FORM 11-K
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1999.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission file number 0-24960
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
COVENANT TRANSPORT, INC. 401(K) AND PROFIT SHARING PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Covenant Transport, Inc.
400 Birmingham Highway
Chattanooga, Tennessee 37419
<PAGE>
COVENANT TRANSPORT, INC.
401(k) and PROFIT SHARING PLAN
Financial Statements and Supplemental Schedules
December 31, 1999 (with comparative statement of
Net Assets Available for Plan Benefits for December 31, 1998)
with
Report of Independent Accountants
<PAGE>
Report of Independent Accountants
To Participants and Plan Administrator
Covenant Transport, Inc.
401(k) and Profit Sharing Plan
In our opinion, the accompanying statements of net assets available for plan
benefits and the related statement of changes in net assets available for plan
benefits present fairly, in all material respects, the net assets available for
benefits of the Covenant Transport, Inc. 401(k) and Profit Sharing Plan (the
"Plan") at December 31, 1999 and 1998, and the changes in net assets available
for benefits for the year ended December 31, 1999 in conformity with accounting
principles generally accepted in the United States. These financial statements
are the responsibility of the Plan's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States, which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of Assets Held
for Investment Purposes and Reportable Transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. These supplemental
schedules are the responsibility of the Plan's management. The supplemental
schedules have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/S/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Knoxville, Tennessee
May 12, 2000
<PAGE>
COVENANT TRANSPORT, INC.
401(k) and Profit Sharing Plan
Statements of Net Assets Available for Plan Benefits
For the years ended December 31, 1999 and 1998
1999 1998
Investments at fair value $ 10,760,656 $ 8,212,879
------------ -----------
Net assets available for benefits $ 10,760,656 $ 8,212,879
============ ===========
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
COVENANT TRANSPORT, INC.
401(k) and Profit Sharing Plan
Statement of Changes in Net Assets Available for Plan Benefits
For the year ended December 31, 1999
Additions to net assets attributed to:
Investment income:
Dividends $ 495,908
Net depreciation of investments (61,073)
Contributions:
Employer 768,656
Employees 3,061,632
-------------
Total additions 4,265,123
Deductions from net assets attributed to:
Benefits paid to participants 1,714,601
Administrative expenses 2,745
-------------
Total deductions 1,717,346
-------------
Net increase in net assets 2,547,777
Net assets available for benefits;
Beginning of year 8,212,879
-------------
End of year $ 10,760,656
=============
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
COVENANT TRANSPORT, INC.
401(k) and Profit Sharing Plan
Notes to Financial Statements
1. DESCRIPTION OF PLAN:
The following brief description of the Covenant Transport, Inc. 401(k) and
Profit Sharing Plan is provided for general information purposes only.
Participants should refer to the Plan agreement for more complete
information.
General - The Plan is a voluntary defined contribution savings plan
covering substantially all employees of Covenant Transport, Inc. It is
subject to the provisions of the Employee Retirement Income Security Act of
1974 (ERISA).
Funding - The Plan is funded by employee and employer contributions.
Participants may contribute up to, but not in excess of, 17% of their
annual compensation. Covenant Transport, Inc. may make discretionary
matching contributions to the plan not to exceed 6% of an employee's
compensation. Annual additions to a participant's account during any Plan
year, when combined with the total annual additions to the accounts of the
participant under any other qualified defined contribution plan maintained
by Covenant Transport, Inc., cannot exceed certain levels established by
federal tax codes.
Vesting - Participants are immediately vested in their voluntary
contributions plus actual earnings thereon. Vesting in the remainder of
their accounts is based on years of continuous service. A participant vests
20 percent annually and is 100 percent vested after five years of credited
service.
Payment of Benefits - On retirement or termination of service, a
participant may receive a lump-sum amount equal to the value of the vested
portion of their account.
Investment of Account - The Plan has five funds in which individual
accounts may be invested. The funds are as follows:
o Fund A SunTrust Employee Benefit Stable Asset Fund - This fund is managed
by SunTrust Bank. The fund is a managed portfolio of insurance company
guaranteed investment contracts and short-term money market instruments.
o Fund B STI Classic Investment Grade Bond Fund - This fund is managed by
SunTrust Bank. The fund is a bond fund, which invests primarily in
government and corporate obligations.
o Fund C STI Classic Value Income Fund - This fund is managed by SunTrust
Bank. The fund is a stock fund, which invests primarily in equity
securities.
o Fund D STI Classic Capital Growth Fund - This fund is managed by SunTrust
Bank. The fund is a managed portfolio of common stocks, warrants, and
convertible securities, which in the advisor's opinion are undervalued.
o Fund E Covenant Transport 401(k) Unitized Stock Fund - This fund invests
in the stock of Covenant Transport, Inc.
4
<PAGE>
Notes to Financial Statements, Continued
1. DESCRIPTION OF PLAN, continued:
Allocation of Benefits - The Plan document requires that the assets of the
Plan be accounted for separately as to participant and employer
contributions and valued annually, allocating to each participant their
share of principal, income and forfeitures. Employer voluntary
contributions are allocated to all eligible employees based on the
employees' contributions for the period.
Forfeitures - Forfeiture of a terminated participant's nonvested account
occurs in plan years in which he receives a distribution of the full vested
value as defined in the Plan document. Forfeitures are used to reduce the
Company's future payments and are allocated in the same manner as matching
employer contributions. Forfeitures for the year ended December 31, 1999
were $107,322.
Administrative Expenses - The administrative expenses of the Plan are
primarily paid by the Company.
2. SIGNIFICANT ACCOUNTING POLICIES:
Method of Accounting - The Plan's financial statements have been prepared
using the accrual basis of accounting.
Investments - Investments are carried at fair value, as determined using
the quoted market prices.
Investment Income - The Plan presents, in the statement of changes in net
assets available for plan benefits, the realized gains or losses and the
unrealized appreciation (depreciation) in the fair value of its
investments. Realized gains (losses) are computed using the
weighted-average price per share as the cost of the asset.
Use of Estimates - The preparation of the financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of additions and deductions during the reporting periods. Actual
results could differ from these estimates.
3. ADMINISTRATION:
The Plan is administered by SunTrust Bank Trust and Investment Services,
the Plan Trustee, who has overall responsibility for the investment of
assets, accounting for financial transactions and distributions to
participants.
5
<PAGE>
4. INVESTMENTS:
Investments held at December 31, 1999 and 1998, including those
representing five percent or more of the Plan's net assets, are as follows:
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
SunTrust Employee Benefit Stable Asset Fund,
92,952 and 72,204 shares, respectively $ 2,569,199 $ 1,899,383
STI Classic Investment Grade Bond Fund,
107,925 and 78,016 shares, respectively 1,079,251 837,889
STI Classic Value Income Fund,
166,102 and 121,383 shares, respectively 1,717,491 1,432,319
STI Classic Capital Growth Fund,
205,284 and 165,415 shares, respectively 3,401,561 2,730,993
Covenant Transport 401(k) Unitized Stock Fund,
115,461 and 73,415 shares, respectively 1,993,154 1,312,295
------------ -----------
$ 10,760,656 $ 8,212,879
============ ===========
</TABLE>
5. PARTICIPANT FUNDS:
The participants can elect to have their accounts invested in any of five
funds, as described in Note 1. An analysis of the changes in the separate
funds is as follows for the year ended December 31, 1999:
<TABLE>
<CAPTION>
Fund A Fund B Fund C Fund D Fund E Total
<S> <C> <C> <C> <C> <C> <C>
Net appreciation
(depreciation) $ 113,568 $ (65,436) $ (231,647) $ 19,014 $ 103,428 $ (61,073)
Dividends -- 55,846 170,273 269,789 -- 495,908
Contributions:
Employer 51,547 107,684 161,884 254,102 193,439 768,656
Employee 830,364 337,189 522,173 823,869 548,037 3,061,632
Benefit payments (353,821) (191,768) (298,189) (601,791) (269,032) (1,714,601)
Administrative expenses (2,745) -- -- -- -- (2,745)
Transfers 30,903 (2,153) (39,322) (94,415) 104,987 --
----------- ----------- ---------- ----------- ----------- ------------
Net increase 669,816 241,362 285,172 670,568 680,859 2,547,777
Net assets available for
plan benefits:
Beginning of year 1,899,383 837,889 1,432,319 2,730,993 1,312,295 8,212,879
----------- ----------- ----------- ----------- ----------- ------------
End of year $ 2,569,199 $ 1,079,251 $ 1,717,491 $ 3,401,561 $ 1,993,154 $ 10,760,656
=========== =========== =========== =========== =========== ============
</TABLE>
6
<PAGE>
6. PLAN TERMINATION:
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of plan
termination, participants will become 100 percent vested in their accounts.
7. FEDERAL INCOME TAXES:
The Internal Revenue Service has determined and informed the Company by a
letter dated February 26, 1996, that the Plan and related trust are
designed in accordance with applicable sections of the Internal Revenue
Code (IRC). The Plan has been amended since receiving the determination
letter. However, the Plan administrator and the Plan's tax counsel believe
that the Plan is designed and is currently being operated in compliance
with the applicable requirements of the IRC.
7
<PAGE>
COVENANT TRANSPORT, INC.
401(k) and Profit Sharing Plan
Line 27a - Schedule of Assets Held for Investment Purposes
December 31, 1999
<TABLE>
<CAPTION>
b. c. d. e.
Identity of issuer, borrower, Description of investment including Cost Current Value
lessor, or similar party maturity date, rate of interest,
collateral, par or maturity value
<S> <C> <C> <C>
SunTrust Bank* Employee Benefit Stable Asset Fund,
92,952 shares $ 2,379,567 $ 2,569,199
SunTrust Bank* STI Classic Investment Grade Bond Fund,
107,925 shares 1,124,668 1,079,251
SunTrust Bank* STI Classic Value Income Fund,
166,102 shares 2,057,297 1,717,491
SunTrust Bank* STI Classic Capital Growth Fund,
205,284 shares 3,245,958 3,401,561
Covenant Transport, Inc.* Covenant Transport 401(k) Unitized
Stock Fund, 115,461 shares 1,785,667 1,993,154
</TABLE>
*Party-in-interest.
NOTE - Column a. is not applicable.
See accompanying Report of Independent Accountants.
8
<PAGE>
COVENANT TRANSPORT, INC.
401(k) and Profit Sharing Plan
Line 27d - Schedule of Reportable Transactions
For the year ended December 31, 1999
1. Single transactions exceeding 5% of total assets as of December 31, 1999.
None
2. Series of transactions involving property other than securities.
None
3. Series of transactions of same issue exceeding 5% of total assets as of
December 31, 1999.
<TABLE>
<CAPTION>
a. b. c. d. g. h. I.
Identity of Party Description of Asset Purchase Selling Cost of Current Net
Involved Price Price Asset Value of Gain or
Asset on (Loss)
Transaction
Date
<S> <C> <C> <C> <C> <C> <C>
SunTrust Bank* Stable Asset Fund $ 1,406,247 $ -- $ 1,406,247 $ -- $ --
SunTrust Bank* Stable Asset Fund -- 629,774 619,485 629,774 10,289
SunTrust Bank* Investment Grade Bond Fund 572,459 -- 572,459 -- --
SunTrust Bank* Investment Grade Bond Fund -- 265,624 273,129 265,624 (7,505)
SunTrust Bank* Value Income Fund 875,259 -- 875,259 -- --
SunTrust Bank* Value Income Fund -- 358,440 354,002 358,440 4,438
SunTrust Bank* Capital Growth Fund 1,536,491 -- 1,536,491 -- --
SunTrust Bank* Capital Growth Fund -- 884,372 867,561 884,372 16,811
SunTrust Bank* 401(k) Unitized Stock Fund 1,196,256 -- 1,196,256 -- --
SunTrust Bank* 401(k) Unitized Stock Fund -- 619,617 607,829 619,617 11,788
</TABLE>
*Party-in-interest.
NOTE - Information required in columns e. and f. is not applicable.
4. Transactions in conjunction with same person involved in reportable single
transactions.
None
See accompanying Report of Independent Accountants.
9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
COVENANT TRANSPORT, INC. 401(K) AND
PROFIT SHARING PLAN
COVENANT TRANSPORT, INC.
Date: June 28, 2000
/S/ R.H. Lovin, Jr.
------------------------------
By: R.H. Lovin, Jr., Administrator
