SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 (Amendment No. 1)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
SWIFT TRANSPORTATION CO., INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
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:
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5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
1) Amount previously paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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SWIFT TRANSPORTATION CO., INC.
2200 SOUTH 75TH AVENUE
PHOENIX, ARIZONA 85043
---------------------------------
NOTICE AND PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 20, 1999
---------------------------------
To Our Stockholders:
The 1999 Annual Meeting of Stockholders (the "Annual Meeting") of Swift
Transportation Co., Inc. (the "Company") will be held at 10:00 a.m., Arizona
Time, on Thursday, May 20, 1999, at the Company's headquarters facility at 2200
South 75th Avenue, Phoenix, Arizona 85043, for the following purposes:
1. To elect two Class III directors to serve for three-year terms;
2. To approve the adoption of a new Swift Transportation Co., Inc.
1999 Stock Option Plan;
3. To approve the Company's Non-Employee Directors Stock Option
Plan, as amended;
4. To approve the amendment of the Company's Articles of
Incorporation to increase the authorized number of shares of
Common Stock authorized for issuance from 75,000,000 to
150,000,000; and
5. To transact such other business as may properly come before the
Annual Meeting. Management is presently aware of no other
business to come before the meeting.
Each outstanding share of the Company's Common Stock entitles the
holder of record at the close of business on March 31, 1999, to receive notice
of and to vote at the Annual Meeting or any adjournment thereof. Shares of
Common Stock can be voted at the Annual Meeting only if the holder is present in
person or by valid proxy. A copy of the Company's 1998 Annual Report to
Stockholders, which includes certified financial statements, is enclosed.
Management cordially invites you to attend the Annual Meeting.
By Order of the Board of Directors
Phoenix, Arizona Jerry C. Moyes
April 7, 1999 Chairman of the Board, President
and Chief Executive Officer
IMPORTANT
STOCKHOLDERS ARE REQUESTED TO SIGN, DATE AND MAIL THE ENCLOSED PROXY.
A POSTAGE-PAID ENVELOPE IS PROVIDED FOR MAILING IN THE UNITED STATES.
<PAGE>
SWIFT TRANSPORTATION CO., INC.
2200 SOUTH 75TH AVENUE
PHOENIX, ARIZONA 85043
---------------------------
PROXY STATEMENT
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This Proxy Statement is furnished to the stockholders of Swift
Transportation Co., Inc. (the "Company") in connection with the solicitation of
proxies to be used in voting at the Annual Meeting of Stockholders to be held on
May 20, 1999. THE ENCLOSED PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE
COMPANY. The proxy materials relating to the Annual Meeting are first being
mailed on or about April 12, 1999, to stockholders of record at the close of
business on March 31, 1999 (the "Record Date"). A person giving the enclosed
proxy has the power to revoke it at any time before it is exercised by: (i)
attending the Annual Meeting and voting in person; (ii) duly executing and
delivering a proxy bearing a later date; or (iii) sending written notice of
revocation to the Secretary of the Company at P.O. Box 29243, Phoenix, Arizona,
85038-9243.
The Company will bear the cost of solicitation of proxies, including
the charges and expenses of brokerage firms and others for forwarding
solicitation material to beneficial owners of the outstanding Common Stock of
the Company. In addition to the use of the mails, proxies may be solicited by
personal interview, telephone or telegraph.
VOTING SECURITIES OUTSTANDING
As of the Record Date, there were 42,511,914 shares of the Company's
Common Stock outstanding. Stockholders are entitled to one vote for each share
held of record on each matter of business to be considered at the Annual
Meeting. Only holders of record of Common Stock at the close of business on the
Record Date will be entitled to vote at the Annual Meeting, either in person or
by valid proxy. Ballots cast at the Annual Meeting will be counted by the
Inspector of Elections and determinations of whether a quorum exists and whether
the proposals are approved will be announced at the Annual Meeting. The
Inspector of Elections will treat abstentions and broker non-votes received as
shares that are present and entitled to vote for purposes of determining a
quorum, but as unvoted for purposes of determining the approval of any matter.
If a broker indicates on the proxy that it does not have discretionary authority
as to certain shares to vote on a particular matter, those shares will not be
considered as present and entitled to vote with respect to that matter.
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ACTION TO BE TAKEN UNDER THE PROXIES
A properly executed proxy in the enclosed form will be voted in
accordance with the instructions thereon. If no instructions are given with
respect to the matters to be acted on, the persons acting under the proxies will
vote the shares represented thereby in favor of the election of the nominees for
directors named herein and at their discretion as to such other business as may
come before the meeting or any adjournment thereof. The Board of Directors is
not aware of any other business to be brought before the meeting. If other
proper matters or matters of which the Board is not aware a reasonable time
prior to the meeting are introduced, then, to the extent permissible by law, the
persons named in the enclosed proxy will vote the shares they represent in
accordance with their judgment.
The information included herein should be reviewed in conjunction with
the consolidated financial statements, notes to consolidated financial
statements, independent auditors' report and other information included in the
Company's 1998 Annual Report to Stockholders that was mailed with this Proxy
Statement to all stockholders of record on the Record Date.
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
The Articles of Incorporation of the Company divides the Board of
Directors into three classes serving staggered terms. One class of directors is
elected each year for a term of three years. The term of office of directors in
Class III will expire at the Annual Meeting. At the Annual Meeting, stockholders
will be asked to elect two directors to Class III for terms that will expire at
the close of the Annual Meeting of Stockholders held in 2002. The Board of
Directors has nominated William F. Riley III and Lou A. Edwards as nominees for
election to Class III. Unless otherwise noted thereon, the shares represented by
the enclosed proxy will be voted for the election of Messrs. Riley and Edwards
as directors of the Company. If either of them becomes unavailable for any
reason or if a vacancy should occur before election (which events are not
anticipated), the shares represented by the enclosed proxy may be voted for such
other person or persons as may be determined by the holders of such proxy.
Election of the director nominees will require the affirmative vote of a
majority of the outstanding Common Stock represented at the Annual Meeting. Each
director elected will serve for three years and until his successor is duly
elected and qualified.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR ELECTION OF
THE CLASS III DIRECTOR NOMINEES.
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INFORMATION CONCERNING DIRECTORS, NOMINEES AND OFFICERS
Information concerning the names, ages, terms, positions with the
Company and business experience of the Company's current directors, director
nominees and executive officers is set forth below.
TERM AS
DIRECTOR
NAME AGE POSITION EXPIRES
---- --- -------- -------
Jerry C. Moyes(1)(2) 55 Chairman of the Board, Class II - 2001
President and Chief
Executive Officer
William F. Riley, III 52 Executive Vice President, Class III - 1999
Chief Financial Officer,
Secretary and Director
Rodney K. Sartor 44 Executive Vice President Class I - 2000
and Director
Alphonse E. Frei(1)(2) 60 Director Class II - 2001
Lou A. Edwards(2) 85 Director Class III - 1999
Earl H. Scudder, Jr.(1) 56 Director Class I - 2000
Patrick J. Farley 54 Executive Vice President
Kevin H. Jensen 44 Executive Vice President
- ----------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
JERRY C. MOYES has served as the Chairman of the Board, President and
Chief Executive Officer of the Company since 1984. Mr. Moyes joined the Company
in 1966 as a Vice President and served in that capacity until 1984. Mr. Moyes
was President of the Arizona Motor Transport Association from 1987 to 1988.
WILLIAM F. RILEY III has served as an Executive Vice President, Chief
Financial Officer, Secretary and a Director of the Company since March 1990 and
as a Vice President of Cooper Motor Lines and Swift Leasing Co., Inc. since
April 1988 and May 1986, respectively. Prior to joining Swift in February 1986,
Mr. Riley was employed by Armour Food Co. from 1978 to January 1986, serving in
various transportation and distribution assignments, principally Manager of
Business Planning of Armour Food Express, its truckload motor carrier.
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RODNEY K. SARTOR has served as an Executive Vice President and a
Director of the Company since May 1990. Mr. Sartor joined Swift in May 1979. He
served as Director of Operations from May 1982 until August 1988 and as a
Regional Vice President from August 1988 until May 1990.
ALPHONSE E. FREI has served as a Director of the Company since May
1990. Mr. Frei served in various capacities, including Chief Financial Officer,
with America West Airlines from 1983 to 1994 and served as a director of America
West Airlines from 1986 to September 1993. Mr. Frei has served in various
executive capacities or as a consultant to a number of business organizations.
LOU A. EDWARDS has served as a Director of the Company since May 1990.
Mr. Edwards is retired from Sundance Truck Centers, a truck dealership, which he
founded in 1975, and has 40 years of experience in the trucking industry.
EARL H. SCUDDER, JR. has served as a Director of the Company since May
1993. Mr. Scudder has been President of the Scudder Law Firm, P.C. in Lincoln,
Nebraska since February 1990, and has engaged in the private practice of law
since 1966. Mr. Scudder also served as a director of Heartland Express, Inc. a
publicly-held trucking company, until 1996, and serves as a director of Central
Freight Lines, Inc., a less-than-truckload motor carrier.
PATRICK J. FARLEY was named an executive officer of the Company in May
1997, and has served as an Executive Vice President of the Company since May
1997. Mr. Farley joined the Company in October 1989 and served as Vice President
of Western Sales prior to his promotion to Executive Vice President in May 1997.
KEVIN H. JENSEN was named an executive officer of the Company in
October 1996, and has served as an Executive Vice President of the Company since
December 1994. Mr. Jensen joined the Company in December 1986 and served the
Company in various capacities, including Director of Operations - Eastern
Division and Vice President - Eastern Division, prior to his promotion to
Executive Vice President in December 1994.
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MEETINGS OF THE BOARD OF DIRECTORS AND ITS COMMITTEES
BOARD OF DIRECTORS. During the year ended December 31, 1998, the Board
of Directors of the Company met on six occasions. Each of the directors attended
all of the meetings of the Board of Directors and all of the meetings held by
committees of the Board on which he served, except Mr. Sartor was absent from
two Board of Directors meetings and Mr. Edwards was absent from one Board of
Directors meeting.
COMPENSATION COMMITTEE. The Compensation Committee of the Board of
Directors, which met once during 1998, reviews all aspects of compensation of
executive officers of the Company and makes recommendations on such matters to
the full Board of Directors. The Report of the Compensation Committee for 1998
is set forth below.
AUDIT COMMITTEE. The Audit Committee, which met three times during
1998, makes recommendations to the Board concerning the selection of outside
auditors, reviews the financial statements of the Company 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. The Audit Committee also reviews proposals for major
transactions.
OTHER COMMITTEES. The Company does not maintain a standing nominating
committee or other committee performing similar functions.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. The
Compensation Committee of the Board of Directors consists of Jerry C. Moyes,
Alphonse E. Frei and Lou A. Edwards. Mr. Moyes also serves as the President and
Chief Executive Officer of the Company.
The Company leases various properties from entities owned by or
affiliated with Jerry C. Moyes. For the year ended December 31, 1998, the
Company expended an aggregate of $135,000 in rental payments on such leases.
Interstate Equipment Leasing, Inc., a corporation wholly-owned by Jerry
C. Moyes ("Interstate Leasing"), leases tractors to some of the Company's owner
operators. In connection with this program, during 1998 the Company acquired
$22.1 million of new revenue equipment on behalf of Interstate Leasing, for
which the Company recognized fee income of $1.3 million. During 1998, the
Company also sold used revenue equipment to Interstate Leasing totaling $320,000
and recognized gains of $69,000.
Interstate Leasing also provides air transportation services to the
Company. The Company paid Interstate Leasing $429,000 for air transportation
services for the year ended December 31, 1998. At December 31, 1998, $141,000
was owed to Interstate Leasing for air transportation services.
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During 1998, the Company provided transportation services to various
entities owned by Jerry C. Moyes. For the year ended December 31, 1998, the
Company recognized $831,000 in operating revenue from those entities.
Jerry C. Moyes acquired a significant ownership interest in Central
Freight Lines, Inc. during 1997. The Company provides transportation services to
this carrier and recognized $5.3 million in operating revenue therefrom in 1998.
At December 31, 1998, $401,000 was owed to the Company for these services. In
addition, the Company sold used equipment to the carrier for $261,000 and paid
$227,000 to the carrier for facilities rental.
Interstate Leasing owns approximately 200 tractors, which operates as a
fleet operator for the Company. During 1998, the Company paid $17.2 million to
this fleet operator for purchased transportation services. At December 31, 1998,
$326,000 was owed for these purchased transportation services. Also, the Company
was paid $267,000 by this fleet operator and paid $450,000 to this fleet
operator for various services, including training and repairs. At December 31,
1998, $32,000 was owed to the Company and nothing was owed by the Company for
these services.
All of the foregoing arrangements were approved by the independent
members of the Board of Directors.
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DIRECTOR COMPENSATION
Directors who are not employees of the Company receive an annual
retainer of $3,000, plus $500 per meeting of the Board of Directors attended by
the director. Pursuant to the Company's Non-Employee Director's Stock Option
Plan, non-employee directors also receive an annual grant of an option to
purchase 1,000 shares of the Company's Common Stock at an exercise price equal
to 85% of the fair market value of such stock on the date of grant and which
vests immediately upon the date of grant. These options are granted to the
non-employee directors on the last trading day in May.
EXECUTIVE COMPENSATION
The table below sets forth information concerning the annual and
long-term compensation for services in all capacities to the Company for the
fiscal years ended December 31, 1998, 1997 and 1996, of those persons who were,
at December 31, 1998 (i) the Chief Executive Officer and (ii) the four most
highly compensated executive officers of the Company (collectively, the "Named
Officers").
SUMMARY COMPENSATION TABLE
Long Term
Annual Compensation Compensation
--------------------- ---------------
All Other
Name and Principal Position Year Salary Bonus Compensation(1)
- --------------------------- ---- ------ ----- ---------------
Jerry C. Moyes 1998 $270,371 $366,161 $166,268
Chairman of the Board & 1997 270,371 376,560 163,219
President 1996 270,371 366,161 160,376
William F. Riley III 1998 $162,225 $337,775 $24,780
Executive Vice President & 1997 162,225 337,764 22,615
Chief Financial Officer 1996 162,225 366,161 19,553
Rodney K. Sartor 1998 $162,225 $137,775 $21,025
Executive Vice President 1997 162,225 137,775 18,025
1996 162,225 366,161 14,953
Kevin H. Jensen 1998 $162,225 $337,775 $18,000
Executive Vice President(2) 1997 162,225 337,764 15,000
1996 162,225 187,775 11,928
Patrick J. Farley 1998 $162,225 $137,775 $18,000
Executive Vice President(3) 1997 141,026 102,048 15,000
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(1) "All Other Compensation" for each of the Named Officers included Company
contributions in the amount of $18,000 for 1998, $15,000 for 1997, and
$11,928 for 1996, pursuant to the Swift Transportation Co., Inc. Retirement
Plan, a 401(k) profit sharing plan (the "401(k) Plan"). The balance of
compensation included in "All Other Compensation" for each of the Named
Officers during each of the identified periods represents Company payments
of term life and disability insurance premiums on behalf of the respective
Named Officers. The amount
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of such insurance premiums paid on behalf of Mr. Riley during 1998, 1997
and 1996 was $6,780, $7,615, and $7,625, respectively. The amount of such
insurance premiums paid on behalf of Mr. Sartor during 1998, 1997 and 1996
was $3,025, $3,025 and $3,025, respectively. The Company does not pay such
premiums for Mr. Jensen or Mr. Farley. The Company procured two term life
insurance policies with a combined face amount of $20 million for the
benefit of Jerry C. Moyes and his spouse. The aggregate annual premiums
paid by the Company for these polices were $148,268, $148,219 and $148,448
in 1998, 1997 and 1996, respectively. The Company's purpose in maintaining
these policies is to ensure that, in the event of the Moyes' deaths, their
estate would be able to satisfy estate taxes without having to sell a large
block of the Company's Common Stock, which might adversely affect the
market for the Common Stock.
(2) Mr. Jensen was named an executive officer of the Company in October 1996.
(3) Mr. Farley was named an executive officer of the Company in May 1997.
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OPTION GRANTS IN LAST FISCAL YEAR
The number of options and the option exercise price reflect a 3-for-2
stock split treated as a dividend, effected on November 18, 1993, of one share
of Common Stock for every two shares of Common Stock outstanding, a 2-for-1
stock split treated as a dividend of one share of Common Stock for each share
outstanding effected on November 18, 1994, a 3-for-2 stock split treated as a
dividend, effected on March 12, 1998, of one share of Common Stock for every two
shares of Common Stock outstanding and a 3-for-2 stock split treated as a
dividend, to be effected on April 10, 1999, of one share of Common Stock for
every two shares of Common Stock outstanding.
<TABLE>
<CAPTION>
Individual Grants
--------------------------------------------------------- Potential Realizable Value At
Percent of Market Assumed Annual Rates of Stock Price
Number of Total Price At Appreciation For Option Term
Securities Options/SARs Exercise Dates -----------------------------------
Underlying Granted To Or Base Of
Option/SARs Employees In Price Grant Expiration
Name Granted (#) Fiscal Year ($/Sh) ($/Sh) Date 0% ($) 5% ($) 10% ($)
---- ----------- ----------- ------ ------ ---- ------ ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jerry C. Moyes -- -- -- -- -- -- -- --
William F. Riley III -- -- -- -- -- -- -- --
Patrick J. Farley -- -- -- -- -- -- -- --
Kevin H. Jensen 75,000(1) 9.28% $10.02 $11.79 10/2/08 $132,660 $688,854 $1,542,166
Rodney K. Sartor -- -- -- -- -- -- -- --
</TABLE>
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(1) One-fifth of options are exercisable on fifth anniversary of grant and
one-fifth on each successive year.
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AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
OPTION VALUE AS OF DECEMBER 31, 1998
The table below sets forth information with respect to the exercise of
stock options during the fiscal year ended December 31, 1998, by the Named
Officers. The Company does not have a long-term incentive plan or a defined
benefit or actuarial plan and has never issued any stock appreciation rights.
The number of options and the option exercise price reflect a 3-for-2
stock split treated as a dividend, effected on November 18, 1993, of one share
of Common Stock for every two shares of Common Stock outstanding, a 2-for-1
stock split treated as a dividend of one share of Common Stock for each share
outstanding effected on November 18, 1994, a 3-for-2 stock split treated as a
dividend, effected on March 12, 1998, of one share of Common Stock for every two
shares of Common Stock outstanding and a 3-for-2 stock split treated as a
dividend, to be effected on April 10, 1999, of one share of Common Stock for
every two shares of Common Stock outstanding.
<TABLE>
<CAPTION>
Value of Unexercised In-the-
Number of Unexercised Options Money Options at Fiscal Year End
Shares at Fiscal Year End (#) ($)
Acquired on ---------------------------- ---------------------------------
Name Exercise Value Realized Exercisable Unexercisable Exercisable(3) Unexercisable(3)
(#)(1) ($)(2)
---- -------- -------------- ----------- ------------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Jerry C. Moyes -- -- -- -- -- --
President & Chief Executive
Officer(7)
William F. Riley III 81,000 895,152 -- 193,500 -- 2,389,249
Executive Vice President &
Chief Financial Officer(4)
Rodney K. Sartor 81,000 1,195,500 -- 81,000 -- 1,413,174
Executive Vice President(4)]
Kevin H. Jensen 27,000 340,250 -- 250,500 -- 2,665,062
Executive Vice President(5)
Patrick J. Farley 13,500 182,425 16,875 84,375 290,336 989,722
Executive Vice President(6)
</TABLE>
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(1) Represents shares of Common Stock acquired pursuant to exercise of options
under the Company's Stock Option Plan. The exercise price for such shares
was $1.24 per share for Messrs. Riley and Sartor, $3.15 per share for Mr.
Jensen and $1.54 per share for Mr. Farley.
(2) Based on the $12.29 last reported sale price of the Company's Common Stock
on October 16, 1998, for Mr. Riley, the $16.00 last reported sale price of
March 31, 1998, for Mr. Sartor, the $14.17 last reported sale price for
13,500 shares exercised on January 5, 1998, and the $17.33 sale price for
13,500 shares exercised on December 16,1998 for Mr. Jensen and the $15.05
sale price on February 5, 1998, for Mr. Farley.
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(3) Based on the $18.69 last reported sales price of the Company's Common Stock
on December 31, 1998.
(4) Mr. Sartor's options and Mr. Riley's options (excepting the 112,500 options
granted to Mr. Riley in 1997) were granted in 1990 and one-fifth of the
shares underlying such options first became exercisable in March 1995.
Thereafter, one fifth of such options become exercisable in each successive
year. The exercise price of such options is $1.24 per share. Such options
will terminate in September 2000. In 1997 Mr. Riley was granted options to
purchase 112,500 shares at $10.02 per share. One-third of the shares
underlying such options first become exercisable in April 2000. Thereafter,
one-third of the options become exercisable in each successive year. These
options will terminate in April 2007.
(5) Mr. Jensen was granted options in 1992, 1994, 1997 and 1998 covering
67,500, 45,000, 90,000 and 75,000 shares of the Company's Common Stock,
respectively. The exercise price for each of Mr. Jensen's options is $3.15,
$4.87, $10.01 (as to 45,000 shares subject to options granted in April
1997) and $10.39 (as to 45,000 shares subject to options granted in
December 1997) and $10.02, respectively. One-fifth of each such option
grant becomes exercisable on the fifth anniversary of the grant and
one-fifth of each such grant becomes exercisable in each successive year
thereafter. All of Mr. Jensen's options terminate on the ten year
anniversary of the date of grant.
(6) Mr. Farley was granted options in 1990 (as to 16,875 shares), December 1991
(as to 67,500 shares), January 1995 (as to 5,625 shares), December 1995 (as
to 3,375 shares), April 1997 (as to 22,500 shares) and July 1997 (as to
22,500 shares). The respective exercise prices for such grants are $1.24,
$1.54, $8.12, $5.62, $10.01 and $11.17. One-fifth of each such option grant
becomes exercisable on the fifth anniversary of the grant and one-fifth of
each such grant becomes exercisable in each successive year thereafter. All
of Mr. Farley's options terminate on the ten year anniversary of the date
of grant.
(7) Mr. Moyes has not been awarded any stock options and is not eligible to
participate in the Company's Stock Option Plan or Employee Stock Purchase
Plan. See "Compensation Committee Report on Executive Compensation" below.
EMPLOYMENT AGREEMENTS
The Company currently does not have any employment contracts or
severance agreements with any of its executive officers.
CHANGE OF CONTROL ARRANGEMENTS
In the event the Company sells all or substantially all of its assets,
or merges with or into another corporation, stock options outstanding are
required to be assumed or equivalent options are required to be substituted by
such successor corporation or a parent or subsidiary of such successor
corporation, unless the Company's Board of Directors determines, in the exercise
of its sole discretion and in lieu of such assumption or substitution, that the
option holder shall have the right to exercise his or her option, including
shares as to which such option would not otherwise be exercisable. If the Board
makes options fully exercisable in lieu of assumption or substitution in the
event of a merger or sale of assets, the Board must notify the option holder
that the option is fully exercisable for a period of thirty (30) days from the
date of such notice (but not later than the expiration of the term of the
option) and the option will terminate upon the expiration of such period.
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COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Under the supervision of the Compensation Committee of the Board of
Directors, the Company has developed and implemented compensation policies and
programs that seek to enhance the profitability of the Company and thus
shareholder value by aligning the interests of senior management with those of
its shareholders. The Company compensates senior management through a mix of
short-term and long-term compensation programs. The three principal components
of executive compensation are base salary, annual bonus awards and stock
options. Jerry C. Moyes does not participate in the Compensation Committee's
deliberations concerning his compensation.
BASE SALARY. In setting base salaries of senior management for 1998,
including the salary of Jerry C. Moyes, the Company's Chief Executive Officer,
the Compensation Committee reviewed and considered (i) compensation information
disclosed by similar publicly held truckload motor carriers (all of which
carriers are included in the Nasdaq Trucking and Transportation Stocks Index);
(ii) the financial performance of the Company, as well as the role and
contribution of the particular executive with respect to such performance; and
(iii) nonfinancial performance related to the individual executive's
contributions. The Compensation Committee believes that the annual salaries of
the Company's Chief Executive Officer and its Executive Vice Presidents are at
or slightly below median levels paid by other publicly held truckload motor
carriers of comparable size. However, the Committee believes that, when the base
salary and annual bonus for the Company's executives are aggregated, its
compensation package is competitive with those provided to similarly situated
executives in the truckload motor carrier industry. The Committee has taken
particular note of management's success in assimilating the operations of
acquired carriers into the Company's operations, growing the Company in terms of
revenue, net earnings and earnings per share, and managing the growth
experienced by the Company during the last fiscal year.
ANNUAL BONUS. The Compensation Committee annually considers the award
of bonus compensation to executive officers as additional compensation based
upon individual and Company financial performance. Company financial performance
is measured by review of a variety of factors, including earnings per share,
operating ratios, revenue growth, and size and performance relative to similarly
situated trucking industry competitors. The Compensation Committee evaluates
individual performance based upon contribution to financial performance goals
and review of other qualitative and quantitative factors. Accordingly, in years
in which the Company's performance goals are exceeded, bonus compensation will
tend to be higher. The Compensation Committee believes that this policy properly
motivates the executive officers to perform to the greatest extent of the
abilities to generate the highest attainable profits for the Company and to
achieve increased shareholder value.
STOCK OPTIONS. The Company believes that it is important for executives
to have an equity stake in the Company in order to encourage them to focus on
long-term prospects. Toward this end, the Company makes option grants to the
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Executive Vice Presidents from time to time pursuant to the Company's Stock
Option Plan. In making option grants to the Executive Vice Presidents, the
Compensation Committee evaluates the individual officer's past and expected
future contributions to the Company's achievement of its long-term performance
goals. Because Jerry Moyes is the largest beneficial stockholder of the Company,
the Compensation Committee has not awarded any stock options to Mr. Moyes, and
Mr. Moyes is not eligible to participate in the Company's Stock Option Plan or
Employee Stock Purchase Plan.
CHIEF EXECUTIVE OFFICER. The two members of the Compensation Committee
other than Mr. Moyes evaluate the Chief Executive Officer's performance and
recommend his salary and bonus to the Board of Directors. As noted above, due to
Mr. Moyes' substantial stock ownership of the Company, the Committee has not
included stock options as a component of Mr. Moyes' overall compensation. Due in
part to this omission of option grants, and primarily due to his significant
contributions to the Company and the Company's dependence on Mr. Moyes, Mr.
Moyes' base salary is set significantly above the base salaries for the other
executive officers. The Committee believes that Mr. Moyes' total compensation is
appropriate compared to the total compensation paid to CEOs of comparable
publicly held truckload motor carriers, especially in light of the Company's
operating results and the increase in stockholder value in 1998.
COMPENSATION COMMITTEE
Jerry C. Moyes Alphonse E. Frei Lou A. Edwards
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STOCK PRICE PERFORMANCE GRAPH
The graph below compares cumulative total return of the Company, the
Nasdaq Stock Market (U.S.) Index and the Nasdaq Trucking and Transportation
Stocks Index from December 31, 1993 to December 31, 1998. The graph assumes that
$100 was invested on December 31, 1993, and any dividends were reinvested.
<TABLE>
<CAPTION>
12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Swift Transportation Co., Inc. 100.000 190.693 141.859 218.599 301.144 391.112
NASDQ Stock Market (US) 100.000 97.752 138.256 170.015 208.580 293.209
Trucking & Transportation Index 100.000 90.679 105.795 116.784 149.479 132.477
</TABLE>
15
<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 during the Company's preceding fiscal year all Section
16(a) filing requirements applicable to its officers, directors and greater than
10% beneficial owners were complied with, except Messers. Jensen and Lyding did
not timely report awards of stock options but did subsequently report the
awards.
16
<PAGE>
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS
AND MANAGEMENT
The following table sets forth, as of March 16, 1999, the number and
percentage of outstanding shares of Common Stock beneficially owned by each
person known by the Company to beneficially own more than 5% of such stock, by
each director and Named Officer of the Company and by all Directors and Named
Officers of the Company as a group.
NAME AND ADDRESS OF
BENEFICIAL OWNER(1) SHARES BENEFICIALLY OWNED PERCENT OWNED
- ----------------------- ------------------------- -------------
Jerry C. Moyes 18,827,967(2) 29.53%
Ronald G. Moyes 9,018,353(2) 14.14%
Lou A. Edwards 395,625 *
William F. Riley III 342,519(3) *
Rodney K. Sartor 176,915(3) *
Alphonse E. Frei 16,125(4) *
Earl H. Scudder, Jr 19,650(5) *
Patrick J. Farley 20,654(6) *
Kevin H. Jensen 6,359 *
FMR Corporation 9,189,030 14.41%
All Directors and Named
Officers as a group 19,805,814 30.96%
(8 persons)
- ----------
* Represents less than 1% of the Company's outstanding Common Stock.
(1) The address of each officer, director and Ronald G. Moyes is 1455 Hulda
Way, Sparks, Nevada 89431. The address of FMR Corporation is 82 Devonshire
Street, Boston, Massachusetts 02109. Information with respect to FMR
Corporation is based upon a Schedule 13G filed by FMR Corporation with the
Securities and Exchange Commission.
(2) The shares beneficially owned by Jerry C. Moyes are held by him, as
follows: (i) 18,321,717 shares are held as a co-trustee of the Jerry and
Vickie Moyes Family Trust, (ii) 33,750 shares are held by a limited
liability company of which Mr. Moyes has controlling interest, and (iii)
472,500 shares are held by SME Industries, Inc. of which Jerry C. Moyes is
the majority shareholder. The shares shown for Jerry C. Moyes do not
include the 9,018,353 shares held by seven irrevocable trusts for the
benefit of six children of Jerry and Vickie Moyes and by an irrevocable
trust for the benefit of Jerry and Vickie Moyes and six of their children,
the sole trustee of each of which is Ronald Moyes, who has sole investment
and voting power over the trusts. The shares shown for Jerry C. Moyes also
do not include 360,000 shares held by an irrevocable trust for the children
of Jerry and Vickie Moyes, the sole trustee of which is Gerald F. Ehrlich,
who has sole investment and voting power. Of the shares held by the Jerry
and Vickie Moyes Family Trust, 16,888,086 shares have been pledged to
secure loans with lending institutions.
(3) Includes options to purchase 81,000 shares exercisable within 60 days.
(4) Includes options to purchase 8,250 shares exercisable within 60 days.
(5) Includes options to purchase 3,750 shares exercisable within 60 days.
(6) Includes options to purchase 20,250 shares exercisable within 60 days.
17
<PAGE>
CERTAIN TRANSACTIONS AND RELATIONSHIPS
During 1998, the Company incurred fees for legal services to the
Scudder Law Firm in the amount of $89,000. Mr. Earl H. Scudder, Jr., a director
of the Company, is a member of the Scudder Law Firm. The Company believes that
the terms of the foregoing transactions were as favorable to the Company as
those which would have been available from an independent third party. See
"Compensation Committee Interlocks and Insider Participation" above for a
description of certain transactions between the Company and members of the
Compensation Committee.
APPROVAL OF ADOPTION OF SWIFT TRANSPORTATION CO., INC.
1999 STOCK OPTION PLAN
(PROPOSAL NO. 2)
GENERAL
At the Annual Meeting, the Company will seek stockholder approval of
the adoption of the Swift Transportation Co., Inc. 1999 Stock Option Plan (the
"Plan") to replace its existing employee stock option plan. The Plan provides
employees with an incentive to actively direct and contribute to the Company's
growth by enabling them to acquire a proprietary interest in the Company. The
Company's Board of Directors has approved adoption of the Plan and has directed
that the adoption be submitted as a proposal for stockholder approval at the
Annual Meeting. The total number of shares authorized for issuance under the
Plan is 750,000. The following summary of the Plan is qualified in its entirety
by reference to the Plan, a copy of which is attached as APPENDIX A.
PLAN PROVISIONS
The Plan authorizes grants of incentive stock options ("ISOs") and
non-qualified stock options ("NQSOs") to employees of the Company. All of the
Company's employees, except Jerry C. Moyes, are eligible to participate in the
Plan.
The Board of Directors believes that use of stock options authorized
under the Plan is beneficial to the Company as a means of promoting the success
and enhancing the value of the Company by linking the personal interests of its
employees and others to those of its stockholders and by providing employees and
others with an incentive for outstanding performance. These incentives also
provide the Company flexibility in its ability to attract and retain the
services of employees and others upon whose judgment, interest and special
effort the successful conduct of the Company's operation is largely dependent.
The Plan is administered by the Board of Directors or a committee
appointed by the Board consisting of at least two (2) non-employee directors
18
<PAGE>
(the "Committee"). The Board of Directors or Committee have the exclusive
authority to administer the Plan, including the power to determine eligibility,
the types and sizes of options and the timing of options.
Generally, options issued under the Plan will be subject to vesting
over a nine-year period, with 20% of the options becoming exercisable by the
holder thereof on the fifth anniversary of the date of grant and 20% becoming
exercisable on each successive anniversary date of the grant. The exercise price
of options granted under the Plan is expected to be equal to 85% of the fair
market value of the Common Stock on the date of the grant. On March 16, 1999,
the last reported sale price of the Common Stock on the Nasdaq National Market
was $19.42 per share.
INCENTIVE STOCK OPTIONS. An ISO is a stock option that satisfies the
requirements specified in Section 422 of the Internal Revenue Code (the "Code").
Under the Code, ISOs may only be granted to employees. In order for an option to
qualify as an ISO, the price payable to exercise the option must equal or exceed
the fair market value of the stock at the date of the grant, the option must
lapse no later than 10 years from the date of the grant, and the stock subject
to ISOs that are first exercisable by an employee in any calendar year must not
have a value of more than $100,000 as of the date of grant. Certain other
requirements must also be met. The Committee determines the consideration to be
paid to the Company upon exercise of any options. The form of payment may
include cash, Common Stock, or other property.
An optionee is not treated as receiving taxable income upon either the
grant of an ISO or upon the exercise of an ISO. However, the difference between
the exercise price and the fair market value on the date of exercise is an item
of tax preference at the time of exercise in determining liability for the
alternative minimum tax, assuming that the Common Stock is either transferable
or is not subject to a substantial risk of forfeiture under Section 83 of the
Code. If at the time of exercise, the Common Stock is both nontransferable and
is subject to a substantial risk of forfeiture, the difference between the
exercise price and the fair market value of the Common Stock (determined at the
time the Common Stock becomes either transferable or not subject to a
substantial risk of forfeiture) will be a tax preference item in the year in
which the Common Stock becomes either transferable or not subject to a
substantial risk of forfeiture.
If Common Stock acquired by the exercise of an ISO is not sold or
otherwise disposed of within two years from the date of its grant and is held
for at least one year after the date such Common Stock is transferred to the
optionee upon exercise, any gain or loss resulting from its disposition is
treated as long-term capital gain or loss. If such Common Stock is disposed of
before the expiration of the above-mentioned holding periods, a "disqualifying
disposition" occurs. If a disqualifying disposition occurs, the optionee
realizes ordinary income in the year of the disposition in an amount equal to
the difference between the fair market value of the Common Stock on the date of
exercise and the exercise price, or the selling price of the Common Stock and
the exercise price, whichever is less. The balance of the optionee's gain on a
disqualifying disposition, if any, is taxed as capital gain.
19
<PAGE>
The Company is not entitled to any tax deduction as a result of the
grant or exercise of an ISO, or on a later disposition of the Common Stock
received, except that in the event of a disqualifying disposition, the Company
is entitled to a deduction equal to the amount of ordinary income realized by
the optionee.
NON-QUALIFIED STOCK OPTIONS. A NQSO is any stock option other than an
ISO. Such options are referred to as "non-qualified" because they do not meet
the requirements of, and are not eligible for, the favorable tax treatment
provided by Section 422 of the Code.
No taxable income is realized by an optionee upon the grant of a NQSO,
nor is the Company entitled to a tax deduction by reason of such grant. Upon the
exercise of a NQSO, the optionee realizes ordinary income in an amount equal to
the excess of the fair market value of the Common Stock on the date of exercise
over the exercise price and the Company is entitled to a corresponding tax
deduction.
Upon a subsequent sale or other disposition of Common Stock acquired
through exercise of a NQSO, the optionee realizes a short-term or long-term
capital gain or loss to the extent of any intervening appreciation or
depreciation. Such a resale by the optionee has no tax consequence to the
Company.
The following table sets forth grants of options made under the current
plan during 1998 to (i) each of the executive officers named on page four; (ii)
all current executive officers, as a group; (iii) all current directors who are
not executive officers, as a group; and (iv) all employees, including all
current officers who are not executive officers, as a group. Grants under the
current plan and the new Plan are made at the discretion of the Board of
Directors or Committee. Accordingly, future grants under the new Plan are not
yet determinable.
20
<PAGE>
PLAN BENEFITS
STOCK OPTION PLAN
NUMBER OF SHARES WEIGHTED AVERAGE
SUBJECT TO OPTIONS EXERCISE PRICE
NAME AND POSITION GRANTED (#) PER SHARE ($/SH)
- ----------------- ------------------ ----------------
Jerry C. Moyes
Chairman of the Board
& President
William F. Riley III
Executive Vice President &
Chief Financial Officer
Rodney K. Sartor
Executive Vice President
Patrick J. Farley
Executive Vice President
Kevin H. Jensen
Executive Vice President 75,000 $10.02
Executive Officer Group 75,000 $10.02
Director Group 4,500 $12.61
Employee Group 732,900 $10.15
- ----------
REQUIRED VOTE
Approval of the adoption of the Plan requires the affirmative vote of a
majority of shares of Common Stock present at the Annual Meeting in person or by
proxy. Abstentions are considered present for this proposal, so they will have
the same effect as votes against the adoption. Broker non-votes are not
considered present for this proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR
APPROVAL OF THE ADOPTION OF THE SWIFT TRANSPORTATION CO., INC. 1999 STOCK OPTION
PLAN.
21
<PAGE>
APPROVAL OF THE SWIFT TRANSPORTATION CO., INC.
NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN,
AS AMENDED
(PROPOSAL NO. 3)
The Swift Transportation Co., Inc. Non-Employee Directors Stock Option
Plan (the "Director Plan") authorizes grants of Director Options to all
non-employee directors of the Company. Currently, the Company's Board of
Directors is composed of three (3) non-employee directors. The last reported
sale price for the Common Stock on the Nasdaq National Market on March 16, 1999,
was $19.42 per share.
The Company's Board of Directors has approved and recommends that the
stockholders approve amendments to the Director Plan (the "1999 Amendments").
These 1999 Amendments include permitting the Company's Board of Directors to
grant options to the non-employee directors that are transferable by such
directors.
The Company's Board of Directors believes these changes will enchance
the value of the Company by (i) strengthening the Company's ability to attract
and retain the services of experienced and knowledgeable persons as directors of
the Company, and (ii) more closely linking the personal interest of directors to
those of the Company's stockholders. The following summary of the Director Plan
and the 1999 Amendments is qualified in its entirety by reference to the
Director Plan, as amended, a copy of which is attached to this proxy statement
as APPENDIX B.
DESCRIPTION OF THE AVAILABLE AWARDS
The amended Director Plan provides that on the last business day in May
of each year on which the Company's Common Stock is traded, each person serving
as a director of the Company on that date, who is not also an employee of the
Company, will automatically be granted an option to purchase 1,000 shares of
Company Common Stock.
DIRECTOR OPTIONS
The option price for the Director Options is 85% of the fair market
value of the Common Stock on the relevant grant date. The term of each Director
Option is six (6) years from the date of grant and such options are immediately
fully vested and exercisable.
The following table shows the grants that will be made during fiscal
year 1999 under the Director Plan assuming that the plan is approved by the
Stockholders and that the current compensation of the Board does not change.
22
<PAGE>
NAME AND POSITION DOLLAR VALUES ($) NUMBER OF UNITS
----------------- ----------------- ---------------
Jerry C. Moyes 0 0(1)
Chairman of the Board, President
and Chief Executive Officer
William F. Riley III 0 0(1)
Executive Vice President, Chief
Financial Officer and Secretary
Rodney K. Sartor 0 0(1)
Executive Vice President
Patrick J. Farley 0 0(1)
Executive Vice President
Kevin H. Jensen 0 0(1)
Executive Vice President
Executive Group 0 0(1)
(5 persons)
Non-Employee Director Group $58,260(2) 3,000(3)
(3 person)
Non-Executive Officer 0 0(1)
Employee Group
- ----------
(1) These individuals and groups would not be participants in the Director
Plan, as amended, but are required by Securities and Exchange Commission
rules to be listed in this table.
(2) Based on the last reported sale price of a share of the Company's Common
Stock on the Nasdaq National Market on March 16, 1999 ($19.42), multiplied
by 3,000, which is the aggregate number of Director Option shares to be
granted to the Company's non-employee directors.
(3) Reflecting 1,000 shares of Director Options to be granted to each of the
Company's non- employee directors on May 31, 1999.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR
APPROVAL OF THE SWIFT TRANSPORTATION CO., INC. NON- EMPLOYEE DIRECTORS STOCK
OPTION PLAN, AS AMENDED.
23
<PAGE>
APPROVAL OF AMENDMENT OF THE COMPANY'S
ARTICLES OF INCORPORATION TO INCREASE
THE NUMBER OF SHARES OF COMMON STOCK
AUTHORIZED FOR ISSUANCE
(PROPOSAL NO. 4)
The Company's Board of Directors has determined that it is in the best
interests of the Company and its stockholders to amend the Company's Articles of
Incorporation to increase the authorized number of shares of Common Stock from
75,000,000 to 150,000,000 (the "Proposed Amendment"). If the Company's
stockholders approve the Proposed Amendment, the Company will be authorized to
issue a total of 151,000,000 shares of capital stock: 150,000,000 shares of
Common Stock and 1,000,000 shares of Preferred Stock.
If the Company's stockholders approve the Proposed Amendment, it will
become effective upon filing of the Company's Amended Articles of Incorporation
with the Secretary of State of the State of Nevada. A copy of the Company's
Amended Articles of Incorporation reflecting the adoption of the Proposed
Amendment is attached hereto as APPENDIX C.
PURPOSE AND EFFECTS OF THE PROPOSED AMENDMENT
The objective of the increase in the authorized number of shares of
Common Stock is to ensure that the Company has sufficient shares available for
business needs and activities as they arise. Such future activities may include,
without limitation, effecting stock splits or dividends, effecting additional
financings, providing equity incentives to employees, officers or directors or
establishing strategic relationships with corporate partners. The additional
shares also may be issued to acquire or invest in other businesses.
On the Record Date, there were 42,511,914 shares of Common Stock issued
and outstanding. The issuance of additional shares of Common Stock would
decrease the proportionate equity interest of the Company's current stockholders
and, depending on the price paid for such additional shares, could result in
dilution to the Company's current stockholders. If issued, the additional shares
of Common Stock would have rights identical to the currently outstanding shares
of Common Stock. Adoption of the Proposed Amendment would not affect the rights
of the Company's current stockholders, except for effects incidental to
authorizing an increase in the number of authorized shares of Common Stock.
If the Company's stockholders approve the Proposed Amendment, the Board
of Directors may cause the issuance of additional shares of Common Stock without
further vote of the stockholders. Current holders of Common Stock do not have
preemptive or similar rights, which means that current stockholders do not have
a prior right to purchase any new issue of capital stock of the Company in order
to maintain their proportionate ownership level. Other than existing stock
24
<PAGE>
options and warrants, the Company currently has no commitments to issue
additional shares of Common Stock, although it is continually exploring
potential acquisitions and financing possibilities, which could lead to the
issuance of additional shares at any time.
There currently are no shares of Preferred Stock outstanding.
The Proposed Amendment requires the affirmative vote of the holders of
a majority of the issued and outstanding shares of Common Stock entitled to vote
at the Annual Meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL
OF THE PROPOSED AMENDMENT.
RELATIONSHIP WITH
INDEPENDENT ACCOUNTANTS
The principal independent public accounting firm utilized by the
Company during the fiscal year ended December 31, 1998 was KPMG LLP, independent
certified public accountants (the "Auditors"). It is presently contemplated that
the Auditors will be retained as the principal accounting firm to be utilized by
the Company during the current fiscal year. A representative of the Auditors
will attend the Annual Meeting for the purpose of responding to appropriate
questions and will be afforded an opportunity to make a statement if the
Auditors so desire.
STOCKHOLDER PROPOSALS
Stockholder proposals for the 2000 Annual Meeting must be received at
the principal executive offices of the Company by December 15, 1999 to be
considered for inclusion in the Company's proxy materials relating to such
meeting.
OTHER MATTERS
The Board of Directors does not intend to present at the Annual Meeting
any matters other than those described herein and does not presently know of any
matters that will be presented by other parties.
25
<PAGE>
SWIFT TRANSPORTATION CO., INC.
/s/ Jerry C. Moyes
----------------------------------------
Jerry C. Moyes
Chairman of the Board, President
and Chief Executive Officer
April 7, 1999
26
<PAGE>
APPENDIX A
SWIFT TRANSPORTATION CO., INC.
1999 STOCK OPTION PLAN
<PAGE>
SWIFT TRANSPORTATION CO., INC.
1999 STOCK OPTION PLAN
May 20, 1999
1. PURPOSE OF THE PLAN. The purposes of this Swift Transportation Co.,
Inc. 1999 Stock Option Plan are to attract and retain the best available
personnel for positions of substantial responsibility, to provide successful
management of the Company's business, to provide additional incentive to certain
key employees of the Company, and to promote the success of the Company's
business through the grant of options to purchase shares of the Company's Common
Stock.
Options granted hereunder may be either "Incentive Stock Options," as
defined in Section 422 of the Code, or "Non-Statutory Stock Options," at the
discretion of the Board and as reflected in the terms of the written option
agreement.
2. DEFINITIONS. As used herein, the following definitions shall apply:
(a) "BOARD" shall mean the Board of Directors of the Company or the
Committee, if one has been appointed.
(b) "CODE" shall mean the Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated thereunder.
(c) "COMMON STOCK" shall mean the common stock of the Company
described in the Company's Certificate of Incorporation, as amended.
(d) "COMPANY" shall mean Swift Transportation Co., Inc., a Nevada
corporation, and shall include any parent or subsidiary corporation of the
Company as defined in Section 424(e) and (f) of the Code.
(e) "COMMITTEE" shall mean the Committee appointed by the Board in
accordance with Section 4(a) of the Plan, if one is appointed.
(f) "EMPLOYEE" shall mean any person, including officers and
directors, employed by the Company. The payment of a director's fee by the
Company shall not be sufficient to constitute "employment" by the Company.
(g) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended.
(h) "FAIR MARKET VALUE" shall mean, with respect to the date a
given Option is granted or exercised, the value of the Common Stock determined
by the Board in such manner as it may deem equitable for Plan purposes but, in
the case of an Incentive Stock Option, no less than
A-1
<PAGE>
is required by applicable laws or regulations; provided, however, that where
there is a public market for the Common Stock, the Fair Market Value per Share
shall mean, in the event the stock is listed or admitted to trading on the
National Association of Securities Dealers Automated Quotation--National Market
System, New York Stock Exchange or the American Stock Exchange, the closing
price of the Common Stock on such exchange on the date of grant as reported in
THE WALL STREET JOURNAL, or, if the Common Stock is not listed or admitted to
trading on any such exchange, the last quoted price or, if not quoted, the
average of the closing bid and asked prices as reported by National Association
of Securities Dealers Automated Quotation (NASDAQ), or such other system then in
use, or if the Common Stock is not quoted by any such organization, the average
of the closing bid and asked prices in the over-the-counter market as furnished
by any New York Stock Exchange member firm selected from time to time by the
Company for that purpose.
(i) "INCENTIVE STOCK OPTION" shall mean an Option which is intended
to qualify as an incentive stock option within the meaning of Section 422 of the
Code.
(j) "NON-EMPLOYEE DIRECTOR" means a member of the Board who
qualifies as a "Non-Employee Director" as defined in Rule 16b-3(b)(3) of the
Exchange Act, or any successor definition adopted by the Board.
(k) "OPTION" shall mean a stock option granted under the Plan.
(l) "OPTIONED STOCK" shall mean the Common Stock subject to an
Option.
(m) "OPTIONEE" shall mean an Employee of the Company who has been
granted one or more Options.
(n) "PARENT" shall mean a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(o) "PLAN" shall mean this Swift Transportation Co., Inc. 1999
Stock Option Plan.
(p) "SHARE" shall mean a share of the Common Stock, as adjusted in
accordance with Section 11 of the Plan.
(q) "STOCK OPTION AGREEMENT" shall mean the written Agreement
evidencing the grant of an Option, in substantially the form of EXHIBIT 1 or
EXHIBIT 2 hereto.
(r) "SUBSIDIARY" shall mean a "subsidiary corporation," whether now
or hereafter existing, as defined in Section 424(f) of the Code.
(s) "TAX DATE" shall mean the date an Optionee is required in pay
the Company an amount with respect to tax withholding obligations in connection
with the exercise of an Option.
A-2
<PAGE>
3. COMMON STOCK SUBJECT TO THE PLAN.
(a) NUMBER OF SHARES. Subject to the provisions of Section 11 of
the Plan, the maximum aggregate number of shares which may be optioned and sold
under the Plan is 750,000 Shares of Common Stock. The Shares may be authorized,
but unissued, or previously issued Shares acquired or to be acquired by the
Company and held in treasury.
(b) LAPSED OPTIONS. If an Option should expire or become
unexercisable for any reason without having been exercised in full, the
unpurchased Shares covered by such Option shall, unless the Plan shall have been
terminated, be available for future grants of Options.
(c) LIMITATION ON NUMBER OF SHARES SUBJECT TO OPTIONS.
Notwithstanding any provision in the Plan to the contrary, and subject to the
adjustment in Section 11, the maximum number of shares of Stock with respect to
one or more Options that may be granted to any one individual during the
Company's fiscal year is 100,000.
4. ADMINISTRATION OF THE PLAN.
(a) PROCEDURE.
(i) The Plan shall be administered by the Board in accordance
with Securities and Exchange Commission Rule 16b-3 ("Rule 16b-3"); provided,
however, that the Board may appoint a Committee to administer the Plan at any
time or from time to time. If the Board appoints a Committee, the Committee
shall consist of at least two individuals, each of whom qualifies as (i) a
Non-Employee Director, and (ii) an "outside director" under Code Section 162(m)
and the regulations issued thereunder. Reference to the Committee shall refer to
the Board if the Board does not appoint a Committee.
(ii) Once appointed, the Committee shall continue to serve
until otherwise directed by the Board. From time to time the Board may increase
the size of the Committee and appoint additional members thereof, remove members
(with or without cause), and appoint new members in substitution therefor, fill
vacancies however caused, or remove all members of the Committee and thereafter
directly administer the Plan.
(b) POWERS OF THE BOARD. Subject to the provisions of the Plan, the
Board shall have the authority, in its discretion: (i) to grant Incentive Stock
Options, in accordance with Section 422 of the Code and to grant "Non-Statutory
Stock Options;" (ii) to determine, upon review of relevant information and in
accordance with Section 2 of the Plan, the Fair Market Value of the Common
Stock; (iii) to determine the exercise price per Share of Options to be granted,
which exercise price shall be determined in accordance with Section 8(a) of the
Plan; (iv) to determine the Employees to whom, and the time or times at which
Options shall be granted and the number of shares to be represented by each
Option; (v) to interpret the Plan; (vi) to prescribe, amend and rescind rules
and procedures relating to the Plan; (vii) to determine the terms and provisions
A-3
<PAGE>
of each Option granted (which need not be identical) and, with the consent of
the Optionee thereof, modify or amend each Option; (viii) to accelerate or defer
(with the consent of the Optionee) the exercise date of any Option; (ix) to
authorize any person to execute on behalf of the Company any instrument required
to effectuate the grant of an Option previously granted by the Board; (x) to
accept or reject the election made by an Optionee pursuant to Section 17 of the
Plan; and (xi) to make all other determinations deemed necessary or advisable
for the administration of the Plan.
(c) EFFECT OF BOARD'S DECISION. All decisions, determinations and
interpretations of the Board shall be final and binding on all Optionees and any
other holders of any Options granted under the Plan.
5. ELIGIBILITY.
(a) GENERAL. Consistent with the Plan's purposes, Options may be
granted only to key Employees of the Company as determined by the Board. An
Employee who has been granted an Option may, if he is otherwise eligible, be
granted an additional Option or Options. Incentive Stock Options may be granted
only to those Employees who meet the requirements applicable under Section 422
of the Code. Notwithstanding anything contained herein to the contrary, Jerry
Moyes shall not be eligible to participate in this Plan.
(b) INCENTIVE STOCK OPTIONS. With respect to Incentive Stock
Options granted under the Plan, the aggregate Fair Market Value (determined at
the time the Incentive Stock Option is granted) of the Common Stock with respect
to which Incentive Stock Options are exercisable for the first time by the
Employee during any calendar year (under all plans of the Company and its Parent
and Subsidiary corporations) shall not exceed One Hundred Thousand Dollars
($100,000). To the extent that Incentive Stock Options are first exercisable by
an Employee in excess of such limitation, the excess shall be considered
Non-Statutory Stock Options.
(c) NO RIGHT TO CONTINUED EMPLOYMENT. The Plan shall not confer
upon any Optionee any right with respect to continuation of employment with the
Company, nor shall it interfere in any way with his right or the Company's right
to terminate his employment at any time.
6. SHAREHOLDER APPROVAL AND EFFECTIVE DATES. The Plan shall take effect
on May 20, 1999, the date on which the Board and all stockholders approve the
Plan. No Option may be granted after May 20, 2009 (ten years from the effective
date of the Plan); provided, however, that the Plan and all outstanding Options
shall remain in effect until such Options have expired or until such Options are
canceled.
7. TERM OF OPTION. Unless otherwise provided in the Stock Option
Agreement, the term of each Incentive Stock Option shall be five (5) years from
the date of grant thereof. In no case shall the term of any Incentive Stock
Option exceed ten (10) years from the date of grant. Unless otherwise provided
in the Stock Option Agreement, the term of each Option which is not an Incentive
Stock Option shall be ten years from the date of grant. Notwithstanding the
above, in the
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case of an Incentive Stock Option granted to an Employee who, at the time the
Incentive Stock Option is granted, owns ten percent (10%) or more of the Common
Stock as such amount is calculated under Section 422(b)(6) of the Code ("Ten
Percent Shareholder"), the term of the Incentive Stock Option shall be five (5)
years from the date of grant thereof or such shorter time as
may be provided in the Stock Option Agreement.
8. EXERCISE PRICE AND PAYMENT.
(a) EXERCISE PRICE. The per Share exercise price for the Shares to
be issued pursuant to exercise of an Option shall be determined by the Board,
but in the case of an Incentive Stock Option shall be no less than one hundred
percent (100%) of the Fair Market Value per Share on the date of grant;
provided, further, that in the case of an Incentive Stock Option granted to an
Employee who, at the time of the grant of such Incentive Stock Option, is a Ten
Percent Shareholder, the per Share exercise price shall be no less than one
hundred ten percent (110%) of the Fair Market Value per Share on the date of
grant. In no event may the exercise price in the case of a Non- Statutory Stock
Option be less than eighty-five (85%) of the Fair Market Value per share on the
date of grant.
(b) PAYMENT. The price of an exercised Option and any taxes
attributable to the delivery of Common Stock under the Plan, or portion thereof,
shall be paid:
(i) In United States dollars in cash or by check, bank draft
or money order payable to the order of the Company; or
(ii) At the discretion of the Board, through the delivery of
shares of Common Stock (either actual tender or attestation), with an aggregate
Fair Market Value equal to the option price, provided that such shares of Common
Stock have been held by the Employee at least six months prior to the date of
delivery; or
(iii) By a combination of (i) and (ii) above.
The Board shall determine acceptable methods for tendering Common Stock
as payment upon exercise of an Option and may impose such limitations and
prohibitions on the use of Common Stock to exercise an Option as it deems
appropriate. With respect to Non-Statutory Stock Options, at the election of the
Optionee pursuant to Section 17, the Company may satisfy its withholding
obligations by retaining such number of Shares of Common Stock subject to the
exercised Option which have an aggregate Fair Market Value on the exercise date
equal to the Company's aggregate federal, state, local and foreign tax
withholding and FICA and FUTA obligations with respect to income generated by
the exercise of the Option by Optionee.
A-5
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9. EXERCISE OF OPTION.
(a) PROCEDURE FOR EXERCISE; RIGHTS AS A SHAREHOLDER. Any Option
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Board, including performance criteria with respect to the
Company and/or the Optionee, and as shall be permissible under the terms of the
Plan. Unless otherwise determined by the Board at the time of grant, an Option
may be exercised in whole or in part. An Option may not be exercised for a
fraction of a Share.
An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may, as authorized by the Board, consist of any
consideration and method of payment allowable under Section 8(b) of the Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. No adjustment will be made for a
dividend or other right for which the record date is prior to the date the stock
certificate is issued, except as provided in Section 11 of the Plan.
Exercise of an Option in any manner shall result in a decrease in the
number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option by the number of Shares as to which the
Option is exercised.
Notwithstanding anything contained in this Plan to the contrary, the
Board may establish certain restrictions on the times at which an Option may be
exercised after a number of elapsed years together with cumulative exercise
rights and may retain certain rights with respect to a fixed repurchase price
for the Option Stock if the Employee voluntarily terminates his employment with
the Company within a certain period of time after exercising the Option or whose
employment is involuntarily terminated for gross misconduct, fraud,
embezzlement, theft, breach of any fiduciary duty owed to the Company or for
nonperformance of duties.
(b) TERMINATION OF STATUS AS AN EMPLOYEE. Unless otherwise provided
in an Option Agreement relating to an Option that is not an Incentive Stock
Option, if an Employee's employment by the Company is terminated, except if such
termination is voluntary or occurs due to retirement with the consent of the
Board, death or disability, the Option, to the extent not exercised, shall cease
on the date on which Employee's employment by the Company is terminated. If an
Employee's termination is voluntary or occurs due to retirement with the consent
of the Board, then the Employee may, but only within thirty (30) days (or such
other period of time not exceeding three (3) months as is determined by the
Board) after the date he ceases to be an Employee of the Company, exercise his
Option to the extent that he was entitled to exercise it at the date of such
termination, but not later than the expiration of the term of the Option. To the
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extent that he was not entitled to exercise the Option at the date of such
termination, or if he does not exercise such Option (which he was entitled to
exercise) within the time specified herein, the Option shall terminate.
(c) DISABILITY. Unless otherwise provided in an Option Agreement
relating to an Option that is not an Incentive Stock Option, notwithstanding the
provisions of Section 9(b) above, in the event an Employee is unable to continue
his employment with the Company as a result of his permanent and total
disability (as defined in Section 22(e)(3) of the Code), he may, but only within
three (3) months (or such other period of time not exceeding twelve (12) months
as it is determined by the Board) from the date of termination, exercise his
Option to the extent he was entitled to exercise it at the date of such
termination, but not later than the expiration of the term of the Option. To the
extent that he was rot entitled to exercise the Option at the date of
termination, or if he does not exercise such Option (which he was entitled to
exercise) within the time specified herein, the Option shall terminate.
(d) DEATH OF OPTIONEE. Unless otherwise provided in an Option
Agreement relating to an Option that is not an Incentive Stock Option, if
Optionee dies during the term of the Option and is at the time of his death an
Employee of the Company who shall have been in continuous status as an Employee
since the date of grant of the Option, the Option may be exercised at any time
within one (1) year following the date of death (or such other period of time as
is determined by the Board), by the Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only to
the extent that Optionee was entitled to exercise the Option on the date of
death and not later than the expiration of the term of the Option. To the extent
that decedent was not entitled to exercise the Option on the date of death, or
if the Optionee's estate, or person who acquired the right to exercise the
Option by bequest or inheritance, does not exercise such Option (which he was
entitled to exercise) within the time specified herein, the Option shall
terminate.
10. NON-TRANSFERABILITY OF OPTION. Except as otherwise provided by the
Committee, an Option may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee or by his guardian or legal representative.
11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER. Subject to
any required action by the shareholders of the Company, the number of shares of
Common Stock covered by each outstanding Option, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options have yet been granted or which have been returned to the Plan
upon cancellation or expiration of an Option, as well as the price per share of
Common Stock covered by each such outstanding Option, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, consolidation,
subdivision, stock dividend, combination or reclassification of the Common
Stock, or any other increase or decrease in the number of issued shares of
Common Stock effected without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the Company shall not
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be deemed to have been "effected without receipt of consideration." Such
adjustment shall be made by the Board, whose determination in that respect shall
be final, binding and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class shall affect, and no adjustment by
reason thereof, shall be made with respect to the number or price of shares of
Common Stock subject to an Option.
In the event of a proposed dissolution or liquidation of the Company or
the proposed sale of all or substantially all of the assets of the Company, or
the merger of the Company with or into another corporation, all outstanding
Options, will become fully vested and exercisable except in the event that the
surviving or resulting entity agrees to assume the Options on terms and
conditions that substantially preserve the Optionee's rights and benefits of the
Option then outstanding. To the extent that this provision causes Incentive
Stock Options to exceed the dollar limitation set forth in Section 5(b), the
excess Options will be deemed to be non-qualified stock options. Upon, or in
anticipation of, such an event, the Committee may cause every Option outstanding
hereunder to terminate at a specific time in the future and will give each
Optionee the right to exercise Options during a period of time as the Committee,
in its sole and absolute discretion, will determine, except in the event that
the surviving or resulting entity agrees to assume the Options on terms and
conditions that substantially preserve the Optionee's rights and benefits of the
Options then outstanding.
12. TIME OF GRANTING OPTIONS. The date of grant of an Option shall, for
all purposes, be the date on which the Board makes the determination granting
such Option. Notice of the determination shall be given to each Employee to whom
an Option is so granted within a reasonable time after the date of such grant.
13. AMENDMENT AND TERMINATION OF THE PLAN.
(a) AMENDMENT AND TERMINATION. The Board, or the Committee
with the Board's approval, may amend or terminate the Plan from time to time in
such respect as the Board may deem advisable; provided, however, that to the
extent necessary and desirable to comply with any applicable law, regulation, or
stock exchange rule, the Company shall obtain shareholder approval of any Plan
amendment in such a manner and to such a degree as required.
(b) EFFECT OF AMENDMENT OR TERMINATION. Any such amendment or
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee and the
Company.
14. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued
pursuant to the exercise of an Optionee unless the exercise of such Option and
the issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations
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promulgated thereunder, and the requirements of any stock exchange upon which
the Share may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such
compliance.
As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.
Inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.
In the case of an Incentive Stock Option, any Optionee who disposes of
Shares of Common Stock acquired on the exercise of an Option by sale or exchange
(a) either within two (2) years after the date of the grant of the Option under
which the Common Stock was acquired or (b) within one (1) year after the
acquisition of such Shares of Common Stock shall notify the Company of such
disposition and of the amount realized upon such disposition.
15. RESERVATION OF SHARES. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
16. OPTION AGREEMENT. Options shall be evidenced by written Stock
Option Agreement in such form as the Board shall approve.
17. WITHHOLDING TAXES. Subject to Section 4(b)(x) of the Plan and prior
to the Tax Date, the Optionee may make an irrevocable election to have the
Company withhold from those Shares that would otherwise be received upon the
exercise of any Non-Statutory Stock Option, a number of Shares having a Fair
Market Value equal to the minimum amount necessary to satisfy the Company's
federal, state, local and foreign tax withholding obligations and FICA and FUTA
obligations with respect to the exercise of such Option by the Optionee.
An Optionee who is also an officer of the Company must make the
above-described election:
(a) at least six months after the date of grant of the Option
(except in the event of death or disability); and
(b) either:
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(i) six months prior to the Tax Date, or
(ii) prior to the Tax Date and during the period beginning on
the third business day following the date the Company releases its quarterly or
annual statement of sales and earnings and ending on the twelfth business day
following such date.
18. MISCELLANEOUS PROVISIONS
(a) PLAN EXPENSES. Any expenses of administering this Plan shall be
borne by the Company.
(b) USE OF EXERCISE PROCEEDS. The payment received from Optionees
from the exercise of Options shall be used for the general corporate purposes of
the Company.
(c) CONSTRUCTION OF PLAN. The place of administration of the Plan
shall be in the State of Arizona, and the validity, construction,
interpretation, administration and effect of the Plan and of its rules and
regulations, and rights relating to the Plan, shall be determined in accordance
with the laws of the State of Nevada and in accordance with the Code.
(d) INDEMNIFICATION. In addition to such other rights of
indemnification as they may have as members of the Board, the members of the
Board shall be indemnified by the Company against all costs and expenses
reasonably incurred by them in connection with any action, suit or proceeding to
which they or any of them may be a party by reason of any action taken or
failure to act under or in connection with the Plan or any Option, and against
all amounts paid by them in settlement thereof (provided such settlement is
approved by independent legal counsel selected by the Company) or paid by them
in satisfaction of a judgment in any such action, suit or proceeding, except a
judgment based upon a finding of bad faith; provided that upon the institution
of any such action, suit or proceeding a Board member shall, in writing give the
Company notice thereof and an opportunity, at its own expense, to handle and
defend the same before such Board member undertakes to handle and defend it on
his own behalf.
(e) GENDER. For purposes of this Plan, words used in the masculine
gender shall include the feminine and neuter, and the singular shall include the
plural and vice versa, as appropriate.
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EXHIBIT 1
NON-STATUTORY STOCK OPTION AGREEMENT
BY THIS STOCK OPTION AGREEMENT ("Agreement") made and entered into this
_____ day of __________, _____ ("Grant Date"), SWIFT TRANSPORTATION CO., INC., a
Nevada corporation (the "Company"), and ___________________, a key employee of
the Company (the "Optionee") hereby state, confirm, represent, warrant and agree
as follows:
I
RECITALS
1.1 The Company, through its Board of Directors (the "Board"), has
determined that in order to attract and retain the best available personnel for
positions of substantial responsibility to provide successful management of the
Company's business, it must offer a compensation package that provides key
employees of the Company a chance to participate financially in the success of
the Company by developing an equity interest in it.
1.2 As part of the compensation package, the Company has adopted the
Swift Transportation Co., Inc. 1999 Stock Option Plan (the "Plan") effective as
of May 20, 1999.
1.3 Shareholders of the Company have adopted and approved the Plan on
May 20, 1999.
1.4 By this Agreement, the Company and the Optionee desire to establish
the terms upon which the Company is willing to grant to the Optionee, and upon
which the Optionee is willing to accept from the Company, an option to purchase
shares of common stock of the Company ("Common Stock").
II
AGREEMENTS
2.1 GRANT OF NON-STATUTORY STOCK OPTION. Subject to the terms and
conditions hereinafter set forth and those provisions set forth and those
contained in the Plan, the Company grants to the Optionee the right and option
(the "Option") to purchase from the Company all or any part of an aggregate
number of _____________ (_____) shares of Common Stock, authorized but unissued
or, at the option of the Company, treasury stock if available (the "Optioned
Shares").
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2.2 EXERCISE OF OPTION. Subject to the terms and conditions of this
Agreement and those of the Plan, the Option may be exercised only by completing
and signing a written notice in substantially the following form:
I hereby exercise the Option granted to me by Swift Transportation Co.,
Inc. and elect to purchase __________ shares of $.001 par value Common
Stock of Swift Transportation Co., Inc. for the purchase price to be
determined under Paragraph 2.3 of this Stock Option Agreement.
2.3 PURCHASE PRICE. The price to be paid for the Optioned Shares (the
"Purchase Price") shall be $______________ per share.
2.4 PAYMENT OF PURCHASE PRICE. Payment of the Purchase Price shall be
made as follows:
(a) In United States dollars in cash or by check, bank draft or
money order payable to the Company, or
(b) At the discretion of the Board, through the delivery of shares
of Common Stock with an aggregate fair market value at the date of such
delivery, equal to the Purchase Price, or
(c) By a combination of both (a) and (b) above.
The Board shall determine acceptable methods for rendering Common Stock as
payment upon exercise of an Option and may impose such limitations and
conditions on the use of Common Stock to exercise an Option as it deems
appropriate. At the election of the Optionee pursuant to Section 17 of the Plan,
and subject to the acceptance of such election by the Board, to satisfy the
Company's withholding obligations, it may retain such number of shares of Common
Stock subject to the exercised Option which have an aggregate Fair Market Value
(as defined in the Plan) on the date of exercise equal to the Company's
aggregate federal, state, local and foreign tax withholding and FICA and FUTA
obligations with respect to income generated by the exercise of the Option by
Optionee.
2.5 EXERCISABILITY OF OPTION. Subject to the provisions of Paragraph
2.6, and except as otherwise provided in Paragraphs 2.8 and 2.9, the Option may
be exercised by the Optionee while in the employ of Company which shall include
any parent ("Parent") or subsidiary ("Subsidiary") corporation of the Company as
defined in Sections 425(e) and (f), respectively, of the Internal Revenue Code
of 1986, as amended ("Code"), in whole or in part from time to time, but only in
accordance with the following schedule:
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<PAGE>
CUMULATIVE PERCENTAGE OF
ELAPSED NUMBER OF YEARS SHARES SUBJECT TO OPTIONS AS TO
AFTER GRANT DATE WHICH OPTION MAY BE EXERCISED
---------------- -------------------------------
0-4 None
5 20%
6 40%
7 60%
8 80%
9 100%
For purposes of the foregoing schedule, a year is measured from the grant date
to the anniversary of the grant date and between anniversary dates thereof.
2.6 TERMINATION OF OPTION. Except as otherwise provided herein, the
Option, to the extent not heretofore exercised, shall terminate upon the first
to occur of the following dates:
(a) The date on which the Optionee's employment by the Company is
terminated except if such termination is voluntary, or occurs due to
retirement with the consent of the Board, death or disability within
the meaning of Section 22(e)(3) of the Code;
(b) Thirty (30) days after voluntary termination or termination
due to retirement with the consent of the Board;
(c) Six (6) months afar termination due to disability within the
meaning of Section 22(e)(3) of the Code;
(d) One (1) year after the Optionee's death; or
(e) __________________, (being the expiration of a term equal to
or less than ten (10) years from the Grant Date).
2.7 ADJUSTMENTS. In the event of any stock split, reverse stock split,
stock divided, combination or reclassification of shares of Common Stock or any
other increase or decrease in the number of issued shares of Common Stock, me
number and kind of Optioned Shares (including any Option outstanding after
termination of employment or deal) and the Purchase Price per share shall be
proportionately and appropriately adjusted without any change in the aggregate
Purchase Price to be paid therefor upon exercise of the Option. The
determination by the Board as to the terms of any of the foregoing adjustments
shall be conclusive and binding.
2.8 LIQUIDATION, SALE OF ASSETS OR MERGER. In the event of a proposed
dissolution or liquidation of me Company, the Option will terminate immediately
prior to the consummation of such proposed action, unless otherwise provided by
the Board. In the event of a proposed sale of all or substantially all of the
assets of the Company, or the merger of the Company with or into
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<PAGE>
another corporation, the option shall be assumed or an equivalent option shall
be substituted by such successor corporation, unless the Board determines that
the Optionee shall have the right to exercise the Option as to all of the Common
Stock subject to the Option. If the Board makes an Option fully exercisable, the
Board shall notify the Optionee that the Option shall be fully exercisable for a
period of thirty (30) days from the date of such notice (but not later than the
expiration of the Option term under Paragraph 2.6), and the Option will
terminate upon the expiration of such period. In the event the thirtieth (30th)
day referred to in this Paragraph shall fall on a day that is not a business
day, then the thirtieth (30th) day shall be the next following business day.
2.9 ACQUISITION. If any person, corporation or other entity or group
thereof (the "Acquiror"), acquires (an "Acquisition"), other than by merger or
consolidation or purchase from the Company, the beneficial ownership (as that
term is used in Section 13(d)(1) of the Securities Exchange Act of 1934 and the
rules and regulations promulgated thereunder) or shares of the Company's common
stock which, when added to any other shares the beneficial ownership of which is
held by the Acquiror, shall have more than 50% of the votes that are entitled to
be cast at meetings of shareholders, any portion of the Option that was not
currently exercisable pursuant to Section 2.5 prior to the date of the
Acquisition shall become immediately exercisable and the Optionee may elect,
during the period commencing on the date of the Acquisition and ending at me
close of business on the thirtieth (30th) day following the date of the
Acquisition (but not later than the expiration of the Option term under
Paragraph 2.6), to exercise the Option in whole or in part. In the event the
thirtieth (30th) day referred to in this Section shall fall on a day that is not
a business day, then the thirtieth (30th) day shall be deemed to be the next
following business day.
2.10 NOTICES. Any notice to be given under the terms of the Agreement
("Notice") shall be addressed to the Company in care of its secretary at 2200
South 75th Avenue, Phoenix, Arizona 85043, or at its then current corporate
headquarters. Notice to be given to the Optionee shall be addressed to him or
her at his or her then current residential address as appearing on the payroll
records.
Notice shall be deemed duly given when enclosed in a properly sealed
envelope and deposited by certified mail, return receipt requested, in a post
office or branch post office regularly maintained by the United States
Government.
2.11 TRANSFERABILITY OF OPTION. The Option shall not be transferable by
the Optionee otherwise than by the will or the laws of descent and distribution,
and may be exercised during the life of the Optionee only by the Optionee.
2.12 OPTIONEE NOT A SHAREHOLDER. The Optionee shall not be deemed for
any purposes to be a shareholder of the Company with respect to any of the
Optioned Shares except to the extent that the Option herein granted shall have
been exercised with respect thereto and a stock certificate issued therefor.
2.13 DISPUTES OR DISAGREEMENTS. As a condition of the granting of the
Option herein granted, the Optionee agrees, for himself and his personal
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<PAGE>
representatives, that any disputes or disagreement which may arise under or as a
result of or pursuant to this Agreement shall be determined by the Board in its
sole discretion, and that any interpretation by the Board of the terms of this
Agreement shall be final, binding and conclusive.
2.14 RIGHT TO REPURCHASE. In the event that:
(a) Optionee voluntarily terminates employment with the
Company or if Optionee's employment is involuntarily terminated for
nonperformance of duties and if Optionee subsequently becomes a sole
proprietor, partner, stockholder, officer, director, employee,
independent contractor or consultant of or to any business which is
engaged in the contract of common carriage of goods; or
(b) if Optionee's employment is involuntarily terminated for
gross misconduct, fraud, embezzlement, theft or breach of any fiduciary
duty owed to the Company
(the "Triggering Event"), then the Board, at its discretion may elect to
repurchase from Optionee Optioned Shares for which an Option was granted to and
exercised by Optionee, for the Purchase Price paid by Optionee under Paragraph
2.3, if such Triggering Event occurs any time within five years after the Option
for such Optioned Shares has been exercised by Optionee. The Company shall
exercise its rights hereunder by written notification to the Optionee to be
given within 180 days after the Board becomes aware of the Triggering Event.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed by its duly authorized officer, and the Optionee has hereunto affixed
his or her signature.
SWIFT TRANSPORTATION CO., INC., a
Nevada corporation
By
------------------------------
Its President
---------------------------------
"OPTIONEE"
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<PAGE>
EXHIBIT 2
INCENTIVE STOCK OPTION AGREEMENT
BY THIS INCENTIVE STOCK OPTION AGREEMENT ("Agreement") made and entered
into this _____ day of __________, _____ ("Grant Date"), SWIFT TRANSPORTATION
CO., INC., a Nevada corporation (the "Company"), and _______________, a key
employee of the Company (the "Optionee") hereby state, confirm, represent,
warrant and agree as follows:
I
RECITALS
1.1 The Company, through its Board of Directors (the "Board"), has
determined that in order to attract and retain the best available personnel for
positions of substantial responsibility to provide successful management of the
Company's business, it must offer a compensation package that provides key
employees of the Company a chance to participate financially in the success of
the Company by developing an equity interest in it.
1.2 As part of the compensation package, the Company had adopted the
Swift Transportation Co., Inc. 1999 Stock Option Plan (the "Plan") effective as
of May 20, 1999.
1.3 Shareholders of the Company have adopted and approved the Plan on
May 20, 1999.
1.4 By this Agreement, the Company and the Optionee desire to establish
the terms upon which the Company is willing to grant to the Optionee, and upon
which the Optionee is willing to accept from the Company, an option to purchase
shares of common stock of the Company ("Common Stock").
II
AGREEMENTS
2.1 GRANT OF INCENTIVE STOCK OPTION. Subject to the terms and
conditions hereinafter set forth and those provisions set forth and those
contained in the Plan, the Company grants to the Optionee the right and option
(the "Option") to purchase from the Company all or any part of an aggregate
number of _____________ (_____) shares of Common Stock, authorized but unissued
or, at the option of the Company, treasury stock if available (the "Optioned
Shares").
2.2 EXERCISE OF OPTION. Subject to the terms and conditions of this
Agreement and those of the Plan, the Option may be exercised only by completing
and signing a written notice in substantially the following form:
6
<PAGE>
I hereby exercise the Option granted to me by Swift Transportation Co.,
Inc. and elect to purchase __________ shares of $.001 par value Common
Stock of Swift Transportation Co., Inc. for the purchase price to be
determined under Paragraph 2.3 of this Stock Option Agreement.
2.3 PURCHASE PRICE. The price to be paid for the Optioned Shares (the
"Purchase Price") shall be $______________ per share, which was not less than
the fair market value of the Optioned Shares as determined by the Board on the
Grant Date, or, in the case of an Option granted to an employee who, on the
Grant Date owns ten percent (10%) or more of the Common Stock, as such amount is
calculated under Section 422(b)(6) of the Internal Revenue Code of 1986, as
amended (the "Code") not less than one hundred and ten percent (110%) of the
fair market value of the Optioned Stock.
2.4 PAYMENT OF PURCHASE PRICE. Payment of the Purchase Price shall be
made as follows:
(a) In United States dollars in cash or by check, bank draft or
money order payable to the Company, or
(b) At the discretion of the Board, through the delivery of
shares of Common Stock with an aggregate fair market value at the date
of such delivery, equal to the Purchase Price, or
(c) By a combination of both (a) and (b) above.
The Board shall determine acceptable methods for rendering Common Stock as
payment upon exercise of an Option and may impose such limitations and
conditions on the use of Common Stock to exercise an Option as it deems
appropriate. At the election of the Optionee pursuant to Section 17 of the Plan,
and subject to the acceptance of such election by the Board, to satisfy the
Company's withholding obligations, it may retain such number of shares of Common
Stock subject to the exercised Option which have an aggregate Fair Market Value
(as defined in the Plan) on the date of exercise equal to the Company's
aggregate federal, state, local and foreign tax withholding and FICA and FUTA
obligations with respect to income generated by the exercise of the Option by
Optionee.
2.5 EXERCISABILITY OF OPTION. Subject to the provisions of Paragraph
2.6, and except as otherwise provided in Paragraphs 2.8 and 2.9, the Option may
be exercised by the Optionee while in the employ of Company which shall include
any parent ("Parent") or subsidiary ("Subsidiary") corporation of the Company as
defined in Sections 425(e) and (f), respectively, of the Internal Revenue Code
of 1986, as amended ("Code"), in whole or in part from time to time, but only in
accordance with the following schedule:
7
<PAGE>
CUMULATIVE PERCENTAGE OF
ELAPSED NUMBER OF YEARS SHARES SUBJECT TO OPTIONS AS TO
AFTER GRANT DATE WHICH OPTION MAY BE EXERCISED
----------------------- -------------------------------
0-4 None
5 20%
6 40%
7 60%
8 80%
9 100%
For purposes of the foregoing schedule, a year is measured from the grant date
to the anniversary of the grant date and between anniversary dates thereof.
2.6 TERMINATION OF OPTION. Except as otherwise provided herein, the
Option, to the extent not heretofore exercised, shall terminate upon the first
to occur of the following dates:
(a) The date on which the Optionee's employment by the Company is
terminated except if such termination is voluntary, or occurs due to
retirement with the consent of the Board, death or disability within
the meaning of Section 22(e)(3) of the Code;
(b) Thirty (30) days after voluntary termination or termination
due to retirement with the consent of the Board;
(c) Six (6) months afar termination due to disability within the
meaning of Section 22(e)(3) of the Code;
(d) One (1) year after the Optionee's death; or
(e) __________________, (being the expiration of a term equal to
or less than ten (10) years from the Grant Date).
2.7 ADJUSTMENTS. In the event of any stock split, reverse stock split,
stock divided, combination or reclassification of shares of Common Stock or any
other increase or decrease in the number of issued shares of Common Stock, the
number and kind of Optioned Shares (including any Option outstanding after
termination of employment or deal) and the Purchase Price per share shall be
proportionately and appropriately adjusted without any change in the aggregate
Purchase Price to be paid therefor upon exercise of the Option. The
determination by the Board as to the terms of any of the foregoing adjustments
shall be conclusive and binding.
2.8 LIQUIDATION, SALE OF ASSETS OR MERGER. In the event of a proposed
dissolution or liquidation of the Company or the proposed sale of all or
substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, the Option will
8
<PAGE>
become fully vested and exercisable except in the event that the surviving or
resulting entity agrees to assume the Option. Upon or in anticipation of such
event, the Committee may cause the Option to terminate, but will provide the
Optionee with a period of time to exercise the Option prior to the termination.
2.9 ACQUISITION. If any person, corporation or other entity or group
thereof (the "Acquiror"), acquires (an "Acquisition"), other than by merger or
consolidation or purchase from the Company, the beneficial ownership (as that
term is used in Section 13(d)(1) of the Securities Exchange Act of 1934 and the
rules and regulations promulgated thereunder) or shares of the Company's common
stock which, when added to any other shares the beneficial ownership of which is
held by the Acquiror, shall have more than 50% of the votes that are entitled to
be cast at meetings of shareholders, any portion of the Option that was not
currently exercisable pursuant to Section 2.5 prior to the date of the
Acquisition shall become immediately exercisable and the Optionee may elect,
during the period commencing on the date of the Acquisition and ending at me
close of business on the thirtieth (30th) day following the date of the
Acquisition (but not later than the expiration of the Option term under
Paragraph 2.6), to exercise the Option in whole or in part. In the event the
thirtieth (30th) day referred to in this Section shall fall on a day that is not
a business day, then the thirtieth (30th) day shall be deemed to be the next
following business day.
2.10 NOTICES. Any notice to be given under the terms of the Agreement
("Notice") shall be addressed to the Company in care of its secretary at 2200
South 75th Avenue, Phoenix, Arizona 85043, or at its then current corporate
headquarters. Notice to be given to me Optionee shall be addressed to him or her
at his or her then current residential address as appearing on the payroll
records.
Notice shall be deemed duly given when enclosed in a properly sealed
envelope and deposited by certified mail, return receipt requested, in a post
office or branch post office regularly maintained by the United States
Government.
2.11 NOTIFICATION OF DISPOSITION OF SHARES. The Optionee hereby
acknowledges that a disposition of shares of Common Stock acquired upon the
exercise of the Option within two (2) years from the Grant Date or within one
(1) year after the transfer of such shares of Common Stock to him or her would
result in detrimental income tax consequences to the Optionee.
The Optionee hereby agrees to promptly notify the Company of any
disposition of shares of Common Stock within either of the above time
limitations.
2.12 MODIFICATION OF AGREEMENT. With the consent of Optionee, the Board
may at any time and from time to time direct that the Agreement be modified in
such respects deemed advisable in order that the Option shall constitute an
incentive stock option pursuant to Section 422 of the Code.
2.13 TRANSFERABILITY OF OPTION. The Option shall not be transferable by
the Optionee otherwise than by the will or the laws of descent and distribution,
and may be exercised during the life of the Optionee only by the Optionee.
9
<PAGE>
2.14 OPTIONEE NOT A SHAREHOLDER. The Optionee shall not be deemed for
any purposes to be a shareholder of the Company with respect to any of the
Optioned Shares except to the extent that the Option herein granted shall have
been exercised with respect thereto and a stock certificate issued therefor.
2.15 DISPUTES OR DISAGREEMENTS. As a condition of the granting of the
Option herein granted, the Optionee agrees, for himself and his personal
representatives, that any disputes or disagreement which may arise under or as a
result of or pursuant to this Agreement shall be determined by the Board in its
sole discretion, and that any interpretation by the Board of the terms of this
Agreement shall be final, binding and conclusive.
2.16 RIGHT TO REPURCHASE. In the event that:
(a) Optionee voluntarily terminates employment with the Company
or if Optionee's employment is involuntarily terminated for
nonperformance of duties and if Optionee subsequently becomes a sole
proprietor, partner, stockholder, officer, director, employee,
independent contractor or consultant of or to any business which is
engaged in the contract of common carriage of goods; or
(b) if Optionee's employment is involuntarily terminated for
gross misconduct, fraud, embezzlement, theft or breach of any
fiduciary duty owed to the Company
(the "Triggering Event"), then the Board, at its discretion may elect to
repurchase from Optionee Optioned Shares for which an Option was granted to and
exercised by Optionee, for the Purchase Price paid by Optionee under Paragraph
2.3, if such Triggering Event occurs any time within five years after the Option
for such Optioned Shares has been exercised by Optionee. The Company shall
exercise its rights hereunder by written notification to the Optionee to be
given within 180 days after the Board becomes aware of the Triggering Event.
10
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed by its duly authorized officer, and the Optionee has hereunto affixed
his or her signature.
SWIFT TRANSPORTATION CO., INC., a
Nevada corporation
By
------------------------------
Its President
---------------------------------
"OPTIONEE"
11
<PAGE>
APPENDIX B
SWIFT TRANSPORTATION CO., INC.
NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
(AS AMENDED AND RESTATED)
<PAGE>
SWIFT TRANSPORTATION CO., INC.
NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
(AMENDED AND RESTATED AS OF MAY 20, 1999)
1. PURPOSES OF THE PLAN. The purposes of this Swift Transportation Co.,
Inc. Non- Employee Directors Stock Option Plan are to attract and retain the
best available individuals to serve as non-employee members of the Board of
Directors of the Company, to reward such directors for their contributions to
the profitable growth of the Company, and to maximize the identity of interest
between such directors and stockholders generally.
2. DEFINITIONS. As used herein, the following definitions shall apply:
(a) "BOARD" shall mean the Board of Directors of the Company.
(b) "COMPANY" shall mean Swift Transportation Co., Inc., a Nevada
corporation.
(c) "FAIR MARKET VALUE" shall mean, with respect to the initial
grants of Options referenced in Section 4(a), the initial public
offering price of a Share, and with respect to any subsequent grants,
the Fair Market Value shall mean, in the event the stock is listed or
admitted to trading on the NASDAQ/National Market System, New York
Stock Exchange or the American Stock Exchange, the closing price of
the Stock on such exchange on the relevant date as reported in THE
WALL STREET JOURNAL, or, if the Shares are not listed or admitted to
trading on any such exchange, the last quoted price or, if not quoted,
the average of the closing bid and asked prices as reported by NASDAQ,
or such other system then in use, or if the Shares are not quoted by
any such organization, the average of the closing bid and asked prices
in the over-the-counter market as furnished by any New York Stock
Exchange member firm selected from time to time by the Company for
that purpose, or, in all other events, the value determined by the
Board in good faith in such manner as it may deem equitable for plan
purposes.
(d) "OPTION" shall mean a right to purchase Stock, granted
pursuant to the Plan.
(e) "OPTIONEE" shall mean a non-employee director of the Company
who has been granted an Option.
(f) "PLAN" shall mean this Swift Transportation Co., Inc.
Non-Employee Directors Stock Option Plan.
(g) "SHARE" shall mean a share of the Stock.
(h) "STOCK" shall mean the common stock of the Company described
in the Articles of Incorporation of the Company, as amended.
B-1
<PAGE>
(i) "STOCK OPTION AGREEMENT" shall mean the written agreement
evidencing the grant of an Option, in substantially the form of
EXHIBIT 1 hereto.
3. COMMON STOCK SUBJECT TO THE PLAN. Subject to increases and
adjustments pursuant to Section 9 of the Plan, the number of Shares reserved and
available for distribution under the Plan shall be 90,000. If an Option shall
expire or become unexercisable for any reason without having been exercised in
full, the unexercised Shares covered by the Option shall, unless the Plan shall
have terminated, be available for future grants of Options.
4. OPTION GRANTS.
(a) On the last business day each May on which the Stock is
traded on the NASDAQ/National Market System or such other exchange, an
Option to purchase One Thousand (1,000) Shares shall be granted to
each non-employee director serving on the Board as of such date.
(b) The purchase price of Shares subject to an Option shall be
85% of the Fair Market Value on the date of grant.
5. EFFECTIVE DATE. This Restatement is effective as of May 20, 1999. No
Option may be granted after the expiration of 10 years from the original
effective date of the Plan; PROVIDED, HOWEVER, that the Plan and all outstanding
Options shall remain in effect until such Options shall have been exercised,
shall have expired or shall otherwise be terminated.
6. TERM; EXERCISE; RIGHTS AS A STOCKHOLDER.
(a) The term of each Option shall be six (6) years from the date
of grant thereof. All of the Shares subject to the Option will be
vested in full and immediately exercisable upon grant of the Option.
The Option may be exercised in whole or in part at any time during the
term of the Option. No fractional Shares will be issued upon exercise
of the Option and, if the exercise results in a fractional interest,
an amount will be paid in cash equal to the value of such fractional
interest based on the Fair Market Value of the Shares on the date of
exercise.
(b) An Option shall be deemed to be exercised upon receipt by the
Company from the Optionee of written notice of such exercise. Such
notice shall be accompanied by full payment for the Shares subject to
such exercise.
(c) Until the issuance (as evidenced by the appropriate entry on
the books of the Company or of a duly authorized transfer agent of the
Company) of the stock certificate evidencing such Shares, no right to
vote or receive dividends or any other rights as a shareholder shall
exist with respect to the Shares subject to the OPTION,
notwithstanding the exercise of the Option. No adjustment will be made
for a dividend or other right for which the record date is prior to
the date of the stock certificate issued except as provided in Section
9 of the Plan.
B-2
<PAGE>
7. PAYMENT. The exercise price shall be paid:
(a) In United States dollars in cash or by check, bank draft, or
money order payable to the order of the Company; or
(b) Subject to the approval of the Board, by delivery of Shares
with an aggregate Fair Market Value equal to the exercise price
provided that such Shares have been held by the Optionee for at least
six months prior to the date of delivery; or
(c) By any combination of (a) and (b) above.
The Board shall determine acceptable methods for tendering Stock as
payment upon exercise of an Option and may impose such limitations and
prohibitions on the use of Stock to exercise an Option as it deems appropriate.
8. TRANSFERABILITY OF OPTIONS. Except as otherwise provided by the
Committee, the Option may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent and distribution. Except as permitted herein, an Option may be
exercised, during the lifetime of the Optionee, only by the Optionee or by his
guardian or legal representative.
In the event of the Optionee's death, his Option shall be exercisable,
prior to the expiration of the Option, by the person or persons to whom his
accrued and vested rights pass by will or by the laws of descent and
distribution.
9. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER. Subject to any
required action by the stockholders of the Company, the number of Shares covered
by each outstanding Option, and the number of Shares which have been authorized
for issuance under the Plan but as to which no Options have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an
Option, as well as the price per Share covered by each such outstanding Option,
shall be proportionately adjusted for any increase or decrease in the number of
issued Shares resulting from a stock split, reverse stock split, consolidation,
subdivision, stock dividend, combination or reclassification of the Shares, or
any other increase or decrease in the number of issued Shares effected without
receipt of consideration by the Company; PROVIDED, HOWEVER, that conversion of
any convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made by
the Board, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made, with
respect to the number or price of Shares subject to an Option.
In the event of the proposed dissolution or liquidation of the Company,
all Options will terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Board. The Board may, in the
exercise of its sole discretion in such instances, declare that any Option shall
B-3
<PAGE>
terminate as of a date fixed by the Board and give each holder the right to
exercise the Option as to all or any part thereof. In the event of a proposed
sale of all or substantially all of the assets of the Company, or the merger of
the Company with or into another corporation, the Option shall be assumed or an
equivalent Option shall be substituted by such successor corporation or a parent
or subsidiary of such successor corporation, unless the Board determines, in the
exercise of its sole discretion and in lieu of such assumption or substitution,
that the holder shall have the right to exercise the Option as to all of the
Shares. If the Board makes an Option exercisable in lieu of assumption or
substitution in the event of a merger or sale of assets, the Board shall notify
the holder that the Option shall be fully exercisable for a period of 30 days
from the date of such notice (but not later than the expiration of the term of
the Option), and the Option will terminate upon the expiration of such period.
10. AMENDMENT AND TERMINATION OF THE PLAN. The Board may amend the Plan
from time to time in such respects as the Board may deem advisable or terminate
the Plan; PROVIDED, HOWEVER, that amendments to the Plan relating to the amount,
price or timing of Option grants shall not be made more than once in any six
month period, other than amendments necessary to comply with changes in the
Internal Revenue Code, or the rules and regulations thereunder. Any amendment or
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee and the
Company.
Notwithstanding the foregoing, revisions or amendments that accomplish
any of the following shall require approval of the stockholders of the Company,
to the extent required by law, rule or regulation:
(a) Materially increase the benefits accruing to participants
under the Plan;
(b) Materially increase the number of Shares which may be issued
under the Plan;
(c) Materially modify the Plan as to eligibility for
participation in the Plan; or
(d) Otherwise cause the Plan to lose its exemption under Section
16(b) of the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
11. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation the Securities Act of
1933, as amended, the Securities Exchange Act of 1934, as amended, the rules and
regulations promulgated thereunder, and the requirements of any stock exchange
or market system upon which the Shares may be listed, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.
As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any
B-4
<PAGE>
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required or
advisable.
Inability of the Company to obtain authority from a regulatory body
having jurisdiction, which authority is deemed by the Company's counsel to be
necessary or advisable to the lawful issuance and sale of any Shares hereunder,
shall relieve the Company of any liability in respect of the failure to issue or
sell such Shares as to which such requisite authority shall not have been
obtained.
12. TERMINATION OF OPTION.
(a) TERMINATION AS A DIRECTOR. If an Optionee ceases to be a
director, unless such cessation occurs due to death or disability,
then the Option shall terminate on the date thirty days after the date
the Optionee ceases to be a director (but not later than the
expiration of the term of the Option).
(b) DISABILITY. Unless otherwise provided in the Stock Option
Agreement, in the event an Optionee is unable to continue to be a
member of the Board as a result of his permanent and total disability
(as defined in Section 22(e)(3) of the Internal Revenue Code of 1986,
as amended), he may exercise the Option at any time within twelve (12)
months following the date he ceased to be a director, but only to the
extent he was entitled to exercise it on the date he ceased to be a
director and not later than the expiration of the term of the Option.
To the extent that he was not entitled to exercise the Option on the
date he ceased to be a director, or if he does not exercise such
Option (which he was entitled to exercise) within the time specified
herein, the Option shall terminate.
(c) DEATH. Unless otherwise provided in the Stock Option
Agreement, if an Optionee dies during the term of the Option, the
Option may be exercised at any time within twelve (12) months
following the date of death, but only to the extent that an Optionee
was entitled to exercise the Option on the date of death and not later
than the expiration of the term of the Option. To the extent that
decedent was not entitled to exercise the Option on the date of death,
or if the Optionee's estate, or person who acquired the right to
exercise the Option by bequest or inheritance, does not exercise such
Option (which he was entitled to exercise) within the time specified
herein, the Option shall terminate.
13. OPTION AGREEMENT. Options shall be evidenced by Stock Option
Agreements in such form as the Board shall approve.
14. MISCELLANEOUS PROVISIONS.
(a) PLAN EXPENSE. Any expenses of administering this Plan shall
be borne by the Company.
B-5
<PAGE>
(b) CONSTRUCTION OF PLAN. The validity, construction,
interpretation, administration and effect of the Plan and of its rules
and regulations, and rights relating to the Plan, shall be determined
by the Board in accordance with the laws of the State of Nevada.
(c) TAXES. The Company shall be entitled if necessary or
desirable to pay or withhold the amount of any tax attributable to the
delivery of Common Shares under the Plan after giving the person
entitled to receive such Shares notice as far in advance as practical,
and the Company may defer making delivery of such Shares if any such
tax may be pending unless and until indemnified to its satisfaction.
(d) GENDER. For purposes of this Plan, words used in the
masculine gender shall include the female and neuter, and the singular
shall include the plural and vice versa, as appropriate.
B-6
<PAGE>
EXHIBIT 1
SWIFT TRANSPORTATION CO., INC.
NON-EMPLOYEE DIRECTORS STOCK OPTION AGREEMENT
BY THIS DIRECTORS STOCK OPTION AGREEMENT (the "Agreement"), SWIFT
TRANSPORTATION CO., INC., a Nevada corporation (the "Company"), and the
undersigned, a non-employee director of the Company (the "Optionee"), desire to
establish the terms and conditions upon which the Company is willing to grant
the Optionee, and upon which the Optionee is willing to accept from the Company,
an Option to purchase shares of Common Stock from the Company, pursuant to the
terms and conditions of the Company's Non-Employee Directors Stock Option Plan
(the "Plan"). The Company and the Optionee hereby agree as follows:
1. THE PLAN. All the terms, conditions and definitions of the Plan are
hereby incorporated by reference into this Agreement, as if fully set forth
herein.
2. TERMS OF GRANT.
(a) Exercise Price: $
(b) Number of Shares Subject to Option: 1,000 Shares of Common
Stock
(c) Grant Date: May___, _______
DATED: _______________________, _____.
SWIFT TRANSPORTATION CO., INC., a
Nevada corporation
By
------------------------------
Its
---------------------------
OPTIONEE
---------------------------------
(Signature)
---------------------------------
(Print Name)
<PAGE>
APPENDIX C
ARTICLES OF INCORPORATION OF
SWIFT TRANSPORTATION CO., INC.
(AS AMENDED AND RESTATED)
<PAGE>
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
SWIFT TRANSPORTATION CO., INC.
KNOW ALL MEN BY THESE PRESENTS:
That we, the undersigned, hereby associate ourselves together for the
purpose of forming a corporation under the laws of the State of Nevada, and for
such purpose hereby adopt Articles of Incorporation as follows:
ARTICLE I
NAME AND DURATION
The name of this corporation shall be SWIFT TRANSPORTATION CO., INC.
The duration of this corporation shall be perpetual.
ARTICLE II
PURPOSE
The purpose for which this corporation is organized is the transaction
of any or all lawful business for which corporations may be incorporated under
the laws of the State of Nevada as they may be amended from time to time.
ARTICLE III
AUTHORIZED CAPITAL
The total number of shares of all classes of capital stock which the
corporation shall have the authority to issue is One-Hundred-Fifty-One Million
(151,000,000) shares consisting of:
(i) One-Hundred-Fifty million (150,000,000) shares of Common
Stock, par value $0.001 per share (hereinafter referred to as "Common
Stock"); and
(ii) One million (1,000,000) shares of Preferred Stock, par value
$.001 per share (hereinafter referred to as "Preferred Stock").
C-1
<PAGE>
The Preferred Stock may be issued from time to time in one or more
series, each of such series to have such voting powers, full or limited, or no
voting powers, and such designations, preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof, as shall be stated and expressed in a resolution or
resolutions providing for the issue of such series adopted by the Board of
Directors. As so provided in such resolution or resolutions and as and to the
extent permitted by law, the shares of any series of the Preferred Stock may be
made subject to redemption, or convertible into or exchangeable for shares of
any other class or series, by the corporation at its option or at the option of
the holders or upon the happening of a specified event.
Shares of any series of Preferred Stock which shall be issued and
thereafter acquired by the corporation through purchase, redemption, conversion,
exchange or otherwise, shall return to the status of authorized but unissued
Preferred Stock of the same series unless otherwise provided in the resolution
or resolutions of the Board of Directors. Unless otherwise provided in the
resolution or resolutions of the Board of Directors providing for the issuance
thereof, the number of authorized shares of stock of any such series may be
increased or decreased (but not below the number of shares thereof then
outstanding) by resolution or resolutions of the Board of Directors. In case the
number of outstanding shares of any such series of Preferred Stock shall be
decreased, the shares representing such decrease shall, unless otherwise
provided in the resolution or resolutions of the Board of Directors providing
for the issuance thereof, resume the status of authorized but unissued Preferred
Stock, undesignated as to series.
No holder of Common Stock or any series of Preferred Stock shall have
the right to cumulate votes in the election of directors of the corporation or
for any other purpose.
ARTICLE IV
PREEMPTIVE RIGHTS
No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or series of
stock or other securities of the corporation shall have any preemptive right to
purchase or subscribe for any unissued stock or security of any class or series
or any additional shares of any class or series to be issued by reason of
increase in the authorized capital stock of the corporation of any class or
series, bonds, certificates of indebtedness, debentures or other securities
convertible into or exchangeable for stock of the corporation of any class or
series. Any such unissued stock, additional authorized issue of shares of any
class or series of stock or securities convertible into or exchangeable for
stock or carrying any right to purchase stock, may be issued and disposed of
pursuant to resolution of the Board of Directors to such persons, whether such
holders or others, and upon such terms as may be deemed advisable by the Board
of Directors in the exercise of its sole discretion.
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<PAGE>
ARTICLE V
REGISTERED AGENT
The name and address of the initial registered agent of the corporation
is The Corporation Trust Company of Nevada, One East First Street, Reno, Nevada
89501.
ARTICLE VI
BOARD OF DIRECTORS
1. NUMBER AND CLASS OF DIRECTORS.
The Board of Directors shall have sole authority to determine the
number of Directors, within the limits set forth herein, and may increase or
decrease the exact number of Directors from time to time by resolution duly
adopted by such Board. No decrease in the number of Directors shall have the
effect of shortening the term of any incumbent Director. The exact number of
Directors shall be seven (7) until so increased or decreased.
The number of Directors shall be divided into three (3) classes, as
nearly equal in number as may be, to serve in the first instance until the
first, second and third annual meetings of the Stockholders to be held,
respectively, and until their successors shall be elected and shall qualify. In
the case of any increase in the number of Directors of the Corporation, the
additional Directors shall be so classified that all classes of Directors shall
be increased equally as nearly as may be, and the additional Directors shall be
elected as provided herein by the Directors or by the Stockholders at an annual
meeting. In case of any decrease in the number of Directors of the Corporation,
all classes of Directors shall be decreased equally, as nearly as may be.
Election of Directors shall be conducted as provided in these Articles, by law
or in the Bylaw.
The name and mailing address of each person who is to serve as a
director until the first, second and third annual meetings of the Stockholders
and until their successors are elected and qualified, and the class designation
and term of office of each director is:
NAME AND MAILING ADDRESS CLASS TERM OF OFFICE
------------------------ ----- --------------
Rodney K. Sartor Class I Term Ending 1994
1705 Marietta Way, Suite A
Sparks, Nevada 89431
Earl H. Scudder, Jr. Class I Term Ending 1994
1705 Marietta Way, Suite A
Sparks, Nevada 89431
Robert W. Cunningham Class II Term Ending 1995
1705 Marietta Way, Suite A
Sparks, Nevada 89431
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Alphonse E. Frei Class II Term Ending 1995
1705 Marietta Way, Suite A
Sparks, Nevada 89431
Jerry C. Moyes Class III Term Ending 1996
1705 Marietta Way, Suite A
Sparks, Nevada 89431
William F. Riley III Class III Term Ending 1996
1705 Marietta Way, Suite A
Sparks, Nevada 89431
Lou A. Edwards Class III Term Ending 1996
1705 Marietta Way, Suite A
Sparks, Nevada 89431
2. VACANCIES.
Vacancies on the Board of Directors, whether created by increase in the
number of Directors, or by death, disability, resignation or removal, shall be
filled by a vote of a majority of the Directors then remaining in office at a
regular meeting, or a special meeting called for the purpose. Each Director so
chosen shall hold office until the next annual meeting of stockholders and until
his successor shall be elected and qualified, or until his earlier death,
resignation or removal.
3. REMOVAL OF DIRECTORS.
A Director may be removed with or without cause by the Stockholders at
a special meeting of the Stockholders, called for the purpose in conformity with
the Bylaws. The affirmative vote of the holders of two-thirds (2/3) of the
voting power of all the shares entitled to vote at such meeting shall be
required to remove a Director.
ARTICLE VII
INCORPORATORS
The name and address of each incorporator of the corporation is:
NAME ADDRESS
---- -------
A. EGELHOFF 3225 N. CENTRAL AVE.
PHOENIX, AZ 85012
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R. WALTERS 3225 N. CENTRAL AVE.
PHOENIX, AZ 85012
J. HURLEY 3225 N. CENTRAL AVE.
PHOENIX, AZ 85012
All powers, duties and responsibilities of the incorporators shall
cease at the time of delivery of those Articles of Incorporation to the
Secretary of the State of Nevada for filing.
ARTICLE VIII
INDEMNIFICATION OF OFFICERS,
DIRECTORS, EMPLOYEES AND AGENTS
The corporation shall indemnify, defend and hold harmless any person
who incurs expenses, claims, damages, or liability by reason of the fact that he
or she is, or was an officer, director, employee or agent of the corporation, to
the fullest extent allowed pursuant to Nevada law.
ARTICLE IX
REPURCHASE OF STOCK
The Board of Directors of the corporation may, from time to time, cause
the corporation to purchase its own stock to the extent permitted by the laws of
the State of Nevada.
ARTICLE X
FISCAL YEAR
The fiscal year of the corporation shall be determined by the Board of
Directors at the organizational meeting and may thereafter be changed from time
to time by action of the Board of Directors.
ARTICLE XI
LIMITATION OF LIABILITY
To the fullest extent permitted by the laws of the State of Nevada, as
the same exist or may hereafter be amended, any director or officer of the
corporation shall not be liable to the corporation or its stockholders for
monetary or other damages for breach of fiduciary duties as a director or
officer. No repeal, amendment, or modification of this Article XI, whether
director or indirect, shall eliminate or reduce its effect with respect to any
act or omission of a director or officer of the corporation occurring prior to
such repeal, amendment, or modification. Notwithstanding any other provision of
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these Articles of Incorporation, the affirmative vote of seventy-five percent
(75%) of the outstanding shares of stock of this corporation entitled to vote
shall be required to amend, alter, change or repeal, or adopt any provision
inconsistent with, this Article.
ARTICLE XII
NON-APPLICABILITY OF CERTAIN STATE ANTI-TAKEOVER LAWS
Pursuant to Arizona Revised Statutes Section 10-1211(A), the
corporation elects not to be subject to Article 2, Chapter 6, Title 10 of the
Arizona Revised Statutes, as the same may be amended from time to time.
Furthermore, pursuant to Nevada Revised Statutes Sections 78.378 and 78.434, the
corporation elects not to be governed by the provisions of Nevada Revised
Statutes Sections 78.378 to 78.3793, inclusive, and 78.411 to 78.444, inclusive,
as the same may be amended from time to time.
IN WITNESS WHEREOF, we, the undersigned, have hereunto set our hands
this 2nd day of July, 1993.
/s/ A. EGELHOFF
---------------------------
A. Egelhoff
/s/ R. WALTERS
---------------------------
R. Walters
/s/ J. HURLEY
---------------------------
J. Hurley
INCORPORATORS
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