-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DHfGKbDlMhGvY56W0h2fmbAwYxe35Xmmke34c6TXMQUK6KRSYEn9cyyD7I88jOmh pQsKrTNzrNJ/q1y63coTxg== 0000950147-02-000528.txt : 20020416 0000950147-02-000528.hdr.sgml : 20020416 ACCESSION NUMBER: 0000950147-02-000528 CONFORMED SUBMISSION TYPE: PRE 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020523 FILED AS OF DATE: 20020411 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SWIFT TRANSPORTATION CO INC CENTRAL INDEX KEY: 0000863557 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 860666860 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: PRE 14A SEC ACT: 1934 Act SEC FILE NUMBER: 000-18605 FILM NUMBER: 02608534 BUSINESS ADDRESS: STREET 1: 2200 SOUTH 75TH AVENUE CITY: PHOENIX STATE: AZ ZIP: 85043 BUSINESS PHONE: 6022699700 MAIL ADDRESS: STREET 1: 2200 SOUTH 75TH AVENUE CITY: PHOENIX STATE: AZ ZIP: 85043 PRE 14A 1 e-8401.txt PRELIMINARY N&PS OF SWIFT TRANSPORTATION CO, INC SCHEDULE 14A INFORMATION (Rule 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant [X] Filed by a Party other than the Registrant [ ] Check the appropriate box: [X] Preliminary Proxy Statement [ ] Confidential, For Use of the [ ] 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. - -------------------------------------------------------------------------------- (Name of Registrant as Specified In Its Charter) - -------------------------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement, if Other Than the Registrant) Payment of Filing Fee (Check the appropriate box): [X] No fee required. [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 1) Title of each class of securities to which transaction applies: - -------------------------------------------------------------------------------- 2) Aggregate number of securities to which transaction applies: - -------------------------------------------------------------------------------- 3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): - -------------------------------------------------------------------------------- 4) Proposed maximum aggregate value of transaction: - -------------------------------------------------------------------------------- 5) Total fee paid: - -------------------------------------------------------------------------------- [ ] Fee paid previously with preliminary materials: [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. 1) Amount previously paid: ------------------------------------------ 2) Form, Schedule or Registration Statement No.: -------------------- 3) Filing Party: ---------------------------------------------------- 4) Date Filed: ------------------------------------------------------ SWIFT TRANSPORTATION CO., INC. 2200 SOUTH 75TH AVENUE PHOENIX, ARIZONA 85043 --------------------------------- NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 23, 2002 --------------------------------- To Our Stockholders: The 2002 Annual Meeting of Stockholders of Swift Transportation Co., Inc. will be held at our headquarters at 2200 South 75th Avenue, Phoenix, Arizona 85043, on May 23, 2002, beginning at 10:00 a.m. local time. At the Annual Meeting, stockholders will act on the following matters: * Election of two Class III directors, each for a term of three years; * Amendment of Swift's Articles of Incorporation to increase the number of shares of Common Stock authorized for issuance from 150,000,000 to 200,000,000; * Amendment of the 1999 Stock Option Plan to authorize an additional 3,000,000 shares of Common Stock for issuance thereunder; and * Any other matters that properly come before the Annual Meeting or any adjournment or postponement thereof. Management is presently aware of no other business to come before the Annual Meeting. Each outstanding share of Swift Common Stock entitles the holder of record at the close of business on April 10, 2002, to receive notice of and to vote at the Annual Meeting or any adjournment or postponement thereof. Shares of Common Stock can be voted at the Annual Meeting only if the holder is present in person or by valid proxy. We have enclosed a copy of our 2001 Annual Report to Stockholders, which includes certified financial statements, and our Proxy Statement. Management cordially invites you to attend the Annual Meeting. - -------------------------------------------------------------------------------- IF YOU PLAN TO ATTEND: PLEASE NOTE THAT SPACE LIMITATIONS MAKE IT NECESSARY TO LIMIT ATTENDANCE TO STOCKHOLDERS AND ONE GUEST. REGISTRATION AND SEATING WILL BEGIN AT 9:00 A.M. COMPLIMENTARY PARKING IS AVAILABLE AT OUR OFFICES. STOCKHOLDERS HOLDING STOCK IN BROKERAGE ACCOUNTS ("STREET NAME" HOLDERS) WILL NEED TO BRING A COPY OF A BROKERAGE STATEMENT REFLECTING STOCK OWNERSHIP AS OF THE RECORD DATE. CAMERAS, RECORDING DEVICES AND OTHER ELECTRONIC DEVICES WILL NOT BE PERMITTED AT THE MEETING. - -------------------------------------------------------------------------------- By Order of the Board of Directors Jerry Moyes Phoenix, Arizona CHAIRMAN OF THE BOARD, PRESIDENT AND April __, 2002 CHIEF EXECUTIVE OFFICER IMPORTANT PLEASE MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POSTAGE-PAID ENVELOPE. YOUR VOTE IS IMPORTANT, SO PLEASE ACT TODAY! TABLE OF CONTENTS Page ABOUT THE MEETING..............................................................1 What is the purpose of the annual meeting?................................1 Who is entitled to vote?..................................................1 Who can attend the meeting?...............................................1 What constitutes a quorum?................................................1 How do I vote?............................................................2 What if I vote and then change my mind?...................................2 What are the Board's recommendations?.....................................2 What vote is required to approve each item?...............................2 Who will bear the costs of this proxy solicitation?......................3 BOARD OF DIRECTORS.............................................................4 What is the makeup of the Board of Directors?.............................4 Are there any directors who are not standing for re-election?.............4 Election of Directors (Proposal No. 1)...............................4 Continuing Directors.................................................5 Continuing Directors.................................................5 How are non-employee directors compensated?...............................6 Are employees of Swift Transportation paid additional compensation for service as a director?..............................................6 How often did the Board meet during fiscal 2001?..........................6 What committees has the Board established?................................7 Compensation Committee....................................................7 Audit Committee...........................................................7 Report of the Audit Committee.............................................7 EXECUTIVE OFFICERS OF SWIFT....................................................9 EXECUTIVE COMPENSATION........................................................10 Summary Compensation Table...............................................10 Options/SAR Grants in Last Fiscal Year...................................11 Aggregated Option/SAR Exercises In Last Fiscal Year and Fiscal Year-End Option/SAR Values..................................12 Employment and Change of Control Agreements..............................13 Report of the Compensation Committee on Executive Compensation...........14 COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION...................17 STOCK PRICE PERFORMANCE GRAPH.................................................18 SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.......................18 SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT...................19 CERTAIN TRANSACTIONS AND RELATIONSHIPS........................................21 AMENDMENT TO ARTICLES OF INCORPORATION (Proposal No. 2).......................22 AMENDMENT TO 1999 STOCK OPTION PLAN (Proposal No. 3)..........................23 RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS.....................................26 STOCKHOLDER PROPOSALS AND NOMINATIONS.........................................26 OTHER MATTERS.................................................................27 ANNEX A: AMENDED AND RESTATED ARTICLES OF INCORPORATION......................A-1 -i- SWIFT TRANSPORTATION CO., INC. 2200 SOUTH 75TH AVENUE PHOENIX, ARIZONA 85043 ------------------------- PROXY STATEMENT ------------------------- This Proxy Statement contains information related to the 2002 Annual Meeting of Stockholders (the "Annual Meeting") of Swift Transportation Co., Inc. to be held on May 23, 2002, at 10:00 a.m. local time, at our headquarters located at 2200 South 75th Avenue, Phoenix, Arizona 85043, or at such other time and place to which the Annual Meeting may be adjourned or postponed. THE ENCLOSED PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF SWIFT TRANSPORTATION. The proxy materials relating to the Annual Meeting are first being mailed to stockholders entitled to vote at the meeting on or about April 26, 2002. ABOUT THE MEETING WHAT IS THE PURPOSE OF THE ANNUAL MEETING? At the Annual Meeting, stockholders will act upon the matters outlined in the accompanying Notice of Annual Meeting of Stockholders. In addition, management will report on the performance of Swift during fiscal 2001 and respond to questions from stockholders. WHO IS ENTITLED TO VOTE? Only stockholders of record at the close of business on April 10, 2002 (the "Record Date"), are entitled to receive notice of the Annual Meeting and to vote the shares of Common Stock that they held on that date at the Annual Meeting, or any postponement or adjournment of the Annual Meeting. Each outstanding share entitles its holder to cast one vote on each matter to be voted upon. WHO CAN ATTEND THE ANNUAL MEETING? All stockholders as of the close of business on the Record Date, or their duly appointed proxies, may attend the Annual Meeting, and each may be accompanied by one guest. Registration and seating will begin at 9:00 a.m. Cameras, recording devices and other electronic devices will not be permitted at the Annual Meeting. Please note that if you hold your shares in "street name" (that is, through a broker or other nominee), you will need to bring a copy of a brokerage statement reflecting your stock ownership as of the Record Date and check in at the registration desk at the Annual Meeting. WHAT CONSTITUTES A QUORUM? The presence at the meeting, in person or by proxy, of the holders of a majority of the shares of Common Stock outstanding on the Record Date will constitute a quorum, permitting Swift to conduct its business at the Annual Meeting. As of the Record Date, 86,385,870 shares of Common Stock were outstanding. Proxies received but marked as abstentions and broker non-votes will be included in the calculation of the number of shares considered to be present at the Annual Meeting. HOW DO I VOTE? You can vote on matters to come before the Annual Meeting in two ways: 1. You can attend the Annual Meeting and cast your vote in person; or 2. You can vote by completing, dating and signing the enclosed proxy card and returning it in the enclosed postage-paid envelope. If you do so, you will authorize the individuals named on the proxy card, referred to as the proxies, to vote your shares according to your instructions or, if you provide no instructions, according to the recommendation of the Board of Directors. WHAT IF I VOTE AND THEN CHANGE MY MIND? You may revoke your proxy at any time before it is exercised by: * sending written notice of revocation to the Secretary of Swift at P.O. Box 29243, Phoenix, Arizona, 85038-9243; or * sending in another duly executed proxy bearing a later date; or * attending the Annual Meeting and casting your vote in person. Your last vote will be the vote that is counted. WHAT ARE THE BOARD'S RECOMMENDATIONS? The Board recommends that you vote FOR election of the nominated slate of directors (see page 4), FOR approval of the proposed amendment to Swift's Articles of Incorporation (see page 22), and FOR approval of the proposed amendment to the 1999 Stock Option Plan (see page 23). Unless you give other instructions on your proxy card, the persons named as proxy holders on the proxy card will vote in accordance with the Board's recommendation. With respect to any other matter that properly comes before the meeting, the proxy holders will vote as recommended by the Board of Directors or, if no recommendation is given, in their own discretion. WHAT VOTE IS REQUIRED TO APPROVE EACH ITEM? ELECTION OF DIRECTORS. The two nominees who receive the most votes will be elected to the Board of Directors. A properly executed proxy marked "WITHHOLD AUTHORITY" with respect to the election of one or more directors will not be voted with respect to the director or directors indicated, although it will be counted for purposes of determining whether there is a quorum. A broker "non-vote" (DISCUSSED BELOW) will also have no effect on the outcome since only a plurality of votes actually cast is required to elect a director. PROPOSED AMENDMENT TO ARTICLES OF INCORPORATION. The proposed amendment to the Articles of Incorporation to increase the number of shares of Common Stock authorized for issuance 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. A properly executed proxy marked "ABSTAIN" with respect to the proposed amendment to the Articles of Incorporation will not be voted. Accordingly, an abstention will have the effect of a negative vote. Similarly, a broker non-vote (DISCUSSED BELOW) will have the same effect as a vote against the proposed amendment to the Articles of Incorporation. 2 PROPOSED AMENDMENT TO THE 1999 STOCK OPTION PLAN AND OTHER ITEMS. For each other item, including the proposed amendment to the 1999 Stock Option Plan, the affirmative vote of the holders of a majority of the shares represented in person or by proxy at the Annual Meeting and entitled to vote thereat will be required for approval; provided, however, that if the shares of stock so represented are less than the number required to constitute a quorum, the affirmative vote must be such as would constitute a majority if a quorum were present. A properly executed proxy marked "ABSTAIN" or a "broker non-vote" (DISCUSSED BELOW) will not be counted as a vote "for" or "against" any such item. EFFECT OF BROKER NON-VOTES. If your shares are held in "street name" through a broker or other nominee, your broker or nominee may not be permitted to exercise voting discretion under certain circumstances. Brokers have the authority under Nasdaq rules to vote customers' unvoted shares on certain "routine" matters, including the election of directors. When a broker votes its customers' unvoted shares, the shares are counted for purposes of establishing a quorum. At the Annual Meeting, these shares will be counted as voted by the broker in the election of directors, but will not be counted as voted for any "non-routine" matters to be voted on. WHO WILL BEAR THE COSTS OF THIS PROXY SOLICITATION? We will bear the cost of solicitation of proxies. This includes the charges and expenses of brokerage firms and others for forwarding solicitation material to beneficial owners of our outstanding Common Stock. We may solicit proxies by mail, personal interview, telephone or telegraph. 3 BOARD OF DIRECTORS THIS SECTION GIVES BIOGRAPHICAL INFORMATION ABOUT OUR DIRECTORS AND DESCRIBES THEIR MEMBERSHIP ON BOARD COMMITTEES, THEIR ATTENDANCE AT MEETINGS AND THEIR COMPENSATION. WHAT IS THE MAKEUP OF THE BOARD OF DIRECTORS? The Board presently consists of eight members. The directors are divided into three classes, with each class serving for a three-year period. The stockholders elect approximately one-third of the Board of Directors each year. There are currently three Class I directors, three Class II directors, and two Class III directors. ARE THERE ANY DIRECTORS WHO ARE NOT STANDING FOR RE-ELECTION? No. ELECTION OF DIRECTORS (PROPOSAL NO. 1) FOR TERM EXPIRING AT 2005 ANNUAL MEETING CLASS III The Board of Directors has nominated William F. Riley III and Lou A. Edwards for election to Class III at the Annual Meeting. Each nominee will be elected to serve until the 2005 Annual Meeting of Stockholders or until his successor shall have been duly elected and qualified or his resignation or removal, whichever first occurs. Each of the nominees has consented to serve a three-year term. If any of them should become unavailable to serve as a director, the Board may designate a substitute nominee. In that case, the persons named as proxies will vote for the substitute nominee designated by the Board. Nominees standing for election are: WILLIAM F. RILEY III, 55 DIRECTOR SINCE 1990 WILLIAM F. RILEY III has served as the Senior Executive Vice President of Swift since January 2000. Mr. Riley has served as Swift's Chief Financial Officer and Secretary since March 1990, at which time he was named an Executive Vice President. Mr. Riley also has served as a Director on the Swift Board since March 1990. In addition, Mr. Riley has acted as a Vice President of Swift Leasing Co., Inc. and Cooper Motor Lines since May 1986 and April 1988, 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 distributions assignments, principally as Manager of Business Planning of Armour Food Express, its truckload motor carrier. LOU A. EDWARDS, 88 DIRECTOR SINCE 1990 LOU A. EDWARDS has served as a Director of Swift since May 1990. Mr. Edwards is a retired president of a truck dealership and has 40 years of experience in the trucking industry. Mr. Edwards also is a member of the board of directors of Simon Transportation Services Inc., a publicly traded trucking company providing nationwide, predominantly temperature controlled transportation services for major shippers. Simon Transportation Services filed for protection under Chapter 11 of the United States Bankruptcy Code on February 25, 2002. - -------------------------------------------------------------------------------- THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR ELECTION OF EACH OF THE DIRECTOR NOMINEES. - -------------------------------------------------------------------------------- 4 CONTINUING DIRECTORS FOR TERM EXPIRING AT 2004 ANNUAL MEETING CLASS II The following Class II directors were elected at our 2001 Annual Meeting for terms ending in 2004: JERRY MOYES, 58 DIRECTOR SINCE 1984 JERRY MOYES has served as the Chairman of the Board, President and Chief Executive Officer of Swift since 1984. Mr. Moyes joined Swift 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. Mr. Moyes also serves as Chairman of the Board of Simon Transportation Services Inc., a publicly traded trucking company providing nationwide, predominantly temperature controlled transportation services for major shippers. Simon Transportation Services filed for protection under Chapter 11 of the United States Bankruptcy Code on February 25, 2002. ALPHONSE E. FREI, 63 DIRECTOR SINCE 1990 ALPHONSE E. FREI has served as a Director of Swift since May 1990. Mr. Frei has served as the Chief Operating Officer of Autom Company, a wholesale and retail distributor of religious products, since May 1999. 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. MICHAEL S. STARNES, 57 DIRECTOR SINCE 2001 MICHAEL S. STARNES has served as a Director of Swift since June 2001. Since 1978, Mr. Starnes has served as a director and the President and Chief Executive Officer of our subsidiary M.S. Carriers, Inc., a major truckload carrier we acquired through a merger in June 2001. Mr. Starnes also has served as a director of RFS Hotel Investors, Inc. since 1992, Mid-America Apartment Communities since 1996 and Union Planters Corporation since 2001. CONTINUING DIRECTORS FOR TERM EXPIRING AT 2003 ANNUAL MEETING CLASS I The following Class I directors were elected at our 2000 Annual Meeting for terms ending in 2003 (with the exception of Edward A. Labry, III, who was elected at our 2001 Annual Meeting for a term ending in 2003): RODNEY K. SARTOR, 47 DIRECTOR SINCE 1990 RODNEY K. SARTOR has served as an Executive Vice President and a Director of Swift 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. 5 EARL H. SCUDDER, 59 DIRECTOR SINCE 1993 EARL H. SCUDDER has served as a Director of Swift since May 1993. Mr. Scudder has been President of Scudder Law Firm, P.C., L.L.O. in Lincoln, Nebraska since February 1990, and has engaged in the private practice of law since 1966. Mr. Scudder served as a director of Heartland Express, Inc. a publicly traded trucking company, from 1986 until 1996. In addition, Mr. Scudder served as a director of Simon Transportation Services Inc., a publicly traded trucking company providing nationwide, predominantly temperature controlled transportation services for major shippers, from 2000 until 2001. Simon Transportation Services filed for protection under Chapter 11 of the United States Bankruptcy Code on February 25, 2002. EDWARD A. LABRY, III, 39 DIRECTOR SINCE 2001 EDWARD A. LABRY, III, has served as a Director of Swift since June 2001. Mr. Labry is the President and a member of the board of directors of Concord EFS, Inc., positions he has held since 1994 and 1993, respectively. He has served on the board of directors of M.S. Carriers since September 1999. HOW ARE NON-EMPLOYEE DIRECTORS COMPENSATED? Swift directors who are employees do not receive additional compensation for their service as directors. In 2001, non-employee directors were paid an annual retainer of $3,000 for their service as directors and received $500 for attending each board meeting and each committee meeting that was not held on the same date as a board meeting. Beginning in 2002, non-employee directors will be paid an annual retainer of $20,000 and receive $1,500 for each board meeting and committee meeting that they attend. Under our Non-Employee Director Stock Option Plan, each non-employee director also receives an option to purchase 5,000 shares of Common Stock every fifth year. These option grants vest and become exercisable over four years beginning on the date of grant, permitting the holder to purchase shares at 85% of their fair market value on the date of grant, which was $11.10 in the case of options granted to Mssrs. Edwards, Frei and Scudder in 2000 and $16.37 in the case of options granted to Mr. Labry in 2001. Unless earlier terminated, forfeited or surrendered pursuant to the plan, each option granted will expire on the sixth anniversary date of the grant. Both employee and non-employee directors are reimbursed for reasonable travel and related expenses incurred in connection with their service on the board and board committees. ARE EMPLOYEES OF SWIFT TRANSPORTATION PAID ADDITIONAL COMPENSATION FOR SERVICE AS A DIRECTOR? No. We do, however, reimburse them for travel and other related expenses. HOW OFTEN DID THE BOARD MEET DURING FISCAL 2001? The Board of Directors held 4 meetings during fiscal 2001. Each of Swift's Directors attended at least 75% of the Board and committee meetings to which the Director was assigned. 6 WHAT COMMITTEES HAS THE BOARD ESTABLISHED? The Board of Directors has standing Compensation and Audit Committees. We do not maintain a standing nominating committee or other committee performing similar functions. The function of nominating directors is carried out by the entire Board of Directors. Our Bylaws, however, provide a procedure for you to recommend candidates for director at an annual meeting. For more information, see page 26 under "Stockholder Proposals and Nominations." NAME COMPENSATION COMMITTEE AUDIT COMMITTEE ---- ---------------------- --------------- Jerry C. Moyes X Alphonse E. Frei X X Lou A. Edwards X X Edward A. Labry, III X COMPENSATION COMMITTEE 1 MEETING IN FISCAL YEAR 2001 The Compensation Committee reviews and recommends compensation of executive officers and administers Swift's stock option plans. AUDIT COMMITTEE 2 MEETINGS IN FISCAL YEAR 2001 The audit committee makes recommendations regarding the selection of Swift's independent auditors and receives and accepts the independent auditor's report. In addition, the audit committee oversees the audit and non-audit activities of the independent accountants. The audit committee meets with the independent auditors to ensure that the scope of their activities has not been restricted and that adequate responses to their recommendations have been received. In addition, the audit committee may be called upon to review certain proposals for major transactions. REPORT OF THE AUDIT COMMITTEE THE FOLLOWING REPORT OF THE AUDIT COMMITTEE DOES NOT CONSTITUTE SOLICITING MATERIAL AND SHOULD NOT BE DEEMED FILED OR INCORPORATED BY REFERENCE INTO ANY OTHER FILING BY SWIFT UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES EXCHANGE ACT OF 1934, EXCEPT TO THE EXTENT SWIFT SPECIFICALLY INCORPORATES THIS REPORT. Effective January 31, 2000, the SEC adopted new rules and amendments to current rules relating to the disclosure of information about companies' audit committees. In large part, the new rules are based on recommendations made by the Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit Committees. The new rules require that, for all votes of stockholders occurring after December 15, 2000, the proxy statement must contain a report of the audit committee addressing several issues identified in the rules. In addition, the SEC recommends that audit committees adopt written charters. Any such charter must be included as an attachment to the proxy statement at least once every three years. Our Audit Committee adopted a charter on June 7, 2000, which was included as Annex E to the joint proxy statement/prospectus filed by Swift on May 11, 2001 pursuant to Rule 424(b)(3) under the Securities Act of 1933, as amended. 7 Our audit committee currently consists of three directors, each of whom are independent directors. Consistent with Nasdaq's independent director and audit committee listing standards, as amended on December 14, 1999, a director will not be considered "independent" if, among other things he has: * been employed by the corporation or its affiliates in the current or past three years; accepted any compensation from the corporation or its affiliates in excess of $60,000 during the previous fiscal year (except for board service, retirement plan benefits, or non-discretionary compensation); * an immediate family member who is, or has been in the past three years, employed by the corporation or its affiliates as an executive officer; * been a partner, controlling stockholder or an executive officer of any for-profit business to which the corporation made, or from which it received, payments (other than those which arise solely from investments in the corporation's securities) that exceed five percent of the organization's consolidated gross revenues for that year, or $200,000, whichever is more, in any of the past three years; or * been employed as an executive of another entity when any of the company's executives serve on that entity's compensation committee. The audit committee has reviewed and discussed the audited financial statements for fiscal year 2001 with management and with the independent auditors. Specifically, the audit committee has discussed with the independent auditors the matters required to be discussed by SAS 61 (Codification of Statements on Auditing Standards, AU Section 380), which includes, among other things: * methods used to account for significant unusual transactions; * the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus; * the process used by management in formulating particularly sensitive accounting estimates and the basis for the auditor's conclusions regarding the reasonableness of those estimates; and * disagreements with management over the application of accounting principles, the basis for management's accounting estimates, and the disclosures in the financial statements. The audit committee has received the written disclosures and the letter from our independent accountants, KPMG LLP, required by Independence Standards Board Standard No. 1, Independence Discussion with Audit Committees. Additionally, the audit committee has discussed with KPMG the issue of its independence as it relates to us. Based on its review of the audited financial statements and the various discussions noted above, the audit committee recommended to Swift's board of directors that the audited financial statements be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2001. Alphonse E. Frei Lou A. Edwards Edward A. Labry, III 8 EXECUTIVE OFFICERS OF SWIFT The table below sets forth, as of March 31, 2002, certain information concerning our executive officers. NAME AGE POSITION - ---- --- -------- Jerry Moyes 58 President and Chief Executive Officer--Swift Transportation Co., Inc. William F. Riley III 55 Senior Executive Vice President, Chief Financial Officer and Secretary--Swift Transportation Co., Inc. Rodney K. Sartor 47 Executive Vice President--Swift Transportation Co., Inc. Patrick J. Farley 57 Executive Vice President--Swift TransportationCo., Inc. Kevin H. Jensen 47 Executive Vice President--Swift Transportation Co., Inc. Michael S. Starnes 57 President and Chief Executive Officer--M.S. Carriers, Inc. M. J. Barrow 57 Senior Vice President of Finance and Administration, Chief Financial Officer, Secretary and Treasurer --M.S. Carriers, Inc. James W. Welch 58 Senior Vice President of Marketing--M.S. Carriers, Inc. Except for the employment agreements Swift entered with Mssrs. Starnes, Barrow and Welch in connection with its merger with M.S. Carriers, Swift does not have fixed term employment contracts with its executive officers. The terms of these employment agreements are summarized below under "Employment and Termination Agreements." PATRICK J. FARLEY became an Executive Vice President of Swift and was named as one of its executive officers in May 1997. Mr. Farley joined Swift 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 has served as an Executive Vice President of Swift since December 1994, and was named an executive officer of Swift in October 1996. Mr. Jensen joined Swift 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. M. J. BARROW has served as the Senior Vice President of Finance and Administration of M.S. Carriers, Inc. since May 1989. Mr. Barrow joined M.S. Carriers in 1982 as its Treasurer and Controller and was shortly thereafter named Vice President of Finance. In February 1986, Mr. Barrow was appointed to the positions of Secretary and Chief Financial Officer of M.S. Carriers. Mr. Barrow has served as a director of M.S. Carriers since 1982. JAMES W. WELCH has served as the Senior Vice President of Marketing of M.S. Carriers since May 1989. Mr. Welch joined M.S. Carriers as a Vice President of Sales in 1982 and served in that capacity until his promotion to Senior Vice President of Marketing in May 1989. Mr. Welch has served as a director of M.S. Carriers since 1982. For biographical information regarding Mssrs. Moyes, Riley, Sartor, and Starnes, see "Board of Directors" above. 9 EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE The table below sets forth information concerning the annual and long-term compensation for services rendered in all capacities to Swift during the three fiscal years ended December 31, 2001, of those persons who were, at December 31, 2001, (i) our Chief Executive Officer and (ii) our four other most highly compensated executive officers (collectively, the "Named Executive Officers").
LONG-TERM COMPENSATION ------------------------------------- ANNUAL COMPENSATION AWARDS PAYOUTS -------------------------------------------- ------------------------ ---------- SECURITIES RESTRICTED UNDERLYING ALL OTHER NAME AND OTHER ANNUAL STOCK OPTIONS/ LTIP COMPENSATION PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) AWARD(S)($) SARS PAYOUTS($) ($)(1) - ------------------ ---- --------- -------- --------------- ----------- ---------- ---------- ------------ JERRY C. MOYES .......... 2001 $400,000 $261,532 $153,845 Chairman of the Board of 2000 $400,000 $261,532 $154,377 Directors, President and 1999 $270,371 $391,161 $164,231 Chief Executive Officer WILLIAM F. RILEY III ... 2001 $250,000 $275,000 $ 14,210 Chief Financial Officer 2000 $250,000 $275,000 $ 14,060 and Senior Executive 1999 $162,225 $362,775 $ 23,280 Vice-President RODNEY K. SARTOR ........ 2001 $200,000 $150,000 $ 10,025 Executive Vice-President 2000 $200,000 $150,000 $ 10,025 1999 $162,225 $187,775 $ 19,525 KEVIN H. JENSEN ......... 2001 $200,000 $150,000 $ 7,000 Executive Vice President 2000 $200,000 $150,000 $ 7,000 1999 $162,225 $187,775 $ 16,500 PATRICK J. FARLEY ....... 2001 $200,000 $150,000 $ 7,000 Executive Vice President 2000 $200,000 $150,000 $ 7,000 1999 $162,225 $187,775 $ 16,500
- ---------- (1) "All Other Compensation" for each of the Named Officers includes Swift's contributions in the amount of $7,000 for 2001, $7,000 for 2000, and $16,500 for 1999, 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 Mr. Moyes during each of the identified periods represents Swift payments of premiums under two term life insurance policies with a combined face amount of $20 million for the benefit of Mr. Moyes and his spouse. The aggregate annual premiums paid by Swift under these polices were $146,845 $147,377 and $147,731 in 2001, 2000 and 1999, respectively. Swift's purpose in procuring and 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 Swift Common Stock, which might adversely affect the market for the Common Stock. The balance of compensation included in "All Other Compensation" for Mssrs. Riley and Sartor during each of the identified periods represents Swift payments of term life and disability insurance premiums on behalf of Mssrs. Riley and Sartor. The amount of such insurance premiums paid on behalf of Mr. Riley during 2001, 2000 and 1999 was $7,210, $7,060, and $6,780, respectively. The amount of such insurance premiums paid on behalf of Mr. Sartor during each of 2001, 2000 and 1999 was $3,025. 10 Swift does not pay such premiums for Mr. Jensen or Mr. Farley. In addition to the amounts in the Summary Compensation Table above, Swift made contingent deposits of $608,864 in 2001 and $507,387 in 2000 to an investment account on behalf of Mr. Riley pursuant to a Nonqualified Deferred Compensation Agreement. OPTIONS/SAR GRANTS IN LAST FISCAL YEAR NONE 11 AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES The table below sets forth information with respect to the exercise of stock options during the fiscal year ended December 31, 2001, by the Named Executive Officers. Other than Swift's 401(k) Plan and Mr. Riley's Deferred Compensation Agreement, Swift does not have a long-term incentive plan or a defined benefit or actuarial plan and has never issued any stock appreciation rights. The number of options and the option exercise price reflect: * a 3-for-2 stock split treated as a dividend, effected on November 18, 1993, of one share of Common Stock for every two shares of Common Stock outstanding; * a 2-for-1 stock split treated as a dividend of one share of Common Stock for each share outstanding effected on November 18, 1994; * a 3-for-2 stock split treated as a dividend, effected on March 12, 1998, of one share of Common Stock for every two shares of Common Stock outstanding; and * a 3-for-2 stock split treated as a dividend, effected on April 10, 1999, of one share of Common Stock for every two shares of Common Stock outstanding.
VALUE OF UNEXERCISED SHARES NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS ACQUIRED ON OPTIONS AT FISCAL YEAR END(#) AT FISCAL YEAR END ($) EXERCISE VALUE REALIZED ----------------------------- --------------------------------- NAME (#)(1) ($)(2) EXERCISABLE UNEXERCISABLE EXERCISABLE(3) UNEXERCISABLE(3) - ---- ------ -------- ----------- ------------- -------------- ---------------- Jerry Moyes -- -- -- -- -- -- President & Chief Executive Officer(4) William F. Riley III -- -- 75,000 37,500 $862,500 $ 431,250 Executive Vice President & Chief Financial Officer(5) Rodney K. Sartor -- -- -- 100,000 -- $1,041,000 Executive Vice President(6) Kevin H. Jensen -- -- 36,000 283,000 $645,480 $3,220,170 Executive Vice President(7) Patrick J. Farley 40,500 $629,670 3,600 150,400 $ 51,579 $1,609,769 Executive Vice President(8)
- ---------- (1) Represents shares of Common Stock acquired pursuant to exercise of options under Swift's 1990 Stock Option Plan. The exercise price for such shares was $1.54. (2) Based on the $17.09 last reported sale price of Swift Common Stock on April 19, 2001. (3) Based on the $21.51 last reported sales price of Swift Common Stock on December 31, 2001. (4) Mr. Moyes has not been awarded any stock options and is not eligible to participate in Swift's Stock Option Plan or Employee Stock Purchase Plan. See "Compensation Committee Report on Executive Compensation" below. (5) In 1997 Mr. Riley was granted options to purchase 112,500 shares at $10.01 per share. One-third of the shares underlying such options first became exercisable in April 2000. Thereafter, one-third of the options become exercisable in each successive year. These options will terminate in April 2007. 12 (6) In 2000, Mr. Sartor was granted options to purchase 100,000 shares at $11.10 per share. Beginning June 2003, 50,000 options begin vesting at a rate of one-third per year. The remaining 50,000 options begin vesting on June 7, 2005 at a rate of one-fifth per year. These options will terminate in June 2010. (7) Mr. Jensen was granted options in 1992, 1994, 1997, and 1998 covering 67,500, 45,000, 90,000, and 75,000 shares of Swift'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 1997) and $10.39 (as to 45,000 shares subject to options granted in 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. In 2000, Mr. Jensen was granted options to purchase 100,000 shares at $11.10 per share. Beginning June 2003, 50,000 options begin vesting at a rate of one-third per year. The remaining 50,000 options begin vesting on June 7, 2005 at a rate of one-fifth per year. All of Mr. Jensen's options terminate on the ten year anniversary of the date of grant. (8) Mr. Farley was granted options in 1991, January 1995, December 1995, April 1997, and July 1997 covering 67,500, 5,625, 3,375, 22,500, and 22,500 shares of Swift's Common Stock, respectively. The respective exercise prices for such grants were $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. In 2000, Mr. Farley was granted options to purchase 100,000 shares at $11.10 per share. Beginning June 2003, 50,000 options begin vesting at a rate of one-third per year. The remaining 50,000 options begin vesting on June 7, 2005 at a rate of one-fifth per year. All of Mr. Farley's options terminate on the ten year anniversary of the date of grant. EMPLOYMENT AND CHANGE OF CONTROL AGREEMENTS Swift currently does not have any employment contracts or severance agreements with any of the Named Executive Officers. Swift has a deferred compensation agreement with Mr. Riley, the contribution to which is described in footnote (1) to the Summary Compensation Table. In addition, in connection with our merger with M.S. Carriers, Inc. in June 2001, we entered into employment agreements with Michael S. Starnes, M.J. Barrow, and James W. Welch. Under Mr. Starnes' employment agreement, he will serve as the top executive officer of our M.S. Carriers subsidiary for a period commencing on June 29, 2001 and ending on June 29, 2004. During his employment term, Mr. Starnes will be paid an annual base salary of $325,000 and will receive a minimum annual bonus of $175,000. Pursuant to Mr. Starnes' employment agreement, Swift will pay premiums under a split dollar life insurance policy until April 7, 2011, when Mr. Starnes attains the age of 65. A trust established by Mr. Starnes owns this policy and his beneficiary will be entitled to the benefits, after repaying the premiums advanced. Mr. Starnes' employment agreement also provides that he will be entitled to participate in employee benefit plans of Swift that generally apply to comparable employees of Swift. The employment agreements for Mssrs. Barrow and Welch each provide for a five-year term, an annual base salary of $200,000, and a minimum annual bonus of $150,000. Until termination of employment, Swift will keep in force existing split dollar life insurance policies on the lives of Messrs. Barrow and Welch and provide each of them with an additional $1 million term life insurance policy. In addition, Messrs. Barrow and Welch are entitled to participate in employee benefit plans of Swift that generally apply to comparable employees of Swift. In the event that Swift 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 Swift'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 13 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. REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION THE FOLLOWING REPORT OF THE COMPENSATION COMMITTEE DOES NOT CONSTITUTE SOLICITING MATERIAL AND SHOULD NOT BE DEEMED FILED OR INCORPORATED BY REFERENCE INTO ANY OTHER FILING BY SWIFT UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES EXCHANGE ACT OF 1934, EXCEPT TO THE EXTENT SWIFT SPECIFICALLY INCORPORATES THIS REPORT. The Compensation Committee has furnished the following report on executive compensation for fiscal 2001. SWIFT'S GENERAL PHILOSOPHY ON EXECUTIVE COMPENSATION. Swift's compensation program for executive officers consists of three key elements: * a base salary; * a performance-based annual bonus; and * long-term incentives in the form of stock option grants. Certain executives also participate in various other benefit plans, including medical plans and a 401(k) plan, which are generally available to all employees of Swift Transportation. The compensation committee believes that this three-part approach best serves the interests of Swift and its stockholders. As described more fully below, each element of Swift's executive compensation program has a somewhat different purpose. The three-part approach enables Swift to meet the requirements of the competitive environment in which it operates, while ensuring that executive officers are compensated in a way that advances both the short- and long-term interests of the stockholders. Under this approach, compensation for these officers was ultimately based upon: * the compensation committee's assessment of the executive officers' performance; * the continuing demand for superior executive talent; * Swift's overall performance both individually as a company and as compared to its peers; and * Swift's future objectives and challenges. Swift's philosophy is to pay base salaries to executives that reward these executives for ongoing performance throughout the year and that enable Swift to attract, motivate and retain highly qualified executives. The annual bonus program is designed to reward executives for performance and is based primarily on Swift's financial results. Stock option grants give executives an opportunity to obtain equity in Swift and, because options result in minimal or no rewards if Swift's stock price does not appreciate but provide substantial rewards to executives if Swift's stock price appreciates, also provide an incentive for 14 outstanding performance in the long term. The board believes that this mix of short- and long-term compensation components provides a balanced approach that enables Swift to attract and retain experienced executives, rewards such executives for their individual and collective contribution to the profitability of Swift, and ensures that the incentives of Swift's executives are aligned with the best interests of its stockholders. The board's decisions concerning the specific fiscal 2001 compensation elements for individual executive officers, including the Chief Executive Officer, were made within this broad framework and in light of each executive officer's level of responsibility, performance, current salary and prior-year bonus and other compensation awards. As noted below, the board's specific decisions involving fiscal 2001 executive officer compensation were ultimately based upon the board's judgment regarding the individual executive officer's performance, potential future contributions, and whether each payment or award would provide an appropriate reward and incentive for such officer to sustain and enhance Swift's long-term performance. A more detailed breakdown of the compensation committee's decisions with respect to each of the three key elements of Swift's executive compensation program follows. BASE SALARY. In setting base salaries of senior management for 2001, including the salary of Jerry Moyes, Swift's Chief Executive Officer, the compensation committee reviewed and considered: * compensation information disclosed by similar publicly held truckload motor carriers (all of which carriers are included in the Nasdaq Trucking and Transportation Stocks Index); * the financial performance of Swift, as well as the role and contribution of the particular executive with respect to such performance; and * nonfinancial performance related to the individual executive's contributions. The compensation committee believes that the annual salaries of Swift's Chief Executive Officer, Senior Executive Vice President and its Executive Vice Presidents are at or slightly below median level salaries of executives performing in similar positions at other publicly held truckload motor carriers of comparable size. However, the committee believes that, when the base salary and annual bonus for Swift'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 growing Swift in terms of revenue, balanced against a reduction in net earnings caused by increased operating costs, primarily resulting from higher fuel costs impacting the industry generally, and other factors. ANNUAL BONUSES. 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 Swift'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 their abilities to generate the highest attainable profits for Swift and to achieve increased stockholder value. STOCK OPTIONS. Swift believes that it is important for executives to have an equity stake in Swift in order to encourage them to focus on long-term prospects. Toward this end, Swift makes option grants to the Senior Executive Vice President and Executive Vice Presidents from time to time pursuant to the 15 Plan. In making option grants to the Senior Executive Vice President and Executive Vice Presidents, the compensation committee evaluates the individual officer's past and expected future contributions to Swift's achievement of its long-term performance goals. Because Jerry Moyes is the largest beneficial stockholder of Swift, the compensation committee has not awarded any stock options to Mr. Moyes, and Mr. Moyes is not eligible to participate in Swift's stock option plan or Employee Stock Purchase Plan. COMPENSATION OF SWIFT'S 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 Swift, 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 Swift and Swift'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 Swift's operating results and the increase in stockholder value over time. Jerry Moyes Lou A. Edwards Alphonse E. Frei 16 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 Swift. Interstate Equipment Leasing, Inc., a corporation wholly-owned by Jerry Moyes, leases tractors to some of Swift's owner operators. In connection with this program, during 2001 Swift acquired new tractors and sold them to Interstate Leasing for $27.6 million and recognized fee income of $1.0 million. During 2001, Swift also sold used revenue equipment to Interstate Leasing totaling $20,000 and recognized a loss of $1,000. At December 31, 2001, nothing was owed to Swift for this equipment. In addition, Interstate Leasing operates as a fleet operator for Swift. During 2001, Swift paid $26.8 million to Interstate Leasing for purchased transportation services. At December 31, 2001, $376,000 was owed by Swift for these transportation services. Also, Swift was paid $3.6 million by Interstate Leasing and paid $104,000 to Interstate Leasing for various services, including training. At December 31, 2001, $741,000 was owed to Swift and nothing was owed by Swift for these services. Swift Aviation Services, Inc., a corporation wholly-owned by Jerry Moyes, provides air transportation services to Swift. Such services totaled $860,000 for the year ended December 31, 2001. At December 31, 2001, $60,000 was owed to Swift Aviation for air transportation services. Jerry Moyes acquired a significant ownership interest in Central Freight Lines, Inc. during 1997. Swift provides transportation and other services to Central Freight Lines and other entities owned by Mr. Moyes and recognized $11.2 million in operating revenue therefrom in 2001. At December 31, 2001, $986,000 was owed to Swift for these services. In addition, Swift paid $492,000 to Central Freight Lines for facilities rental during the year ended December 31, 2001. Swift provides transportation, repair and other services to Simon Transportation Services, Inc., a publicly traded trucking company which is majority owned by Jerry Moyes. Swift recognized $944,000 in revenues from these services in 2001. At December 31, 2001, $102,000 was owed to Swift for these services. All of the foregoing arrangements were approved by the independent members of the Board of Directors. 17 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, 1996 to December 31, 2001. The graph assumes that $100 was invested on December 31, 1996, and any dividends were reinvested. COMPARISON OF CUMULATIVE TOTAL RETURN AMONG SWIFT TRANSPORTATION CORPORATION, THE NASDAQ STOCK INDEX AND THE NASDAQ TRUCKING AND TRANSPORTATION STOCKS INDEX
12/31/96 12/31/97 12/31/98 12/31/99 12/31/00 12/31/01 -------- -------- -------- -------- -------- -------- Swift Transportation 100 137.772 178.935 168.757 189.707 205.955 NASDQ Stock Market (US) 100 122.476 172.68 320.894 193.012 153.152 Trucking & Transportation Index 100 128.15 115.792 111.53 101.378 119.991
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Securities Exchange Act of 1934 requires our officers and directors, and persons who own more than 10% of our Common Stock, 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 us with copies of all Section 16(a) forms they file. Based solely upon a review of the copies of such forms furnished to us, or written representations that no Forms 5 were required, we believe that during our preceding fiscal year all Section 16(a) filing requirements applicable to our officers, directors and greater than 10% beneficial owners were complied with, except Mssrs. Starnes, Labry, Barrow and Welch did not timely report their acquisition of Swift Common Stock in connection with the merger of Swift and M.S. Carriers. Each of Mssrs. Starnes, Labry, Barrow and Welch reported their acquisition of Swift Common Stock in subsequent filings. 18 SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT The following table sets forth, as of March 31, 2002, the number and percentage of outstanding shares of Common Stock beneficially owned by each person known by us to beneficially own more than 5% of such stock, by each director and Named Executive Officer of Swift and by all directors and executive officers of Swift as a group. Shares Name and Address of Beneficial Owner(1) Beneficially Owned Percent Owned - --------------------------------------- ------------------ ------------- Jerry Moyes 19,175,067(2) 22.20% Ronald G. Moyes 9,018,353(2) 10.44% William F. Riley III 418,272(3) * Rodney K. Sartor 28,279 * Lou A. Edwards 298,625(4) * Alphonse E. Frei 7,875(5) * Earl H. Scudder, Jr. 23,950(6) * Kevin H. Jensen 34,505(7) * Patrick J. Farley 13,545(8) * Michael S. Starnes 4,724,560(9) 5.46% Edward A. Labry, III 18,850(10) * FMR Corporation 12,779,529 14.79% Taunus Corporation, DB Alex Brown LLC 4,620,253 5.35% All Directors and Named Officers as a group (10 persons) 28.56% - ---------- * Represents less than 1% of the Company's outstanding Common Stock. (1) The address of each officer, director and Ronald G. Moyes is 2200 South 75th Avenue, Phoenix, Arizona 85043. The address of FMR Corporation is 82 Devonshire Street, Boston, Massachusetts 02109. The address for the Taunus Corporation is 31 West 52nd Street, New York, New York and the address for its subsidiary DB Alex Brown, LLC is 130 Liberty Street, New York, New York 10006. Information with respect to FMR Corporation, the Taunus Corporation and DB Alex Brown is based upon statements on Schedule 13Gs filed by such entities with the Securities and Exchange Commission. (2) The shares beneficially owned by Jerry Moyes are held by him, as follows: (i) 18,648,817 shares are held as a co-trustee of the Jerry and Vickie Moyes Family Trust, (ii) 33,750 shares are held by VJM Investments, LLC, a limited liability company in which Mr. Moyes has controlling interest, and (iii) 492,500 shares are held by SME Industries, Inc. of which Jerry Moyes is the majority shareholder. The shares shown for Jerry Moyes do not include the 9,018,353 shares held by (i) the Moyes Children's Limited Partnership, the sole general partner of which is Ronald Moyes, who has 19 sole investment and voting power over the limited partnership and (ii) 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 shares held by the trusts. The Moyes Children's Limited Partnership has pledged 1,300,000 shares to an unaffiliated third party under a variable prepaid forward contract dated May 8, 2001. The contract has a period of three years. At the expiration of the contract, the partnership must deliver an agreed settlement amount, which may be paid in cash, shares, or a combination of the two. The shares shown for Jerry 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 and the Moyes Children's Limited Partnership, 18,490,340 and 8,995,832 shares, respectively, have been pledged to secure loans with lending institutions. (3) Includes options to purchase 112,500 shares exercisable within 60 days, and excludes 2,700 shares held by Mr. Riley's spouse. (4) Includes options to purchase 2,000 shares exercisable within 60 days. (5) Includes options to purchase 2,000 shares exercisable within 60 days. (6) Includes options to purchase 6,750 shares exercisable within 60 days, and excludes 8,700 shares owned by Mr. Scudder's spouse. (7) Includes options to purchase 9,000 shares exercisable within 60 days. (8) Includes options to purchase 9,225 shares exercisable within 60 days. (9) Includes options to purchase 153,000 shares exercisable within 60 days. Mr. Starnes has pledged 1,500,000 shares to an unaffiliated third party under two separate variable prepaid forward contracts entered on November 9, 2001 and March 28, 2002. The contracts expire on March 6, 2003 and March 28, 2004, respectively. At the expiration of the contracts, Mr. Starnes must deliver an agreed settlement amount, which may be paid in shares or cash. (10) Includes options to purchase 4,400 shares exercisable within 60 days. 20 CERTAIN TRANSACTIONS AND RELATIONSHIPS During 2001, Swift incurred fees for legal services to Scudder Law Firm in the amount of approximately $337,000. Earl H. Scudder, a director of Swift, is the President and a member of Scudder Law Firm. During 2001, Swift purchased $466,000 of refrigeration units from Thermo King West, a corporation owned by William F. Riley III. Edward A. Labry, III is the President of Concord EFS, Inc., which provides financial services to Swift. Such services totaled $381,000 in 2001. At December 31, 2001, nothing was owed by Swift for these services. In 2001, M.S. Carriers agreed to sell its interest in an aircraft to its president Michael S. Starnes, who is a current member of Swift's Board of Directors. The sale price was $3,240,000 and M.S. Carriers recognized a loss of $430,000 on the sale. Swift believes that the terms of the foregoing transactions were as favorable to Swift 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. 21 AMENDMENT TO SWIFT'S ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK AUTHORIZED FOR ISSUANCE (PROPOSAL NO. 2) The Board of Directors has determined that it is in the best interests of Swift and its stockholders to amend the Swift's Articles of Incorporation to increase the authorized number of shares of Common Stock from 150,000,000 to 200,000,000 (the "Proposed Articles of Incorporation Amendment"). If Swift's stockholders approve the Proposed Articles of Incorporation Amendment, the Company will be authorized to issue a total of 201,000,000 shares of capital stock: 200,000,000 shares of Common Stock and 1,000,000 shares of Preferred Stock. If the Company's stockholders approve the Proposed Articles of Incorporation Amendment, it will become effective upon filing of a Certificate of Amendment to Swift's Articles of Incorporation with the Secretary of State of Nevada. A copy of the Swift's Amended and Restated Articles of Incorporation reflecting the adoption of the Proposed Articles of Incorporation Amendment is attached hereto as Annex A. PURPOSE AND EFFECTS OF THE PROPOSED ARTICLES OF INCORPORATION AMENDMENT The objective of the increase in the authorized number of shares of Common Stock is to ensure that Swift 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 86,385,870 shares of Common Stock issued and outstanding. The issuance of additional shares of Common Stock would decrease the proportionate equity interest of Swift's current stockholders and, depending on the price paid for such additional shares, could result in dilution to Swift'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 Articles of Incorporation Amendment would not affect the rights of Swift's current stockholders, except for effects incidental to authorizing an increase in the number of authorized shares of Common Stock. If Swift's stockholders approve the Proposed Articles of Incorporation 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 Swift in order to maintain their proportionate ownership level. Other than existing stock options and warrants, Swift 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. 22 REQUIRED VOTE The Proposed Articles of Incorporation 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 THAT YOU VOTE FOR APPROVAL OF THE ADOPTION OF THE PROPOSED AMENDMENT TO THE ARTICLES OF INCORPORATION. - -------------------------------------------------------------------------------- AMENDMENT TO SWIFT 1999 STOCK OPTION PLAN (PROPOSAL NO. 3) GENERAL At the Annual Meeting, the Company will seek stockholder approval of an amendment (the "Proposed Plan Amendment") to the Swift Transportation Co., Inc. 1999 Stock Option Plan (the "Plan") to increase the number of shares authorized for issuance thereunder from 4,250,000 to 7,250,000. The Plan provides employees with an incentive to actively direct and contribute to the Swift's growth by enabling them to acquire a proprietary interest in the company. Swift's Board of Directors has approved the Proposed Plan Amendment and has directed that the Proposed Plan Amendment be submitted as a proposal for stockholder approval at the Annual Meeting. The Plan was originally adopted in 1999. CURRENT 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 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 Swift 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 Swift 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 Swift'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 (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. 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 April 8, 2002, the last reported sale price of the Common Stock on the Nasdaq National Market was $19.49 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 23 requirements must also be met. The Committee determines the consideration to be paid to Swift 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. Swift 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, Swift 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 Swift 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 Swift 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 Swift. The following table sets forth grants of options made under the Plan during 2001 to (i) each of the Named Executive Officers of Swift; (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 Plan are made at the discretion of the Board of Directors or Committee. Accordingly, future grants under the Plan are not yet determinable. 24 PLAN BENEFITS STOCK OPTION PLAN WEIGHTED AVERAGE NUMBER OF SHARES SUBJECT EXERCISE PRICE NAME AND POSITION TO OPTIONS GRANTED (#) PER SHARE ($/SH) ----------------- ---------------------- ---------------- Jerry Moyes -- -- Chairman of the Board & President William F. Riley III -- -- Senior Executive Vice President & Chief Financial Officer Rodney K. Sartor -- -- Executive Vice President Patrick J. Farley -- -- Executive Vice President Kevin H. Jensen -- -- Executive Vice President Executive Officer Group 360,000 $16.37 Director Group 5,000 $16.37 Employee Group 415,000 $16.19 AMENDMENTS TO PLAN The Board of Directors has reviewed the options currently remaining in the option pool for the Plan and has determined that it is appropriate to increase the number of shares authorized for issuance under the Plan. As of March 31, 2001, (i) no shares have been issued upon exercise of options granted under the Plan and (ii) option grants representing 2,334,850 shares were outstanding under the Plan. The Board believes that an increase in the number of authorized shares is necessary for the continued optimal use of the Plan. Therefore, the Board has approved the Proposed Plan Amendment that would increase the number of shares authorized for issuance under the Plan from 4,250,000 to 7,250,000. REQUIRED VOTE Approval of the adoption of the Proposed Plan Amendment requires the affirmative vote of a majority of shares of Common Stock present at the Annual Meeting in person or by proxy. - -------------------------------------------------------------------------------- THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR APPROVAL OF THE ADOPTION OF THE PROPOSED AMENDMENT TO THE SWIFT TRANSPORTATION CO., INC. 1999 STOCK OPTION PLAN. - -------------------------------------------------------------------------------- 25 RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS The principal independent public accounting firm utilized by Swift during the fiscal year ended December 31, 2001 was KPMG LLP, independent certified public accountants. It is presently contemplated that KPMG LLP will be retained as the principal accounting firm to be utilized by Swift during the current fiscal year. A representative of KPMG LLP will attend the annual meeting for the purpose of responding to appropriate questions and will be afforded an opportunity to make a statement if KPMG LLP so desires. AUDIT FEES The aggregate fees billed to Swift by KPMG LLP for professional services rendered for the audit of Swift's annual financial statements for fiscal year 2001 and the reviews of the financial statements included in Swift's Forms 10-Q for fiscal year 2001 was $310,000. FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES No fees were billed to Swift by KPMG LLP for professional services described in Paragraph (c)(4)(ii) of Rule 2-01 of Regulation S-X ("Financial Information Systems Design and Implementation Fees") during fiscal year 2001. OTHER FEES The aggregate fees billed to Swift by KPMG LLP for services not described in the two preceding paragraphs during fiscal year 2001 was $891,000. After consideration, the Swift audit committee has concluded that the provision of non-audit services by KPMG LLP to Swift is compatible with maintaining the independence of KPMG LLP. STOCKHOLDER PROPOSALS AND NOMINATIONS Pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, stockholder proposals for the 2003 Annual Meeting must be received at the principal executive offices of Swift by December 24, 2002 to be considered for inclusion in our proxy materials relating to such meeting. If you wish to nominate directors for election at the 2003 Annual Meeting of Stockholders or to submit a proposal that is not intended to be included in our proxy materials relating to such meeting, our Bylaws require that: * You notify the Corporate Secretary in writing no later than January 24, 2003, which is 120 days prior to the anniversary date of the 2002 Annual Meeting. * Your notice to the Corporate Secretary contain the specific information set forth in our Bylaws. * You be a stockholder of record at the time you deliver your notice to the Corporate Secretary and be entitled to vote at the meeting of stockholders to which such notice relates. 26 A nomination or other proposal will be disregarded if it does not comply with the above procedure and any additional requirements set forth in our Bylaws. Please note that these requirements are separate from the SEC's requirements to have your proposal included in our proxy materials. All proposals and nominations should be sent to Swift Transportation Co., Inc., 2200 South 75th Avenue, Phoenix, Arizona 85043, Attention: Corporate Secretary. OTHER MATTERS As of the date of this proxy statement, 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. If any other matter is properly brought before the meeting for action by stockholders, proxies in the enclosed form returned to Swift will be voted in accordance with the recommendation of the Board of Directors or, in the absence of such a recommendation, in accordance with the judgment of the proxy holder. April __, 2002 SWIFT TRANSPORTATION CO., INC. ---------------------------------------- Jerry Moyes Chairman of the Board, President and Chief Executive Officer 27 Annex A AMENDED AND RESTATED ARTICLES OF INCORPORATION OF SWIFT TRANSPORTATION CO., INC. 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 Two-Hundred-One million (201,000,000) shares consisting of: (i) Two-Hundred million (200,000,000) 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"). 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 A-1 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. 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 A-2 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 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. A-3 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 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. A-4 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 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. A-5 PROXY PROXY SWIFT TRANSPORTATION CO., INC. PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 23, 2002 I appoint Jerry Moyes and William F. Riley III, individually and together, proxies with full power of substitution, to vote all my shares of common stock of Swift Transportation Co., Inc. (the "Company") which I have the power to vote, at the Annual Meeting of Stockholders of the Company (the "Annual Meeting") to be held at the Company's corporate headquarters at 2200 South 75th Avenue, Phoenix, Arizona 85043 on May 23, 2002 beginning at 10:00 a.m. local time and at any adjournments and postponements of the Annual Meeting. In the absence of specific voting directions from me, my proxies will vote my shares in accordance with the Director's recommendations on the reverse side of this card. My proxies may vote according to their discretion on any other matter which may properly come before the Annual Meeting. I revoke any proxy previously given and acknowledge that I may revoke this proxy prior to its exercise. UNLESS OTHERWISE MARKED, THIS PROXY WILL BE VOTED FOR (1) THE ELECTION OF EACH CLASS III DIRECTOR NOMINEE, (2) APPROVAL OF THE ADOPTION OF THE PROPOSED AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF ITS COMMON STOCK, AND (3) APPROVAL OF THE ADOPTION OF THE PROPOSED AMENDMENT TO THE COMPANY'S 1999 STOCK OPTION PLAN TO INCREASE THE NUMBER OF SHARES AUTHORIZED FOR ISSUANCE THEREUNDER. YOUR VOTE IS IMPORTANT: PLEASE SIGN AND DATE THE OTHER SIDE OF THIS PROXY CARD AND RETURN IT PROMPTLY USING THE ENCLOSED ENVELOPE. (Continued and to be marked, signed and dated on the reverse side.) SWIFT TRANSPORTATION CO., INC. PLEASE MARK BOXES, SIGN AND DATE USING DARK INK ONLY. The Board of Directors recommends a vote FOR Proposals 1 through 3. For All 1. TO ELECT CLASS III DIRECTORS For Withhold Except Nominee Nominees: William F. Riley III All All Written Below and Lou A. Edwards [ ] [ ] [ ] To withhold authority to vote for any individual nominee, write the name of such nominee in the space below: _____________________ 2. TO APPROVE THE AMENDMENT TO For Against Abstain THE COMPANY'S ARTICLES OF INCORPORATION TO INCREASE THE [ ] [ ] [ ] NUMBER OF SHARES OF COMMON STOCK AUTHORIZED FOR ISSUANCE FROM 150,000,000 TO 200,000,000. 3. TO APPROVE THE AMENDMENT TO For Against Abstain THE COMPANY'S 1999 STOCK PLAN TO INCREASE THE NUMBER OF [ ] [ ] [ ] SHARES AUTHORIZED FOR ISSUANCE FROM 4,250,000 TO 7,250,000. Please sign exactly as name(s) appear(s) on your common stock certificate(s) and date. If acting as an executor, administrator, trustee, custodian, guardian, etc., you should so indicate in signing. If the stockholder is a corporation, the proxy should indicate the full corporate name and be signed by a duly authorized officer (indicating his or her position). If shares are held jointly, each stockholder named on the common stock certificate(s) should sign. ---------------------------------------- ---------------------------------------- Signature ---------------------------------------- Signature Dated: _____________, 2002 THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS YOU SPECIFY ABOVE. IF NO SPECIFIC VOTING INSTRUCTIONS ARE GIVEN BY YOU, THIS PROXY WILL BE VOTED FOR EACH OF THE LISTED PROPOSALS AND, WITH RESPECT TO SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING, OR ANY ADJOURNMENTS OR POSTPONEMENTS, IN ACCORDANCE WITH THE DISCRETION OF THE APPOINTED PROXIES. PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY. -----END PRIVACY-ENHANCED MESSAGE-----