisting of at least two (2) non-employee directors (the
"Committee"). The Board of Directors or Committee have the exclusive authority
to administer the Plan, including the power to determine eligibility, the types
and sizes of options and the timing of options.
The exercise price of options granted under the Plan is expected to be
equal to 85% of the fair market value of the Common Stock on the date of the
grant. On April 8, 2002, the last reported sale price of the Common Stock on the
Nasdaq National Market was $19.49 per share.
INCENTIVE STOCK OPTIONS. An ISO is a stock option that satisfies the
requirements specified in Section 422 of the Internal Revenue Code (the "Code").
Under the Code, ISOs may only be granted to employees. In order for an option to
qualify as an ISO, the price payable to exercise the option must equal or exceed
the fair market value of the stock at the date of the grant, the option must
lapse no later than 10 years from the date of the grant, and the stock subject
to ISOs that are first exercisable by an employee in any calendar year must not
have a value of more than $100,000 as of the date of grant. Certain other
23
requirements must also be met. The Committee determines the consideration to be
paid to Swift upon exercise of any options. The form of payment may include
cash, Common Stock, or other property.
An optionee is not treated as receiving taxable income upon either the
grant of an ISO or upon the exercise of an ISO. However, the difference between
the exercise price and the fair market value on the date of exercise is an item
of tax preference at the time of exercise in determining liability for the
alternative minimum tax, assuming that the Common Stock is either transferable
or is not subject to a substantial risk of forfeiture under Section 83 of the
Code. If at the time of exercise, the Common Stock is both nontransferable and
is subject to a substantial risk of forfeiture, the difference between the
exercise price and the fair market value of the Common Stock (determined at the
time the Common Stock becomes either transferable or not subject to a
substantial risk of forfeiture) will be a tax preference item in the year in
which the Common Stock becomes either transferable or not subject to a
substantial risk of forfeiture.
If Common Stock acquired by the exercise of an ISO is not sold or otherwise
disposed of within two years from the date of its grant and is held for at least
one year after the date such Common Stock is transferred to the optionee upon
exercise, any gain or loss resulting from its disposition is treated as
long-term capital gain or loss. If such Common Stock is disposed of before the
expiration of the above-mentioned holding periods, a "disqualifying disposition"
occurs. If a disqualifying disposition occurs, the optionee realizes ordinary
income in the year of the disposition in an amount equal to the difference
between the fair market value of the Common Stock on the date of exercise and
the exercise price, or the selling price of the Common Stock and the exercise
price, whichever is less. The balance of the optionee's gain on a disqualifying
disposition, if any, is taxed as capital gain.
Swift is not entitled to any tax deduction as a result of the grant or
exercise of an ISO, or on a later disposition of the Common Stock received,
except that in the event of a disqualifying disposition, Swift is entitled to a
deduction equal to the amount of ordinary income realized by the optionee.
NON-QUALIFIED STOCK OPTIONS. A NQSO is any stock option other than an ISO.
Such options are referred to as "non-qualified" because they do not meet the
requirements of, and are not eligible for, the favorable tax treatment provided
by Section 422 of the Code.
No taxable income is realized by an optionee upon the grant of a NQSO, nor
is Swift entitled to a tax deduction by reason of such grant. Upon the exercise
of a NQSO, the optionee realizes ordinary income in an amount equal to the
excess of the fair market value of the Common Stock on the date of exercise over
the exercise price and Swift is entitled to a corresponding tax deduction.
Upon a subsequent sale or other disposition of Common Stock acquired
through exercise of a NQSO, the optionee realizes a short-term or long-term
capital gain or loss to the extent of any intervening appreciation or
depreciation. Such a resale by the optionee has no tax consequence to Swift.
The following table sets forth grants of options made under the Plan during
2001 to (i) each of the Named Executive Officers of Swift; (ii) all current
executive officers, as a group; (iii) all current directors who are not
executive officers, as a group; and (iv) all employees, including all current
officers who are not executive officers, as a group. Grants under the Plan are
made at the discretion of the Board of Directors or Committee. Accordingly,
future grants under the Plan are not yet determinable.
24
PLAN BENEFITS
STOCK OPTION PLAN
WEIGHTED AVERAGE
NUMBER OF SHARES SUBJECT EXERCISE PRICE
NAME AND POSITION TO OPTIONS GRANTED (#) PER SHARE ($/SH)
----------------- ---------------------- ----------------
Jerry Moyes -- --
Chairman of the Board & President
William F. Riley III -- --
Senior Executive Vice President
& Chief Financial Officer
Rodney K. Sartor -- --
Executive Vice President
Patrick J. Farley -- --
Executive Vice President
Kevin H. Jensen -- --
Executive Vice President
Executive Officer Group 360,000 $16.37
Director Group 5,000 $16.37
Employee Group 415,000 $16.19
AMENDMENTS TO PLAN
The Board of Directors has reviewed the options currently remaining in the
option pool for the Plan and has determined that it is appropriate to increase
the number of shares authorized for issuance under the Plan. As of March 31,
2001, (i) no shares have been issued upon exercise of options granted under the
Plan and (ii) option grants representing 2,334,850 shares were outstanding under
the Plan. The Board believes that an increase in the number of authorized shares
is necessary for the continued optimal use of the Plan. Therefore, the Board has
approved the Proposed Plan Amendment that would increase the number of shares
authorized for issuance under the Plan from 4,250,000 to 7,250,000.
REQUIRED VOTE
Approval of the adoption of the Proposed Plan Amendment requires the
affirmative vote of a majority of shares of Common Stock present at the Annual
Meeting in person or by proxy.
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR APPROVAL OF THE
ADOPTION OF THE PROPOSED AMENDMENT TO THE SWIFT TRANSPORTATION CO., INC. 1999
STOCK OPTION PLAN.
- --------------------------------------------------------------------------------
25
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
The principal independent public accounting firm utilized by Swift during
the fiscal year ended December 31, 2001 was KPMG LLP, independent certified
public accountants. It is presently contemplated that KPMG LLP will be retained
as the principal accounting firm to be utilized by Swift during the current
fiscal year. A representative of KPMG LLP will attend the annual meeting for the
purpose of responding to appropriate questions and will be afforded an
opportunity to make a statement if KPMG LLP so desires.
AUDIT FEES
The aggregate fees billed to Swift by KPMG LLP for professional services
rendered for the audit of Swift's annual financial statements for fiscal year
2001 and the reviews of the financial statements included in Swift's Forms 10-Q
for fiscal year 2001 was $310,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
No fees were billed to Swift by KPMG LLP for professional services
described in Paragraph (c)(4)(ii) of Rule 2-01 of Regulation S-X ("Financial
Information Systems Design and Implementation Fees") during fiscal year 2001.
OTHER FEES
The aggregate fees billed to Swift by KPMG LLP for services not described
in the two preceding paragraphs during fiscal year 2001 was $891,000.
After consideration, the Swift audit committee has concluded that the
provision of non-audit services by KPMG LLP to Swift is compatible with
maintaining the independence of KPMG LLP.
STOCKHOLDER PROPOSALS AND NOMINATIONS
Pursuant to Rule 14a-8 under the Securities Exchange Act of 1934,
stockholder proposals for the 2003 Annual Meeting must be received at the
principal executive offices of Swift by December 24, 2002 to be considered for
inclusion in our proxy materials relating to such meeting.
If you wish to nominate directors for election at the 2003 Annual Meeting
of Stockholders or to submit a proposal that is not intended to be included in
our proxy materials relating to such meeting, our Bylaws require that:
* You notify the Corporate Secretary in writing no later than
January 24, 2003, which is 120 days prior to the anniversary date
of the 2002 Annual Meeting.
* Your notice to the Corporate Secretary contain the specific
information set forth in our Bylaws.
* You be a stockholder of record at the time you deliver your
notice to the Corporate Secretary and be entitled to vote at the
meeting of stockholders to which such notice relates.
26
A nomination or other proposal will be disregarded if it does not comply
with the above procedure and any additional requirements set forth in our
Bylaws. Please note that these requirements are separate from the SEC's
requirements to have your proposal included in our proxy materials.
All proposals and nominations should be sent to Swift Transportation Co.,
Inc., 2200 South 75th Avenue, Phoenix, Arizona 85043, Attention: Corporate
Secretary.
OTHER MATTERS
As of the date of this proxy statement, 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. If any other matter is properly brought before the meeting for
action by stockholders, proxies in the enclosed form returned to Swift will be
voted in accordance with the recommendation of the Board of Directors or, in the
absence of such a recommendation, in accordance with the judgment of the proxy
holder.
April __, 2002
SWIFT TRANSPORTATION CO., INC.
----------------------------------------
Jerry Moyes
Chairman of the Board, President and
Chief Executive Officer
27
Annex A
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
SWIFT TRANSPORTATION CO., INC.
ARTICLE I
NAME AND DURATION
The name of this corporation shall be SWIFT TRANSPORTATION CO., INC. The
duration of this corporation shall be perpetual.
ARTICLE II
PURPOSE
The purpose for which this corporation is organized is the transaction of
any or all lawful business for which corporations may be incorporated under the
laws of the State of Nevada as they may be amended from time to time.
ARTICLE III
AUTHORIZED CAPITAL
The total number of shares of all classes of capital stock which the
corporation shall have the authority to issue is Two-Hundred-One million
(201,000,000) shares consisting of:
(i) Two-Hundred million (200,000,000) shares of Common Stock, par
value $0.001 per share (hereinafter referred to as "Common Stock"); and
(ii) One million (1,000,000) shares of Preferred Stock, par value
$.001 per share (hereinafter referred to as "Preferred Stock").
The Preferred Stock may be issued from time to time in one or more series,
each of such series to have such voting powers, full or limited, or no voting
powers, and such designations, preferences and relative, participating, optional
or other special rights, and qualifications, limitations or restrictions
thereof, as shall be stated and expressed in a resolution or resolutions
providing for the issue of such series adopted by the Board of Directors. As so
provided in such resolution or resolutions and as and to the extent permitted by
law, the shares of any series of the Preferred Stock may be made subject to
redemption, or convertible into or exchangeable for shares of any other class or
series, by the corporation at its option or at the option of the holders or upon
the happening of a specified event.
Shares of any series of Preferred Stock which shall be issued and
thereafter acquired by the corporation through purchase, redemption, conversion,
exchange or otherwise, shall return to the status of authorized but unissued
A-1
Preferred Stock of the same series unless otherwise provided in the resolution
or resolutions of the Board of Directors. Unless otherwise provided in the
resolution or resolutions of the Board of Directors providing for the issuance
thereof, the number of authorized shares of stock of any such series may be
increased or decreased (but not below the number of shares thereof then
outstanding) by resolution or resolutions of the Board of Directors. In case the
number of outstanding shares of any such series of Preferred Stock shall be
decreased, the shares representing such decrease shall, unless otherwise
provided in the resolution or resolutions of the Board of Directors providing
for the issuance thereof, resume the status of authorized but unissued Preferred
Stock, undesignated as to series.
No holder of Common Stock or any series of Preferred Stock shall have the
right to cumulate votes in the election of directors of the corporation or for
any other purpose.
ARTICLE IV
PREEMPTIVE RIGHTS
No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or series of
stock or other securities of the corporation shall have any preemptive right to
purchase or subscribe for any unissued stock or security of any class or series
or any additional shares of any class or series to be issued by reason of
increase in the authorized capital stock of the corporation of any class or
series, bonds, certificates of indebtedness, debentures or other securities
convertible into or exchangeable for stock of the corporation of any class or
series. Any such unissued stock, additional authorized issue of shares of any
class or series of stock or securities convertible into or exchangeable for
stock or carrying any right to purchase stock, may be issued and disposed of
pursuant to resolution of the Board of Directors to such persons, whether such
holders or others, and upon such terms as may be deemed advisable by the Board
of Directors in the exercise of its sole discretion.
ARTICLE V
REGISTERED AGENT
The name and address of the initial registered agent of the corporation is
The Corporation Trust Company of Nevada, One East First Street, Reno, Nevada
89501.
ARTICLE VI
BOARD OF DIRECTORS
1. NUMBER AND CLASS OF DIRECTORS.
The Board of Directors shall have sole authority to determine the number of
Directors, within the limits set forth herein, and may increase or decrease the
exact number of Directors from time to time by resolution duly adopted by such
Board. No decrease in the number of Directors shall have the effect of
shortening the term of any incumbent Director. The exact number of Directors
shall be seven (7) until so increased or decreased.
The number of Directors shall be divided into three (3) classes, as nearly
equal in number as may be, to serve in the first instance until the first,
second and third annual meetings of the Stockholders to be held, respectively,
and until their successors shall be elected and shall qualify. In the case of
A-2
any increase in the number of Directors of the Corporation, the additional
Directors shall be so classified that all classes of Directors shall be
increased equally as nearly as may be, and the additional Directors shall be
elected as provided herein by the Directors or by the Stockholders at an annual
meeting. In case of any decrease in the number of Directors of the Corporation,
all classes of Directors shall be decreased equally, as nearly as may be.
Election of Directors shall be conducted as provided in these Articles, by law
or in the Bylaw.
The name and mailing address of each person who is to serve as a director
until the first, second and third annual meetings of the Stockholders and until
their successors are elected and qualified, and the class designation and term
of office of each director is:
NAME AND MAILING ADDRESS CLASS TERM OF OFFICE
------------------------ ----- --------------
Rodney K. Sartor Class I Term Ending 1994
1705 Marietta Way, Suite A
Sparks, Nevada 89431
Earl H. Scudder, Jr. Class I Term Ending 1994
1705 Marietta Way, Suite A
Sparks, Nevada 89431
Robert W. Cunningham Class II Term Ending 1995
1705 Marietta Way, Suite A
Sparks, Nevada 89431
Alphonse E. Frei Class II Term Ending 1995
1705 Marietta Way, Suite A
Sparks, Nevada 89431
Jerry C. Moyes Class III Term Ending 1996
1705 Marietta Way, Suite A
Sparks, Nevada 89431
William F. Riley III Class III Term Ending 1996
1705 Marietta Way, Suite A
Sparks, Nevada 89431
Lou A. Edwards Class III Term Ending 1996
1705 Marietta Way, Suite A
Sparks, Nevada 89431
2. VACANCIES.
Vacancies on the Board of Directors, whether created by increase in the
number of Directors, or by death, disability, resignation or removal, shall be
filled by a vote of a majority of the Directors then remaining in office at a
regular meeting, or a special meeting called for the purpose. Each Director so
chosen shall hold office until the next annual meeting of stockholders and until
his successor shall be elected and qualified, or until his earlier death,
resignation or removal.
A-3
3. REMOVAL OF DIRECTORS.
A Director may be removed with or without cause by the Stockholders at a
special meeting of the Stockholders, called for the purpose in conformity with
the Bylaws. The affirmative vote of the holders of two-thirds (2/3) of the
voting power of all the shares entitled to vote at such meeting shall be
required to remove a Director.
ARTICLE VII
INCORPORATORS
The name and address of each incorporator of the corporation is:
NAME ADDRESS
---- -------
A. Egelhoff 3225 N. Central Ave.
Phoenix, AZ 85012
R. Walters 3225 N. Central Ave.
Phoenix, AZ 85012
J. Hurley 3225 N. Central Ave.
Phoenix, AZ 85012
All powers, duties and responsibilities of the incorporators shall cease at
the time of delivery of those Articles of Incorporation to the Secretary of the
State of Nevada for filing.
ARTICLE VIII
INDEMNIFICATION OF OFFICERS,
DIRECTORS, EMPLOYEES AND AGENTS
The corporation shall indemnify, defend and hold harmless any person who
incurs expenses, claims, damages, or liability by reason of the fact that he or
she is, or was an officer, director, employee or agent of the corporation, to
the fullest extent allowed pursuant to Nevada law.
ARTICLE IX
REPURCHASE OF STOCK
The Board of Directors of the corporation may, from time to time, cause the
corporation to purchase its own stock to the extent permitted by the laws of the
State of Nevada.
ARTICLE X
FISCAL YEAR
The fiscal year of the corporation shall be determined by the Board of
Directors at the organizational meeting and may thereafter be changed from time
to time by action of the Board of Directors.
A-4
ARTICLE XI
LIMITATION OF LIABILITY
To the fullest extent permitted by the laws of the State of Nevada, as the
same exist or may hereafter be amended, any director or officer of the
corporation shall not be liable to the corporation or its stockholders for
monetary or other damages for breach of fiduciary duties as a director or
officer. No repeal, amendment, or modification of this Article XI, whether
director or indirect, shall eliminate or reduce its effect with respect to any
act or omission of a director or officer of the corporation occurring prior to
such repeal, amendment, or modification. Notwithstanding any other provision of
these Articles of Incorporation, the affirmative vote of seventy-five percent
(75%) of the outstanding shares of stock of this corporation entitled to vote
shall be required to amend, alter, change or repeal, or adopt any provision
inconsistent with, this Article.
ARTICLE XII
NON-APPLICABILITY OF CERTAIN STATE ANTI-TAKEOVER LAWS
Pursuant to Arizona Revised Statutes Section 10-1211(A), the corporation
elects not to be subject to Article 2, Chapter 6, Title 10 of the Arizona
Revised Statutes, as the same may be amended from time to time. Furthermore,
pursuant to Nevada Revised Statutes Sections 78.378 and 78.434, the corporation
elects not to be governed by the provisions of Nevada Revised Statutes Sections
78.378 to 78.3793, inclusive, and 78.411 to 78.444, inclusive, as the same may
be amended from time to time.
A-5
PROXY PROXY
SWIFT TRANSPORTATION CO., INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 23, 2002
I appoint Jerry Moyes and William F. Riley III, individually and together,
proxies with full power of substitution, to vote all my shares of common stock
of Swift Transportation Co., Inc. (the "Company") which I have the power to
vote, at the Annual Meeting of Stockholders of the Company (the "Annual
Meeting") to be held at the Company's corporate headquarters at 2200 South 75th
Avenue, Phoenix, Arizona 85043 on May 23, 2002 beginning at 10:00 a.m. local
time and at any adjournments and postponements of the Annual Meeting. In the
absence of specific voting directions from me, my proxies will vote my shares in
accordance with the Director's recommendations on the reverse side of this card.
My proxies may vote according to their discretion on any other matter which may
properly come before the Annual Meeting. I revoke any proxy previously given and
acknowledge that I may revoke this proxy prior to its exercise.
UNLESS OTHERWISE MARKED, THIS PROXY WILL BE VOTED FOR (1) THE ELECTION OF EACH
CLASS III DIRECTOR NOMINEE, (2) APPROVAL OF THE ADOPTION OF THE PROPOSED
AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF
AUTHORIZED SHARES OF ITS COMMON STOCK, AND (3) APPROVAL OF THE ADOPTION OF THE
PROPOSED AMENDMENT TO THE COMPANY'S 1999 STOCK OPTION PLAN TO INCREASE THE
NUMBER OF SHARES AUTHORIZED FOR ISSUANCE THEREUNDER.
YOUR VOTE IS IMPORTANT: PLEASE SIGN AND DATE THE OTHER SIDE OF THIS PROXY CARD
AND RETURN IT PROMPTLY USING THE ENCLOSED ENVELOPE.
(Continued and to be marked, signed and dated on the reverse side.)
SWIFT TRANSPORTATION CO., INC.
PLEASE MARK BOXES, SIGN AND DATE USING DARK INK ONLY.
The Board of Directors recommends a vote FOR Proposals 1 through 3.
For All
1. TO ELECT CLASS III DIRECTORS For Withhold Except Nominee
Nominees: William F. Riley III All All Written Below
and Lou A. Edwards
[ ] [ ] [ ]
To withhold authority
to vote for any
individual nominee,
write the name of
such nominee in the
space below:
_____________________
2. TO APPROVE THE AMENDMENT TO For Against Abstain
THE COMPANY'S ARTICLES OF
INCORPORATION TO INCREASE THE [ ] [ ] [ ]
NUMBER OF SHARES OF COMMON
STOCK AUTHORIZED FOR ISSUANCE
FROM 150,000,000 TO
200,000,000.
3. TO APPROVE THE AMENDMENT TO For Against Abstain
THE COMPANY'S 1999 STOCK PLAN
TO INCREASE THE NUMBER OF [ ] [ ] [ ]
SHARES AUTHORIZED FOR ISSUANCE
FROM 4,250,000 TO 7,250,000.
Please sign exactly as name(s) appear(s)
on your common stock certificate(s) and
date. If acting as an executor,
administrator, trustee, custodian,
guardian, etc., you should so indicate
in signing. If the stockholder is a
corporation, the proxy should indicate
the full corporate name and be signed by
a duly authorized officer (indicating
his or her position). If shares are held
jointly, each stockholder named on the
common stock certificate(s) should sign.
----------------------------------------
----------------------------------------
Signature
----------------------------------------
Signature
Dated: _____________, 2002
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS YOU SPECIFY ABOVE. IF NO
SPECIFIC VOTING INSTRUCTIONS ARE GIVEN BY YOU, THIS PROXY WILL BE VOTED FOR EACH
OF THE LISTED PROPOSALS AND, WITH RESPECT TO SUCH OTHER BUSINESS AS MAY PROPERLY
COME BEFORE THE ANNUAL MEETING, OR ANY ADJOURNMENTS OR POSTPONEMENTS, IN
ACCORDANCE WITH THE DISCRETION OF THE APPOINTED PROXIES. PLEASE SIGN, DATE AND
RETURN THIS PROXY PROMPTLY.