SIMON TRANSPORTATION SERVICES INC, 424B1, 1997-02-13

SIMON TRANSPORTATION SERVICES INC
424B1, 1997-02-13
TRUCKING (NO LOCAL)

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Filed Pursuant to Rule No. 424(B)(1)
Registration No. 333-20019

2,200,000 SHARES

SIMON TRANSPORTATION

LOGO CLASS A COMMON STOCK

----------------
Of the 2,200,000 shares of Class A Common Stock offered hereby (the
"Offering"), 1,425,000 are being sold by Simon Transportation Services Inc.
(the "Company") and 775,000 are being sold by certain stockholders of the
Company (the "Selling Stockholders"). See "Principal and Selling
Stockholders." The Company will not receive any proceeds from the sale of the
Class A Common Stock by the Selling Stockholders. The Company's Class A Common
Stock is traded on the Nasdaq National Market under the symbol "SIMN." The
closing price of the Company's Class A Common Stock on February 12, 1997, was
$16.50 per share.

The Company's authorized capital stock includes Class A Common Stock, Class
B Common Stock (together with the Class A Common Stock, the "Common Stock")
and preferred stock. The Class A Common Stock is substantially identical to
the Class B Common Stock, except with respect to voting rights. The Class A
Common Stock is entitled to one vote per share, and the Class B Common Stock
is entitled to two votes per share so long as it is beneficially owned by
Richard D. Simon or certain members of his immediate family. See "Risk
Factors--Voting Control of the Company" and "Description of Capital Stock."

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SEE "RISK FACTORS" BEGINNING ON PAGE 6 OF THIS PROSPECTUS FOR CERTAIN
INFORMATION THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS.

----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

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<TABLE>
<CAPTION>
UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND PROCEEDS TO SELLING
PUBLIC COMMISSIONS(1) COMPANY(2) STOCKHOLDERS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share.................. $16.00 $.88 $15.12 $15.12
- --------------------------------------------------------------------------------
Total(3)................... $35,200,000 $1,936,000 $21,546,000 $11,718,000
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities arising under the Securities Act of
1933, as amended (the "Securities Act"). See "Underwriting."
(2) Before deducting expenses estimated at approximately $200,000 payable by
the Company.
(3) The Company and one of the Selling Stockholders have granted the
Underwriters options, exercisable within 30 days after the date hereof, to
purchase up to an additional 110,000 and 220,000 shares of Class A Common
Stock, respectively, at the Price to Public less Underwriting Discounts
and Commissions, solely to cover over-allotments, if any. If all such
shares are purchased, the total Price to Public, Underwriting Discounts
and Commissions, Proceeds to Company, and Proceeds to Selling Stockholders
will be $40,480,000, $2,226,400, $23,209,200, and $15,044,400,
respectively. See "Underwriting."

----------------
The Class A Common Stock is offered by the several Underwriters, subject to
prior sale, when, as and if issued to and accepted by the Underwriters,
subject to their right to withdraw, cancel, modify, or reject orders in whole
or in part, and subject to certain other conditions. It is expected that
delivery of the shares of Class A Common Stock offered hereby will be made on
or about February 19, 1997.

MORGAN KEEGAN & COMPANY, INC.

A.G. EDWARDS & SONS, INC.

GEORGE K. BAUM & COMPANY

The date of this Prospectus is February 13, 1997
<PAGE>

AVAILABLE INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-1 (together with all
amendments and exhibits thereto, the "Registration Statement") under the
Securities Act of 1933 with respect to the Class A Common Stock offered
hereby. This Prospectus, which constitutes part of the Registration Statement,
does not contain all of the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission. For further information with respect to the
Company and the Class A Common Stock, reference is made to the Registration
Statement and the exhibits and schedules filed as a part thereof. The
Registration Statement and the exhibits thereto, as well as the reports, proxy
statements, and other information filed by the Company under the Exchange Act
may be examined without charge at the Public Reference Section of the
Commission located at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, DC 20549, at the regional offices of the Commission located at 7
World Trade Center, Suite 1300, New York, NY 10048, and 500 West Madison
Street, Suite 1400, Chicago, IL 60661-2511, and at the Web site maintained by
the Commission at http://www.sec.gov.

Statements made in this Prospectus as to the contents of any contract,
agreement, or other document referred to are not necessarily complete. With
respect to each such contract, agreement, or other document filed as an
exhibit to the Registration Statement, reference is made to the exhibit for a
more complete description of the matter involved, and each such statement
shall be deemed qualified in its entirety by such reference.

----------------

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE CLASS A
COMMON STOCK AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER MARKET OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS AND SELLING GROUP
MEMBERS, IF ANY, MAY ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS IN THE CLASS
A COMMON STOCK ON THE NASDAQ STOCK MARKET IN ACCORDANCE WITH RULE 10B-6A UNDER
THE SECURITIES EXCHANGE ACT OF 1934. SEE "UNDERWRITING."

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<PAGE>

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and the Consolidated Financial Statements, including the Notes
thereto, appearing elsewhere in this Prospectus. Unless otherwise indicated in
this Prospectus, (i) all information assumes that the Underwriters' over-
allotment option is not exercised; (ii) all references to the "Company" or
"Simon Transportation" refer to Simon Transportation Services Inc. and Dick
Simon Trucking, Inc., a Utah corporation, the wholly owned subsidiary of Simon
Transportation Services Inc; and (iii) all financial information includes the
historical operations of Dick Simon Trucking, Inc. and R. D. Simon Trucking, a
sole proprietorship formerly owned by Richard D. Simon. See "Holding Company
Formation" and Note 1 to Consolidated Financial Statements.

THE COMPANY

Simon Transportation has become one of the country's fastest-growing
truckload carriers by providing nationwide, predominantly temperature-
controlled transportation services for major shippers in the food industry.
Many large shippers rely upon a limited number of transportation partners, or
core carriers, to provide just-in-time deliveries, dedicated fleet service, and
"continuous movement" of equipment. By offering these and other premium
services at a cost generally lower than private fleets, Simon Transportation
has become a core carrier for service-sensitive national accounts such as
Nestle, Kraft, M&M Mars, ConAgra, Albertson's, Pillsbury, Campbell's Soup, and
Coca-Cola Foods. Management believes that serving food industry shippers is
desirable because their products are generally less affected by economic
cycles, and many of these shippers require time-sensitive and specialized
service that justifies a higher rate per mile. As a result of this strategy,
Simon Transportation has increased its revenue to $101.1 million in fiscal 1996
from $40.8 million in fiscal 1992, a 25.5% compounded annual growth rate.
During the same period, operating earnings more than doubled to $9.2 million
from $4.5 million.

Simon Transportation substantially expanded and upgraded its tractor and
trailer fleets during the fiscal year ended September 30, 1996. After applying
the net proceeds of its November 1995 initial public offering to reduce debt
and purchase revenue equipment, the Company took delivery of approximately 665
new tractors and traded approximately 348 older models. This expanded Simon
Transportation's fleet by 317 tractors and reduced the fleet's average age to
approximately 13 months at September 30, 1996. Following the fleet upgrade, all
of the Company's tractors are equipped with electronic engines and Qualcomm
satellite-based tracking and communication units, and most are covered with
three-year, 500,000 mile engine warranties. Simon Transportation also took
delivery of 806 new 53-foot, temperature-controlled trailers during fiscal
1996, in response to customer demand for greater freight capacity. The Company
has scheduled deliveries that would increase its fleet by approximately 360
tractors and 500 53-foot trailers during fiscal 1997 and has options on an
additional 100 tractors.

Simon Transportation's fleet expansion and upgrade, along with strong
customer demand, contributed to 34.4% revenue growth in fiscal 1996, to $101.1
million from $75.2 million in fiscal 1995. In addition to increasing its
weighted average tractor fleet by 29.4%, the Company improved its revenue per
tractor per week by approximately 4.5%. The newer tractors also improved fuel
efficiency and lowered maintenance and repair costs. These factors contributed
toward improving Simon Transportation's pretax margin to 6.3% in fiscal 1996
from 3.4% in fiscal 1995.

The truckload industry, including the temperature-controlled segment, is
consolidating in response to several identifiable trends. Many major shippers
are reducing the number of carriers they use in favor of service-based, ongoing
relationships with a limited group of core carriers. These partnerships and the
increasing use of equipment and drivers dedicated to a single shipper's needs
("dedicated fleets") are designed to ensure higher quality, more consistent
service for shippers and greater equipment utilization and more predictable
revenue for

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<PAGE>

core carriers. Other shippers that own tractor-trailer fleets are outsourcing
their transportation requirements to truckload carriers to lower operating
expenses and conserve capital for core corporate purposes. This outsourcing has
resulted in some shippers eliminating their own trucks in favor of truckload
carriers, which, according to a study commissioned by the American Trucking
Associations Foundation, can provide similar service at approximately 25% less
cost. Deregulation and economies of scale also promote consolidation. Many
truckload carriers have grown rapidly since deregulation in 1980 and have
achieved the size to negotiate lifetime equipment warranties and obtain
equipment, fuel, insurance, financing, and other items for significantly less
than smaller or more leveraged competitors. All of these trends favor large
carriers with modern fleets, excellent service, in-transit communication and
load tracking, good drivers, a strong safety record, adequate insurance, and a
strong capital base. Management plans to continue the Company's growth and
believes that the Company's net proceeds of the Offering will strengthen its
ability to capitalize on these industry trends.

Simon Transportation Services Inc. was incorporated under the laws of Nevada
in August 1995 to own 100% of Dick Simon Trucking, Inc., which was incorporated
in Utah in 1972. The Company's headquarters is located at 4646 South 500 West,
Salt Lake City, Utah 84123, and its telephone number is (801) 268-9100.

THE OFFERING

<TABLE>
<S> <C>
Class A Common Stock offered by the
Company........................... 1,425,000 shares
Class A Common Stock offered by the
Selling Stockholders.............. 775,000 shares(1)
Common Stock to be outstanding
after the Offering:
Class A Common Stock............. 4,987,257 shares(2)
Class B Common Stock............. 1,182,661 shares(1)
Total.............................. 6,169,918 shares(2)
Use of Proceeds.................... Purchase new revenue equipment and provide
working capital. See "Use of Proceeds."
Nasdaq National Market symbol...... SIMN
</TABLE>
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(1) Richard D. Simon is selling 10,500 shares of Class A Common Stock and
689,500 shares of Class B Common Stock, which will immediately convert to
Class A Common Stock upon sale. The Class A Common Stock is entitled to one
vote per share. The Class B Common Stock is entitled to two votes per share
and automatically converts into Class A Common Stock if beneficially owned
by persons other than Richard D. Simon and certain members of his immediate
family. The Class A and Class B Common Stock vote together as a single
class except as required by law and are substantially identical, except
with respect to voting rights. See "Description of Capital Stock."
(2) Excludes approximately 398,000 shares of Class A Common Stock reserved for
issuance under the Company's Incentive Stock Plan, options to purchase
approximately 358,150 of which are currently outstanding. Also excludes
24,000 shares of Class A Common Stock reserved for issuance under the
Company's Outside Director Stock Plan, options to purchase 4,000 of which
are currently outstanding. See "Management--Incentive Stock Plan" and
"Management--Directors' Compensation."

RISK FACTORS

There are a number of factors that should be considered by potential
investors before purchasing shares of the Company's Class A Common Stock. See
"Risk Factors."

4
<PAGE>

SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS AND OPERATING DATA)

<TABLE>
<CAPTION>
DECEMBER 31, 1996
----------------------
ACTUAL AS ADJUSTED(4)
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<S> <C> <C>
BALANCE SHEET DATA:
Net property and equipment............................ $55,836 $55,836
Total assets.......................................... 78,528 99,874
Long-term debt and capitalized leases, including
current portion...................................... 38,013 38,013
Stockholders' equity.................................. 30,359 51,705
</TABLE>
- --------
(1) The provisions for income tax for fiscal 1996 and the three months ended
December 31, 1995, include a one-time, non-cash charge of approximately
$3.0 million in recognition of deferred income taxes that resulted from the
Company's conversion to a C Corporation on November 17, 1995, the date of
its initial public offering.
(2) The Company was treated as an S Corporation for federal and state income
tax purposes from October 1, 1990, to November 16, 1995. As a result, the
Company's taxable earnings for such period were taxed for federal and state
income tax purposes directly to the Company's then-existing stockholders.
The pro forma statement of earnings data give effect to an adjustment for a
provision for federal and state income taxes as if the Company had been
treated as a C Corporation during all periods reported. The pro forma
statement of earnings data do not give effect to the one-time, non-cash
charge of approximately $3.0 million in recognition of deferred income
taxes that resulted from the Company's conversion to a C Corporation on
November 17, 1995, the date of its initial public offering. See Note 3 to
Consolidated Financial Statements.
(3) Operating expenses as a percentage of revenue. The Company's operating
ratio is affected by the method of equipment financing. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."
(4) Adjusted for the sale of the 1,425,000 shares of Class A Common Stock
offered by the Company and the application of the estimated net proceeds
therefrom as described under "Use of Proceeds."

5
<PAGE>

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

When used in this Prospectus, the words "believe," "anticipate," "expects
to," and similar expressions are intended to identify forward-looking
statements (as such term is defined in the Securities Act of 1933, as amended
(the "Securities Act")). Such statements are based on current knowledge and
current judgments, but are subject to certain risks and uncertainties that
could cause the actual results to differ materially from those projected.
Readers are cautioned not to place undue reliance on these forward-looking
statements which speak only as of the date hereof. Readers are also urged to
carefully review and consider the various disclosures made by the Company that
attempt to advise interested parties of the factors that affect the Company's
business, including the disclosures made under the heading "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

RISK FACTORS

In addition to the other information in this Prospectus, the following risk
factors should be considered carefully in evaluating an investment in the
shares of Class A Common Stock.

ECONOMIC FACTORS; FUEL PRICES

The Company has little or no control over economic factors such as fuel
prices, fuel tax, interest rate fluctuations, recessions, and customers'
business cycles. Fuel prices increased substantially during the Company's 1996
fiscal year, and not all of the increased fuel cost was recovered through
higher rates and fuel surcharges. An extended period of elevated fuel prices
or significant increases in other operating costs and interest rates, to the
extent not offset by increases in freight rates, would adversely affect the
Company's operating results. Economic recessions, temporary inventory
imbalances, or downturns in customers' business cycles also could have a
materially adverse effect upon the operating results of the Company. The
Company historically has recognized a gain on the sale of its revenue
equipment. If the resale value of the Company's revenue equipment were to
decline, the Company could find it necessary to dispose of its equipment at
lower prices or retain some of its equipment longer, with a resulting increase
in operating expenses. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business--Fuel Availability and
Cost."

DEPENDENCE ON CERTAIN CUSTOMERS

For the fiscal year ended September 30, 1996, the Company's 25 largest
customers represented 75.2% of revenue, its ten largest customers represented
60.1% of revenue, and its five largest customers represented 45.7% of revenue.
Nestle, including all divisions, accounted for 18.7% of revenue during fiscal
1996. Most of the Company's contracts with customers are cancelable on 30
days' notice. The loss of any of its major customers could have a materially
adverse effect on the Company's operating results and profitability. See
"Business--Customers and Marketing."

RECRUITMENT, RETENTION, AND COMPENSATION OF QUALIFIED DRIVERS

Competition for drivers is intense in the trucking industry, and the Company
occasionally experiences difficulty attracting and retaining enough qualified
drivers. There is, and historically has been, an industry-wide shortage of
qualified drivers, and this shortage could affect the Company's operations and
profitability in the future, force the Company to significantly increase the
compensation it pays to driver employees, or curtail the Company's growth. The
nation's second largest truckload carrier, J.B. Hunt Transport, Inc., recently
announced a substantial increase in the per-mile compensation of certain of
its drivers. The effect, if any, this will have on driver compensation and
retention is unknown. Difficulty in attracting and retaining qualified drivers
would have a materially adverse effect upon the Company's operations and
ability to grow. See "Business--Drivers and Other Personnel."

6
<PAGE>

CHALLENGES TO RAPID GROWTH OF BUSINESS

The Company has scheduled deliveries that would increase its fleet by
approximately 360 tractors and 500 53-foot trailers during fiscal 1997 and has
options to purchase an additional 100 tractors. There can be no assurance that
the Company will be able to attract and retain enough qualified drivers to
meet that growth. There also can be no assurance that scheduled deliveries of
revenue equipment will not be delayed because of manufacturers' inability to
meet the demand for tractors, trailers, engines, or other components. Further,
expected growth, if achieved, may place a significant strain on the Company's
management, working capital, and accounting and other operating systems. There
is no assurance that such systems will be adequate to handle such growth or
that operating margins will not be adversely affected by future changes in and
expansion of the Company's business. Finally, the Company may be forced to
curtail its plans for growth due to changes in economic conditions,
particularly decreased demand for truckload carrier services. See "Business--
Strategy" and "Revenue Equipment."

COMPETITION

The trucking industry is highly competitive and fragmented. The Company
competes primarily with other truckload carriers that provide temperature-
controlled service, private fleets operated by existing and potential
customers, and, to a lesser extent, railroads. Competition for the freight
transported by the Company is based primarily on service, efficiency, and
freight rates. The Company competes with a number of other trucking companies,
including truckload carriers that have temperature-controlled divisions. Some
of these competitors have substantially greater financial resources, operate
more equipment, or carry a larger volume of freight than the Company. See
"Business--Competition."

CAPITAL REQUIREMENTS; LEVERAGE

The trucking industry requires extensive investment in revenue equipment.
The Company historically has relied upon debt, capitalized leases, operating
leases, and the net proceeds of its initial public offering to finance new
revenue equipment. The Company has granted its lenders liens on a substantial
portion of its assets. If in the future the Company were unable to borrow
sufficient funds, enter into acceptable lease arrangements, sell or trade its
used equipment at acceptable prices, or raise additional equity capital, the
resulting capital shortage would limit the Company's growth and force the
Company to operate its revenue equipment for longer periods, which would be
likely to adversely affect the Company's growth and profitability. The Company
currently has a long-term debt to total capitalization ratio higher than many
of its competitors. The Company's long-term debt to total capitalization ratio
will improve significantly after application of the estimated net proceeds
from the Offering. See "Use of Proceeds," "Capitalization," and "Management's
Discussion and Analysis of Financial Condition and Results of Operations--
Liquidity and Capital Resources."

VOTING CONTROL OF THE COMPANY

On all matters with respect to which the Company's stockholders have a right
to vote, including the election of directors, each share of Class A Common
Stock is entitled to one vote, while each share of Class B Common Stock is
entitled to two votes. Neither class of Common Stock is entitled to cumulative
voting in the election of directors. The Class B Common Stock is convertible
into shares of Class A Common Stock on a share-for-share basis at the election
of the holder and will be converted automatically into shares of Class A
Common Stock if beneficially owned by any person other than Richard D. Simon
or certain members of his immediate family. Upon completion of the Offering,
the Simon family will beneficially own approximately 5.7% of the outstanding
shares of Class A Common Stock and all of the outstanding shares of Class B
Common Stock, which together will represent approximately 23.8% of all of the
outstanding shares of Common Stock and 36.0% of the total voting power of the
Company's outstanding shares (approximately 19.9% ownership and 30.5% of the
total voting power if the Underwriters' over-allotment option is exercised in
full). Although the Simons will not control a majority of the votes entitled
to be cast by holders of the Company's Common Stock, they will have
substantial ability to influence the election of the Board of Directors of the
Company and determine the outcome of matters involving a stockholder vote.
Such control by the Simons could make it more difficult for a third party

7
<PAGE>

to acquire, or discourage a third party from attempting to acquire, control of
the Company. See "Principal and Selling Stockholders" and "Description of
Capital Stock."

DEPENDENCE UPON KEY PERSONNEL

The Company's success is highly dependent upon the continued services of
Richard D. Simon, the Company's Chairman of the Board, President, and Chief
Executive Officer. The loss of Mr. Simon could materially and adversely affect
the Company's continued growth and profitability. There can be no assurance
that the Company will be able to attract and retain qualified management in
the future. The Company does not carry key-man insurance on any of its
officers or directors. See "Management."

LIMITATIONS ON TAKEOVERS

Certain corporate governance and statutory provisions may inhibit changes in
control of the Company. Applicable provisions of Nevada law restrict the
voting rights of certain acquirors and the ability of such persons to engage
in unapproved business combinations with the Company. The Company's Articles
of Incorporation permit the issuance of additional shares of authorized but
unissued Class B Common Stock, which is entitled to two votes per share while
owned by certain members of the Simon family, and allow the Board of Directors
to establish all relevant provisions of, and issue preferred stock without
further action by the stockholders. Such preferred stock could be used, for
example, in a stockholders' rights plan. The Company's Bylaws limit the
persons who may call a special meeting of the stockholders. The effect of
these provisions and the Simons' stock ownership could be to make a takeover
more difficult or to discourage a person from attempting a takeover, including
a takeover that some stockholders may deem to be in their best interests. See
"Description of Capital Stock--Certain Provisions of Articles and Bylaws" and
"Statutory Anti-Takeover Provisions."

CLAIMS EXPOSURE AND INSURANCE COSTS

Trucking companies, including the Company, face multiple claims for personal
injury and property damage relating to accidents, cargo damage, and workers'
compensation. The Company currently maintains liability insurance for bodily
injury and property damage with a deductible of $100,000, along with workers'
compensation insurance with a deductible, in states in which a deductible is
allowed, of $100,000. The Company also carries cargo and physical damage
insurance. To the extent that the Company experiences a material increase in
the frequency or severity of accidents or workers' compensation claims, or
unfavorable developments on existing claims, the Company's operating results
and financial condition could be materially adversely affected. Significant
increases in the Company's claims and insurance cost, to the extent not offset
by rate increases, would reduce the Company's profitability. See "Business--
Safety and Insurance."

SEASONALITY

The Company serves primarily food-industry customers that require
temperature-controlled trailers. Shipments are generally reduced during the
first calendar quarter of each year, and the Company's operating expenses
historically have been higher in the winter months due to decreased fuel
efficiency and increased maintenance costs in colder weather. The Company's
operating revenue and net income may vary as a result of seasonal factors, and
accordingly, results of operations are subject to fluctuation, and results in
any period should not be considered indicative of the results to be expected
for any future period. Fluctuations in operating results may also result in
fluctuations in the price of the Class A Common Stock. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations--
Seasonality."

8
<PAGE>

ENVIRONMENTAL MATTERS

The Company's operations are subject to various environmental laws and
regulations dealing with the transportation, storage, presence, use, disposal,
and handling of hazardous materials and hazardous wastes, discharge of
stormwater, and underground fuel storage tanks. The Company maintains above-
ground and underground fuel storage tanks on its properties. Although the
Company is not aware of any fuel spills or hazardous substance contamination
on its properties and believes that its operations are in material compliance
with existing environmental laws and regulations, if any such substances were
found on the Company's properties or if the Company were found to be in
violation of applicable laws and regulations, the Company could be responsible
for clean-up costs, property damage, and fines or other penalties, any one of
which could have a materially adverse effect on the Company. See "Business--
Properties" and "Regulation."

SHARES ELIGIBLE FOR FUTURE SALE

Sales of a substantial number of shares of Class A Common Stock or the
availability of such shares for sale in the public market following the
Offering may adversely affect prevailing market prices for the Class A Common
Stock and may make it more difficult for the Company to sell its equity
securities in the future on terms it deems appropriate. Upon completion of the
Offering, the Company will have 6,169,918 shares of outstanding Common Stock.
All of the 2,200,000 shares of Class A Common Stock offered hereby (2,530,000
shares if the Underwriters' over-allotment option is exercised in full) will
be freely tradeable without restriction or further registration unless
acquired by "affiliates" of the Company as defined in Rule 144 of the
Securities Act ("Rule 144"). In connection with the Offering, the Selling
Stockholders, along with the Company and its other executive officers and
directors, who will beneficially own approximately 1,538,178 or 24.9% of the
Company's outstanding Common Stock after the Offering, have agreed not to sell
or otherwise dispose of any of their shares, directly or indirectly, for 180
days from the date of this Prospectus without the prior written consent of
Morgan Keegan & Company, Inc. After the 180 day period all such shares will be
eligible for sale, subject to compliance with Rule 144. See "Principal and
Selling Stockholders" and "Shares Eligible for Future Sale."

GOVERNMENT REGULATION

The Company also is subject to regulations promulgated by the Environmental
Protection Agency (the "EPA") and similar state agencies. Although management
believes that its operations are in material compliance with current laws and
regulations, there can be no assurance that current regulatory requirements
will not change or that currently unforeseen environmental incidents will not
occur or that contamination or past non-compliance with environmental laws
will not be discovered on properties on which the Company has operated. See
"Business--Regulation."

LACK OF DIVIDENDS

The Company intends to retain its earnings to finance the growth and
development of its business and does not anticipate paying cash dividends. Any
payment of cash dividends in the future will depend upon the Company's
financial condition, capital requirements, earnings, restrictions under loan
agreements, and other factors the Board of Directors may deem relevant. See
"Dividend Policy."

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<PAGE>

POSSIBLE VOLATILITY OF STOCK PRICE

Trading volume in the Class A Common Stock has been limited, which causes the
price of the Class A Common Stock to be more vulnerable to significant price
fluctuations than the stock prices of companies with greater market
capitalization. From time to time after the Offering, there may be significant
volatility in the market price for the Class A Common Stock. Quarterly
operating results of the Company, changes in general conditions in the economy
or the transportation industry, or other developments affecting the Company or
its competitors could cause the market price of the Class A Common Stock to
fluctuate substantially. The equity markets have, on occasion, experienced
significant price and volume fluctuations that have affected the market prices
for securities and that have been unrelated to the operating performance of
individual companies.

HOLDING COMPANY FORMATION

The Company and its stockholders engaged in several transactions in
preparation for the Company's November 17, 1995, initial public offering. They
formed a holding company and acquired the related entities, R. D. Simon
Trucking, a sole proprietorship previously owned by Richard D. Simon ("R. D.
Simon Trucking"), and Freight Sales, Inc., a Utah corporation formerly owned by
the adult children of Richard D. Simon ("Freight Sales"), as well as eliminated
certain notes payable to stockholders, all in exchange for shares of the
Company's Common Stock as described below.

The Company issued 753,135 shares of Common Stock to Richard D. Simon
effective April 19, 1995, in exchange for all of the R. D. Simon Trucking
assets and the assumption of related liabilities. The R. D. Simon Trucking
assets consisted of terminals previously leased by the Company at Atlanta,
Georgia; Phoenix, Arizona; Fontana, California; Jerome, Idaho; and Salt Lake
City, Utah; the 55 acres in Salt Lake City on which the Company plans to
relocate in 1997; and four tractors and 22 trailers. The R. D. Simon Trucking
assets had a net fair value of $5,401,886 ($8,526,924 less $3,125,038 in
related debt). The Salt Lake City properties and Atlanta and Phoenix terminals
were valued at the levels contained in independent appraisals prepared by Jerry
R. Webber, MAI; Chris L. Bradford & Associates, Inc.; and Sell, Huish &
Associates, Inc., respectively, in April 1995. All other real estate and
improvements were valued at Mr. Simon's cost from unrelated parties. The
revenue equipment was valued at fair market value estimated by Richard D. Simon
and Alban B. Lang. The Company accounted for the acquisition of the R. D. Simon
Trucking assets as a reorganization of entities under common control and,
accordingly, the financial statements reflect the assets at their historical
bases.

The Company issued 5,577 shares of Common Stock effective April 19, 1995 to
each of Kelle A. Simon, Lyn Simon, Sherry L. Simon Bokovoy, and Richard D.
Simon, Jr. in exchange for all of the outstanding capital stock of Freight
Sales. The Freight Sales stock was valued at the $160,000 estimated fair market
value of the three tractors and one parcel of real estate owned by Freight
Sales. Freight Sales had no recorded liabilities. The assets were valued at
fair market value estimated by Richard D. Simon and Alban B. Lang. The Company
also issued 13,245 shares of Common Stock effective April 19, 1995 to each of
Kelle A. Simon, Lyn Simon, Sherry L. Simon Bokovoy, Richard D. Simon Jr., and
Alban B. Lang in exchange for their $95,000 promissory notes representing the
cash value of canceled life insurance policies payable to each of them by the
Company.

Following the transactions described above, the Company effected a one-for-
3.37 reverse stock split that reduced the number of outstanding shares to
3,550,000. On September 30, 1995, the Company's stockholders contributed on a
pro rata basis 272,161 shares of Class A and 977,839 shares of Class B Common
Stock to the Company, which reduced the number of outstanding shares to the
2,300,000 outstanding immediately prior to the initial public offering. The
Company issued 2,441,968 shares of Class A Common Stock in its initial public
offering.

10
<PAGE>

DIVIDEND POLICY

The Company currently intends to retain its earnings to finance the growth
and development of its business and does not anticipate paying cash dividends
in the foreseeable future. Any payment of cash dividends in the future will
depend upon the Company's financial condition, capital requirements, earnings,
restrictions under loan agreements, and other factors the Board of Directors
may deem relevant.

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 1,425,000 shares of
Class A Common Stock offered by the Company are estimated to be approximately
$21.3 million, after deducting underwriting discounts, commissions, and
estimated expenses of the Offering payable by the Company. The Company will
not receive any proceeds from the sale of Class A Common Stock by the Selling
Stockholders.

The net proceeds to the Company from the Offering will be used to purchase
new revenue equipment scheduled for delivery during fiscal 1997 and for
working capital. Pending application of the net proceeds as described above,
the Company intends to invest such proceeds in short-term, investment grade,
interest bearing securities.

PRICE RANGE OF COMMON STOCK

The Company's Class A Common Stock has been traded on the Nasdaq National
Market, under the symbol SIMN, since November 17, 1995, the date of the
Company's initial public offering. The following table sets forth, for the
calendar periods indicated, the range of high and low bid quotations for the
Company's Class A Common Stock as reported by Nasdaq from November 17, 1995,
to February 11, 1997.

<TABLE>
<CAPTION>
PERIOD HIGH LOW
------ ------- -------
<S> <C> <C>
Calendar Year 1995
4th Quarter (from November 17, 1995)................... $ 9 1/2 $ 8 1/2
Calendar Year 1996
1st Quarter............................................ $11 1/4 $ 9
2nd Quarter............................................ $ 14 $10 1/2
3rd Quarter............................................ $ 15 $12 3/4
4th Quarter............................................ $17 1/4 $13 3/4
Calendar Year 1997
1st Quarter (through February 11th).................... $17 5/8 $14 7/8
</TABLE>

The prices reported reflect interdealer quotations without retail mark-ups,
mark-downs, or commissions, and may not represent actual transactions. As of
October 31, 1996, the Company had 669 stockholders of record of its Class A
Common Stock. However, the Company believes that many additional holders of
Class A Common Stock are unidentified because a substantial number of the
Company's shares are held of record by brokers or dealers for their customers
in street names. All of the outstanding Common Stock is, and the shares of
Class A Common Stock offered by the Company hereby when issued and paid for
will be, fully paid and non-assessable.

11
<PAGE>

CAPITALIZATION

The following table sets forth (i) the current portion of long-term debt and
capitalized leases and (ii) the capitalization of the Company (a) as of
December 31, 1996; and (b) as adjusted to give effect to the sale of the
1,425,000 shares of Class A Common Stock offered by the Company hereby and
application of the estimated net proceeds therefrom as described in "Use of
Proceeds." The following table should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Consolidated Financial Statements and Notes thereto
included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
DECEMBER 31, 1996
-------------------
ACTUAL AS ADJUSTED
------- -----------
(IN THOUSANDS)
<S> <C> <C>
Current portion of long-term debt and capitalized leases.. $ 6,653 $ 6,653
======= =======
Long-term debt (net of current portion):
Secured debt............................................ $17,329 $17,329
Capitalized leases...................................... 14,030 14,030
------- -------
Total long-term debt.................................... 31,359 31,359
------- -------
Stockholders' equity(1):
Preferred stock, $.01 par value; 5,000,000 shares
authorized; none issued and outstanding................ -- --
Class A Common Stock, $.01 par value; 20,000,000 shares
authorized; 2,872,757 shares issued and outstanding;
4,987,257 shares issued and outstanding as adjusted.... 29 50(2)
Class B Common Stock, $.01 par value; 5,000,000 shares
authorized; 1,872,161 shares issued and outstanding;
1,182,661 shares issued and outstanding as adjusted.... 19 12(2)
Additional paid-in capital.............................. 25,302 46,634
Retained earnings....................................... 5,009 5,009
------- -------
Total stockholders' equity............................ 30,359 51,705
------- -------
Total capitalization.................................. $61,718 $83,064
======= =======
</TABLE>
- --------
(1) Excludes approximately 398,000 shares of Class A Common Stock reserved for
issuance under the Company's Incentive Stock Plan, options to purchase
approximately 358,150 of which are currently outstanding. Also excludes
24,000 shares of Class A Common Stock reserved for issuance under the
Company's Outside Director Stock Plan, options to purchase 4,000 of which
are currently outstanding. See "Management--Incentive Stock Plan" and
"Management--Directors' Compensation."
(2) Richard D. Simon is selling 10,500 shares of Class A Common Stock and
689,500 shares of Class B Common Stock, which will immediately convert to
Class A Common Stock upon the sale. See "Description of Capital Stock."

12
<PAGE>

SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS AND OPERATING DATA)

The selected consolidated statement of earnings and balance sheet data as of
and for each of the years in the five-year period ended September 30, 1996,
are derived from the Company's consolidated financial statements and have been
audited by Arthur Andersen LLP, independent public accountants. The selected
consolidated statement of earnings and balance sheet data as of and for the
three-month periods ended December 31, 1995 and 1996, are unaudited. In the
opinion of management, such unaudited financial statements include all
adjustments (consisting only of normal recurring accruals) necessary for a
fair presentation of the Company's financial condition and results of
operations for such periods. The selected operating data set forth below are
unaudited. The results for the three-month period ended December 31, 1996, are
not necessarily indicative of the results expected for the full year. The
selected financial data should be read in conjunction with the Consolidated
Financial Statements and Notes thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEARS ENDED SEPTEMBER 30, DECEMBER 31,
-------------------------------------------- ----------------
1992 1993 1994 1995 1996 1995 1996
------- ------- ------- ------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF EARNINGS
DATA:
Operating revenue...... $40,823 $57,694 $71,691 $75,218 $101,090 $20,588 $34,166
------- ------- ------- ------- -------- ------- -------
Operating expenses:
Salaries, wages, and
benefits............ 14,990 21,990 25,949 28,035 40,015 8,242 13,172
Fuel and fuel taxes.. 8,014 11,629 14,363 14,115 20,359 4,043 6,658
Operating supplies
and expenses........ 4,245 6,111 8,978 10,839 13,701 3,166 4,350
Taxes and licenses... 1,625 2,291 2,558 2,756 3,288 700 1,436
Insurance and
claims.............. 1,320 1,600 1,995 2,003 2,172 275 626
Communications and
utilities........... 579 927 1,274 1,245 1,680 354 530
Depreciation and
amortization........ 1,898 4,781 6,857 7,223 5,920 1,728 1,514
Rent................. 3,632 3,422 3,435 2,926 4,794 419 3,447
------- ------- ------- ------- -------- ------- -------
Total operating
expenses.......... 36,303 52,751 65,409 69,142 91,929 18,927 31,733
------- ------- ------- ------- -------- ------- -------
Operating
earnings.......... 4,520 4,943 6,282 6,076 9,161 1,661 2,433
Interest expense and
other, net............ 1,276 2,559 3,136 3,527 2,758 806 446
Earnings before
provision for income
taxes................. 3,244 2,384 3,146 2,549 6,403 855 1,987
Provision for income
taxes(1).............. -- -- -- -- 5,454 3,257 751
------- ------- ------- ------- -------- ------- -------
Net earnings(2)........ $ 3,244 $ 2,384 $ 3,146 $ 2,549 $ 949 $(2,402) $ 1,236
======= ======= ======= ======= ======== ======= =======
PRO FORMA STATEMENT OF
EARNINGS DATA:(2)
Earnings before
provision for income
taxes................. 3,244 2,384 3,146 2,549 6,403 855 1,987
Provision for income
taxes................. 1,285 944 1,246 1,010 2,536 339 751
------- ------- ------- ------- -------- ------- -------
Net earnings........... $ 1,959 $ 1,440 $ 1,900 $ 1,539 $ 3,867 $ 516 $ 1,236
======= ======= ======= ======= ======== ======= =======
Net earnings per
common share.......... $ 0.85 $ 0.63 $ 0.83 $ 0.67 $ 0.88 $ 0.15 $ 0.26
======= ======= ======= ======= ======== ======= =======
Weighted average
common shares
outstanding........... 2,300 2,300 2,300 2,300 4,418 3,451 4,743
OPERATING DATA:
Operating ratio(3)..... 88.9% 91.4% 91.2% 91.9% 90.9% 91.9% 92.9%
Pretax margin.......... 7.9% 4.1% 4.4% 3.4% 6.3% 4.2% 5.8%
Average revenue per
loaded mile........... $ 1.23 $ 1.23 $ 1.23 $ 1.26 $ 1.24 $ 1.25 $ 1.27
Average revenue per
total mile............ $ 1.07 $ 1.07 $ 1.10 $ 1.11 $ 1.10 $ 1.10 $ 1.12
Average revenue per
tractor per week...... $ 2,582 $ 2,471 $ 2,489 $ 2,417 $ 2,526 $ 2,513 $ 2,665
Empty miles
percentage............ 13.2% 12.6% 10.7% 11.3% 11.7% 11.8% 12.0%
Average length of haul
in miles.............. 596 677 725 949 984 1,004 979
Weighted average
tractors during
period................ 304 449 554 598 774 632 990
Tractors at end of
period................ 389 523 570 623 940 647 1,011
Trailers at end of
period................ 589 745 873 877 1,430 915 1,550
BALANCE SHEET DATA (AT
END OF PERIOD):
Net property and
equipment............. $29,665 $45,409 $49,039 $52,200 $ 56,714 $54,338 $55,836
Total assets........... 34,863 52,601 56,752 61,437 78,223 69,159 78,528
Long-term debt and
capitalized leases,
including current
portion............... 27,217 43,181 44,525 47,903 37,428 35,617 38,013
Stockholders' equity... 4,871 5,736 7,443 9,033 29,103 25,742 30,359
</TABLE>
(footnotes are on following page)

13
<PAGE>

- --------
(1) The provisions for income tax for fiscal 1996 and the three months ended
December 31, 1995, include a one-time, non-cash charge of approximately
$3.0 million in recognition of deferred income taxes that resulted from
the Company's conversion to a C Corporation on November 17, 1995, the date
of its initial public offering.
(2) The Company was treated as an S Corporation for federal and state income
tax purposes from October 1, 1990, to November 16, 1995. As a result, the
Company's taxable earnings for such period were taxed for federal and
state income tax purposes directly to the Company's then-existing
stockholders. The pro forma statement of earnings data give effect to an
adjustment for a provision for federal and state income taxes as if the
Company had been treated as a C Corporation during all periods reported.
The pro forma statement of earnings data do not give effect to the one-
time, non-cash charge of approximately $3.0 million in recognition of
deferred income taxes that resulted from the Company's conversion to a C
Corporation on November 17, 1995, the date of its initial public offering.
See Note 3 to Consolidated Financial Statements.
(3) Operating expenses as a percentage of revenue. The Company's operating
ratio is affected by the method of equipment financing. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

14
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

Founded by Richard D. Simon in 1955 with a single truck, Simon
Transportation today provides nationwide, predominantly temperature-controlled
truckload transportation for numerous major shippers in the food industry. In
recent years, much of the Company's growth has resulted from earning core
carrier status with major shippers and meeting the demands of these shippers
for additional equipment. The Company has grown to $101.1 million in revenue
for its fiscal year ended September 30, 1996, from $40.8 million in revenue
for fiscal 1992, a compounded annual growth rate of 25.5%. During the same
period, operating earnings more than doubled to $9.2 million from $4.5
million.

During fiscal years 1994 and 1995, the Company financed most of its tractors
and trailers with debt and capitalized leases. In the 1996 fiscal year, the
Company financed most of its revenue equipment with operating leases rather
than borrowing. Financing equipment with operating leases increases the
Company's operating ratio because the implied interest component of the lease
payments is reflected as an "above-the-line" operating expense rather than
interest expense. The Company's operating ratio may fluctuate from time-to-
time based upon the method of equipment financing.

The Company operated as an S Corporation from October 1, 1990, to November
16, 1995. As a result, the Company's net taxable earnings were taxed directly
to the Company's existing stockholders rather than to the Company. The pro
forma statement of earnings data included in the "Selected Consolidated
Financial and Operating Data" set forth the Company's net earnings for such
periods presented as if the Company had been subject to federal and state
income taxes. In addition to the ongoing income tax effect, the termination of
the Company's S Corporation status resulted in a one-time, non-cash charge of
approximately $3.0 million during the 1996 fiscal year in recognition of
deferred income taxes.

RESULTS OF OPERATIONS

The following table sets forth the percentage relationship of certain items
to operating revenue for the periods indicated:

<TABLE>
<CAPTION>
THREE MONTHS
FISCAL YEARS ENDED ENDED
SEPTEMBER 30, DECEMBER 31,
---------------------- --------------
1994 1995 1996 1995 1996
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Operating Revenue..................... 100.0% 100.0% 100.0% 100.0% 100.0%
Operating Expenses:
Salaries, wages, and benefits....... 36.2 37.3 39.6 40.0 38.6
Fuel and fuel taxes................. 20.0 18.8 20.1 19.6 19.5
Operating supplies and expenses..... 12.4 14.4 13.6 15.4 12.7
Taxes and licenses.................. 3.6 3.6 3.3 3.4 4.2
Insurance and claims................ 2.8 2.7 2.1 1.3 1.8
Communications and utilities........ 1.8 1.6 1.6 1.7 1.6
Depreciation and amortization....... 9.6 9.6 5.9 8.4 4.4
Rent................................ 4.8 3.9 4.7 2.0 10.1
------ ------ ------ ------ ------
Total operating expenses.......... 91.2 91.9 90.9 91.9 92.9
------ ------ ------ ------ ------
Operating earnings.................... 8.8 8.1 9.1 8.1 7.1
Interest expense and other, net....... (4.4) (4.7) (2.8) (3.9) (1.3)
------ ------ ------ ------ ------
Earnings before provision for income
taxes................................ 4.4 3.4 6.3 4.2 5.8
Pro forma provision for income taxes.. (1.7) (1.4) (2.5) (1.7) (2.2)
------ ------ ------ ------ ------
Pro forma net earnings................ 2.7% 2.0% 3.8% 2.5% 3.6%
====== ====== ====== ====== ======
</TABLE>

15
<PAGE>

Comparison of Three Months Ended December 31, 1996 with Three Months Ended
December 31, 1995.

Operating revenue increased 66.0%, to $34.2 million for the three months
ended December 31, 1996, from $20.6 million for the corresponding period of
1995. The increase in operating revenue was primarily attributable to a 56.7%
increase in the weighted average number of tractors, to 990 in the 1996 period
from 632 in the 1995 period, and a 6.0% increase in average revenue per
tractor per week, to $2,665 in the 1996 period from $2,513 in the 1995 period.
These increases were partially offset by an increase in empty miles percentage
to 12.0% from 11.8%.

Salaries, wages, and benefits decreased to 38.6% of revenue for the three
months ended December 31, 1996, from 40.0% for the corresponding period of
1995. The change was attributable to a leveling of the fixed costs associated
with salaries paid to shop and administrative personnel. Salaries and wages
for administrative personnel did not increase proportionately with revenue.

Fuel and fuel taxes decreased to 19.5% of revenue for the three months ended
December 31, 1996, from 19.6% for the corresponding period of 1995,
principally as a result of an increase in the overall fuel efficiency of the
Company's newer tractor fleet and fuel surcharges implemented with a
substantial number of customers during the 1996 period. These savings were
partially offset by higher fuel prices in the 1996 period as compared with the
1995 period.

Operating supplies and expenses decreased to 12.7% of revenue for the three
months ended December 31, 1996, from 15.4% for the corresponding period of
1995, primarily as a result of lower parts and tire replacement costs, outside
repairs, and maintenance expense associated with a decrease in the average age
of the Company's tractor fleet. Most of the Company's tractors are covered by
three-year, 500,000-mile engine warranties.

Taxes and licenses increased to 4.2% of revenue for the three months ended
December 31, 1996, from 3.4% for the corresponding period of 1995, primarily
as a result of amortizing the remaining portion of prepaid licensing fees for
equipment disposed of prior to the end of the licensing year.

Insurance and claims increased to 1.8% of revenue for the three months ended
December 31, 1996, from 1.3% for the corresponding period of 1995 because of
increased claims expense.

Communications and utilities decreased to 1.6% of revenue for the three
months ended December 31, 1996, from 1.7% for the corresponding period of
1995, primarily as a result of reduced rates for the Company's long-distance
service.

Depreciation and amortization (adjusted for the net gain on the sale of
property and equipment) decreased to 4.4% of revenue for the three months
ended December 31, 1996, from 8.4% for the corresponding period of 1995. The
decrease was primarily attributable to the use of operating leases rather than
capitalized leases to acquire new equipment during the period. The Company
realized a net gain of $156,931 on the sale of property and revenue equipment
during the 1996 period compared with a $463,500 net gain during the 1995
period.

Rent increased to 10.1% of revenue for the three months ended December 31,
1996, from 2.0% for the corresponding period of 1995 as the Company replaced
equipment that had been financed under capitalized lease arrangements with
equipment financed under operating leases. The Company has utilized operating
leases in the most recent quarter because of more favorable terms. If the
Company continues to use operating lease financing, its operating ratio may be
affected in future periods because the implied financing costs of such
equipment are included as operating expenses instead of interest expense.

As a result of the foregoing, the Company's operating ratio increased to
92.9% for the three months ended December 31, 1996, from 91.9% for the
corresponding period of 1995.

Net interest expense decreased to 1.3% of revenue for the three months ended
December 31, 1996, from 3.9% for the corresponding period in 1995 as a result
of lower average debt and capitalized lease balances and a decrease in the
Company's average interest rate in the 1996 period compared with the 1995
period.

16
<PAGE>

The Company's effective combined federal and state income tax rate for the
three months ended December 31, 1996, was 37.8%, compared with an estimated
combined federal and state income tax rate of 39.6% used for the three months
ended December 31, 1995.

As a result of the factors described above, net earnings increased to $1.2
million (3.6% of revenue) for the three months ended December 31, 1996,
compared with pro forma net earnings of $516,000 (2.5% of revenue) for the
corresponding period of 1995.

Comparison of fiscal year ended September 30, 1996, with fiscal year ended
September 30, 1995.

Operating revenue increased 34.4%, to $101.1 million during the 1996 fiscal
year from $75.2 million during the 1995 fiscal year. The increase in revenue
was primarily attributable to a 29.4% increase in the weighted average number
of tractors, to 774 during the 1996 fiscal year from 598 during the 1995
fiscal year and an increase in the average revenue per tractor per week to
$2,526 during the 1996 fiscal year from $2,417 during the 1995 fiscal year.
These increases were partially offset by a decrease in the Company's average
revenue per loaded mile to $1.24 during the 1996 fiscal year from $1.26 during
the 1995 fiscal year, and an increase in empty miles percentage to 11.7%
during the 1996 fiscal year from 11.3% during the 1995 fiscal year.

Salaries, wages, and benefits increased to 39.6% of revenue during the 1996
fiscal year from 37.3% during the 1995 fiscal year. The change was
attributable to the full effect of an increase in driver base pay implemented
during the 1995 fiscal year; the improvement of health insurance coverage to
attract and retain qualified drivers and other personnel; an increase in the
number of active participants in the 401(k) plan; and an increase in
administrative personnel. The additional cost of these items was partially
offset by reduced workers' compensation premiums and a reduction in workers'
compensation claims.

Fuel and fuel taxes increased to 20.1% of revenue during the 1996 fiscal
year from 18.8% during the 1995 fiscal year as a result of an increase in fuel
prices. The increase in fuel prices was partially offset by an overall
increase in the fuel efficiency of the Company's fleet. As of September 30,
1996, the Company had entered into fuel surcharge agreements with
approximately 45% of its customers. These customers represent approximately
70% of the Company's revenue. The fuel surcharges are adjusted weekly based on
the national weekly average price of diesel fuel published by the Department
of Energy.

Operating supplies and expenses decreased to 13.6% of revenue during the
1996 fiscal year, from 14.4% during the 1995 fiscal year, primarily as a
result of decreased parts costs, outside repairs, and maintenance expense
associated with a decrease in the average age of the Company's tractor fleet.
These savings were partially offset by retaining certain older tractors that
had been scheduled for trade or sale in order to meet customer demand for more
equipment. The Company upgraded its tractor fleet in fiscal year 1996 and
reduced the average age of its fleet at September 30, 1996, to approximately
13 months from 30 months at September 30, 1995. Most of the Company's tractor
fleet is now covered by three-year, 500,000-mile warranties.

Taxes and licenses decreased to 3.3% of revenue during the 1996 fiscal year
from 3.6% during the 1995 fiscal year primarily as a result of greater
efficiency in licensing new tractors being added to the fleet.

Insurance and claims decreased to 2.1% of revenue during the 1996 fiscal
year from 2.7% during the 1995 fiscal year because of reduced insurance
premiums and claims.

Communications and utilities remained constant at 1.6% of revenue during the
1996 and 1995 fiscal years.

Depreciation and amortization (adjusted for the net gain on sale of
equipment) decreased to 5.9% of revenue during the 1996 fiscal year from 9.6%
during the 1995 fiscal year. Depreciation and amortization (unadjusted for the
net gain on sale of equipment) decreased to 8.3% of revenue ($8.4 million)
during the 1996 fiscal year from 10.8% of revenue ($8.1 million) during the
1995 fiscal year as a result of a decrease in the percentage of the Company's
revenue equipment that was owned or acquired under capitalized leases. A
portion of the decrease in depreciation was a result of a $2.4 million net
gain on the sale of revenue equipment during the 1996 fiscal year

17
<PAGE>

compared with an $885,000 net gain during the 1995 fiscal year. Rent increased
to 4.7% of revenue during the 1996 fiscal year from 3.9% during the 1995
fiscal year as the Company increased its percentage of revenue equipment under
operating leases.

As a result of the foregoing, the Company's operating ratio decreased to
90.9% during the 1996 fiscal year from 91.9% during the 1995 fiscal year.

Interest expense and other, net decreased to 2.8% of revenue during the 1996
fiscal year from 4.7% during the 1995 fiscal year. This resulted from
application of $17.2 million in net proceeds from the Company's initial public
offering to decrease debt and capitalized lease balances, a decrease in the
Company's average interest rate in the 1996 fiscal year compared with the 1995
fiscal year, and an increase in the percentage of the Company's tractor and
trailer fleets being obtained through operating leases.

The pro forma income tax provision was computed using an estimated combined
federal and state income tax rate of 39.6% for both fiscal 1996 and fiscal
1995.

As a result of the factors described above, pro forma net earnings increased
to $3.9 million (3.8% of revenue) during the 1996 fiscal year from $1.5
million (2.0% of revenue) during the 1995 fiscal year.

Comparison of fiscal year ended September 30, 1995, with fiscal year ended
September 30, 1994

Operating revenue increased 4.9%, to $75.2 million during the 1995 fiscal
year from $71.7 million during the 1994 fiscal year, as management slowed the
addition of new revenue equipment to avoid increasing the Company's level of
long-term debt and lease obligations. The weighted average number of tractors
increased 7.9% to 598 during the 1995 fiscal year from 554 during the 1994
fiscal year. The Company's average revenue per loaded mile increased to $1.26
during the 1995 fiscal year from $1.23 during the 1994 fiscal year, but this
was partially offset by an increase in empty miles percentage to 11.3% during
the 1995 fiscal year from 10.7% during the 1994 fiscal year. Average revenue
per tractor per week declined to $2,417 during the 1995 fiscal year from
$2,489 during the 1994 fiscal year.

Salaries, wages, and benefits increased to 37.3% of revenue during the 1995
fiscal year from 36.2% during the 1994 fiscal year. The change was
attributable to an increase in driver base pay; the implementation of a driver
bonus program; the improvement of health insurance coverage to attract and
retain qualified drivers and other personnel; an increase in the number of
active participants in the 401(k) plan; and an increase in administrative
personnel. The additional cost of these items was partially offset by a one-
time rebate from the previous workers' compensation insurer, reduced workers'
compensation premiums, and a reduction in workers' compensation claims.

Fuel and fuel taxes decreased to 18.8% of revenue during the 1995 fiscal
year from 20.0% during the 1994 fiscal year as a result of a decrease in fuel
prices under a fuel management program implemented in January 1995 and an
overall increase in the fuel efficiency of the Company's fleet.

Operating supplies and expenses increased to 14.4% of revenue during the
1995 fiscal year, from 12.4% during the 1994 fiscal year, primarily as a
result of increased parts and tire replacement costs, outside repairs, and
maintenance expense associated with the delay in trading and adding new
revenue equipment. The average age of the Company's tractor fleet at September
30, 1995, was 30 months, and most repairs of such tractors were no longer
covered by manufacturers' warranties. The Company also experienced an increase
in loading and unloading, pallet, and toll costs associated with additional
shipper requirements.

Taxes and licenses and insurance and claims both remained essentially
constant during the 1995 and 1994 fiscal years.

Communications and utilities decreased to 1.6% of revenue during the 1995
fiscal year from 1.8% during the 1994 fiscal year as a result of a one-time,
negotiated credit with the Company's long distance provider for

18
<PAGE>

expenses incurred during the 1995 fiscal year. The Company also negotiated a
reduction of approximately 35% in monthly in long-distance rates effective
October 1995.

Depreciation and amortization (adjusted for the net gain on sale of
equipment) remained unchanged at 9.6% of revenue during the 1995 and 1994
fiscal years. Depreciation and amortization (unadjusted for the net gain on
sale of equipment) increased to $8.1 million (10.8% of revenue) during the
1995 fiscal year from $7.1 million (9.9% of revenue) during the 1994 fiscal
year as a result of an increase in the percentage of the Company's revenue
equipment that was owned or acquired under capitalized leases. The increase in
depreciation was offset by an $885,000 net gain on the sale of revenue
equipment during the 1995 fiscal year compared with a $229,000 net gain during
the 1994 fiscal year. Rent decreased to 3.9% of revenue during the 1995 fiscal
year from 4.8% during the 1994 fiscal year as the Company reduced its
percentage of revenue equipment under operating leases.

As a result of the foregoing, the Company's operating ratio increased to
91.9% during the 1995 fiscal year from 91.2% during the 1994 fiscal year.

Interest expense and other, net increased to 4.7% of revenue during the 1995
fiscal year from 4.4% during the 1994 fiscal year as a result of higher
average interest rates and an increase in the percentage of the Company's
revenue equipment that was owned or acquired under capitalized leases.

The pro forma income tax provision was computed using an estimated combined
federal and state income tax rate of 39.6% for both fiscal 1996 and fiscal
1995.

As a result of the factors described above, pro forma net earnings decreased
to $1.5 million (2.0% of revenue) during the 1995 fiscal year from $1.9
million (2.7% of revenue) during the 1994 fiscal year.

LIQUIDITY AND CAPITAL RESOURCES

The growth of the Company's business has required significant investment in
new revenue equipment that the Company has financed with borrowings under
installment notes payable to commercial lending institutions and equipment
manufacturers, equipment leases from third-party lessors, borrowings under its
line of credit, funds provided by its initial public offering in November
1995, and cash flow from operations. The Company's primary sources of
liquidity currently are funds provided by operations and borrowings and leases
with financial institutions and equipment manufacturers.

Net cash provided by (used in) operating activities was $10.4 million, $8.3
million, and $7.0 million for the fiscal years ended September 30, 1994, 1995,
and 1996, respectively, and ($345,000) for the three months ended December 31,
1996. The cash deficit for the three months ended December 31, 1996, was
primarily caused by the payment of annual income taxes and annual revenue
equipment licensing fees. The Company's principal use of cash from operations
is to service debt incurred to purchase new revenue equipment and internally
finance accounts receivable associated with growth in the business. Customer
accounts receivable increased $753,000, $478,000, and $5.9 million for the
fiscal years ended September 30, 1994, 1995, and 1996, respectively, and
decreased $93,000 for the three months ended December 31, 1996. The average
age of the Company's accounts receivable was 36, 36, and 39 days for the
fiscal years ended September 30, 1994, 1995, and 1996, respectively, and 35
days for the three months ended December 31, 1996.

Net cash (used in) provided by investing activities was ($6.1 million), $1.3
million, and ($4.6 million) for the fiscal years ended September 30, 1994,
1995, and 1996, respectively, and ($1.7 million) for the three months ended
December 31, 1996. The Company expects capital expenditures (primarily for
revenue equipment, satellite communications units, and the construction of a
new main terminal and headquarters facility), net of revenue equipment trade-
ins, to be approximately $21.0 million in 1997. The Company's projected
capital expenditures will be funded with borrowings or capitalized or
operating leases, cash flows from operations, and the Company's net proceeds
of the Offering. The total cost of the Company's new primary terminal, which
will include maintenance, driver recruitment and orientation, and office
facilities, is estimated at approximately $16.0

19
<PAGE>

million. Substantially all of this amount is expected to be incurred during
fiscal 1997. Following completion of the new facility, the Company intends to
sell its existing headquarters facility, which had an appraised value of
approximately $3.4 million in May 1995.

Net cash (used in) provided by financing activities of ($4.5 million), ($9.2
million), and $2.9 million for the fiscal years ended September 30, 1994, 1995,
and 1996, respectively, and $605,000 for the three months ended December 31,
1996, consisted primarily of approximately $19.7 million in net proceeds from
the Company's November 1995 initial public offering (in fiscal 1996), net
payments of $3.0 million, $10.2 million, $11.9 million, and $2.0 million of
principal under the Company's long-term debt and capitalized lease agreements
and net (borrowings) payments of ($9,000), ($2.6 million), $4.3 million, and $0
under the Company's line of credit. In addition, prior to the Company's
termination of its S Corporation status, it paid dividends to its stockholders
of $1.4 million, $1.6 million, and $605,000 for the fiscal years ended
September 30, 1994, 1995, and 1996, respectively, and $0 during the three
months ended December 31, 1996.

The maximum amount committed under the Company's line of credit at December
31, 1996, was $5.0 million and no borrowings were outstanding. The interest
rate on the line of credit is one-half percent (.5%) above the 30-day London
Interbank Offered Rate ("LIBOR") in effect from time-to-time. At December 31,
1996, the Company had outstanding long-term debt and capitalized lease
obligations (including current portions) consisting of approximately $38.0
million, most of which comprised obligations for the purchase of revenue
equipment. See Notes 4 and 6 to Consolidated Financial Statements.

Although the Company from time-to-time has experienced a working capital
deficit common to many truckload carriers that have expanded by financing
revenue equipment purchases, management believes its working capital deficits
have had little impact upon liquidity. When the purchase of revenue equipment
is financed through borrowing or capitalized lease obligations, a portion of
the indebtedness is categorized as a current liability, although the revenue
equipment is classified as a long-term asset. Consequently, each purchase of
financed revenue equipment decreases working capital. The Company's working
capital at September 30, 1996 and December 31, 1996, was $6.7 million and $8.8
million, respectively. The Company's working capital deficits amounted to $7.0
million and $16.7 million at September 30, 1994 and 1995, respectively.
Management believes that available borrowings under the line of credit, future
borrowings under installment notes payable or lease arrangements for revenue
equipment, cash flows generated from operations, and the Company's net proceeds
of the Offering will allow the Company to continue to meet its working capital
requirements, anticipated capital expenditures, and obligations under debt and
capitalized and operating leases at least through calendar year 1997.

INFLATION AND FUEL COSTS

With the exception of occasional fuel price increases, inflation has had a
minimal effect upon the Company's profitability in recent years. In the second
half of fiscal 1996, a sharp increase in fuel prices occurred nationwide as a
result of a perceived shortage in supply. The Company historically has been
able to pass through most increases in fuel prices and taxes to customers in
the form of higher rates. As of September 30, 1996, the Company had entered
into fuel surcharge agreements with approximately 45% of its customers. These
customers represented approximately 70% of the Company's revenue for the year
ended September 30, 1996. The fuel surcharges are adjusted weekly based on the
national weekly average price of diesel fuel published by the Department of
Energy. Management expects to maintain the fuel surcharges or seek rate
increases if fuel prices remain elevated. Most of the Company's operating
expenses are inflation-sensitive, with inflation generally producing increased
costs of operation. The Company expects that inflation will affect its costs no
more than it affects those of other truckload carriers.

SEASONALITY

The Company experiences some seasonal fluctuations in freight volume, as
shipments historically have decreased during the first calendar quarter. In
addition, the Company's operating expenses historically have been higher in the
winter months due to decreased fuel efficiency and increased maintenance costs
in colder weather.

20
<PAGE>

SELECTED QUARTERLY FINANCIAL DATA

The following table sets forth, for the periods indicated, certain
consolidated quarterly financial information of the Company. This information
is derived from unaudited consolidated financial statements which include, in
the opinion of management, all normal recurring adjustments which management
considers necessary for the fair presentation of the results for such periods.
This information should be read in conjunction with the Company's Consolidated
Financial Statements and the Notes thereto included elsewhere in this
Prospectus. The results for any quarter are not necessarily indicative of
results for any future period.

CONSOLIDATED QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
FISCAL 1995 FISCAL 1996 FISCAL 1997
------------------------------- -------------------------------- -----------
FIRST SECOND THIRD FOURTH FIRST SECOND THIRD FOURTH FIRST
QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER
------- ------- ------- ------- ------- ------- ------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF EARNINGS
DATA:
Operating revenue....... $17,851 $18,539 $19,288 $19,540 $20,588 $22,208 $27,225 $31,068 $34,166
Operating earnings...... 1,491 1,440 1,460 1,684 1,661 2,235 2,568 2,697 2,433
Earnings before
provision for income
taxes.................. 647 529 545 828 855 1,596 1,812 2,140 1,987
Provision for income
taxes(1)............... -- -- -- -- 3,257 632 717 848 751
Net earnings(1)......... 647 529 545 828 (2,402) 964 1,095 1,292 1,236
PRO FORMA
INFORMATION:(1)
Earnings before
provision for income
taxes.................. 647 529 545 828 855 1,596 1,812 2,140 1,987
Provision for income
taxes.................. 256 209 216 328 339 632 717 848 751
Net earnings............ 391 320 329 500 516 964 1,095 1,292 1,236
Net earnings per common
share.................. $ 0.17 $ 0.14 $ 0.14 $ 0.22 $ 0.15 $ 0.20 $ 0.23 $ 0.27 $ 0.26
Weighted average common
shares................. 2,300 2,300 2,300 2,300 3,451 4,742 4,742 4,742 4,743
</TABLE>
- --------
(1) The Company was treated as an S Corporation for federal and state income
tax purposes from October 1, 1990, to November 16, 1995. As a result, the
Company's taxable earnings for such period were taxed for federal and
state income tax purposes directly to the Company's then-existing
stockholders. The pro forma data give effect to an adjustment for a
provision for federal and state income taxes as if the Company had been
treated as a C Corporation during all periods reported, and do not give
effect to the one-time, non-cash charge of approximately $3.0 million in
recognition of deferred income taxes that resulted from the Company's
conversion to a C Corporation on November 17, 1995, the date of its
initial public offering. See Note 3 to Consolidated Financial Statements.

21
<PAGE>

INDUSTRY OVERVIEW

Simon Transportation operates exclusively in the truckload segment of the
trucking industry. Truckload carriers transport full trailer loads of freight
directly from origin to destination without the delays and expense of en-route
handling and multiple shipper load consolidation that characterize less-than-
truckload traffic. The for-hire truckload market is generally estimated at
approximately $50 billion revenue per year. Distinct shipper needs have caused
a variety of specialized market segments to develop within the truckload
industry based upon equipment type, service criteria, length of haul, and
geographic region. The Company specializes in the temperature-controlled
truckload segment and operates primarily refrigerated trailers to transport
food products and other goods that are temperature sensitive. The for-hire
temperature-controlled segment is estimated at approximately $4 billion in
annual revenue. Although the five largest temperature-controlled carriers
generated more than 25% of the for-hire revenue in 1995, the remaining market
is divided among several thousand carriers.

The truckload industry is consolidating as shippers establish service-based,
long-term relationships with a limited group of core carriers. These
partnerships are designed to ensure higher quality, more consistent service for
the shipper, and greater equipment utilization and more predictable revenue for
the carrier. Shippers select core carriers based upon performance criteria such
as equipment availability, time-sensitive and damage-free product deliveries,
well-trained drivers, modern equipment, in-transit communication and load
tracking, electronic data interchange, strong safety record, accurate billing,
quick settlement of claims, and adequate insurance. The availability of such
services and a desire to conserve capital resources for their primary
businesses have encouraged many shippers to outsource to core carriers,
including dedicated fleets. The trend toward use of core carriers offers
significant growth opportunities for financially stable carriers and raises
entry barriers for potential industry competitors.

The Company focuses on the temperature-controlled market to take advantage of
more than 30 years of experience in transporting temperature-sensitive
commodities. Management believes that serving food industry shippers is
attractive because their products are generally less affected by economic
cycles, and temperature-controlled trailers offer the flexibility of hauling
both temperature-sensitive and nontemperature-sensitive food products.
Management estimates that the cost of operating a fleet of temperature-
controlled trailers exceeds the cost of owning and operating a dry van fleet by
approximately $.04 per mile. The additional expense is attributable to higher
depreciation and interest expense resulting from the higher cost of a
refrigerated trailer, which is approximately $39,000, compared with
approximately $19,000 for a dry van, and the fuel and maintenance costs of
operating the refrigeration unit. Management believes that higher revenue per
mile and typically lower trailer to tractor ratio for refrigerated carriers
compensates for these additional expenses.

22
<PAGE>

BUSINESS

THE COMPANY

Simon Transportation is a rapidly-growing truckload carrier that specializes
in temperature-controlled transportation services for major shippers in the
food industry. Richard D. Simon founded the Company with one truck in 1955.
Today Simon Transportation operates nationwide, in eight Canadian provinces,
and in portions of Mexico from its strategically located headquarters in Salt
Lake City, Utah, and terminals in Phoenix, Arizona; Fontana, California;
Atlanta, Georgia; Portland, Oregon; and Katy, Texas. The Company has grown as
a result of its reputation for on-time delivery of undamaged freight and its
willingness to meet shipper needs by opening additional terminals and
providing dedicated equipment and personnel for continuous, round-trip
movements. This customer focus has resulted in revenue growth to $101.1
million in fiscal 1996 from $40.8 million in fiscal 1992, a compounded annual
growth rate of 25.5%. During the same period, operating earnings more than
doubled to $9.2 million from $4.5 million.

STRATEGY

The Company has grown rapidly in recent years by adding revenue equipment to
meet the service demands of new and existing customers and expanding core
carrier partnerships. Management plans to continue the Company's growth by
capitalizing on industry trends among shippers to place increased reliance on
a smaller number of financially stable, service-oriented core carriers,
outsource transportation requirements formerly provided by private fleets, and
seek dedicated service. Management believes that large shippers with
nationwide, temperature-controlled transportation needs will continue to
request expanded service and that the proceeds to the Company from the
Offering will enable the Company to add revenue equipment to meet customer
demand. The key elements of the Company's strategy are:

Food Industry Focus. Simon Transportation focuses on providing specialized
service to sophisticated high-volume customers in the food industry such as
Nestle, Kraft, M&M Mars, ConAgra, Albertson's, Pillsbury, Campbell's Soup, and
Coca-Cola Foods. These customers seek nationwide transportation partners that
understand the specialized needs of food industry shippers and offer the late-
model equipment, experienced personnel, advanced technology, and geographic
coverage to provide "continuous movement" of temperature-controlled and dry
loads from processing or packaging plants to distribution centers and other
destinations. Management believes the food industry is an attractive niche
because it is generally less affected by economic cycles and many shippers
require time-sensitive and specialized service that justifies a higher rate
per mile.

Core Carrier Partnerships. Simon Transportation has grown rapidly by
establishing core carrier partnerships with high-volume, service sensitive
shippers. Core carriers provide customers with consistent equipment
availability and premium service such as time-definite pick-up and delivery,
express time-in-transit, multiple delivery stops, and real-time access to load
information through satellite-based tracking and communication systems and EDI
capability. The Company also meets specialized customer requests for access to
terminal facilities, stationing employees at customer locations, and
dedicating equipment to specific traffic lanes. Management believes major
shippers favor their core carrier "partners" during periods of reduced demand
for truck service, and that the trend among major shippers to reduce the
number of carriers used in favor of core carriers will continue.

Dedicated Fleets. Simon Transportation emphasizes dedicated fleet operations
in which it offers round trip or continuous movement service to a shipper (or
a shipper and one or more of its suppliers) by dedicating certain tractors and
trailers exclusively to that shipper's needs. Dedicated service is desirable
because the customers typically pay a round-trip rate per mile assuming that
the truck will return empty and cover all loading, unloading, and pallet
costs. The Company frequently is able to further enhance revenue per mile by
locating a profitable load to cover unloaded segments. In addition, drivers
prefer the predictable runs and priority treatment at shipping and receiving
locations. Management intends to aggressively grow its dedicated fleet
operations and expects this service niche to expand as shippers outsource
transportation needs presently served by private carriage.

23
<PAGE>

Modern Fleet. Simon Transportation intends to maintain a modern tractor
fleet and utilize the 53-foot temperature-controlled trailer as its standard.
Reliable, late-model equipment promotes customer service and driver
recruitment and retention by minimizing the delays caused by breakdowns and
excessive maintenance. In addition, management believes that a practice of
replacing tractors while under warranty will reduce expenses and permit the
Company to take advantage of improvements in fuel economy and equipment
technology.

Technology. Simon Transportation is an industry leader in technology and the
Company's entire fleet has been equipped with Qualcomm systems since 1992.
Simon Transportation was the thirteenth carrier in the nation to install the
units in 100% of its tractors. This system and EDI capability improve customer
service and operating efficiency by offering the Company and customers real
time access to load locations and advance warning of potential delivery
delays. The Company also utilizes document imaging and load optimization
systems. Management believes shippers will continue to demand advanced
technology of their core carriers and plans to respond to such requirements.

OPERATIONS

The Company conducts a centralized dispatch and customer service operation
at its Salt Lake City headquarters to offer the precision scheduling required
by its customers. The operations center features a fully-integrated,
computerized network of dispatch, customer service, and driver liaison
personnel. Customer service representatives solicit and accept freight, quote
rates, and serve as the primary contact with customers. After accepting a
load, customer service representatives transfer the pick-up and delivery
information to the computer screen of the appropriate load planner, who
assigns the load to an available driver based upon the proximity of the
trucks, scheduled "home time," and available hours-in-service. Dispatchers
then use the Qualcomm satellite-based tracking and communication system to
locate the position and availability status of equipment and notify the driver
of pick-up and delivery requirements, route and fueling instructions, and
other information. Upon the assignment of a load, the Company's proprietary
software calculates the projected travel time from origin to destination and
uses satellite position updates and driver communications to provide load
progress reports at 30-minute intervals. The system automatically advises the
appropriate dispatcher and customer service representative if a load is behind
schedule, and customers are able to use EDI to access information about load
locations at any time. Management believes that these satellite and computer
systems are crucial to satisfying the stringent service standards, such as 30-
minute pick-up and delivery "windows," demanded by shippers of their core
carriers.

Management measures the Company's efficiency through miles per tractor,
empty miles percentage, revenue per mile, and revenue per tractor. Fleet
productivity is tracked daily in the operations center, with actual progress
matched against a monthly goal. All operations personnel have access to these
statistics on a real time basis, and all participate in a cash bonus program
for achieving certain fleetwide levels of miles per tractor per month, driver
turnover, and revenue per mile.

CUSTOMERS AND MARKETING

The Company's sales and marketing function is led by senior management and
other sales professionals based in its Salt Lake City headquarters and near
key customers. These sales personnel aggressively market Simon Transportation
to food industry shippers as a customer-oriented provider of dependable, on-
time service. The Company targets customers that seek financially stable,
long-term transportation partners offering dependable equipment, satellite and
EDI technologies, and premium service. This customer service philosophy has
contributed to continuing demands for added equipment to expand service for
existing shippers and establishing core carrier relationships with Nestle,
Kraft, M&M Mars, ConAgra, Albertson's, Pillsbury, Campbell's Soup, Coca-Cola
Foods, and other major customers. Management intends to continue developing
business with existing customers and attempting to add new core carrier
relationships. The Company's top 5, 10, and 25 customers accounted for 45.7%,
60.1%, and 75.2% of revenue, respectively, during fiscal 1996, with Nestle
(including Nestle's Stouffer's and Friskie's units) accounting for 18.7% of
revenue.

24
<PAGE>

Simon Transportation provides service to and from customer locations
throughout the United States, in several Canadian provinces and in portions of
Mexico. The Company's operations are strongest in the western United States and
between points in the West to and from points in the East and Southeast. In
addition to traditional for-hire service, management emphasizes the marketing
of dedicated fleet and regional distribution services. Dedicated fleets
generally receive compensation for all miles, and regional operations provide a
stronger presence for driver recruiting. Management believes that these
services offer consistent equipment utilization and predictable home-time for
drivers.

The Company has written contracts with substantially all of its customers.
These contracts generally specify service standards and rates, eliminating the
need for negotiating the rate for individual shipments. Although a contract
typically runs for a specified term of at least one year, it generally may be
terminated by either party upon 30 days' notice.

TECHNOLOGY

The Company uses computer and satellite technology to enhance efficiency and
customer service in all aspects of its operations, and management believes the
Company is among the industry leaders in applying advanced technology to
improve transportation service. The Qualcomm OmniTRACS(TM) satellite-based
tracking and communication system provides hourly updates of the position of
each tractor and permits real-time communication between operations personnel
and every driver. As a result, dispatchers relay pick-up and delivery times,
weather and road information, route and fueling directions, and other
instructions without waiting for a driver to stop and call the Company. The
Company's entire fleet has been equipped with the Qualcomm systems since 1992.
Simon Transportation was the thirteenth carrier in the nation to install the
units in 100% of its tractors. The Company's proprietary software also monitors
load progress against projected delivery time every half-hour and warns the
appropriate dispatcher and customer service representative if a load is behind
schedule. This software also facilitates early routing toward each driver's
home base by signaling dispatchers several days in advance of drivers'
requested home-time dates.

The Company's EDI capability permits customers to communicate directly via
computer link to tender loads, receive load confirmation, check load status,
and receive billing information. The Company's largest customers require EDI
service from their core carriers, and more than 50% of the Company's revenue is
generated by customers that actively use EDI. EDI not only improves customer
service and communication, but also benefits the Company's cash flow through
accelerated receivable collection. The Company further enhances its operations
through its recently installed document imaging technology, which provides
customer service representatives and other personnel (all of whom have
computers) real-time access to freight bills, supplier invoices, and other
information. Management believes that advanced technology will be required by
an increasing number of large shippers as they reduce the number of carriers
they use in favor of core carriers.

The Company has designed a load optimization software program that allows
customer service representatives to quote rates by automatically computing the
range of acceptable rates between any two points, based upon the rates for all
Simon Transportation loads in and out of the applicable region during the past
year and the need for pallets, multiple stops, and other additional charges.
The system then prioritizes the loads and identifies the optimal tractor to
accept a load, based upon location, empty miles required, remaining driver
hours-in-service, maintenance scheduling, driver home time, and other factors.

The Company's maintenance shops are fully computerized and paperless, and all
maintenance, repair, and inspection records for each vehicle are instantly
accessible. Drivers are able to monitor maintenance progress on computer
screens located in the driver lounge.

25
<PAGE>

REVENUE EQUIPMENT

Simon Transportation's equipment strategy is to operate modern tractors and
trailers that help reduce parts, maintenance, and fuel costs, promote the
reliable service customers demand from core carriers, and attract and retain
drivers. At December 31, 1996, the Company operated 1,011 conventional
tractors (engine-forward) equipped with electronic engines and Eaton
transmissions, most of which are covered by three-year, 500,000- mile engine
warranties and lifetime transmission warranties. Most of the tractors also are
equipped with the "condo" sleeper cabs preferred by drivers. The Company has
scheduled deliveries that would increase its tractor fleet by approximately
360 tractors during fiscal 1997, with options to purchase an additional 100
units.

At December 31, 1996, the Company operated 1,442 temperature-controlled
trailers, 460 of which were 48J x 1020 models, and 982 were 53J x 1020 models.
Management believes that the added capacity of 53-foot models compared with
48-foot models offers a marketing advantage. The Company anticipates adding
approximately 500 53-foot trailers and replacing approximately 200 48-foot
models in fiscal 1997. The Company also operated 108 insulated dry vans used
in its dedicated fleet operations.

Nearly all of the Company's temperature-controlled trailers are equipped
with ThermoKing refrigeration units. ThermoKing has developed "screw
compressor" technology capable of maintaining a "DF" (deep freeze) rating that
previously was not offered in 53-foot trailers. Simon Transportation has taken
delivery on 982 such trailers, and orders for an additional 500 trailers have
been placed for delivery in fiscal 1997. Management believes that these 53-
foot trailers, which have been engineered with approximately the same weight
as most 48-foot refrigerated trailers, offer a marketing advantage because of
greater shipping capacity for customers.

The Company's practice is to trade or replace its tractors on a three-year
cycle and its trailers on a five-year cycle. The Company's tractor and trailer
fleets had average ages of 12 and 17 months, respectively, at December 31,
1996.

DRIVERS AND OTHER PERSONNEL

Driver hiring and retention are critical to the success of all trucking
companies. Simon Transportation emphasizes driver satisfaction and has made
significant investments to improve its drivers' employment experience. Drivers
are selected in accordance with specific Company quality guidelines relating
primarily to safety history, driving experience, road test evaluations, and
other personnel evaluations, including physical examinations and mandatory
drug testing. The Company offers competitive compensation, including mileage
pay, and full participation in all employee benefit and profit-sharing plans.
The Company uses proprietary software to warn dispatchers in advance of a
driver's requested home time. Management believes it has promoted driver
loyalty by assigning drivers to a single dispatcher, regardless of geographic
area, awarding dedicated routes and regional distribution positions to senior,
top-performing drivers, and educating customers concerning the need to treat
drivers with respect.

The truckload industry has experienced a shortage of qualified drivers.
Strict DOT enforcement of hours-in-service limitations, mandatory drug and
alcohol testing, and other safety measures have shrunk the available pool of
drivers and increased the cost of recruiting and retention. Despite this
driver shortage and vigorous competition for drivers during the past several
years, the Company's driver turnover has decreased from 134% in fiscal 1990 to
76% in fiscal 1996, measuring drivers after they are assigned a tractor.

At December 31, 1996, Simon Transportation employed approximately 400 non-
driver employees and approximately 1,140 drivers. The Company's employees have
never been represented by or attempted to organize a union, and management
believes it has a good relationship with the Company's employees.

26
<PAGE>

SAFETY AND INSURANCE

Simon Transportation emphasizes safety in all aspects of its operations. Its
safety program includes: (i) initial orientation; (ii) a four-week to eight-
week, on-the-road training program; (iii) 100% log monitoring; and (iv)
progressive penalties for excessive speed. The Company has earned the highest
DOT safety and fitness rating of "satisfactory," which most recently was
extended on June 7, 1995.

The Company carries primary and excess liability insurance coverage of $30
million, with a $100,000 deductible for personal injury and property damage.
The Company's workers' compensation coverage also carries a $100,000
deductible, in states where a deductible is allowed, with no coverage limit.
The Company's equipment is insured for fair market value, subject to
deductibles of $25,000 for tractors and $10,000 for trailers, and cargo loss
is covered to $200,000 with a $10,000 deductible. Management believes these
coverages are adequate to cover reasonably anticipated claims.

PROPERTIES

Simon Transportation operates terminals and driver recruitment offices at
six locations. The Company's headquarters is located on ten acres near the
intersection of Interstates 15 and 80 in Salt Lake City, Utah, and includes a
17,000 square foot office building housing all operations and administrative
personnel, a 23,000 square foot maintenance shop, and a 3,600 square foot
driver recruitment and orientation center. The Company owns additional
terminal and driver recruitment facilities in Phoenix, Arizona; Fontana,
California; and Atlanta, Georgia; leases terminal space in Katy, Texas, and
Portland, Oregon; and leases trailer drop yards at Tulare, California and
various customer locations. All locations except the Atlanta office and the
Katy office have modern fuel facilities with environmental monitoring
equipment.

The Company is constructing a new primary terminal in Salt Lake City on 55
acres owned by the Company, which will include maintenance, driver recruitment
and orientation, and office facilities. Management anticipates that
construction of the new facility will be completed in the spring of 1997. Upon
completion, the Company intends to sell its existing facility. The available
acreage will accommodate future expansion, and the facility has been designed
so that additions can be constructed to serve the Company's foreseeable future
needs. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Liquidity and Capital Resources."

COMPETITION

The truckload segment of the trucking industry is highly competitive and
fragmented, and no carrier or group of carriers dominates the temperature-
controlled or dry van market. According to the September 1996 issue of
Refrigerated Transporter, the five largest temperature-controlled carriers by
revenue are Frozen Food Express Industries, KLLM Transport Services, Prime,
Inc., C. R. England & Sons, and Rocor International. The combined revenue
reported for these five carriers comprises more than 25% of the estimated $4
billion for-hire, temperature-controlled market. The private fleet portion of
the temperature-controlled market has been estimated at an additional $3
billion. The Company's 1996 fiscal year revenue constituted approximately one
percent of the total market for temperature-controlled services and
approximately two percent of the for-hire market. The Company competes with a
number of other trucking companies, as well as private truck fleets used by
shippers to transport their own products. The Company competes to a limited
extent with rail and rail-truck intermodal service, but attempts to limit this
competition by seeking service-sensitive freight. There are other trucking
companies, including diversified carriers with large temperature-controlled
fleets, possessing substantially greater financial resources and operating
more equipment than the Company.

27
<PAGE>

FUEL AVAILABILITY AND COST

The Company actively manages its fuel costs by requiring drivers to fuel at
Company terminals or, whenever possible en route, at service centers with which
the Company has established volume purchasing arrangements. The Company
controls fuel purchases by using its proprietary software and Qualcomm
communications ability to schedule fueling stops and amounts purchased based
upon fuel prices at locations on drivers' routes. The Company historically has
been able to pass through most increases in fuel prices and taxes to customers
in the form of higher rates. At September 30, 1996, the Company had entered
into fuel surcharge agreements with approximately 45% of its customers. These
customers represent approximately 70% of the Company's revenue for the year
ended September 30, 1996. The fuel surcharges are adjusted weekly based on the
national weekly average price of diesel fuel published by the Department of
Energy. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

REGULATION

The Company is a common and contract motor carrier of general commodities.
Historically, the Interstate Commerce Commission (the "ICC") and various state
agencies regulated motor carriers' operating rights, accounting systems,
mergers and acquisitions, periodic financial reporting, and other matters. In
1995, federal legislation preempted state regulation of prices, routes, and
services of motor carriers and eliminated the ICC. Several ICC functions were
transferred to the Department of Transportation (the "DOT"). Management does
not believe that regulation by the DOT or by the states in their remaining
areas of authority will have a material effect on the Company's operations. The
Company's employee and independent contractor drivers also must comply with the
safety and fitness regulations promulgated by the DOT, including those relating
to drug and alcohol testing and hours of service. The Company's operations are
subject to various federal, state, and local environmental laws and
regulations, implemented principally by the EPA and similar state regulatory
agencies, governing the management of hazardous wastes, other discharge of
pollutants into the air and surface and underground waters, and the disposal of
certain substances. These regulations extend to the above ground and
underground fuel storage tanks located at each of the Company's terminal
facilities. All of the Company's tanks are of double hull construction in
accordance with EPA requirements and equipped with monitoring devices which
constantly monitor for leakage. Management is not aware of any fuel spills or
hazardous substance contamination on its properties and believes that its
operations are in material compliance with current laws and regulations.

LEGAL PROCEEDINGS

The Company from time to time is a party to litigation arising in the
ordinary course of its business, substantially all of which involves claims for
personal injury and property damage incurred in the transportation of freight.
The Company presently is not a party to any legal proceeding other than
litigation arising from vehicle accidents, and management is not aware of any
claims or threatened claims that reasonably would be expected to exceed
insurance limits or have a materially adverse effect upon the Company's
operations or financial position.

28
<PAGE>

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The table below sets forth information concerning the Company's executive
officers and directors.

<TABLE>
<CAPTION>
NAME AGE POSITION WITH COMPANY
- ---- --- ---------------------
<S> <C> <C>
Richard D. Simon........ 60 Chairman of the Board, President, and Chief Executive Officer
Alban B. Lang........... 50 Chief Financial Officer, Treasurer, and Secretary; Director
Kelle A. Simon.......... 35 Vice President of Maintenance
Lyn Simon............... 32 Vice President of Sales
Richard D. Simon, Jr. .. 25 Vice President of Operations
Irene Warr.............. 65 Director
H. J. Frazier........... 61 Director
</TABLE>

Richard D. Simon has over 40 years of experience in the trucking industry. He
founded the Company in 1955 and has served as its Chairman of the Board,
President, and Chief Executive Officer since its incorporation in 1972. Mr.
Simon was involved in an action concerning underreporting of income for
calendar 1983 relating to personal expenses paid by the Company, which was then
100% owned by him. Mr. Simon acted on the advice of his former accountant, who
prepared and filed the tax return. In 1988 Mr. Simon pled guilty to a single
count of attempted evasion of federal income tax, was fined $25,000, and served
two years' probation. The Company was not a party to this action.

Alban B. Lang has over 20 years of experience in the trucking industry. He
has served as Chief Financial Officer, Treasurer, and Secretary since 1992,
prior to which he served as Controller since 1987. Mr. Lang is a certified
public accountant and holds two Bachelor of Science degrees, one in chemistry
and the other in accounting, a Masters of Business Administration degree, and a
Masters degree in fuel engineering, all from the University of Utah. He has
served as a director of the Company since 1988.

Kelle A. Simon has over 19 years of experience in the trucking industry. He
has served as Vice President of Maintenance since 1992 and in that capacity
also managed fleet purchasing. From 1986 to 1992 he served as Maintenance
Director for the Company and was instrumental in the implementation of the
Qualcomm software and computer systems. Prior to that time, Mr. Simon served
the Company in a variety of capacities.

Lyn Simon has over 15 years of experience in the trucking industry. He has
served as Vice President of Sales since 1986. From 1984 to 1986, Mr. Simon
served in numerous operating positions with the Company, including implementing
computer and telecommunications systems, and managing the accounts receivable,
accounts payable, public relations, and fuel tax and licensing departments.

Richard D. Simon, Jr. has over six years of experience in the trucking
industry. He has served as Vice President of Operations since 1992, prior to
which he served as a dispatcher and customer service representative after
joining the Company in 1990.

Irene Warr has been engaged in the private practice of law in Salt Lake City
since 1957 and has represented the Company in numerous matters since 1962. Ms.
Warr represents many trucking companies and has specialized in motor carrier
transportation law for over 30 years. She has served as a director since May
1995.

H. J. Frazier held various management positions with Westinghouse Electric,
Inc. from 1973 until his retirement in 1993, including serving as President of
Westinghouse Communities, a residential real estate development subsidiary.
Prior to joining Westinghouse, Mr. Frazier practiced as an attorney. He was a
founder of Full House Resort, Inc., a publicly held resort and gaming
properties enterprise. Mr. Frazier has served as a director since the Company's
initial public offering on November 17, 1995.

Richard D. Simon is the father of Kelle A. Simon, Lyn Simon, and Richard D.
Simon, Jr.

29
<PAGE>

COMMITTEES

Compensation Committee. The Compensation Committee of the Board of Directors
is composed of Richard D. Simon and Irene Warr. This committee reviews all
aspects of compensation of the Company's executive officers and makes
recommendations on such matters to the full Board of Directors. The
Compensation Committee had sole discretion to select participants, grant
awards, and otherwise administer the Company's Incentive Stock Plan prior to
August 15, 1996, when such plan was amended to conform with new rules issued by
the Securities and Exchange Commission. See "Management--Incentive Stock Plan."

Audit Committee. The Audit Committee, composed of Mr. Frazier and Ms. Warr,
makes recommendations to the Board of Directors concerning the selection of
outside auditors, reviews the Company's financial statements, reviews and
discusses audit plans, audit work, internal controls, and the report and
recommendations of the Company's independent auditors, and considers such other
matters in relation to the external audit of the financial affairs of the
Company as may be necessary or appropriate in order to facilitate accurate and
timely financial reporting.

Stock Option Committee. The Board of Directors appointed a Stock Option
Committee comprised of Richard D. Simon and Alban B. Lang to identify and make
awards to non-officer participants under the Plan.

30
<PAGE>

EXECUTIVE COMPENSATION

The following table sets forth the total compensation awarded to, earned by,
or paid to the Company's chief executive officer and the four other most
highly compensated executive officers for services rendered in all capacities
during the fiscal years ended September 30, 1995 and 1996:

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
--------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
-------------------------------------- ------------------ -------
RESTRICTED
OTHER ANNUAL STOCK OPTION/ ALL OTHER
SALARY(1) BONUS COMPENSATION(2) AWARD(S) SAR LTIP COMPENSATION(3)
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#) PAYOUTS ($)
- --------------------------- ---- --------- ----- --------------- ---------- ------- ------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Richard D. Simon ........ 1996 348,400 -- -- -- -- -- 11,539
Chairman, President, and 1995 210,000(4) -- 61,936 -- -- -- 11,539
Chief Executive Officer
Alban B. Lang............ 1996 156,000 -- -- -- -- -- 7,483
Chief Financial Officer, 1995 156,000 -- 33,762 -- 23,000 -- 7,483
Treasurer, and Secretary
Kelle A. Simon........... 1996 156,000 -- -- -- -- -- 3,974
Vice President of 1995 156,000(5) -- 52,628 -- 23,000 -- 2,893
Maintenance
Lyn Simon................ 1996 156,000 -- -- -- -- -- 7,483
Vice President of Sales 1995 156,000 -- 42,768 -- 23,000 -- 7,483
Richard D. Simon, Jr. ... 1996 156,000 -- -- -- -- -- 7,423
Vice President of 1995 156,000 -- 65,689 -- 23,000 -- 7,423
Operations
</TABLE>
- --------
(1) Includes amounts deferred pursuant to the Company's 401(k) Plan, which
generally allows employees to defer up to 15% of their compensation,
subject to applicable limitations set forth in the Internal Revenue Code.
(2) Represents the value of premiums and taxes due with respect to life
insurance policies that the Company has discontinued. Excludes $1,198,672
and $492,509 for Richard D. Simon, $74,325 and $20,762 for Alban B. Lang,
and $80,154 and $22,947 for each of Kelle A. Simon, Lyn Simon, and Richard
D. Simon, Jr., in S Corporation distributions, paid in fiscal 1995 and
1996 prior to the Company's S Corporation's termination on November 17,
1995, respectively.
(3) Represents $2,803 in Company-paid health benefits for each of the named
executives and Company contributions pursuant to the Company's 401(k) Plan
in the amount of $8,736, $4,680, $4,680, and $4,620 for 1995 and 1996 for
Richard D. Simon, Alban B. Lang, Lyn Simon, and Richard D. Simon, Jr.,
respectively. The Company's contribution pursuant to the 401(k) Plan for
Kelle A. Simon was $90 and $1,171 for 1995 and 1996, respectively.
(4) During the fiscal year ended September 30, 1995, Mr. Simon also received
$532,000 in rental payments relating to certain real estate and revenue
equipment leased to the Company by R. D. Simon Trucking. Mr. Simon
contributed the R. D. Simon Trucking assets, subject to related
liabilities, to the Company effective April 19, 1995 and no longer leases
any assets to the Company. Contemporaneously with the contribution of such
assets, Mr. Simon's salary was adjusted to $348,400 annually. See "Holding
Company Formation" and "Certain Transactions."
(5) Excludes $21,772 paid to Kelle A. Simon, which represents the excess of
the August 1995 sale price over the April 1995 valuation of certain real
estate acquired by the Company in the Freight Sales merger.

31
<PAGE>

EXECUTIVE BONUS PROGRAM

The Company has adopted an executive bonus program for the 1997 fiscal year
in which certain executive officers and key employees are eligible to
participate in a bonus pool equal to five percent of the Company's earnings
before provision for income taxes. For the 1997 fiscal year, Richard D. Simon
has been allocated 25% of the aggregate bonus amount, and each of Kelle A.
Simon, Lyn Simon, Sherry L. Simon Bokovoy, Richard D. Simon, Jr., and Alban B.
Lang has been allocated 15% of the aggregate bonus amount.

STOCK OPTIONS

The Company did not grant stock options to the Named Officers during the
fiscal year ended September 30, 1996. On December 18, 1996, the Board of
Directors granted options to purchase 27,000 shares of Class A Common Stock at
$16.00 per share to each of the Named Officers other than Richard D. Simon.
The following table sets forth information with respect to the Named Officers
concerning the exercise and ownership of options held at September 30, 1996:

AGGREGATED OPTION EXERCISES AND HOLDINGS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
NUMBER OF OPTIONS AT 9/30/96 VALUE OF OPTIONS AT 9/30/96(1)
NAME SHARES VALUE EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ------ ----- ---------------------------- ------------------------------
<S> <C> <C> <C> <C>
Richard D. Simon........ -- -- -- --
Alban B. Lang........... -- -- 4,600/18,400 $22,264/89,056
Kelle A. Simon.......... -- -- 4,600/18,400 $22,264/89,056
Lyn Simon............... -- -- 4,600/18,400 $22,264/89,056
Richard D. Simon, Jr.... -- -- 4,600/18,400 $22,264/89,056
</TABLE>
- --------
(1) Based on the $13.84 closing price of the Company's Class A Common Stock on
September 30, 1996.

The Company does not have a long-term incentive plan or a defined benefit or
actuarial plan and has never issued any stock appreciation rights.

INCENTIVE STOCK PLAN

The Company maintains an Incentive Stock Plan (the "Plan") to attract and
retain employees and motivate them through incentives that are aligned with
the Company's goals of increased profitability and stockholder value. Awards
under the Plan were originally made by the Compensation Committee of the Board
of Directors in compliance with then applicable Rule 16b-3(c) of the General
Rules and Regulations under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). Effective August 15, 1996, the Board of Directors voted
to amend the Plan to bring it into compliance with new Section 16 rules under
the Exchange Act and rely on the new Section 16 rules as of that date.
Accordingly, the Plan is presently administered by the Board of Directors and
may be administered in the future by a committee if one is appointed by the
Board of Directors. The Board has approved a Stock Option Committee, comprised
of Richard D. Simon and Alban B. Lang, to identify and make awards to non-
officer participants. Nonemployee directors would comprise any committee that
makes awards to executive officers, directors, or 10% stockholders. Awards may
be in the form of incentive stock options, non-qualified stock options,
restricted stock awards, or any other awards of stock consistent with the
Plan's purpose. Decisions of the administrator are binding upon the Company
and all participants.

The administrator may amend the Plan but may not, without the prior approval
of the stockholders, amend the plan to extend the period during which the
options or awards may be granted or exercised, extend the term of the Plan, or
increase the total number of reserved shares. The administrator may substitute
new stock options for previously granted options. No awards of incentive stock
options may be made after May 31, 2005.

32
<PAGE>

The Company originally reserved 400,000 shares of Class A Common Stock for
issuance pursuant to the Plan. To date the Company has outstanding options
covering approximately 358,150 of such shares and options representing
approximately 2,000 shares have been exercised. All options granted under the
Plan vest 20% per year on the first through the fifth anniversaries of the
grant. The price payable upon exercise of an option may be satisfied in cash
or, in the administrator's discretion, with previously acquired shares of the
Company's Class A Common Stock or vested but unexercised options (valued at
the difference between the market price of the stock on the date of exercise
and the exercise price). The market price of the stock as of December 31,
1996, was $15 1/2, which results in the vested portion of such options having
a market value of $661,385 at such date. Options or awards that expire
unexercised, are forfeited, or are settled in exchange for tax withholding or
in payment of the exercise price of other options, become available again for
issuance under the Plan. The administrator may determine when and in what
amounts future awards vest and options become exercisable. Terms of awards
need not be the same for all participants.

No awards have been granted to Richard D. Simon, the Company's Chairman,
President, and Chief Executive Officer. Options for 50,000 shares each have
been granted to Named Officers Kelle A. Simon, Lyn Simon, Richard D. Simon,
Jr., and Alban B. Lang, as well as to Sherry L. Simon Bokovoy, the Company's
Assistant Treasurer and Assistant Secretary, who is a daughter of Richard D.
Simon. These options include options to purchase 23,000 shares each at an
exercise price of $9.00 per share granted June 1, 1995, and 27,000 shares each
at an exercise price of $16.00 per share granted December 18, 1996. The
options to purchase an aggregate 200,000 shares granted to such persons
constitute 5% or more of the shares subject to the Plan. Mrs. Bokovoy is the
only associate of any director or executive officer who has been granted
options.

401(K) PROFIT SHARING PLAN

The Company maintains a defined contribution plan (the "401(k) Plan"), which
is intended to satisfy the tax qualification requirements of sections of the
Internal Revenue Code of 1986, as amended (the "Code"). All Company personnel
age 21 or older are eligible to participate in the 401(k) Plan after one year
of service with the Company. The 401(k) Plan permits participants to
contribute up to 15% of their annual compensation from the Company, subject to
the limits imposed by the Code. All amounts deferred under the 401(k) Plan by
a participant fully vest immediately. The 401(k) Plan also permits
discretionary contributions by the Company, which contributed $94,500,
$141,240, and $192,389 in 1994, 1995, and 1996, respectively. Amounts
contributed by the Company vest 20% each year from the second through the
sixth year after contributions. The Company has no defined benefit or
actuarial plans.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION.

Ms. Warr has served on the Compensation Committee since the Company's
initial public offering on November 17, 1995. She is not an officer or
employee of the Company. On May 3, 1996, Richard D. Simon was appointed to
serve on the Compensation Committee. Effective January 1, 1995, the Company
agreed to pay Ms. Warr $30,000 annually ($2,500 per month) and provide her
health insurance coverage at a cost to the Company of $130 per month and an
office at the Company's headquarters. Ms. Warr has served as counsel to
Richard D. Simon since 1962 and the Company since its incorporation in 1972.
See "Certain Transactions" for additional disclosure of transactions between
the Company and its directors and executive officers.

DIRECTORS' COMPENSATION

Directors who are not employees of the Company receive an annual retainer of
$5,000 plus $1,000 per meeting of the Board of Directors or a committee
thereof attended by the director (if such committee meeting is held other than
on the day of a Board meeting), plus reimbursement of expenses incurred in
attending such Board or committee meetings. Non-employee directors also
receive the annual option to purchase 1,000 shares of the Company's Class A
Common Stock at 85% of the market price on the last day of the calendar month
immediately preceding the date of the grant, except for 1995, in which the
exercise price was $9.00. The Company originally reserved 25,000 shares of
Class A Common Stock for issuance under the Outside Director Stock Plan. To
date the Company has outstanding options covering 4,000 of such shares, and an
option to purchase 1,000 shares has been exercised.

33
<PAGE>

CERTAIN TRANSACTIONS

Effective April 19, 1995, the Company issued an aggregate 841,668 shares of
Common Stock to Richard D. Simon, Kelle A. Simon, Lyn Simon, Sherry L. Simon
Bokovoy, and Richard D. Simon, Jr. in exchange for the assets and stock of
certain related entities and the contribution of notes payable to such
stockholders by the Company. Prior to April 19, 1995, the Company leased
certain real estate and revenue equipment from R. D. Simon Trucking. The
Company paid rent of approximately $532,000 from October 1, 1994 to April 19,
1995 and $912,000 in fiscal 1994, but all of such amounts were eliminated in
the Company's audited and interim consolidated financial statements because of
related ownership and the single purpose of the entities. Effective April 19,
1995, the Company acquired all of the assets formerly leased from R. D. Simon
Trucking in the recapitalization described in "Holding Company Formation" and
Note 1 to the Consolidated Financial Statements.

Prior to April 19, 1995, the Company leased certain revenue equipment from
Freight Sales, a corporation owned 25% by each of Kelle A. Simon, Lyn Simon,
Sherry L. Simon Bokovoy, and Richard D. Simon, Jr. The Company paid Freight
Sales approximately $90,000 in fiscal 1994 and $30,000 from October 1, 1994 to
April 19, 1995. Effective April 19, 1995, the Company merged Freight Sales
into the Company in the recapitalization described in "Holding Company
Formation."

As an S Corporation prior to November 17, 1995, the Company periodically
paid pro rata distributions to its then-existing stockholders. The amounts of
such distributions were $1,438,974, $1,593,611, and $605,060 for the fiscal
years ended September 30, 1994, 1995, and 1996, respectively. See "Holding
Company Formation."

Sherry L. Simon Bokovoy and Jon Bokovoy are the daughter and son-in-law of
Richard D. Simon. Ms. Bokovoy is employed by the Company as assistant
treasurer and assistant secretary, and Mr. Bokovoy is employed by the Company
as a customer service representative. Ms. Bokovoy was paid an aggregate of
$81,377 ($24,331 in salary and $57,046 in insurance cost) and $90,924 ($32,600
in salary, $1,278 in employer contributions to the 401(k) Plan, and $57,046 in
insurance cost) during fiscal years 1994 and 1995, respectively. She was paid
an aggregate $99,211 during the 1996 fiscal year, which included $93,600 in
salary and $2,808 in employer contributions to the 401(k) Plan, and $2,803 in
health insurance costs. Mr. Bokovoy was paid an aggregate of $124,800,
$101,352 ($98,400 in salary and $2,952 in employer contributions to the 401(k)
Plan), and $64,781 ($62,900 in salary and $1,881 in employer contributions to
the 401(k) Plan) during fiscal years 1994, 1995, and 1996, respectively. Ms.
Bokovoy is a participant in the executive bonus program for the 1997 fiscal
year and has been allocated 15% of the available bonus amount. The bonus
program provides for an aggregate amount equal to five percent of earnings
before provision for income taxes. See "Management--Executive Compensation."

Prior to the Company's initial public offering, Richard D. Simon guaranteed
the Company's line of credit and all of its revenue equipment debt,
capitalized leases, and operating leases. The guarantees were released after
the offering.

For additional information concerning certain transactions involving the
Company's officers and directors, see "Management--Compensation Committee
Interlocks and Insider Participation."

Upon completion of its initial public offering, the Company adopted a policy
that any future transactions with affiliated persons or entities would be on
terms no less favorable to the Company than those that could have been
obtained on an arms-length basis from unaffiliated third parties and that any
such transactions must be approved by a majority of the disinterested
directors.

34
<PAGE>

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth information regarding the beneficial
ownership of Class A and Class B Common Stock as of the date of this
Prospectus, and as adjusted to reflect the sale of the shares of Class A
Common Stock offered hereby, by each person known by the Company to
beneficially own more than 5% of the outstanding shares of Common Stock; each
of the Company's directors; each of the executive officers identified in the
Summary Compensation Table; and all directors and executive officers as a
group. Unless otherwise indicated, each of the stockholders has sole voting
and investment power with respect to the shares beneficially owned.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES SHARES TO BE BENEFICIALLY
OWNED BEFORE OFFERING(1) OFFERED OWNED AFTER OFFERING(1)
------------------------------------ ------------------------------
NAME AND ADDRESS(2) NUMBER PERCENT(3) NUMBER NUMBER PERCENT(3)
------------------- -------------- --------------------- --------------- --------------
<S> <C> <C> <C> <C> <C>
Richard D. Simon(4)(5).. 1,882,661 39.7% 700,000 1,182,661 19.2%
Alban B. Lang........... 79,923 1.7% 15,000 64,923 1.1%
Kelle A. Simon.......... 88,229 1.9% 15,000 73,229 1.2%
Lyn Simon............... 82,507 1.7% 15,000 67,507 1.1%
Richard D. Simon, Jr. .. 87,229 1.8% 15,000 72,229 1.2%
Irene Warr.............. 400 * -- 400 *
H. J. Frazier........... 5,000 * -- 5,000 *
Sherry L. Simon
Bokovoy................ 87,229 1.8% 15,000 72,229 1.2%
Cowen Asset Management.. 283,400 6.0% -- 283,400 4.7%
All directors and
executive officers as a
group (first 7
persons)............... 2,225,949 46.9% 760,000 1,465,949 23.8%
</TABLE>
- --------
* Less than one percent.
(1) Assumes no exercise of the underwriters' over-allotment option. Excludes
options to purchase 200,000 shares of Class A Common Stock granted (50,000
shares each, of which 4,600 shares each were at December 31, 1996, subject
to vested but unexercised options) to Kelle A. Simon, Lyn Simon, Richard
D. Simon, Jr., and Alban B. Lang under the Company's Incentive Stock Plan.
Unless otherwise indicated all shares are owned directly.
(2) The address of Richard D. Simon is 4646 South 500 West, Salt Lake City,
Utah 84123, and the address of Cowen Asset Management is Financial Square,
31st Floor, New York, New York 10005.
(3) Percentage ownership includes both Class A and Class B Common Stock.
(4) Mr. Simon owns 10,500 shares of Class A Common Stock and 1,872,161 shares
of Class B Common Stock. All of Mr. Simon's Class A Common Stock and
689,500 shares of his Class B Common Stock will be sold in the Offering.
(5) All shares are held by Richard D. Simon, Trustee of the Richard D. Simon
Revocable Trust, UTAD 2/12/93, of which the four children of Richard D.
Simon are the beneficiaries, subject to a life estate in favor of Valene
Simon, wife of Richard D. Simon. Because the Class B Common Stock is
entitled to two votes per share, Mr. Simon, as Trustee, controls 56.7% of
the combined voting power of the Common Stock before the Offering and
32.2% after the Offering (26.6% if the Underwriters' over-allotment option
is exercised in full). See "Risk Factors--Voting Control of the Company."

35
<PAGE>

DESCRIPTION OF CAPITAL STOCK

GENERAL

The Company is authorized to issue up to 20,000,000 shares of Class A Common
Stock, par value one cent ($.01) per share, 5,000,000 shares of Class B Common
Stock, par value one cent ($.01) per share, and 5,000,000 shares of preferred
stock, par value one cent ($.01) per share. At December 31, 1996, 2,872,757
shares of Class A Common Stock, 1,872,161 shares of Class B Common Stock, and
no shares of preferred stock were issued and outstanding. As of October 31,
1996 the Class A Common Stock was held by 669 stockholders of record, and all
shares of Class B Common Stock are held by Richard D. Simon. However, the
Company believes a substantial number of the Company's shares are held of
record by brokers or dealers for their customers in street names. All of the
outstanding Common Stock is, and the shares of Class A Common Stock offered by
the Company hereby when issued and paid for will be, fully paid and non-
assessable.

CLASS A AND CLASS B COMMON STOCK

Voting. Holders of Class A Common Stock are entitled to one vote per share.
Holders of Class B Common Stock are entitled to two votes per share. All
actions submitted to a vote of stockholders are voted on by holders of Class A
and Class B Common Stock voting together as a single class, except as otherwise
required by law. Holders of the Company's Common Stock are not entitled to
cumulative voting in the election of directors.

Conversion. Class A Common Stock has no conversion rights. Holders of Class B
Common Stock may convert their Class B Common Stock into Class A Common Stock
at any time at the ratio of one share of Class A Common Stock for each share of
Class B Common Stock. Class B Common Stock immediately and automatically
converts into an equal number of Class A Common Stock shares if any person
other than Richard D. Simon, Valene Simon, Kelle A. Simon, Lyn Simon, Sherry L.
Simon Bokovoy, and Richard D. Simon, Jr. (or trusts for the benefit of any of
them or entities wholly owned by any of them), obtains ownership of such
shares.

Dividends. Holders of Class A Common Stock and Class B Common Stock are
entitled to receive dividends payable in cash or property other than Common
Stock on an equal basis, if and when such dividends are declared by the Board
of Directors from funds legally available, subject to any preference in favor
of outstanding shares of preferred stock, if any. In the case of any dividend
payable in Common Stock, all holders of Common Stock shall receive the same
percentage dividend, with the holders of Class A Common Stock receiving shares
of Class A Common Stock and the holders of Class B Common Stock receiving
shares of Class A or Class B Common Stock, as determined by the Board of
Directors when declaring such dividend.

Liquidation. In the event of liquidation, holders of Class A and Class B
Common Stock participate with each other on a ratable basis as a single class
in the net assets of the Company available for distribution after payment or
provision for liabilities of the Company and payment of the liquidation
preference, if any, on any outstanding shares of preferred stock.

Other Terms. Neither the Class A nor the Class B Common Stock may be
subdivided, consolidated, reclassified, or otherwise changed unless
contemporaneously therewith the other class of shares is subdivided,
consolidated, reclassified, or otherwise changed in the same proportion and in
the same manner. In any merger, consolidation, reorganization, or other
business combination, the consideration to be received per share by holders of
either Class A or Class B Common Stock must be identical to that received by
holders of the other class of Common Stock, except that if, after such business
combination, Richard D. Simon, Valene Simon, Kelle A. Simon, Lyn Simon, Sherry
L. Simon Bokovoy, and Richard D. Simon, Jr. (or trusts for the benefit of any
of them or entities wholly owned by any of them) beneficially own, in the
aggregate, more than one-third of the equity interests in the surviving entity,
any securities received by them may differ as to voting rights only to the
extent that voting rights now differ between Class A and Class B Common Stock.
Holders of Common Stock are not entitled to preemptive rights and neither the
Class A Common Stock nor the Class B Common Stock is subject to redemption.

36
<PAGE>

The rights, preferences, and privileges of holders of both classes of Common
Stock are subject to, and may be adversely affected by, the rights of the
holders of shares of any series of preferred stock which the Company may
designate and issue in the future.

PREFERRED STOCK

The Board of Directors is authorized to issue, from time to time, without
approval of the stockholders, up to 5,000,000 shares of preferred stock in one
or more series. The Board of Directors may fix for each series: the distinctive
serial designation and number of shares of the series; the voting powers and
the right, if any, to elect a director or directors (and the terms of office of
any such directors); the dividend rights, if any; the terms of redemption, and
the amount of and provisions regarding any sinking fund for the purchase or
redemption thereof; the liquidation preferences and the amounts payable on
dissolution or liquidation; the terms and conditions under which shares of the
series may or shall be converted into any other series or class of stock or
debt of the corporation; and any other terms or provisions which the Board of
Directors is legally authorized to fix or alter.

It is not possible to state the actual effect of the authorization of the
preferred stock upon the rights of holders of the Common Stock until the Board
determines the specific rights of the holders of any series of preferred stock.
Depending upon the rights granted to any series of preferred stock, issuance
thereof could adversely affect the voting power, liquidation preference, or
other rights of the holders of Common Stock or other preferred stock. The
Board's authority to issue shares of preferred stock provides a potential
vehicle for use in possible acquisitions and other corporate purposes, but its
issuance, for example in connection with a stockholder rights plan, could have
the effect of making it more difficult for a third party to acquire, or of
discouraging a third party from acquiring, control of the Company. The Company
has no present plans to issue any shares of preferred stock.

CERTAIN PROVISIONS OF ARTICLES AND BYLAWS

Provisions with Anti-Takeover Implications. Certain provisions of the
Company's Articles of Incorporation ("Articles") and Bylaws deal with matters
of corporate governance and the rights of stockholders. Under the Company's
Articles, the Board of Directors may issue shares of preferred stock and set
the voting rights, preferences, and other terms thereof, and the Board of
Directors may also issue Class B Common Stock, which possesses disproportionate
voting rights while owned by Simon family members. The Company's Bylaws provide
that a special meeting of stockholders may be called only by the Chairman of
the Board, the President, or a majority of the directors. Such provisions,
together with certain provisions of the Nevada General Corporation Law (see
"Description of Capital Stock--Statutory Anti-Takeover Provisions"), could be
deemed to have an anti-takeover effect and discourage takeover attempts not
first approved by the Board of Directors (including takeovers which certain
stockholders may deem to be in their best interest). Any such discouraging
effect upon takeover attempts could potentially depress the market price of the
Class A Common Stock or inhibit temporary fluctuations in the market price of
the Class A Common Stock that otherwise could result from actual or rumored
takeover attempts.

Indemnification and Limitation of Liability. Under its Articles and Bylaws,
the Company will indemnify its officers, directors, and agents against all
liabilities and expenses reasonably incurred in connection with service for or
on behalf of the Company to the full extent permitted by Nevada law. The
Company also is authorized to advance expenses, purchase insurance, enter into
indemnification agreements, and otherwise grant broader indemnification rights.
The Articles also eliminate the liability of directors and officers to the
Company or its stockholders for monetary damages for breach of fiduciary duty
except to the extent such exemption from liability or limitation thereof is not
permitted under the Nevada General Corporation Law. This provision does not
eliminate the duty of care and, in appropriate circumstances, equitable
remedies such as injunctive or other forms of non-monetary relief will remain
available under Nevada law. In addition, each director continues to be subject
to liability for monetary damages for acts or omissions involving intentional
misconduct, fraud, knowing violations of law, and unlawful distributions. The
Company believes that these provisions of its Articles and Bylaws are necessary
to attract and retain qualified persons as directors and officers.

37
<PAGE>

STATUTORY ANTI-TAKEOVER PROVISIONS

Nevada's "Combination with Interested Stockholders Statute" and "Control
Share Acquisition Statute" may have the effect of delaying or making it more
difficult to effect a change in control of the Company.

The Combination with Interested Stockholders Statute prevents an "interested
stockholder" and an applicable Nevada corporation from entering into a
"combination," unless certain conditions are met. A "combination" includes,
among other transactions, any merger or consolidation with an "interested
stockholder," or any sale, lease, exchange, mortgage, pledge, transfer, or
other disposition, in one transaction or a series of transactions with an
"interested stockholder" having: an aggregate market value equal to 5% or more
of the aggregate market value of the assets of a corporation; an aggregate
market value equal to 5% or more of the aggregate market value of all
outstanding shares of a corporation; or representing 10% or more of the earning
power or net income of the corporation. An "interested stockholder" means the
beneficial owner of 10% or more of the voting shares of a corporation, or an
affiliate or associate thereof. A corporation may not engage in a "combination"
within three years after the interested stockholder acquired his shares unless
the combination or purchase is approved by the board of directors before the
interested stockholder acquired such shares. If this approval is not obtained,
then after the expiration of the three-year period, the business combination
may be consummated by the approval of the board of directors before the
interested stockholder's date of acquiring shares, or a majority of the voting
power held by disinterested stockholders, or if the consideration to be paid by
the interested stockholder is at least equal to the highest of: the highest
price per share paid by the interested stockholder within the three years
immediately preceding the date of the announcement of the combination or in the
transaction in which he became an interested stockholder, whichever is higher
(as adjusted for interest and dividends); the market value per common share on
the date of announcement of the combination or the date the interested
stockholder acquired the shares, whichever is higher (as adjusted for interest
and dividends); or if higher for the holders of shares of preferred stock, the
highest liquidation value for the shares of preferred stock.

Nevada's Control Share Acquisition Statute prohibits an acquiror, under
certain circumstances, from voting shares of a target corporation's stock after
crossing certain threshold ownership percentages, unless the acquiror obtains
the approval of the target corporation's disinterested stockholders. The
Control Share Acquisition Statute specifies three thresholds: one-fifth or more
but less than one-third, one-third but less than a majority, and a majority or
more, of the outstanding voting power. Once an acquiror crosses one of the
above thresholds in an offer or acquisition, those shares acquired within 90
days become Control Shares (as defined in such statute) and such Control Shares
are deprived of the right to vote until disinterested stockholders restore the
right. The Control Share Acquisition Statute also provides that in the event
Control Shares are accorded full voting rights and the acquiring person has
acquired a majority or more of all voting power, all other stockholders who do
not vote in favor of authorizing voting rights to the Control Shares are
entitled to demand payment for the fair value of their shares. The board of
directors is to notify the stockholders as soon as practicable after such an
event has occurred that they have the right to receive the fair value of their
shares in accordance with statutory procedures established generally for
dissenters' rights. This statute is applicable only to Nevada corporations
doing business in the state and that have at least 200 stockholders, at least
100 of whom are stockholders of record and residents of Nevada.

TRANSFER AGENT AND REGISTRAR

UMB Bank, n.a., 928 Grand Avenue, Kansas City, Missouri 64106, is the
Transfer Agent and Registrar for the Class A Common Stock.

38
<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Offering, the Company will have outstanding 6,169,918
shares of Common Stock. Of these shares, all of the 2,200,000 shares
(2,530,000 shares if the Underwriters' over-allotment option is exercised in
full) sold in the Offering will be freely transferable by persons other than
"affiliates" of the Company, without further restriction under the Securities
Act. Of the remaining 3,969,918 shares, 3,424,615 were freely tradeable
without restriction or registration prior to the Offering and 545,303 are
restricted shares within the meaning of Rule 144 and may not be sold without
registration or an exemption from registration. In connection with the
Offering, the Selling Stockholders, along with the Company and its other
executive officers and directors, who will beneficially own approximately
1,538,178 or 24.9% of the Company's outstanding Common Stock after the
Offering, have agreed not to sell or otherwise dispose of any of their shares,
directly or indirectly, for 180 days from the date of this Prospectus without
the prior written consent of Morgan Keegan & Company, Inc. After the 180 day
period all such shares will be eligible for sale, subject to compliance with
Rule 144. See "Principal and Selling Stockholders" and "Risk Factors--Shares
Eligible for Future Sale."

In general, Rule 144 provides that, subject to its provisions and other
applicable federal and state securities law requirements, any person (or
persons whose shares are aggregated), including any person who may be deemed
an "affiliate" as defined under the Securities Act, who has beneficially owned
shares for at least two years is entitled to sell, within any three-month
period, a number of shares that does not exceed the greater of (i) the average
weekly trading volume of the same class of securities during the four calendar
weeks preceding the filing of notice of the sale with the Securities and
Exchange Commission; or (ii) 1% of the same class of securities then
outstanding, subject in each case to certain manner-of-sale provisions, notice
requirements, and the availability of current information concerning the
Company. A person who is not deemed an "affiliate" of the Company and who has
beneficially owned shares for at least three years is entitled to sell shares
under Rule 144 without regard to the volume limitations and current public
information, manner of sale, and notice requirements described above.
Restricted shares will also be eligible for sale to "qualified institutional
buyers" pursuant to Rule 144A under the Securities Act, without regard to the
volume limitations contained in Rule 144.

The Company has filed registration statements under the Securities Act to
register shares of Class A Common Stock reserved for issuance under its
Incentive Stock Plan, Outside Director Stock Plan, and 401(k) Plan, thus
permitting the resale of such shares by non-affiliates in the public market
without restriction under the Securities Act. A total of 400,000 shares
originally were reserved for issuance under the Incentive Stock Plan. Options
covering approximately 358,150 of such shares are currently outstanding and
options for approximately 2,000 shares have been exercised. An additional
25,000 shares were reserved for issuance under the Outside Director Stock
Plan. Options covering 4,000 of such shares are currently outstanding and
options for 1,000 shares have been exercised. At December 31, 1996, the 401(k)
Plan had 69,389 shares allocated to employee accounts and the total dollar
value invested in the Employer Stock Fund was $1,075,530.

39
<PAGE>

UNDERWRITING

The Underwriters named below (the "Underwriters") have severally agreed,
subject to the terms and conditions of the Underwriting Agreement, to purchase
from the Company and the Selling Stockholders, the aggregate number of shares
of Class A Common Stock set forth opposite their respective names below:

<TABLE>
<CAPTION>
UNDERWRITERS NUMBER OF SHARES
------------ ----------------
<S> <C>
Morgan Keegan & Company, Inc. ........................... 733,334
A.G. Edwards & Sons, Inc. ............................... 733,333
George K. Baum & Company................................. 733,333
---------
Total................................................ 2,200,000
=========
</TABLE>
The Underwriting Agreement provides that the obligations of the Underwriters
thereunder are subject to approval of certain legal matters by counsel and to
various other conditions, including, among other things, the continuing
accuracy of the representations and warranties of the Company and Selling
Stockholders contained in the Underwriting Agreement, the performance by the
Company and Selling Stockholders of their respective obligations under the
Underwriting Agreement, and the receipt of an opinion of counsel for the
Company in form and substance reasonably satisfactory to counsel for the
Underwriters. The nature of the Underwriters' obligations is such that they
are committed to purchase and pay for all of the shares of Class A Common
Stock, if any are purchased. The Underwriting Agreement contains covenants of
indemnity between the Underwriters and the Company and Selling Stockholders
against certain civil liabilities, including liabilities under the Securities
Act.

The Company has been advised by the Underwriters that they propose to offer
the shares of Class A Common Stock to the public at the offering price set
forth on the cover page of this Prospectus and to certain dealers at such
price less a concession not in excess of $0.52 per share. The Underwriters may
allow, and such dealers may reallow, a concession not in excess of $0.10 per
share to other dealers. The offering price and the concessions and discount to
dealers may be changed by the Underwriters after the Offering.

The Company and Richard D. Simon have granted to the Underwriters options,
expiring on the thirtieth day subsequent to the date of this Prospectus, to
purchase up to an additional 110,000 and 220,000 shares of Class A Common
Stock, respectively, at the price to public, less underwriting discount, as
shown on the cover page of this Prospectus. The parties have agreed that the
option to Mr. Simon will be exercised before the option to the Company. The
Underwriters may exercise such options solely for the purpose of covering
over-allotments, if any, incurred in the sale of Class A Common Stock offered
hereby. To the extent that the Underwriters exercise such options, each
Underwriter will become obligated, subject to certain conditions, to purchase
approximately the same percentage of such additional shares as the number of
shares of Class A Common Stock set forth next to such Underwriter's name in
the preceding table bears to the total offered initially.

The Company has agreed to indemnify the several Underwriters or to
contribute to losses arising out of certain liabilities, including liabilities
under the Securities Act.

With certain limited exceptions, the Company and its executive officers have
agreed not to offer, sell, contract to sell, grant any option to purchase, or
otherwise dispose (or announce any offer, sale, or grant of any option to
purchase or other disposition) of any shares of Class A Common Stock, or any
securities convertible into, or exercisable or exchangeable for, shares of
Class A Common Stock for a period of 180 days after the date of this
Prospectus, without the prior written consent of Morgan Keegan & Company, Inc.

The Underwriters have informed the Company that they do not intend to
confirm sales to any account over which they exercise discretionary authority.

One or more of the Underwriters currently act as market makers for the Class
A Common Stock and may engage in "passive market making" in such securities on
the Nasdaq National Market in accordance with Rule 10b-6A under the Exchange
Act. Rule 10b-6A permits, upon the satisfaction of certain conditions,

40
<PAGE>

underwriters and selling group members participating in a distribution that are
also Nasdaq market makers in the security being distributed to engage in
limited market making transactions during the period when Rule 10b-6 under the
Exchange Act would otherwise prohibit such activity. Rule 10b-6A prohibits
underwriters and selling group members engaged in passive market making
generally from entering a bid or effecting a purchase at a price that exceeds
the highest bid for those securities displayed on the Nasdaq National Market by
a market maker that is not participating in the distribution. Under Rule 10b-
6A, each underwriter or selling group member engaged in passive market making
is subject to a daily net purchase limitation equal to 30% of such entity's
average daily trading volume during the two full consecutive calendar months
immediately preceding the date of the filing of the registration statement
under the Securities Act pertaining to the security to be distributed.

LEGAL MATTERS

The validity of the shares of Class A Common Stock offered hereby will be
passed upon for the Company by Scudder Law Firm, P.C., Lincoln, Nebraska.
Certain legal matters in connection with the Offering are being passed upon for
the Underwriters by Baker, Donelson, Bearman & Caldwell, a Professional
Corporation, Memphis, Tennessee.

EXPERTS

The consolidated financial statements included in this Prospectus, to the
extent and for the periods indicated in their report, have been audited by
Arthur Andersen LLP, independent public accountants and are included herein in
reliance upon the authority of said firm as experts in giving said report.

41
<PAGE>

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Index to Consolidated Financial Statements Covered by Report of
Independent Public Accountants
Report of Independent Public Accountants................................ F-2
Consolidated Statements of Earnings for the Years Ended September 30,
1994, 1995, and 1996, and for the Three Months Ended December 31, 1995
(unaudited) and 1996 (unaudited)....................................... F-3
Consolidated Statements of Financial Position as of September 30, 1995
and 1996, and as of December 31, 1996 (unaudited)...................... F-4
Consolidated Statements of Stockholders' Equity for the Years Ended
September 30, 1994, 1995, and 1996, and for the Three Months Ended
December 31, 1996 (unaudited).......................................... F-5
Consolidated Statements of Cash Flows for the Years Ended September 30,
1994, 1995, and 1996, and for the Three Months Ended December 31, 1995
(unaudited) and 1996 (unaudited)....................................... F-6
Notes to Consolidated Financial Statements.............................. F-7
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors of Simon Transportation Services Inc.:

We have audited the accompanying consolidated statements of financial
position of Simon Transportation Services Inc. (a Nevada corporation) and
subsidiary as of September 30, 1995 and 1996 and the related consolidated
statements of earnings, stockholders' equity, and cash flows for each of the
three years in the period ended September 30, 1996. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Simon Transportation
Services Inc. and subsidiary as of September 30, 1995 and 1996, and the
results of their operations and their cash flows for each of the three years
in the period ended September 30, 1996 in conformity with generally accepted
accounting principles.

/s/ Arthur Andersen LLP

Salt Lake City, Utah
October 11, 1996

F-2
<PAGE>

SIMON TRANSPORTATION SERVICES INC.

CONSOLIDATED STATEMENTS OF EARNINGS

<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
FOR THE YEARS ENDED SEPTEMBER 30, DECEMBER 31,
-------------------------------------- ----------------------------
1994 1995 1996 1995 1996
----------- ----------- ------------ ------------- -------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Operating Revenue....... $71,690,734 $75,218,184 $101,089,530 $ 20,588,101 $ 34,166,193
----------- ----------- ------------ ------------- -------------
Operating Expenses:
Salaries, wages, and
benefits............. 25,948,755 28,035,318 40,014,702 8,241,904 13,171,808
Fuel and fuel taxes... 14,362,789 14,115,283 20,359,375 4,042,972 6,657,636
Operating supplies and
expenses............. 8,978,394 10,839,485 13,701,428 3,166,317 4,350,499
Taxes and licenses.... 2,557,612 2,756,587 3,287,833 700,390 1,436,465
Insurance and claims.. 1,995,244 2,002,505 2,172,308 274,627 626,360
Communications and
utilities............ 1,274,074 1,244,650 1,679,967 354,331 530,004
Depreciation and
amortization......... 6,856,673 7,222,887 5,919,494 1,728,200 1,513,545
Rent.................. 3,435,117 2,925,541 4,793,804 418,792 3,446,607
----------- ----------- ------------ ------------- -------------
Total operating
expenses........... 65,408,658 69,142,256 91,928,911 18,927,533 31,732,924
----------- ----------- ------------ ------------- -------------
Operating earnings.. 6,282,076 6,075,928 9,160,619 1,660,568 2,433,269
Other (Expense)
Earnings:
Interest expense...... (3,191,708) (3,558,932) (2,849,549) (805,597) (446,623)
Other, net............ 55,876 31,751 92,025 -- --
----------- ----------- ------------ ------------- -------------
Earnings before
provision for income
taxes.................. 3,146,244 2,548,747 6,403,095 854,971 1,986,646
Provision for income
taxes (Note 11)........ -- -- 5,454,170 3,257,112 750,952
=========== =========== ============ ============= =============
Net Earnings............ $ 3,146,244 $ 2,548,747 $ 948,925 $ (2,402,141) $ 1,235,694
=========== =========== ============ ============= =============
Unaudited Pro Forma
Information:
(Note 11)
Earnings before
provision for income
taxes................ $ 3,146,244 $ 2,548,747 $ 6,403,095 $ 854,971 $ 1,986,646
Provision for income
taxes................ 1,245,913 1,009,304 2,535,626 338,569 750,952
----------- ----------- ------------ ------------- -------------
Net earnings.......... $ 1,900,331 $ 1,539,443 $ 3,867,469 $ 516,402 $ 1,235,694
=========== =========== ============ ============= =============
Net earnings per
common share......... $ 0.83 $ 0.67 $ 0.88 $ 0.15 $ 0.26
=========== =========== ============ ============= =============
Weighted average
common shares
outstanding.......... 2,300,000 2,300,000 4,417,643 3,451,233 4,743,154
=========== =========== ============ ============= =============
</TABLE>

The accompanying notes to consolidated financial statements are an integral
part of these consolidated financial statements.

F-3
<PAGE>

SIMON TRANSPORTATION SERVICES INC.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

<TABLE>
<CAPTION>
SEPTEMBER 30,
-------------------------- DECEMBER 31,
1995 1996 1996
------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash............................... $ 350,380 $ 5,571,431 $ 4,107,994
Receivables, net of allowance for
doubtful accounts of $115,000,
$66,000, and $48,000,
respectively...................... 7,331,701 13,261,974 14,256,016
Operating supplies................. 639,915 428,123 425,371
Prepaid expenses and other......... 416,945 1,302,492 2,322,690
Deferred tax asset................. -- 627,883 627,883
------------ ------------ ------------
Total current assets............. 8,738,941 21,191,903 21,739,954
------------ ------------ ------------
Property and Equipment, at cost:
Land............................... 2,710,071 2,918,804 2,928,804
Revenue equipment.................. 63,591,169 58,779,032 53,700,875
Buildings and improvements......... 4,796,379 8,639,875 11,375,793
Office furniture and equipment..... 2,116,518 2,766,218 2,790,525
------------ ------------ ------------
73,214,137 73,103,929 70,795,997
Less accumulated depreciation and
amortization...................... (21,014,556) (16,390,209) (14,960,370)
------------ ------------ ------------
52,199,581 56,713,720 55,835,627
------------ ------------ ------------
Other Assets......................... 498,473 317,645 951,995
------------ ------------ ------------
$ 61,436,995 $ 78,223,268 $ 78,527,576
============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt.. $ 8,577,770 $ 2,892,300 $ 2,927,734
Current portion of capitalized
lease obligations................. 12,389,442 3,760,250 3,725,397
Accounts payable................... 1,369,252 1,691,900 1,731,341
Income taxes payable............... -- 2,191,984 781,531
Accrued liabilities................ 1,835,620 2,324,918 2,249,987
Accrued claims payable............. 1,296,575 1,602,344 1,512,132
------------ ------------ ------------
Total current liabilities........ 25,468,659 14,463,696 12,928,122
------------ ------------ ------------
Long-Term Debt, net of current
portion............................. 7,135,935 15,433,145 17,328,692
------------ ------------ ------------
Capitalized Lease Obligations, net of
current portion..................... 19,799,823 15,342,293 14,030,684
------------ ------------ ------------
Deferred Income Taxes................ -- 3,880,653 3,880,653
------------ ------------ ------------
Commitments (Note 7)
Stockholders' Equity:
Preferred stock, $.01 par value,
5,000,000 shares authorized, none
issued............................ -- -- --
Class A Common Stock, $.01 par
value, 20,000,000 shares
authorized, 427,839, 2,870,507,
and 2,872,757 shares issued,
respectively...................... 4,278 28,705 28,728
Class B Common Stock, $.01 par
value, 5,000,000 shares
authorized, 1,872,161 shares
issued............................ 18,722 18,722 18,722
Additional paid-in capital......... 735,292 25,282,496 25,302,723
Retained earnings.................. 8,274,286 3,773,558 5,009,252
------------ ------------ ------------
Total stockholders' equity....... 9,032,578 29,103,481 30,359,425
------------ ------------ ------------
$ 61,436,995 $ 78,223,268 $ 78,527,576
============ ============ ============
</TABLE>

The accompanying notes to consolidated financial statements are an integral
part of these consolidated financial statements.

F-4
<PAGE>

SIMON TRANSPORTATION SERVICES INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
CLASS A CLASS B ADDITIONAL TOTAL
COMMON COMMON COMMON PAID-IN RETAINED TREASURY STOCKHOLDERS'
STOCK STOCK STOCK CAPITAL EARNINGS STOCK EQUITY
-------- ------- ------- ----------- ---------- -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, September 30,
1993................... $149,852 $ -- $ -- $ -- $5,611,880 $(25,764) $ 5,735,968
Distributions to
stockholders of
S corporation......... -- -- -- -- (1,438,974) -- (1,438,974)
Net Earnings........... -- -- -- -- 3,146,244 -- 3,146,244
-------- ------- ------- ----------- ---------- -------- -----------
Balance, September 30,
1994................... 149,852 -- -- -- 7,319,150 (25,764) 7,443,238
Distributions to
stockholders of
S corporation......... -- -- -- -- (1,593,611) -- (1,593,611)
Acquisition of Freight
Sales, Inc. through
issuance of 22,308
shares of common stock
(Note 1).............. 160,000 -- -- -- -- -- 160,000
Payment of notes
payable to
stockholders through
issuance of 66,225
shares of common stock
(Note 9).............. 474,204 -- -- -- -- -- 474,204
Recapitalization of
capital stock, 700,000
Class A shares and
2,850,000 Class B
shares of Common Stock
issued for 3,550,000
shares of common stock
(Note 1).............. (784,056) 7,000 28,500 722,792 -- 25,764 --
Pro rata contribution
of 272,161 shares of
Class A Common Stock
and 977,839 shares of
Class B Common Stock
by stockholders (Note
1).................... -- (2,722) (9,778) 12,500 -- -- --
Net Earnings........... -- -- -- -- 2,548,747 -- 2,548,747
-------- ------- ------- ----------- ---------- -------- -----------
Balance, September 30,
1995................... -- 4,278 18,722 735,292 8,274,286 -- 9,032,578
Distributions to
stockholders of
S corporation......... -- -- -- -- (605,060) -- (605,060)
Sale of Common Stock in
initial public
offering, net of
issuance costs........ -- 24,420 -- 19,696,318 -- -- 19,720,738
Change in tax status... -- -- -- 4,844,593 (4,844,593) -- --
Exercise of stock
options............... -- 7 -- 6,293 -- -- 6,300
Net Earnings........... -- -- -- -- 948,925 -- 948,925
-------- ------- ------- ----------- ---------- -------- -----------
Balance, September 30,
1996................... -- 28,705 18,722 25,282,496 3,773,558 -- 29,103,481
Exercise of stock
options (unaudited)... -- 23 -- 20,227 -- -- 20,250
Net earnings
(unaudited)........... -- -- -- -- 1,235,694 -- 1,235,694
-------- ------- ------- ----------- ---------- -------- -----------
Balance, December 31,
1996 (unaudited)....... $ -- $28,728 $18,722 $25,302,723 $5,009,252 $ -- $30,359,425
======== ======= ======= =========== ========== ======== ===========
</TABLE>

The accompanying notes to consolidated financial statements are an integral
part of these consolidated financial statements.

F-5
<PAGE>

SIMON TRANSPORTATION SERVICES INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
FOR THE YEARS ENDED FOR THE THREE MONTHS ENDED
SEPTEMBER 30, DECEMBER 31,
------------------------------------- ----------------------------
1994 1995 1996 1995 1996
----------- ----------- ----------- ------------- -------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash Flows From Operat-
ing Activities:
Net earnings.......... $ 3,146,244 $ 2,548,747 $ 948,925 $ (2,402,141) $ 1,235,694
Adjustments to recon-
cile net earnings to
net cash provided by
(used in) operating
activities:
Depreciation and am-
ortization........... 6,856,673 7,222,887 5,919,494 1,728,200 1,513,545
Changes in assets and
liabilities:
(Increase) decrease
in receivables,
net................ (752,748) (477,913) (5,930,273) (187,658) 93,458
(Increase) decrease
in operating sup-
plies.............. (71,633) (166,726) 211,792 63,178 2,752
Increase in prepaid
expenses and oth-
er................. (22,397) (117,628) (885,547) (1,783,916) (1,020,198)
Increase in deferred
tax asset.......... -- -- (627,883) -- --
Decrease (increase)
in other assets.... 99,225 (464,990) 180,828 373,306 (634,350)
Increase (decrease)
in accounts pay-
able............... 274,652 (577,613) 322,648 271,588 39,441
Increase (decrease)
in income taxes
payable............ -- -- 2,191,984 -- (1,410,453)
Increase (decrease)
in accrued liabili-
ties............... 326,248 17,700 489,298 (231,730) (74,931)
Increase (decrease)
in accrued claims
payable............ 498,654 277,903 305,769 (92,300) (90,212)
Increase in deferred
income taxes....... -- -- 3,880,653 3,351,427 --
----------- ----------- ----------- ------------- ------------
Net cash provided
by (used in)
operating
activities....... 10,354,918 8,262,367 7,007,688 1,089,954 (345,254)
----------- ----------- ----------- ------------- ------------
Cash Flows From Invest-
ing Activities:
Purchase of property
and equipment........ (8,332,284) (6,338,014) (23,149,090) (1,131,139) (3,731,952)
Proceeds from the
sale of property and
equipment............ 2,224,519 7,594,684 18,499,863 837,500 2,009,000
----------- ----------- ----------- ------------- ------------
Net cash used in
investing activi-
ties............. (6,107,765) 1,256,670 (4,649,227) (293,639) (1,722,952)
----------- ----------- ----------- ------------- ------------
Cash Flows From Financ-
ing Activities:
Proceeds from issu-
ance of long-term
debt................. 13,553,287 3,764,916 19,666,814 -- 2,628,684
Principal payments on
long-term debt....... (10,818,948) (4,653,591) (12,775,333) (10,232,605) (697,703)
Net borrowings
(payments) under
line-of-credit ...... 9,313 2,570,529 (4,279,741) (4,279,741) --
Principal payments
under capitalized
lease obligations.... (5,779,042) (9,309,717) (18,871,127) (3,558,523) (1,346,462)
Net proceeds from is-
suance of Class A
Common Stock......... -- -- 19,727,037 19,716,753 20,250
Distributions to
stockholders......... (1,438,973) (1,593,611) (605,060) (605,060) --
----------- ----------- ----------- ------------- ------------
Net cash (used in)
provided by
financing
activities....... (4,474,363) (9,221,474) 2,862,590 1,040,824 604,769
----------- ----------- ----------- ------------- ------------
Net (Decrease) Increase
In Cash............... (227,210) 297,563 5,221,051 1,837,139 (1,463,437)
Cash at Beginning of
Period................ 280,027 52,817 350,380 350,380 5,571,431
----------- ----------- ----------- ------------- ------------
Cash at End of Period.. $ 52,817 $ 350,380 $ 5,571,431 $ 2,187,519 $ 4,107,994
=========== =========== =========== ============= ============
Supplemental Disclosure
of Cash Flow Informa-
tion:
Cash paid during the
period for inter-
est.................. $ 3,150,503 $ 3,440,685 $ 2,847,583 $ 820,383 $ 526,424
Cash paid during the
period for income
taxes................ -- -- -- -- 1,891,923
Supplemental Schedule
of Noncash Investing
and
Financing Activities:
Equipment acquired
through capitalized
lease obligations.... $ 4,379,060 $11,479,970 $ 5,784,405 $ 5,784,406 $ --
Sale of equipment in
exchange for receiv-
able ................ $ -- $ -- $ -- $ 2,211,000 $ 1,087,500
</TABLE>

The accompanying notes to consolidated financial statements are an integral
part of these consolidated financial statements.

F-6
<PAGE>

SIMON TRANSPORTATION SERVICES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) DESCRIPTION OF THE COMPANY, ACQUISITIONS, AND RECAPITALIZATION

Simon Transportation Services Inc. was incorporated in Nevada on August 15,
1995 to acquire all of the outstanding capital stock of Dick Simon Trucking,
Inc., a Utah corporation, through a transaction intended to qualify as a
transfer to a controlled corporation. The accompanying consolidated financial
statements present the consolidated financial position and results of
operations of Simon Transportation Services Inc. and Dick Simon Trucking,
Inc., its wholly owned subsidiary (collectively, the "Company"). All
intercompany accounts and transactions have been eliminated in consolidation.

The Company is a truckload carrier that specializes in premium service,
primarily through temperature-controlled transportation predominantly for
major shippers in the U.S. food industry.

R. D. Simon Trucking

Historically, the accompanying financial statements included the combined
accounts of Dick Simon Trucking, Inc. and R. D. Simon Trucking (the
"Affiliate"). The Affiliate was a sole proprietorship owned by Richard D.
Simon, the majority stockholder of the Company. The Affiliate leased tractors,
trailers and terminal and shop facilities to the Company.

On April 19, 1995, the Company entered into an exchange agreement with its
majority stockholder to acquire all of the assets and liabilities of the
Affiliate in exchange for 753,135 shares of Common Stock of the Company. In
exchange for the issuance of the common stock, the Company assumed ownership
of assets with an estimated fair value of approximately $8,500,000 and
liabilities of approximately $3,100,000.

The Company has accounted for the acquisition of the Affiliate as a
reorganization of entities under common control and, accordingly, the
financial statements for all periods presented have been adjusted to reflect
the combination of the entities at their historical bases.

Freight Sales, Inc.

In connection with the above mentioned exchange agreement, the Company also
acquired Freight Sales, Inc. ("Freight Sales"), a company owned by the adult
children of the majority stockholder of the Company, which children are also
minority stockholders of the Company. The Company issued 22,308 shares of
common stock in exchange for all of the outstanding stock of Freight Sales.

The Company has accounted for the acquisition of Freight Sales under the
purchase method of accounting and, accordingly, the acquired asset values of
$160,000 are presented in these financial statements as of the acquisition
date at their respective fair values in relation to the purchase price. No
intangible assets were recorded in this acquisition. As part of the
transaction, Freight Sales was merged into the Company and ceased to exist as
a legal entity. The Company has omitted the pro forma results of operations
required by Accounting Principles Board Opinion No. 16 because the transaction
was immaterial to the Company's consolidated financial statements.

Recapitalization

In August 1995, the Board of Directors approved a reverse stock split of
one-for-3.37 shares of common stock, and a recapitalization of the Company.
All references in the consolidated financial statements to the number of
shares of common stock have been restated to reflect this reverse stock split.

The post-recapitalization authorized capital stock for the Company consists
of 20,000,000 shares of $.01 par value Class A Common Stock with one vote per
share voting rights; 5,000,000 shares of $.01 par value

F-7
<PAGE>

SIMON TRANSPORTATION SERVICES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Class B Common Stock with two votes per share voting rights; and 5,000,000
shares $.01 par value preferred stock. In connection with this
recapitalization, the Company issued 700,000 shares of Class A and 2,850,000
shares of Class B Common Stock in exchange for all of the previously
outstanding shares of common stock. All of the Class B and 39,641 shares of
Class A Common Stock were issued to the majority stockholder of the Company.

On September 30, 1995, the Company's stockholders contributed on a pro rata
basis 272,161 shares of Class A and 977,839 shares of Class B Common Stock to
the Company. This contribution was made to reduce the number of shares of the
Company's common stock prior to its initial public offering. All contributed
shares were retired by the Company.

Immediately prior to the effective date of the Company's initial public
offering, the Company issued 427,839 shares of Class A and 1,872,161 shares of
Class B Common Stock of Simon Transportation Services Inc. to the existing
shareholders of Dick Simon Trucking, Inc. in exchange for all of the
outstanding capital stock of Dick Simon Trucking, Inc. in a transaction
intended to qualify as a transfer to a controlled corporation under Section
351 of the Internal Revenue Code. This transaction was consummated on November
17, 1995, and resulted in a capital stock structure identical to that
reflected in the accompanying September 30, 1995 consolidated balance sheet.

On November 17, 1995, the Company completed its initial public offering of
2,441,968 shares of Class A Common Stock which generated net proceeds of
$19,720,738 after deducting underwriting commissions and other expenses. A
majority of the proceeds were used to pay off certain long-term debt (see Note
4).

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expense during the
reporting period. Actual results could differ from these estimates.

Revenue Recognition and Significant Customers

Freight charges and related direct freight expenses are recognized as
revenue and operating expense when freight is delivered at a destination
point. One customer accounted for approximately 15, 19, and 18 percent of
operating revenue in fiscal years 1994, 1995, and 1996, respectively. At
September 30, 1996, the Company had accounts receivable outstanding with this
customer totaling $1,793,808. Another customer accounted for approximately 17
and 12 percent of operating revenue in fiscal years 1994 and 1995,
respectively.

Operating Supplies

Operating supplies consist primarily of tires, fuel and maintenance parts
for revenue equipment which are stated at the lower of first-in, first-out
(FIFO) cost or market value.

Property and Equipment

Property and equipment are recorded at cost and depreciated based on the
straight-line method over their estimated useful lives, taking into
consideration salvage values for purchased property and residual values for
equipment held under capitalized leases. Leasehold improvements are amortized
over the terms of the respective lease or the lives of the assets, whichever
is shorter.

F-8
<PAGE>

SIMON TRANSPORTATION SERVICES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Expenditures for routine maintenance and repairs are charged to operating
expense as incurred. Major renewals and betterments are capitalized and
depreciated over their estimated useful lives. Upon retirement or other
disposition of property and equipment, the cost and accumulated depreciation
are removed from the accounts, and any gain or loss is recorded as an
adjustment to depreciation and amortization. Net gains from the disposition of
equipment in the amounts of $229,386, $885,439, and $2,447,765 for the fiscal
years ended September 30, 1994, 1995, and 1996, respectively, have been
included in depreciation and amortization in the accompanying statements of
earnings and cash flows.

The estimated useful lives of property and equipment are as follows:

<TABLE>
<S> <C>
Revenue equipment.................. 3-7 years
Buildings and improvements......... 30 years
Office furniture and equipment..... 5-8 years
</TABLE>

Tires purchased as part of revenue equipment are capitalized as a cost of
the equipment. Replacement tires are expensed when placed in service.

Fair Value of Financial Instruments

The carrying amounts reported in the accompanying statements of financial
position for cash, accounts receivable, and accounts payable approximate fair
values because of the immediate or short-term maturities of these financial
instruments. The carrying amounts of the Company's long-term debt also
approximate fair values based on current rates for similar debt.

Insurance Coverage and Accrued Claims Payable

The Company acts as a self-insurer for auto liability, workers'
compensation, tractor physical damage, trailer physical damage, and cargo
damage claims up to $100,000, $100,000, $25,000, $10,000 and $10,000,
respectively, per single occurrence. Liability in excess of these amounts is
assumed by the insurance underwriter up to applicable policy limits. The
Company maintains loss prevention programs in an effort to minimize this risk.

The Company estimates and accrues a liability for its share of ultimate
settlements using all available information including the services of a third-
party insurance risk claims administrator to assist in establishing reserve
levels for each occurrence based on the facts and circumstances of the
occurrence coupled with the Company's past history of such claims. The Company
accrues for workers' compensation and automobile liabilities when reported,
typically the same day as the occurrence. Additionally, the Company accrues an
estimated liability for incurred but not reported claims. Expense depends upon
actual loss experience and changes in estimates of settlement amounts for open
claims which have not been fully resolved. The Company provides for adverse
loss developments in the period when new information so dictates.

The Company had outstanding letters of credit related to insurance coverage
totaling $950,000 at September 30, 1996. These letters of credit mature at
various times through November 1996 and renew annually unless terminated by
either party.

Recent Accounting Pronouncement

In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of" ("SFAS No.
121"). SFAS No. 121 is required to be adopted for fiscal years beginning after

F-9
<PAGE>

SIMON TRANSPORTATION SERVICES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

December 15, 1995, with early adoption permitted. The effect of implementing
SFAS No. 121 is not expected to be material to the Company's financial
position and results of operations when adopted.

(3) INCOME TAXES

Effective October 1, 1990, Dick Simon Trucking, Inc. elected for federal and
state income tax purposes to include its taxable earnings with that of its
stockholders (an S corporation election). Accordingly, from that date to
November 16, 1995, the Company made no provision for income taxes in its
financial statements. The Company's policy was to make distributions to its
stockholders in amounts at least equal to the stockholders' income taxes that
were attributable to the net earnings of the Company. The Company recorded
such distributions when they were declared to the stockholders.

Concurrently with the acquisition of all of the capital stock of Dick Simon
Trucking, Inc. by Simon Transportation Services Inc. (see Note 1), the S
corporation status of the Company terminated and the Company became subject to
federal and state income taxes. Upon termination of the Company's S
corporation status, the Company recognized deferred income tax assets and
liabilities in accordance with Statement of Financial Accounting Standards No.
109 ("SFAS No. 109"), "Accounting for Income Taxes." The Company recorded, in
accordance with SFAS No. 109, a net deferred income tax liability and the
related deferred income tax expense in the quarter in which the change
occurred. Additionally, in connection with the termination of the S
corporation election, the Company reclassified its retained earnings to
additional paid-in capital.

The provision for income taxes includes the following components for the
year ended September 30, 1996:

<TABLE>
<S> <C> <C>
Current tax provision:
Federal.................................................. $1,758,933
State.................................................... 442,467
---------- ---
2,201,400
---------- ---
Deferred tax provision:
Federal.................................................. 254,592
State.................................................... 18,063
Net deferred tax liability upon termination of
S corporation status.................................... 2,980,115
---------- ---
3,252,770
---------- ---
Provision for income taxes................................. $5,454,170
========== ===
</TABLE>

The following is a reconciliation between the statutory Federal income tax
rate of 34 percent and the effective rate which is derived by dividing the
provision for income taxes by earnings before provision for income taxes:

<TABLE>
<S> <C> <C>
Computed "expected" provision for income taxes
at the statutory rate.................................... $2,177,053
Increase (decrease) in income taxes resulting from:
Net deferred tax liability upon termination of
S corporation status................................. 2,980,115
State income taxes, net of federal income tax benefit.. 303,950
Other, net............................................. (6,948)
---------- ---
Provision for income taxes................................. $5,454,170
========== ===
</TABLE>

F-10
<PAGE>

SIMON TRANSPORTATION SERVICES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The components of the net deferred income tax liability as of November 17,
1995 and September 30, 1996, (the date the S corporation status terminated)
are as follows:

<TABLE>
<CAPTION>
NOVEMBER 17, SEPTEMBER 30,
1995 1996
------------ -------------
<S> <C> <C> <C>
Deferred income tax assets:
Claims reserve........................ $ 292,435 $ 423,768
Other reserves and accruals........... 78,877 204,115
----------- ----------- ---
Total deferred income tax assets........ 371,312 627,883
Deferred income tax liability:
Difference between book and tax basis
of property and equipment............ (3,351,427) (3,880,653)
----------- ----------- ---
Net deferred income tax liability....... $(2,980,115) $(3,252,770)
=========== =========== ===
</TABLE>

(4) LONG-TERM DEBT

Long-term debt consists of the following and the construction loan discussed
in Note 5:

<TABLE>
<CAPTION>
SEPTEMBER 30,
------------------------
1995 1996
----------- -----------
<S> <C> <C>
Notes payable to a bank, interest ranging from 6.24
percent to 7.20 percent, payable in monthly
installments through April 2001, secured by revenue
equipment.......................................... $ -- $12,331,568
Note payable to a bank, interest at LIBOR plus 1.1
percent (6.48 percent at September 30, 1996),
payable in monthly installments through May 2001,
secured by revenue equipment....................... -- 1,816,874
Notes payable to a finance company, interest ranging
from LIBOR plus 1.75 to 2.75 percent (7.53 to 8.53
percent at September 30, 1995), secured by revenue
equipment and land, paid in full during fiscal year
1996............................................... 4,310,763 --
Notes payable to a finance company, interest at a
variable rate based on the
30-day commercial paper rate plus 2.75 percent (8.7
percent at September 30, 1995), secured by revenue
equipment, paid in full during fiscal year 1996.... 2,571,969 --
Notes payable to a bank, interest ranging from prime
plus .75 to 1 percent (9.50 to 9.75 percent at
September 30, 1995), secured by land and buildings,
paid in full during fiscal year 1996............... 1,395,846 --
Notes payable to a finance company, interest at
prime plus .35 percent (9.10 percent at September
30, 1995), secured by revenue equipment, paid in
full during fiscal year 1996....................... 1,039,181 --
Notes payable to a bank, interest ranging from prime
plus .25 to .75 percent (9 to 9.5 percent at
September 30, 1995), secured by revenue equipment,
office equipment and land, paid in full during
fiscal year 1996................................... 1,037,671 --
Notes payable to a bank, interest rates ranging from
7.20 to 8.25 percent, payable in monthly
installments through October 1996, secured by
revenue equipment.................................. 416,258 7,126
Line-of-credit totaling $7,500,000 at September 30,
1995, interest at LIBOR plus 2 percent (7.78
percent at September 30, 1995) secured by accounts
receivable, paid in full during fiscal year 1996... 4,279,470 --
Other............................................... 662,547 --
----------- -----------
15,713,705 14,155,568
Less current portion................................ (8,577,770) (2,892,300)
----------- -----------
$ 7,135,935 $11,263,268
=========== ===========
</TABLE>

F-11
<PAGE>

SIMON TRANSPORTATION SERVICES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Scheduled principal payments of long-term debt are as follows:

(5) CONSTRUCTION LOAN AND LINE OF CREDIT

The Company has entered into a construction loan agreement with a bank to
finance the construction of a new headquarters, shop, terminal and driver
recruitment and orientation center. The agreement provides a $10 million
credit facility that will convert to a term loan upon completion of the
facility. Until construction is completed, no payments are due and all accrued
interest is added to the loan balance. As of September 30, 1996, and December
31, 1996, the Company had borrowed $4,169,877 and $6,798,560 (unaudited),
respectively, under the agreement.

The construction loan contains various restrictive covenants including
maximum debt to tangible net worth and minimum tangible net worth
requirements. As of September 30, 1996, the Company was in compliance with all
covenants under the construction loan agreement.

The Company has an unsecured line of credit for $5,000,000. As of September
30, 1996, and December 31, 1996, the Company had not drawn on this line of
credit.

(6) CAPITALIZED LEASE OBLIGATIONS

Certain revenue equipment is leased under capitalized lease obligations. The
following is a summary of assets held under capital lease agreements:

<TABLE>
<CAPTION>
SEPTEMBER 30,
-------------------------
1995 1996
------------ -----------
<S> <C> <C>
Revenue equipment................................ $ 48,678,031 $28,823,541
Less accumulated amortization.................... (14,433,957) (7,313,862)
------------ -----------
$ 34,244,074 $21,509,679
============ ===========
</TABLE>

The following is a schedule by year of future minimum lease payments under
capitalized leases together with the present value of the minimum lease
payments at September 30, 1996:

<TABLE>
<CAPTION>
YEARS ENDING SEPTEMBER 30, AMOUNT
-------------------------- -----------
<S> <C>
1997........................................................... $ 4,869,050
1998........................................................... 8,195,453
1999........................................................... 3,340,570
2000........................................................... 3,463,770
2001........................................................... 1,843,795
-----------
Total minimum lease payments..................................... 21,712,638
Less amount representing interest................................ (2,610,094)
-----------
Present value of minimum lease payments.......................... 19,102,544
Less current portion............................................. (3,760,251)
-----------
$15,342,293
===========
</TABLE>

F-12
<PAGE>

SIMON TRANSPORTATION SERVICES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(7) COMMITMENTS

Operating Leases

The Company is committed under noncancelable operating leases involving
certain revenue equipment. Rent expense for noncancelable operating leases was
$3,153,238, $2,562,440, and $3,997,352 for fiscal years 1994, 1995, and 1996,
respectively. Aggregate future lease commitments are $11,483,479, $11,406,441,
$8,359,297, $2,548,065 and $2,153,511 for the years ending September 30, 1997,
1998, 1999, 2000 and 2001, respectively.

Orders for Revenue Equipment

As of September 30, 1996, the Company had placed orders for fiscal years
1997 and 1998 to purchase revenue equipment at an estimated total purchase
price of $77,000,000. The revenue equipment is to be delivered during fiscal
years 1997 and 1998. Approximately $21,000,000 of the new revenue equipment
will be used to replace older revenue equipment and the balance represents
incremental additions to the Company's fleet. These orders may be canceled by
the Company without penalty upon written notification any time prior to 85
days before the revenue equipment's scheduled delivery.

(8) STOCK PLANS

Incentive Stock Plan

On May 31, 1995, the Board of Directors and stockholders approved and
adopted the Dick Simon Trucking, Inc. Incentive Stock Plan (the "Plan"). The
Plan originally reserved 400,000 shares of Class A Common Stock for issuance
thereunder and approximately 2,000 of such shares have been issued pursuant to
option exercises. The Board of Directors or its designated committee
administers the Plan and has the discretion to determine the employees and
officers who will receive awards, the type of awards (incentive stock options,
non-statutory stock options, restricted stock awards, reload options, other
stock based awards, and other benefits) to be granted and the term, vesting
provisions and exercise prices.

Outside Director Stock Plan

On August 16, 1995, the Company adopted an Outside Director Stock Plan,
under which each director who is not an employee of the Company will receive
an annual option to purchase 1,000 shares of the Company's Class A Common
Stock at 85% of the market price at the end of the month immediately preceding
the grant date, except for 1995, in which the exercise price was $9.00. The
Company originally reserved 25,000 shares of Class A Common Stock for issuance
under the Outside Director Stock Plan and 1,000 of such shares have been
issued pursuant to exercise of an option.

The following table summarizes the combined stock option activity for both
plans from inception of the plans through December 31, 1996:

<TABLE>
<CAPTION>
NUMBER OF OPTIONS PRICE PER SHARE
----------------- ---------------
<S> <C> <C>
Outstanding at September 30, 1994..... -- --
Granted............................. 230,900 $ 9.00
------- -------------
Outstanding at September 30, 1995..... 230,900 $ 9.00
Granted............................. 3,000 $ 9.00
Exercised........................... (700) $ 9.00
Forfeited........................... (5,500) $ 9.00
------- -------------
Outstanding at September 30, 1996..... 227,700 $ 9.00
Granted (unaudited)................. 141,000 $13.18-$16.00
Exercised (unaudited)............... (2,250) $ 9.00
Forfeited (unaudited)............... (4,300) $ 9.00
------- -------------
Outstanding at December 31, 1996
(unaudited).......................... 362,150 $ 9.00-$16.00
======= =============
</TABLE>

F-13
<PAGE>

SIMON TRANSPORTATION SERVICES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

As of December 31, 1996, approximately 42,450 (unaudited) options are
exercisable.

Executive Bonuses

On May 3, 1996, the Board of Directors approved an executive bonus program
whereby 5 percent of earnings before provision for income taxes will be
distributed to executive officers as bonuses. The executive bonus program will
be effective beginning in fiscal year 1997.

(9) RELATED PARTY TRANSACTIONS

Historically the Company maintained life insurance policies on certain
officers (other than Richard D. Simon) and an employee. The Company was named
as the beneficiary under each of the policies. The cash surrender value for
each policy accrued to the insured officer or employee. During February 1995,
the Company canceled the policies and issued notes payable totaling $475,000
to the insured individuals for the amount of the cash surrender value of the
policies. During April 1995, the Company issued 66,225 shares of common stock
to these individuals as satisfaction of the notes payable.

During fiscal years 1994 and 1995 the Company paid lease payments of $90,000
and $30,000, respectively, to Freight Sales.

Prior to the reorganization described in Note 1, the Company leased certain
real estate and revenue equipment from the Affiliate. During fiscal years 1994
and 1995, the Company paid rent of approximately $912,000 and $532,000 to the
Affiliate. All such amounts have been eliminated in the accompanying
consolidated financial statements because of related ownership and the single
purpose of the entities.

(10) EMPLOYEE BENEFIT PLAN

The Company has adopted a defined contribution plan, the Dick Simon
Trucking, Inc. 401(k) Profit Sharing Plan (the "401(k) Plan"). All employees
who have completed one year of service and have reached age 21 are eligible to
participate in the 401(k) Plan. Newly eligible employees may first begin
participating in the 401(k) Plan on the earlier of January 1 or July 1 after
meeting the eligibility requirements. Under the 401(k) Plan, employees are
allowed to make contributions of up to 15 percent of their annual
compensation; the Company may make matching contributions equal to a
discretionary percentage, to be determined by the Company, of the employee's
salary reductions. The Company may also make additional discretionary
contributions to the 401(k) Plan. All amounts contributed by a participant are
fully vested at all times. The participant becomes 20 percent vested in any
matching or discretionary contributions after two years of service. This
vesting percentage increases to 100 percent after six years of service. During
fiscal years 1994, 1995, and 1996, the Company contributed $94,500, $141,240,
and $192,389, respectively, to the 401(k) Plan.

(11) PRO FORMA INFORMATION (UNAUDITED)

Pro Forma Provision for Income Taxes

Contemporaneously with the November 17, 1995 effective date of the Company's
initial public offering, the S corporation stockholders terminated their S
corporation election. Accordingly, the pro forma provision for income taxes
has been determined in accordance with SFAS No. 109, assuming the Company had
been taxed as a C corporation for federal and state income tax purposes using
an effective income tax rate of 39.6 percent. The pro forma provision for
income taxes does not reflect the $2,980,115 charge to earnings for deferred
taxes the Company recorded upon termination of its S corporation status.

F-14
<PAGE>

SIMON TRANSPORTATION SERVICES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONCLUDED)

Pro Forma Net Earnings Per Common Share and Weighted Average Common Shares
Outstanding

As discussed in Note 1, in 1995, the Company recapitalized its capital
stock. Accordingly, the historical presentation of net earnings per common
share would not present a meaningful comparison due to the recapitalization.
However, pro forma net earnings per common share is reflected in the
accompanying consolidated financial statements in order to present net
earnings per common share as if the recapitalization, contribution of Common
Stock, and all Common Stock issuances through September 30, 1995 had been
effective for all periods presented.

F-15
<PAGE>

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NO DEALER, SALESPERSON, OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFOR-
MATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PRO-
SPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OF THE UNDERWRIT-
ERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF
ANY OFFER TO BUY ANY SECURITY OTHER THAN THE COMMON STOCK BY ANYONE IN ANY JU-
RISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY OFFER OR SALE MADE HEREUNDER SHALL, UN-
DER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.

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TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary....................................................... 3
Cautionary Statement Regarding Forward-Looking Statements................ 6
Risk Factors............................................................. 6
Holding Company Formation................................................ 10
Dividend Policy.......................................................... 11
Use of Proceeds.......................................................... 11
Price Range of Common Stock.............................................. 11
Capitalization........................................................... 12
Selected Consolidated Financial and Operating Data....................... 13
Management's Discussion And Analysis of Financial Condition And Results
of Operations........................................................... 15
Selected Quarterly Financial Data........................................ 21
Industry Overview........................................................ 22
Business................................................................. 23
Management............................................................... 29
Certain Transactions..................................................... 34
Principal and Selling Stockholders....................................... 35
Description of Capital Stock............................................. 36
Shares Eligible For Future Sale.......................................... 39
Underwriting............................................................. 40
Legal Matters............................................................ 41
Experts.................................................................. 41
Index to Consolidated Financial Statements............................... F-1
</TABLE>

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2,200,000 SHARES

LOGO

SIMON TRANSPORTATION
SERVICES INC.

CLASS A COMMON STOCK

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PROSPECTUS

---------------

MORGAN KEEGAN & COMPANY, INC.

A.G. EDWARDS & SONS, INC.

GEORGE K. BAUM & COMPANY

FEBRUARY 13, 1997

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