SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
Annual Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934 for the fiscal year ended
December 31, 1996
Commission File Number 333-562
KNIGHT TRANSPORTATION, INC.
401(k) PLAN AND TRUST AGREEMENT
(Full title of the plan)
KNIGHT TRANSPORTATION, INC.
5601 West Buckeye Road
Phoenix, Arizona 85043
(602) 269-2000
(Name of issuer of the securities held pursuant to the plan
and the address of the issuer's principal executive office)
<PAGE>
KNIGHT TRANSPORTATION, INC.
401(k) PLAN AND TRUST AGREEMENT
PN 001
EIN: 86-0649974
FORM 5500
FINANCIAL STATEMENTS
AND SUPPLEMENTARY INFORMATION
-----------------------------
YEAR ENDED DECEMBER 31, 1996
<PAGE>
KNIGHT TRANSPORTATION, INC. 401(k) PLAN
AND TRUST AGREEMENT
PN 001
EIN: 86-0649974
Year Ended December 31, 1996
Table of Contents
-----------------
Page No.
--------
Auditor's Report 1 - 2
Statement of Net Assets Available for Plan Benefits
December 31, 1996 and 1995 3
Statement of Changes in Net Assets Available for Plan
Benefits With Fund Information
For the Year Ended December 31, 1996 4
Notes to Financial Statements 5 - 7
Supplementary Information
Schedule of Assets Held for Investment Purposes
December 31, 1996 8
<PAGE>
KNIGHT TRANSPORTATION, INC. 401(k) PLAN
AND TRUST AGREEMENT
PN 001
EIN: 86-0649974
Form 5500, Item 26b(1)
Year Ended December 31, 1996
June 23, 1997
INDEPENDENT AUDITOR'S REPORT
Trustees
Knight Transportation, Inc. 401(k) Plan
Phoenix, Arizona
We have audited the accompanying statement of net assets available for plan
benefits of Knight Transportation, Inc. 401(k) Plan and Trust Agreement as of
December 31, 1996 and 1995, and the related statement of changes in net assets
available for plan benefits with fund information for the year ended December
31, 1996. 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 in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of Knight
Transportation, Inc. 401(k) Plan and Trust Agreement as of December 31, 1996 and
1995, and the changes in net assets available for plan benefits for the year
ended December 31, 1996, in conformity with generally accepted accounting
principles.
-continued-
<PAGE>
KNIGHT TRANSPORTATION, INC. 401(k) PLAN
AND TRUST AGREEMENT
PN 001
EIN: 86-0649974
Form 5500, Item 26b(1)
Year Ended December 31, 1996
June 23, 1997
INDEPENDENT AUDITOR'S REPORT
-continued-
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule of assets held for
investment purposes on page 8 is presented for the purposes of additional
analysis and is not a required part of the basic financial statements but is
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. Such information has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
Tull, Forsberg & Olson
<PAGE>
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KNIGHT TRANSPORTATION, INC. 401(k) PLAN
AND TRUST AGREEMENT
PN 001
EIN: 86-0649974
Form 5500, Item 31
Statement of Net Assets Available for Plan Benefits
December 31, 1996 and 1995
1996 1995
--------- ----------
ASSETS
Investments
At fair value:
Shares of registered investment companies:
Investment Co. of America - Equity
Growth Fund $ 683,901 $ 452,793
The Bond Fund of America - Corporate
Bond Fund 134,641 101,733
Growth Fund of America - Growth Fund 32,173 0
Participant loans receivable 35,875 20,910
Smith Barney Cash Portfolio - Money Fund 182,164 0
Dean Witter Liquid Asset Fund -
Money Market 0 115,852
Cash - noninterest bearing account 30,490 0
---------- ----------
Total investments 1,099,244 691,288
---------- ----------
Receivables
Employer's contributions 57,277 54,024
Participants' contributions 0 28,311
---------- ----------
Total receivables 57,277 82,335
---------- ----------
TOTAL ASSETS 1,156,521 773,623
LIABILITIES
Total Liabilities 0 0
---------- ----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $1,156,521 $ 773,623
========== ==========
The accompanying notes are an integral part of these financial statements.
<PAGE>
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KNIGHT TRANSPORTATION, INC. 401(k) PLAN AND TRUST AGREEMENT
PN 001
EIN: 86-0649974
Form 5500, Item 32
<TABLE>
<CAPTION>
Statement of Changes in Net Assets Available for Plan Benefits With Fund Information
For the Year Ended December 31, 1996
Smith
Dean Witter The Bond Investment Growth Barney
Liquid Fund of Company of Fund of Cash Participant
Asset Fund America, Inc. America America Portfolio Loans Other Total
---------- ---------- ---------- --------- ---------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income
Unrealized appreciation in
fair value of assets 0 ($ 240) $ 62,576 $ 1,392 $ 63,728
Interest $ 503 $ 1,657 2,160
Dividends 8,691 40,006 1,779 $ 6,825 57,301
---------- --------- ---------- --------- ---------- --------- --------- ----------
503 8,451 102,582 3,171 6,825 1,657 $ 0 123,189
---------- --------- ---------- --------- ---------- --------- --------- ----------
Contributions
Employer 57,277 57,277
Participants 0 32,504 96,840 21,439 67,662 0 30,490 248,935
Rollover 8,249 17,581 16,691 676 43,197
---------- --------- ---------- --------- ---------- --------- --------- ----------
0 40,753 114,421 38,130 68,338 0 87,767 349,409
---------- --------- ---------- --------- ---------- --------- --------- ----------
Total Additions 503 49,204 217,003 41,301 75,163 1,657 87,767 472,598
---------- --------- ---------- --------- ---------- --------- --------- ----------
DEDUCTIONS
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits Paid to Participants 0 17,365 24,686 211 44,258 3,130 89,650
Administrative Expenses 50 50
---------- --------- ---------- --------- ---------- --------- --------- ----------
Total Deductions 0 17,365 24,686 211 44,308 3,130 0 89,700
---------- --------- ---------- --------- ---------- --------- --------- ----------
Net increase prior to interfund transfers 503 31,839 192,317 41,090 30,855 (1,473) 87,767 382,898
Interfund transfers (116,355) 1,070 38,791 (8,917) 151,309 16,437 (82,335) 0
---------- --------- ---------- --------- ---------- --------- --------- ----------
Net Increase (Decrease) (115,852) 32,909 231,108 32,173 182,164 14,964 5,432 382,898
Net assets available for benefits:
Beginning of year 115,852 101,733 452,793 0 0 20,910 82,335 773,623
---------- --------- ---------- --------- ---------- --------- --------- ----------
End of year $ 0 $ 134,642 $ 683,901 $ 32,173 $ 182,164 $ 35,874 $ 87,767 $1,156,521
========== ========= ========== ========= ========== ========= ========= ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
-5-
KNIGHT TRANSPORTATION, INC. 401(k) PLAN
AND TRUST AGREEMENT
PN 001
EIN: 86-0649974
Form 5500 - Year Ended December 31, 1996
Notes to Financial Statements
NOTE 1. DESCRIPTION OF PLAN
The following description of the Knight Transportation, Inc.
(Company) 401(k) Plan and Trust Agreement (Plan) provides only
general information. Participants should refer to the Plan
agreement for a more complete description of the Plan's
provisions.
General. The Plan is a defined contribution plan covering
basically all full time employees of the Company who have one year
of service and are age nineteen or older. It is subject to the
provisions of the Employee Retirement Income Security Act of 1974
(ERISA).
Contributions. Each year, participants may contribute a portion
of their compensation to the Plan. For 1996 the maximum amount
that can be contributed is $9,500. Participants may also
contribute amounts representing distributions from other qualified
plans. The Company contributes 50 percent of the participant's
salary reduction contributions for the year, not to exceed $625.
For Plan years beginning after December 31, 1994, these
contributions may be made with either cash or common stock of the
Company. For 1996, the contributions will be made with cash. The
Company may also make a discretionary contribution at the option
of the Company's Board of Directors. These contributions can be
either cash or common stock of the Company. For 1996, there were
no discretionary Company contributions made.
Participant Accounts. Each participant's account is credited
with the participant's contribution, company matching
contribution, company discretionary contribution, if any, and plan
earnings on participant's account balance. Forfeited balances of
terminated participants' nonvested accounts are used to reduce
future Company contributions. The benefit to which a participant
is entitled is the benefit that can be provided from the
participant's vested account.
Vesting. Participants are immediately vested in their
contributions plus earnings. Vesting in the Company's matching and
discretionary portion of their accounts plus earnings is based on
years of service. A participant is 100 percent vested after five
years of service.
Investment Options. Upon enrollment in the Plan, a participant
may direct his contributions in any of four investment options:
Investment Co. of America - Equity Growth Fund
----------------------------------------------
Funds are invested in shares of a registered investment
company that invests mainly in common stocks and U. S.
Treasury securities.
-continued-
<PAGE>
-6-
KNIGHT TRANSPORTATION, INC. 401(k) PLAN
AND TRUST AGREEMENT
PN 001
EIN: 86-0649974
Form 5500 - Year Ended December 31, 1996
Notes to Financial Statements
-Continued-
NOTE 1. DESCRIPTION OF PLAN (Continued)
The Bond Fund of America - Corporate Bond Fund
----------------------------------------------
Funds are invested in shares of a registered investment
company that invests mainly in corporate bonds and U. S.
Treasury securities.
Growth Fund of America - Growth Fund
------------------------------------
Funds are invested in shares of a registered investment
company that invests mainly in common and preferred stocks
and short-term corporate notes.
Smith Barney Cash Portfolio - Money Fund
-----------------------------------------
Funds are invested in an interest bearing account.
Company matching contributions may be invested in either the Smith
Barney Cash Portfolio - Money Fund or common stock of the Company.
For 1996, the matching contribution was invested in the Money
Fund.
Participants may change their investment options twice a year.
Payment of Benefits. Upon the participant's separation from
service as a result of death, disability or retirement at age 65,
the employee's account balance from employer contributions will be
100% nonforfeitable and paid in a lump-sum. The Plan has
provisions for hardship distributions.
Participant Loans. Participants may borrow from their fund
accounts a minimum of $1,000 and to a maximum equal to the lessor
of $50,000 or 50% of their nonforfeitable account balances.
Repayments are made through payroll deductions. The loans are
secured by 50% of the nonforfeitable balance in the participant's
account. All loans are considered a directed investment of the
participant.
Plan Expenses. The Company incurs all major expenses associated
with the Plan.
Concentration of Credit Risk and Financial. Instruments
Financial instruments which potentially subject the Plan to
concentrations of credit risk consist of a deposit with an
investment custodian.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting. The financial statements are prepared on
the accrual basis of accounting.
-continued-
<PAGE>
-7-
KNIGHT TRANSPORTATION, INC. 401(k) PLAN
AND TRUST AGREEMENT
PN 001
EIN: 86-0649974
Form 5500 - Year Ended December 31, 1996
Notes to Financial Statements
-Continued-
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Estimates. The preparation of financial statements in
conformity with generally accepted accounting principles requires
the Plan Administrator to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly,
actual results may differ from those estimates.
Investment Valuation and Income Recognition. Investments in the
Plan are adjusted to their fair market value as of the balance
sheet date. Shares of registered investment companies are valued
at quoted market prices which represent the net asset value of
shares held by the Plan at year end. Participant loans are valued
at cost, which approximates fair value.
Purchases and sales of securities are recorded on a trade-date
basis. Interest income is recorded on the accrual basis. Dividends
are recorded on the ex dividend date.
Payment of Benefits Benefit payments are recorded when paid.
NOTE 3. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has
the right under the Plan to terminate the Plan at any time. In the
event of Plan termination, participants will become 100 percent
vested in their accounts.
NOTE 4. TAX STATUS
Effective January 1, 1995, the Plan adopted a new prototype plan.
During the year ended December 31, 1996, the Internal Revenue
Service has determined and informed the Company by letter that the
Plan and related Trust are designed in accordance with applicable
sections of the Internal Revenue Code.
<PAGE>
SUPPLEMENTARY INFORMATION
-------------------------
-8-
KNIGHT TRANSPORTATION, INC. 401(k) PLAN
AND TRUST AGREEMENT
PN 001
EIN: 86-0649974
Form 5500, Item 27a
Schedule of Assets Held for Investment Purposes
Year Ended December 31, 1996
<TABLE>
<CAPTION>
(a) (b) Identity of issue, borrower, (c) Description of investment (d) Cost (e) Current
lessor, or similar party including maturity date, Value
rate of interest, collateral,
par or maturity value
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
American Funds Group/Investment 28,225.371 shares @ $24.23 per share $570,236 $ 683,901
Company of America
American Funds Group/Bond Fund 9,792.066 shares @ $13.75 per share 133,422 134,641
of America
American Funds Group/Growth Fund 1,941.659 shares @ $16.57 per share 30,783 32,173
of America
Smith Barney/Money Funds Cash Money Fund Account 182,164 182,164
Portfolio CL A
Smith Barney/Cash Account Noninterest bearing cash account 30,490 30,490
Participant Loans 8.75% to 10% 0 35,875
-------- ----------
TOTAL $947,095 $1,099,244
======== ==========
</TABLE>
<PAGE>
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.
KNIGHT TRANSPORTATION, INC. 401(k)
PLAN AND TRUST AGREEMENT
Dated: June 26, 1997 By /s/ Donald A. Bliss
-----------------------------------------
Donald A. Bliss, Chairman of the
Advisory Committee (Plan Administrator),
on behalf of the Plan
Dated: June 27, 1997 KNIGHT TRANSPORTATION, INC.,
Plan Sponsor
By /s/ Clark A. Jenkins
-----------------------------------------
Clark A. Jenkins
Chief Financial Officer
-2-
<PAGE>
EXHIBIT INDEX
-------------
Exhibit No. Description
- ----------- -----------
Exhibit 23 Consent of Tull, Forsberg & Olson, independent public accountants.
-3-
Consent of Independent Public Accountants
We hereby consent to the use of our report dated June 23,
1997, on the net assets available for Plan benefits of the Knight
Transportation, Inc. 401(k) Plan and Trust Agreement as of December 31, 1996 and
1995, and the related statement of changes in net assets available for Plan
benefits with fund information for the year ended December 31, 1996, included in
this report on Form 11-K for the Knight Transportation, Inc. 401(k) Plan and
Trust Agreement.
Tull Forsberg & Olson
Phoenix, Arizona
June 23, 1997
