SCHEDULE 14A
(Rule 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
[X] Filed by the Registrant
[ ] Filed by a Party other than the Registrant
Check the appropriate box:
[X] Preliminary Proxy Statement (Revocation of Consent)
[ ] Confidential, for use of the Commission only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
SIMON TRANSPORTATION SERVICES INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0- 11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
REVOCATION OF CONSENT STATEMENT
BY THE BOARD OF DIRECTORS OF SIMON TRANSPORTATION SERVICES INC.
IN OPPOSITION TO THE SOLICITATION OF CONSENTS BY JERRY MOYES
The Board of Directors (the "Board") of Simon Transportation Services
Inc., a Nevada corporation (the "Company" or "Simon"), is furnishing this
Revocation of Consent Statement and the accompanying BLUE Revocation of Consent
Card to the holders of the outstanding shares of the Company's Common Stock in
opposition to the solicitation by Jerry Moyes of written consents from the
Company's stockholders.
As you know, on May 23, 2000, Mr. Moyes initiated a formal tender offer
to purchase all outstanding shares of the Company's Class A and Class B Common
Stock at a price of $7.00 per share. As more fully described in a letter from
Richard D. Simon to stockholders dated May 26, 2000, the Board has elected to
remain neutral with respect to the tender offer but Mr. Simon and other members
of the Company's management have indicated that they do not intend to tender any
of their shares to Mr. Moyes. The Board continues to remain neutral with respect
to the tender offer.
Without notifying the Company in advance, however, Mr. Moyes
simultaneously commenced a consent solicitation in an effort to take control of
your duly elected Board of Directors. Accordingly, a consent in favor of Mr.
Moyes' proposals is a consent to turn over control of your Board to Mr. Moyes.
The Board is strongly opposed to Mr. Moyes' hostile consent
solicitation because it violates the good faith in which the Board cooperated
with Mr. Moyes in the tender offer and, more importantly, could give Mr. Moyes
effective control of the Company without his having paid for it.
Your Board unanimously opposes Mr. Moyes' consent solicitation and
urges you to discard any white consent cards sent to you by Mr. Moyes.
If you have previously signed and returned a white consent card to Mr.
Moyes, you have every right to change your mind. The board urges you to sign,
date and mail the enclosed BLUE Revocation of Consent Card in the postage-paid
envelope provided.
Even if you have not previously signed and returned a white consent
card to Mr. Moyes, you may still send a BLUE Revocation of Consent Card to the
Company, which will have no legal effect but will assist us in monitoring the
progress of the consent solicitation.
If your shares are held in the name of a bank, broker or other nominee,
only your bank, broker or other nominee can execute a Revocation of Consent for
your shares, and only pursuant to your specific instructions. Accordingly, you
are urged to reject Mr. Moyes' consent solicitation by signing, dating and
returning the enclosed BLUE Revocation of Consent Card promptly, and giving
written instructions to the person responsible for your account to return a BLUE
Revocation of Consent Card on your behalf.
If you have any questions or require any assistance in executing your
Revocation of Consent, please contact:
Georgeson Shareholder Communications Inc.
17 State Street, 10th Floor
New York, New York 10004
Call Toll Free: (800) 223-2064
This Revocation of Consent Statement and the enclosed BLUE Revocation
of Consent Card are first being mailed to stockholders on or about June 20,
2000.
<PAGE>
REASONS YOUR BOARD OPPOSES MR. MOYES' CONSENT SOLICITATION
Mr. Moyes is soliciting consents in favor of three separate proposals
(the "Moyes Solicitation"), which are described under "The Moyes Proposals" on
page 11. Each of Mr. Moyes' proposals is designed to enable Mr. Moyes to take
control of your Board of Directors. Your Board is strongly opposed to the Moyes
Solicitation and urges you not to sign any white consent card sent to you by
Mr. Moyes.
Mr. Moyes Is Attempting To Gain Control Without Paying For It
Mr. Moyes is attempting to gain control of the Company through the
consent solicitation process without paying you any control premium. Although
you do not have the right to receive a control premium simply by virtue of
owning your stock, the Board believes the payment of a control premium would be
appropriate in a transaction to acquire control of the Company. Mr. Moyes states
in his consent solicitation documents that the purpose of the consent is to
enable him to complete the tender offer. We believe that this statement is
disingenuous. We believe that the consent solicitation serves as a way for Mr.
Moyes to take over the Company without any further investment. We have three
primary reasons for these beliefs:
o Mr. Moyes' consent solicitation does not materially increase the
possibility that the tender offer will be successful. The Board has
already waived the application of two Nevada anti-takeover statutes
that otherwise may have prevented Mr. Moyes from successfully
completing the tender offer, announced that it will not stand in
the way of Mr. Moyes' tender offer and otherwise cooperated with
Mr. Moyes.
o Mr. Moyes has placed numerous and significant conditions precedent
on the tender offer, which enable him to refuse to purchase
tendered shares even if shares holding a majority of the voting
power are tendered.
o After Mr. Moyes filed his consent documents, the Board proposed an
agreement with Mr. Moyes whereby the Board would be restructured to
give Mr. Moyes control of the Board if the tender offer is
successful, in return for Mr. Moyes' withdrawal of the consent
solicitation. Mr. Moyes, however, would not agree to these terms,
which indicates to the Board that Mr. Moyes' true intent behind the
consent solicitation is to take control of the Company regardless
of the success of the tender offer.
The Board Has Been Elected By an Overwhelming Majority, Including By Mr. Moyes
The Board that Mr. Moyes seeks to remove was overwhelmingly elected at
the past three annual meetings by 94.5% to 99.5% of the voting stockholders of
the Company. Since he first began to accumulate shares, Mr. Moyes has voted for
the current Board, including most recently in February of 2000. No stockholder
voted against any Board member at the February 2000 annual meeting.
Mr. Moyes Has Not Articulated Any Specific Plans as to How He Will Maximize
Stockholder Value
Mr. Moyes has not articulated any specific plans as to how he will
maximize stockholder value. In contrast, the Company, under the direction of the
Board, has lowered its operating ratio over the last four quarters by a total of
6.5 points. We achieved a record average haul in March of 2000, over 1,100 miles
per load, generating 10,533 miles per seated truck. The Company also returned to
profitability during the first quarter of 2000, which we believe is a
significant achievement, given that the first quarter is usually the least
profitable of the Company's fiscal year. The average number of unseated trucks
has decreased significantly, with only 14 unseated trucks out of 1,892 active
trucks as of June 7, 2000. In addition, deadhead has decreased, and pricing on
new equipment has been locked in, with advantageous trades for the next two
years. By August of this year, our debt on the terminal facilities in West
Valley City, Utah and Atlanta, Georgia will be paid, and all Company properties
will be debt free. Our management is very optimistic and we believe the Company
has a bright future. Now is not the time to interrupt the work of current
management, especially considering that Mr. Moyes has not provided you with any
specific strategies for maximizing shareholder value. Your Board appreciates the
support it has received from you and remains committed to the Company's
long-term strategic goals and to the enhancement of stockholder value.
<PAGE>
Key Customer and Employee Relations Will Be Damaged by a Takeover
The Board believes that if the Moyes Solicitation is successful, the
Company's relationships with key customers and employees may be irreparably
damaged. A number of the Company's key customers have expressed significant
concerns regarding the disruption that a hostile consent solicitation will have
on their business relationships with the Company. Additionally, several of the
Company's key managers have told the Board they will resign if Mr. Moyes'
consent solicitation is successful.
CONSENT PROCEDURE
The record date for determination of the stockholders of the Company
entitled to execute, withhold or revoke consents relating to the Moyes
Solicitation is May 23, 2000 (the "Record Date"). Under Nevada law and the
Bylaws of the Company, in order for the Moyes Solicitation to succeed, Mr. Moyes
must obtain unrevoked consents to each of his proposals from the holders of
record of a number of shares of Common Stock representing a majority of the
total voting power of all outstanding shares on the Record Date. Thus, an
abstention from voting or a broker non-vote will have the practical effect of a
vote against the Moyes Solicitation. A stockholder may revoke any previously
signed consent by signing, dating and returning a BLUE Revocation of Consent
Card in the form attached hereto. Even if you have not returned a white consent
solicitation card to Mr. Moyes, the Company urges you to return the BLUE
Revocation of Consent Card, which, while it will have no legal effect, will
assist the Company in monitoring the opposition to the Moyes Solicitation. Under
the terms of the Moyes Solicitation, consents must be delivered to the Company
on or before July 19, 2000 in order to be effective.
As of the Record Date, there were 5,196,358 shares of Class A Common
Stock and 913,751 shares of Class B Common Stock outstanding and eligible to
vote. Each share of Class A Common Stock is entitled to one vote, and each share
of Class B Common Stock is entitled to two votes so long as the holder is
Richard D. Simon, Valene Simon, Kelle A. Simon, Lyn Simon, Sherry L. Bokovoy, or
Richard D. Simon, Jr. (the "Founders"), any trust for the benefit of one or more
of the Founders or any entity that is 100% owned by the Founders. If any Class B
Common Stock ceases to be owned by one of the foregoing persons or entities,
such stock is automatically converted into Class A Common Stock and is entitled
to one vote per share.
You have the right to revoke any consent you may have previously given
to Mr. Moyes. To do so, you need only sign, date and return in the enclosed
postage-paid envelope the BLUE Revocation of Consent Card attached hereto. If
you do not indicate a specific vote on the BLUE Revocation of Consent Card, the
card will be used in accordance with the Board's recommendation to revoke any
consent given with respect to the Moyes Solicitation. If you have not signed a
consent from Mr. Moyes, we urge you to show your opposition to the Moyes
Solicitation by signing, dating and returning the enclosed BLUE Revocation of
Consent Card. This will enable the Company to keep track of how many
stockholders oppose the Moyes Solicitation.
If your shares are held in the name of a brokerage firm, bank nominee
other institution, only that entity can execute a Revocation of Consent with
respect to your shares. You must provide written instructions to the person
responsible for your account instructing him or her to vote a BLUE Revocation of
Consent Card on your behalf. We urge you to confirm in writing your instructions
to the person responsible for your account and to provide a copy of those
instructions to the Company in care of Georgeson at the address set forth above
so that the Company can insure that such instructions are followed. You may also
revoke your consent by delivering to Mr. Moyes or his designated agent a written
Revocation of Consent or a later-dated consent covering the same shares. Any
consent revocation may itself be revoked by signing, dating and returning to the
Company a subsequently dated white consent card sent to you by Mr. Moyes, or by
delivery of a written revocation of such consent revocation to the Company.
The Company has retained Georgeson Shareholder Communications Inc.
("Georgeson") to assist in communicating with stockholders in connection with
the Moyes Solicitation and to assist in our efforts to obtain consent
revocations. If you have any questions about how to complete or submit your BLUE
Revocation of Consent Card or any other questions, Georgeson will be pleased to
assist you. You may call Georgeson toll-free at (800) 223-2064. Banks and
brokers should call collect at (212) 440-9800.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS,
DIRECTORS AND OFFICERS OF THE COMPANY
The following table sets forth the number of shares of each class of
stock of the Company beneficially owned as of June 9, 2000 by each director, the
chief executive officer, the four most highly compensated executive officers
other than the Chief Executive Officer, each person then known by the Company to
be the beneficial owner of more than 5% of the Company's outstanding Class A
Common Shares, and by all current directors and executive officers of the
Company as a group.
<TABLE>
<S> <C> <C> <C> <C>
Amount & Nature
of Beneficial Percent of
Name of Beneficial Owner(1) Ownership (2) Title of Class Percent of Class Total Shares(3)
-------------------------------------------------------------------------------------------------------------------------
Richard D. Simon + 10,000 Class A Common * *
Richard D. Simon (4) 913,751 Class B Common 100.0% 15.0%
Alban B. Lang + 122,837 Class A Common 2.3% 2.0%
Kelle A. Simon + 137,777 Class A Common 2.6% 2.2%
Lyn Simon + 132,248 Class A Common 2.5% 2.1%
Richard D. Simon, Jr. + 130,995 Class A Common 2.5% 2.1%
Sherry L. Bokovoy + 123,338 Class A Common 2.3% 2.0%
Gus E. Paulos + -- Class A Common -- --
Don L. Skaggs + 55,000 Class A Common 1.1% *
Irene Warr + 4,700 Class A Common * *
Jerry Moyes (5) 657,650 Class A Common 12.7% 10.8%
SME Steel 300,000 Class A Common 5.8% 4.9%
Contractors, Inc. (5)
Dimensional Fund 337,600 Class A Common 6.5% 5.5%
Advisors Inc.
Wynnefield Capital 330,500 Class A Common 6.4% 5.4%
Management
Capital Research and 300,000 Class A Common 5.8% 4.9%
Management Company
All directors and 1,630,646 (6) Class A & Class B N/A 25.2%
executive officers Common
as a group (9 persons)
--------------------------------
<FN>
+ Deemed to be a "participant" in this solicitation under the applicable rules
of the Securities and Exchange Commission.
* Less than one percent.
(1) The business address of Richard D. Simon, Kelle A. Simon, Alban B. Lang,
Lyn Simon, Richard D. Simon, Jr., Sherry L. Bokovoy, and Irene Warr is
P.O. Box 26297, Salt Lake City, Utah 84126-0297. The business address of
Gus E. Paulos is 4050 West 3500 South, West Valley City, Utah 84120. The
business address of Don L. Skaggs is 3828 South Main Street, Salt Lake
City, Utah 84115. The business address of Jerry Moyes is 2200 South 75th
Avenue, Phoenix, Arizona 85043. The address of SME Steel Contractors, Inc.
is 5955 West Wells Park Road, West Jordan, Utah 84088. The address of
Dimensional Fund Advisors Inc. is 1299 Ocean Avenue, 11th Floor, Santa
Monica, California 90401-1038. The address of Wynnefield Capital Management
is One Penn Plaza, Suite 4720, New York, New York 10119. The address of
Capital Research and Management Company is 333 South Hope Street, Los
Angeles, California 90071.
(2) In accordance with applicable rules under the Securities Exchange Act of
1934, as amended, the number of shares beneficially owned includes 69,200
Class A Common Shares underlying options to purchase granted to each of
Alban B. Lang, Kelle A. Simon, Lyn Simon, Richard D. Simon, Jr., and Sherry
L. Bokovoy (the "Optionees") that were, at June 9, 2000, either currently
exercisable or were scheduled to become exercisable within 60 days of June
9, 2000. The 55,800 remaining shares underlying options granted to the
Optionees that were not scheduled to become exercisable within 60 days of
June 9, 2000 are excluded. The options have exercise prices ranging from
$9.00 to $23.38 per share. The shares owned also include an aggregate
23,156 shares of Class A Common Shares held in the Company's 401(k) Plan on
behalf of Alban B. Lang (9,378 shares), Lyn Simon (11,205 shares), and
Sherry L. Bokovoy (2,573 shares). The total shares include 3,000 Class A
Common Shares underlying stock options granted to Irene Warr that are
currently exercisable or were scheduled to become exercisable within 60
days of June 9, 2000. Unless otherwise indicated all shares are owned
directly.
<PAGE>
(3) Percentage based on 5,196,358 Class A and 913,751 Class B Common Shares
outstanding and includes for purposes of this chart only the vested portion
of options granted under the Company's Incentive Stock Plan and Outside
Director Stock Plan.
(4) 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 Shares are
entitled to two votes per share, Mr. Simon, as Trustee, controls 24.9% of
the combined voting power of the Shares. Richard D. Simon filed a Form 13G
with the Commission on February 10, 2000.
(5) Includes 60,500 Class A Shares held by Jerry Moyes; 297,150 Class A Common
Shares held by The Jerry & Vickie Moyes Family Trust Dated 12/11/87, of
which Jerry Moyes and his wife, Vickie L. Moyes, are co-trustees; and
300,000 Class A Common Shares held by SME Steel Contractors, Inc., the
beneficial ownership of which may be attributable to Mr. Moyes under
applicable rules of the Commission. Mr. Moyes owns approximately 75% of the
outstanding voting stock of the parent corporation of SME Steel
Contractors, Inc.
(6) Includes approximately 349,000 shares underlying exercisable stock options
with exercise prices ranging from $9.00 to $23.38 per share.
</FN>
</TABLE>
INFORMATION ABOUT THE BOARD OF DIRECTORS AND EXECUTIVE OFFICERS OF SIMON
Information concerning the names, ages, positions with the Company,
tenure as director, and business experience of the Company's executive officers
and directors is set forth below. All references to experience with the Company
include positions with the Company's operating subsidiary, Dick Simon Trucking,
Inc., a Utah corporation. Richard D. Simon is the father of Kelle A. Simon, Lyn
Simon, Sherry L. Bokovoy, and Richard D. Simon, Jr.
<TABLE>
<S> <C> <C> <C>
Name Age Position(s) with Simon Tenure as Director
----------------------------- ------- ---------------------------- ------------------------------------
Richard D. Simon(1) 64 Chairman of the Board, 1972-Present (Class III)
Chief Executive Officer
and Director
Kelle A. Simon 39 President and Director 1997-Present (Class III)
Alban B. Lang 53 Chief Financial Officer, 1988-Present (Class I)
Treasurer, Secretary and
Director
Lyn Simon 36 Vice President of Sales 1997-Present (Class I)
and Marketing and Director
Richard D. Simon, Jr. 28 Vice President of 1997-Present (Class I)
Operations and Director
Sherry L. Bokovoy 31 Vice President of Human 1997-Present (Class II)
Resources and Director
Gus E. Paulos(1) (2) 58 Director 1999-Present (Class III)
Don L. Skaggs(2) 44 Director February 4, 2000-Present (Class II)
Irene Warr(2) 68 Director 1995-Present (Class II)
--------------------------------------
<FN>
(1) Member of the Compensation Committee
(2) Member of the Audit Committee
</FN>
</TABLE>
Richard D. Simon. Richard D. Simon founded the Company in 1955 and has served
as its Chairman of the Board and Chief Executive Officer since its incorporation
in 1972. Mr. Simon served as the Company's President from 1972 until April 2000.
<PAGE>
Kelle A. Simon. Kelle A. Simon has served as the Company's President since
April 2000. From 1992 until April 2000, he served as Vice President of
Maintenance and Fleet Purchasing. He served as Maintenance Director from 1986
to 1992.
Alban B. Lang. Alban B. Lang has served as Chief Financial Officer, Treasurer,
and Secretary since 1992. He served as Chief Operating Officer from March 1999
to April 2000. From 1987 to 1992, he served as controller. 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.
Lyn Simon. Lyn Simon has served as Vice President of Sales and Marketing since
1986. From July 1998 to February 1999, he also served as Vice President of
Operations. Prior to this 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 after joining the Company in 1984.
Richard D. Simon, Jr. Richard D. Simon, Jr. was reappointed Vice President
of Operations in February 1999. He previously served in this position from 1992
until July 1998. From July 1998 to February 1999, Mr. Simon served as the
Company's Vice President of Driver Relations. He served as Vice President of
Operations from 1992 to 1998, and as a dispatcher and customer service
representative after joining the Company in 1990.
Sherry L. Bokovoy. Sherry L. Bokovoy was appointed Vice President of Human
Resources on April 2000. She also continues to serve as Assistant
Secretary/Treasurer, as she has done since 1994. Since joining the Company in
1987, she has held numerous positions within the Company, including supervising
administrative and maintenance payrolls, the employee stock purchase program,
and the Company store.
Gus E. Paulos. Gus E. Paulos has served as the President of Gus Paulos Chevrolet
since 1980. Mr. Paulos has served as President of the Western Region Advertising
Association for Chevrolet Motor Corporation for the past six years.
Don L. Skaggs. Don L. Skaggs has served as the President of Skaggs Co. Inc.
since 1997. Prior to this time, Mr. Skaggs served as President of Skaggs
Telecommunication Service, a subsidiary of American Stores Co. from 1980
through 1997. Skaggs Co. Inc. is a privately held manufacturer and distributor
of law enforcement communication equipment and clothing.
Irene Warr. 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.
BOARD MEETINGS AND COMPENSATION
Board of Directors. During the fiscal year ended September 30, 1999, the Board
of Directors of the Company met on four occasions. All directors attended the
meetings of the Board of Directors and all of the meetings held by committees of
the Board on which they served. 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.
Compensation Committee. The Compensation Committee of the Board of Directors met
once during fiscal year 1999, and all members were present at such meeting. 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 Report of the Compensation Committee for fiscal year 1999 is set
forth below. See "Compensation Committee Report on Executive Compensation."
<PAGE>
Audit Committee. The Audit Committee met once during fiscal year 1999, and all
members were present at such meeting. The Audit Committee makes recommendations
to the Board 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.
Nominating Committee. The Board does not maintain a standing nominating
committee or other committee performing similar functions.
Compensation Committee Interlocks and Insider Participation. Ms. Warr served
on the Compensation Committee from the Company's initial public offering
on November 17, 1995 until the most recent Annual Meeting. She is not an
officer or employee of the Company. During the 1999 fiscal year, the Company
paid Ms. Warr $30,000 annually ($2,500 per month), provided her health insurance
coverage at a cost to the Company of $130 per month, and provided an office at
the Company's headquarters as compensation for legal services. Ms. Warr has
served as counsel to Richard D. Simon since 1962 and the Company since its
incorporation in 1972. Richard D. Simon serves on the Compensation Committee,
and he is the father of Kelle A. Simon, Lyn Simon, Sherry L. Bokovoy, and
Richard D. Simon, Jr. The Board of Directors elected Mr. Paulos to replace
Ms. Warr on the Compensation Committee following the Annual Meeting. During
the 1999 fiscal year, the Company purchased $93,257 of vehicles from Gus
Paulos Chevrolet in arms-length transactions.
EXECUTIVE COMPENSATION
The following table sets forth, for the three most recent fiscal years
of the Company, the compensation paid to the chief executive officer and the
four other named executive officers of the company (the "Named Officers").
<TABLE>
<CAPTION>
Annual Compensation Awards Payouts Long-Term Compensation
-------------------------------------- ------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Other Restricted
Annual Stock Options/ LTIP All Other
Name and Principal Salary Bonus Compensation Awards SARs Payouts Compensation
Position Year ($) ($) ($) ($) (#) ($) ($)(1)
--------------------------------------- --------- ---------------- ----------------------- ---------- -----------------
Richard D. Simon, 1999 $348,400 0 0 0 0 0 2,803
Chairman and CEO 1998 $348,400 0 0 0 0 0 2,803
1997 $348,400 $163,750 0 0 0 0 2,803
Kelle A. Simon, 1999 $156,000 0 0 0 0 0 2,803
President 1998 $156,000 0 0 0 75,000 0 2,803
1997 $156,000 $98,250 0 0 27,000 0 2,803
Alban B. Lang, 1999 $156,000 0 0 0 0 0 2,803
CFO, Treasurer, and 1998 $156,000 0 0 0 75,000 0 2,803
Secretary 1997 $156,000 $98,250 0 0 27,000 0 2,803
Lyn Simon, Vice 1999 $156,000 0 0 0 0 0 2,803
President of Sales 1998 $156,000 0 0 0 75,000 0 2,803
and Marketing 1997 $156,000 $98,250 0 0 27,000 0 2,803
Richard D. Simon, 1999 $156,000 0 0 0 0 0 2,803
Jr., Vice President 1998 $156,000 0 0 0 75,000 0 2,803
of Operations 1997 $156,000 $98,250 0 0 27,000 0 2,803
<FN>
(1) Represents the amount of Company-paid health benefits.
</FN>
</TABLE>
<PAGE>
Option Grants in Last Fiscal Year. The Company did not grant options to purchase
shares of Class A Common Stock to any of the Named Officers during the fiscal
year ended September 30, 1999.
Aggregated Option Exercises in the Last Fiscal Year and Year End Option Values.
The following table sets forth the number of unexercised options to acquire
shares of Class A Common Stock held on September 30, 1999 and the aggregate
value of such options held by the Named Officers. The Named Officers did not
exercise options to acquire shares of Class A Common Stock during fiscal year
1999. As of September 30, 1999, the Company had not granted any stock
appreciation rights to any of the Named Officers.
<TABLE>
<CAPTION>
Number of Value of Unexercised
Unexercised Options In-the Money Options at September
at September 30, 1999 30, 1999
----------------------------------- -----------------------------------
<S> <C> <C> <C> <C>
Name Exercisable Unexercisable Exercisable Unexercisable
------------------------------------- -------------- ---------------- -------------- -----------------
Richard D. Simon -- -- -- --
Kelle A. Simon 44,200 80,800 $0 $0
Alban B. Lang 44,200 80,800 $0 $0
Lyn Simon 44,200 80,800 $0 $0
Richard D. Simon, Jr. 44,200 80,800 $0 $0
</TABLE>
Executive Employment and Consulting Arrangements. The Company currently does not
have any employment contracts, severance, or change-in-control agreements with
any of its executive officers. However, under certain circumstances in which
there is a change of control, executive officers holding outstanding stock
options granted under certain option plans are entitled to exercise such options
notwithstanding that such options may otherwise not have been fully exercisable.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee believes that the Company's executive
officers, including the Named Officers and the Chief Executive Officer, should
be compensated at a level comparable to persons holding similar positions at
peer companies, taking into account the relative size of the companies,
responsibilities of the officers, experience, geographical location, and the
relative performance of the Company and its peers, measured by stock
performance, profit margin, and revenue and net income growth rates. In
addition, the Compensation Committee will consider the attainment of specific
goals that may be established for such officers from time-to-time. Corporate
performance, measured by stock appreciation, is an important aspect of the
executive officers' compensation, as reflected by net awards to date of stock
options covering 986,700 shares of Class A Common Stock to the executive
officers and certain other key employees. The base salaries of all executive
officers, including the Chief Executive Officer, were established prior to the
Company's initial public offering and prior to any meeting of the Compensation
Committee. The Compensation Committee believes that the base salaries paid to
the Chief Executive Officer and other Named Officers are reasonable in
comparison with other salaries in the industry. In addition to base salaries,
the Chief Executive Officer and Named Officers participate in a bonus pool equal
to 5 percent of earnings before provision for income taxes, subject to the
achievement of financial performance goals. The Company did not meet its goal in
fiscal year 1999, and the executive officers did not receive bonuses. The Chief
Executive Officer owns approximately 14.1% of the Company's outstanding Common
Stock. Therefore, his net worth is directly affected by the market value of the
Company's stock.
Compensation Committee:
Gus E. Paulos
Richard D. Simon
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than 10% of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
("SEC"). Officers, directors, and greater than 10% stockholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file. Based solely upon a review of the copies of such forms furnished to
the Company, or written representations that no Forms 5 were required, the
Company believes that its officers, directors and greater than 10% beneficial
owners complied with all Section 16(a) filing requirements applicable to them
during the Company's preceding fiscal year.
STOCK PRICE PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return of
the Company's Class A Common Stock with the cumulative total stockholder return
of the NASDAQ Stock Market (U.S. Companies) and the NASDAQ Trucking &
Transportation Stocks commencing November 17, 1995, and ending September 30,
1999.
GRAPH WAS CENTERED HERE IN PRINTED FORM
<TABLE>
<S> <C> <C> <C> <C>
Index Description 11/17/95 9/30/96 9/30/97 9/30/98 9/30/99
------------------------------------------- ----------- ----------- ------------ ---------- ----------
Simon Transportation Services Inc. $100.00 $156.00 $266.20 $57.70 $53.50
NASDAQ Stock Market $100.00 $118.30 $162.50 $165.20 $268.30
(US Companies)
CRSP Index for NASDAQ Trucking & $100.00 $101.80 $143.50 $106.90 $124.40
Transportation Stocks
</TABLE>
The stock performance graph assumes $100 was invested on November 17,
1995, the date of the Company's initial public offering. There can be no
assurance that the Company's stock performance will continue into the future
with the same or similar trends depicted in the graph above. The Company will
not make or endorse predictions as to future stock performance. The CRSP Index
for NASDAQ Trucking & Transportation Stocks includes all publicly held truckload
motor carriers traded on the NASDAQ Stock Market, as well as all NASDAQ
companies within the Standard Industrial Code Classifications 3700-3799,
4200-4299, 4400-4599, and 4700-4799.
LEGAL PROCEEDINGS
The Company and certain of its officers and directors have been named
as defendants in a securities class action filed in the United States District
Court for the District of Utah, Caprin v. Simon Transportation Services, Inc.,
et al., No. 2:98CV 863K (filed December 3, 1998). Plaintiffs in this action
allege that defendants made material misrepresentations and omissions during the
period February 13, 1997 through April 2, 1998 in violation of Sections 11,
12(2) and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The
Company intends to vigorously defend this action. No officer, director,
affiliate of the Company or holder of more than 5% of any class of voting
securities of the Company, or any associate of the foregoing, has been named as
an adverse party to the Company; however, this action is a class action and
purports to be brought on behalf of all stockholders of the Company.
<PAGE>
SOLICITATION OF REVOCATIONS
This solicitation is being made by the Board. The cost of the
solicitation of revocations of consent will be borne by the Company. The Company
estimates that the total expenditures in connection with such solicitation
(including the fees and expenses of the Company's attorneys, public relations
advisers and solicitors, and advertising, printing, mailing, travel and other
costs, but excluding salaries and wages of officers and employees and the amount
normally expended for a solicitation for an uncontested election of directors),
will be approximately $130,000, of which approximately $50,000 has been spent to
date. Directors, officers and other Company employees may, without additional
compensation, solicit revocations by mail, in person, by telecommunication or by
other electronic means.
The Company has retained Georgeson, at an estimated fee of $20,000,
plus reasonable out-of-pocket expenses, to assist in the solicitation of
revocations, as well as to assist the Company in communicating with stockholders
with respect to, and to provide other services to the Company in connection
with, the Company's opposition to the Moyes Solicitation. Approximately 30
persons will be utilized by Georgeson in its efforts. The Company will reimburse
brokerage houses, banks, custodians and other nominees and fiduciaries for
out-of-pocket expenses incurred in forwarding the Company's consent revocation
materials to, and obtaining instructions relating to such materials from,
beneficial owners of the Common Stock. The Company has agreed to indemnify
Georgeson against certain liabilities and expenses in connection with its
engagement, including certain liabilities under the federal securities laws.
Under applicable regulations of the SEC, each member of the Board may
be deemed to be a "participant" in the Company's solicitation of revocations of
consent. The principal occupations of each participant are set forth in Schedule
A, and the business addresses and present ownership of each participant are set
forth in "Security Ownership of Certain Beneficial Owners, Directors and
Officers of the Company" on page 4.
APPRAISAL RIGHTS
No appraisal rights are or will be available under Nevada law in
connection with the Moyes Solicitation.
STOCKHOLDER PROPOSALS
In order to be considered for inclusion in the Company's proxy
materials for the 2001 Annual Meeting, stockholder proposals must be received by
the Company at its headquarters not later than September 8, 2000, and must
satisfy the conditions established by the SEC for stockholder proposals to be
included in the Company's proxy materials for the meeting. Any proposals should
be directed to the Secretary of the Company.
SELECTION OF INDEPENDENT ACCOUNTANTS
At the Annual Meeting of Stockholders of the Company held on February
4, 2000, the stockholders of the Company ratified the selection of Arthur
Andersen LLP as independent public accountants for the Company for the 2000
fiscal year. Arthur Andersen LLP has served as independent public accountants
for the Company since 1988.
FORWARD-LOOKING STATEMENTS
This Revocation of Consent Statement, as well as information contained
in written material, press releases and oral statements issued by or on behalf
of the Company, contains, or may contain, certain statements that may be deemed
to be "forward-looking statements" within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act. Such forward-looking
statements relate to the Company's future prospects, developments and business
strategies for its operations. These forward-looking statements are identified
by the use of terms and phrases such as "expect", "estimate", "project",
"believe", and similar terms and phrases. Such forward-looking statements are
contained in various sections of this Revocation of Consent Statement. These
statements are based upon certain assumptions and analyses made by the Company
in light of its experience and perception of historical trends, current
conditions, expected future developments and other factors it believes are
<PAGE>
appropriate under the circumstances, and involve risks and uncertainties that
may cause actual future activities and results of operations to be materially
different from that suggested or described in this Revocation of Consent
Statement. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary from
those expected, estimated or projected.
THE MOYES PROPOSALS
Proposal No. 1. The Repeal of Current Bylaws Proposal.
Proposal No. 1, the Repeal of Current Bylaws Proposal, is worded
as follows: "Resolved, that the bylaws of Simon Transportation Services Inc.,
as previously amended and in effect immediately prior to the adoption of this
resolution, are hereby repealed in their entirety."
Proposal No. 2. The New Bylaws Proposal.
Proposal No. 2, the New Bylaws Proposal, is worded as follows:
"Resolved, that the New Bylaws of Simon Transportation Services Inc., in the
form attached as Exhibit A to the Consent Statement of Jerry Moyes, are hereby
adopted as the bylaws of Simon Transportation Services Inc., effective
immediately."
Proposal No. 3. The Director Election Proposal.
Proposal No. 3, the Director Election Proposal is worded as follows:
"Resolved, that the following persons are hereby elected, effective
immediately upon the adoption of the New Bylaws, as directors of Simon
Transportation Services Inc. to serve until the next annual meeting of the
stockholders of Simon Transportation Services Inc. or until their successors
are duly elected and qualified:
Jerry Moyes Jeff L. Archibald
Jon Isaacson Patrice Archibald
Earl H. Scudder Ronald G. Moyes
Gordon K. Holladay Krista B. Moyes
Vickie L. Moyes Michael J. Moyes
Craig P. Moyes Buddy Favero
Laura Favero"
IMPORTANT
1. If your shares are registered in your own name, please sign, date
and mail the enclosed BLUE Revocation of Consent Card to Georgeson
in the postage-paid envelope provided.
2. If you have previously signed and returned a white consent card to
Mr. Moyes, you have every right to change your vote. Only your
latest dated card will count. You may revoke any white consent
card already sent to Mr. Moyes by signing, dating and mailing the
enclosed BLUE Revocation of Consent Card in the postage-paid
envelope provided.
3. If your shares are held in the name of a brokerage firm, bank
nominee or other institution, only it can sign a BLUE Revocation
of Consent Card with respect to your shares and only after
receiving your specific instructions. Accordingly, to ensure that
your shares are voted, you should contact the person responsible
for your account and give instructions for a BLUE Revocation of
Consent Card to be issued representing your shares, and you should
also sign, date and mail the enclosed BLUE Revocation of Consent
Card in the postage-paid envelope provided.
4. After signing the enclosed BLUE Revocation of Consent Card, do not
sign or return the white consent card. Do not even use Mr. Moyes'
white consent card to indicate your opposition to the Moyes
Solicitation.
<PAGE>
If you have any questions about giving your revocation of consent
or require assistance, please contact:
Georgeson Shareholder Communications Inc.
17 State Street, 10th Floor
New York, New York 10004
Call Toll Free: (800) 223-2064
Banks & Brokers Call Collect: (212) 440-9800
<PAGE>
SCHEDULE A
INFORMATION CONCERNING THE PARTICIPANTS
The following table sets forth the names, and principal occupations or
employment, and the names of any corporation or other organization in which such
employment is carried on, of the directors of the Company who are deemed to be
"participants" in this solicitation. Unless otherwise indicated, the principal
occupation refers to such person's position with the Company. The security
holdings and business addresses of each of the following participants are set
forth on page 4 of this Revocation of Consent Statement. None of the
participants owns any securities of the Company of record but not beneficially,
nor does any associate of a participant own, directly or indirectly, any
securities of the Company.
Name Principal Employment
----------------------- -------------------------------------------------
Richard D. Simon Chairman of the Board and Chief Executive
Officer of Simon
Kelle A. Simon President
Alban B. Lang Chief Financial Officer, Treasurer, Secretary
of Simon
Lyn Simon Vice President of Sales and Marketing of Simon
Richard D. Simon, Jr. Vice President of Operations of Simon
Sherry L. Bokovoy Vice President of Human Resources of Simon
Gus E. Paulos President of Gus Paulos Chevrolet(1)
Don L. Skaggs President of Skaggs Co. Inc.(2)
Irene Warr Attorney
(1) Gus Paulos Chevrolet is a retail dealer of new and used vehicles.
(2) Skaggs Co. Inc. is a privately held manufacturer and distributor of law
enforcement communication equipment and clothing.
<PAGE>
INFORMATION REGARDING TRANSACTIONS IN SIMON'S SECURITIES BY PARTICIPANTS
The following table sets forth purchases and sales of the Company's
shares by the participants listed below during the past two years. Unless
otherwise indicated all transactions were completed in the public market.
<TABLE>
<S> <C> <C> <C>
Name Transaction Date Number of shares acquired or sold Note
--------------------------- ---------------------- ----------------------------------- --------
Richard D. Simon August 12, 1998 10,000 (4)
Various 11,241 (2)
January 21, 2000 (38,819) (3)
Kelle A. Simon September 2, 1999 20,000 (4)
Various 135 (5)
Various 1,641 (2)
January 21, 2000 (6,631) (3)
Alban B. Lang Various 2,931 (2)
Lyn Simon October 26, 1998 5,000 (4)
Various 4,538 (2)
Richard D. Simon, Jr. September 1, 1998 10,000 (4)
Sherry L. Bokovoy Various 821 (2)
Gus E. Paulos February 4, 2000 1,000 (1)
Don L. Skaggs June 1, 1998 1,000 (4)
June 2, 1998 2,000 (4)
July 8, 1998 2,500 (4)
July 9, 1998 2,500 (4)
July 14, 1998 10,000 (4)
July 16, 1998 10,000 (4)
July 17, 1998 20,000 (4)
March 18, 1999 2,140 (4)
February 4, 2000 1,000 (1)
Irene Warr August 13, 1998 300 (4)
December 18, 1998 1,000 (1)
February 4, 2000 1,000 (1)
<FN>
NOTES:
(1) Stock option award
(2) Aggregate number of securities purchased through a 401(k) plan for the
past two years. A de minimis amount of shares are purchased through
an employee's contribution each month
(3) Securities sold through a 401(k) plan on the date indicated through
re-direction of funds invested in such plan
(4) Open market purchase
(5) Aggregate number of securities purchased through a payroll withholding
plan for the past two years. A de minimis amount of shares are
purchased through an employee's contribution each month
</FN>
</TABLE>
CERTAIN TRANSACTIONS
Sherry L. Bokovoy and Jon Bokovoy are the daughter and son-in-law
of Richard D. Simon. Ms. Bokovoy is employed by the Company as the Vice
President of Human Resources and as an assistant treasurer and assistant
secretary, and Mr. Bokovoy is employed by the Company as a dispatch supervisor.
Ms. Bokovoy was paid an aggregate of $93,600 during the 1999 fiscal year. Mr.
Bokovoy was paid an aggregate of $94,600 during fiscal year 1999.
During the 1999 fiscal year, the Company purchased $93,257 of vehicles
from Gus Paulos Chevrolet and $65,487 of electronic video and security equipment
from Skaggs Telecommunications. Prices were established through arms-length
negotiations between the parties.
MISCELLANEOUS INFORMATION CONCERNING PARTICIPANTS
Except as described in this Schedule A or in the Revocation of Consent
Statement, none of the persons who may be deemed "participants" as defined in
Schedule 14A promulgated under the Exchange Act nor any of their respective
affiliates or associates (together, the "Participant Affiliates"), (1) directly
or indirectly beneficially owns any securities of the Company or any securities
of a subsidiary of the Company; or (2) has any arrangement or understanding with
any person with respect to (A) any future employment with the Company or its
affiliates, or (B) any future transactions to which the Company or its
affiliates will or may be a party.
