def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the
Registrant þ
Filed by a Party other than the
Registrant o
Check the appropriate box:
o Preliminary
Proxy Statement
o Confidential,
for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
þ Definitive
Proxy Statement
o Definitive
Additional Materials
o Soliciting
Material Pursuant under Sec.
240.14a-12
Swift Transportation Company
(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):
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No fee required.
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Fee computed on table below per Exchange Act
Rules 14a-6(i)(4)
and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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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):
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(4)
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Proposed maximum aggregate value of transaction:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by
Exchange Act
Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 3, 2011
To our stockholders:
We cordially invite you to attend the 2011 annual meeting of
Swifts stockholders. The meeting will take place at the
corporate offices of the Company which are located at
2200 S. 75th Ave., Phoenix, Arizona 85043, on Friday,
June 3, 2011, at 9:00 a.m. local time. We look forward
to your attendance either in person or by proxy.
The purpose of the meeting is to:
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(1)
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Elect the five nominees named in the attached proxy statement as
directors of Swift;
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(2)
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Submit an advisory vote on the compensation of Swifts
named executive officers;
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(3)
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Submit an advisory vote on the frequency of future votes on the
compensation of Swifts named executive officers;
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(4)
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Ratify the appointment of KPMG LLP as Swifts independent
registered public accounting firm for the fiscal year
2011; and
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(5)
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Transact any other business that may properly come before the
meeting.
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Only stockholders of record at the close of business on
April 12, 2011, may vote at the meeting or any
postponements or adjournments of the meeting.
By Order of the Board of Directors,
James Fry
Executive Vice President, General Counsel and
Secretary
Date: April 22, 2011
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
STOCKHOLDER MEETING TO BE HELD ON JUNE 3, 2011
The Companys proxy statement for the 2011 annual
meeting of stockholders and its Annual Report to stockholders
for the fiscal year ended December 31, 2010 are available
at www.swifttrans.com.
TABLE OF
CONTENTS
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PROXY
STATEMENT
SWIFT
TRANSPORTATION COMPANY
2200
South 75th Avenue
Phoenix, Arizona 85043
ANNUAL
MEETING OF STOCKHOLDERS
To be
held on June 3, 2011
The Board of Directors (the Board) of Swift
Transportation Company (the Company,
Swift, we, our) is
furnishing you this proxy statement in connection with the
solicitation of proxies on its behalf for the 2011 Annual
Meeting of Stockholders (Annual Meeting). The
meeting will take place at the corporate offices of the Company
which are located at 2200 S. 75th Ave., Phoenix,
Arizona 85043, on Friday, June 3, 2011, at 9:00 a.m.
local time. At the meeting, stockholders will vote on
(i) the election of directors named in this proxy
statement, (ii) the ratification of KPMG LLP as
Swifts independent registered public accounting firm for
2011, (iii) an advisory vote to approve the compensation of
Swifts named executive officers, and (iv) an advisory
vote on the frequency of future advisory votes on the
compensation of Swifts named executive officers.
Stockholders also will consider any other matters that may
properly come before the meeting, although we know of no other
business to be presented.
By submitting your proxy (either by signing and returning the
enclosed proxy card or by voting electronically on the Internet
or by telephone), you authorize James Fry, Swifts
Executive Vice President, General Counsel and Secretary, and
Ginnie Henkels, Swifts Executive Vice President and Chief
Financial Officer (CFO), to represent you and vote
your shares at the meeting in accordance with your instructions.
They also may vote your shares to adjourn the meeting and will
be authorized to vote your shares at any postponements or
adjournments of the meeting.
Swifts Annual Report to Stockholders for the fiscal year
ended December 31, 2010, which includes the Companys
fiscal 2010 audited consolidated financial statements,
accompanies this proxy statement. Although the Annual Report is
being distributed with this proxy statement, it does not
constitute a part of the proxy solicitation materials and is not
incorporated by reference into this proxy statement.
We are first sending the proxy statement, form of proxy and
accompanying materials to stockholders on or about
April 28, 2011.
QUESTIONS
AND ANSWERS ABOUT THE PROXY MATERIALS
AND THE ANNUAL MEETING
When
and Where is the Annual Meeting?
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Date: |
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Friday, June 3, 2011 |
Time: |
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9:00 a.m., Local Time |
Location: |
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Swift Transportation Company
2200 S. 75th Ave.
Phoenix, AZ 85043 |
What
Matters will be Voted upon at the Annual Meeting?
At the Annual Meeting, you will be asked to:
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Consider and vote upon a proposal to elect nominees William
Post, Jerry Moyes, Richard H. Dozer, David Vander Ploeg and
Glenn Brown as directors to hold office for a term of one year,
expiring at the close of the Annual Meeting of Stockholders in
2012.
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Vote, on an advisory basis, to approve the compensation of
Swifts named executive officers.
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Vote, on an advisory basis, the frequency of future advisory
votes on the compensation of Swifts named executive
officers.
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Consider and vote upon a proposal to ratify the appointment of
KPMG LLP as Swifts independent registered public
accounting firm for the 2011 calendar year.
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Transact such other business as may properly come before the
Annual Meeting or any adjournments thereof.
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What
Constitutes a Quorum?
The presence, either in person or by proxy, of the holders of at
least a majority of our issued and outstanding shares of common
stock entitled to vote is required to constitute a quorum for
the transaction of business at the Annual Meeting. Abstentions
and broker non-votes, which are described in more detail below,
are counted as shares present at the Annual Meeting for purposes
of determining whether a quorum exists.
What
if a Quorum is not Present at the Annual Meeting?
If a quorum is not present at the meeting, the holders of a
majority of the shares entitled to vote at the meeting who are
present, in person or represented by proxy, or the chairman of
the meeting, may adjourn the meeting until a quorum is present.
The time and place of the adjourned meeting will be announced at
the time the adjournment is taken, and no other notice will be
given.
Who is
Entitled to Vote?
Only stockholders of record of Swifts common stock at the
close of business on Tuesday, April 12, 2011, which is the
record date, are entitled to notice of, and to vote
at, the Annual Meeting. Shares that may be voted include shares
that are held:
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directly by the stockholder of record, and
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beneficially through a broker, bank or other nominee.
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Each share of our Class A common stock will be entitled to
one vote on all matters submitted for a vote at the Annual
Meeting. Each share of our Class B common stock will be
entitled to two votes on all matters submitted for a vote at the
Annual Meeting.
As of the record date, there were 79,359,344 shares of our
Class A common stock issued and outstanding and entitled to
be voted at the Annual Meeting and 60,116,713 shares of our
Class B common stock entitled to be voted at the Annual
Meeting.
2
What
is the Effect of not Casting your Vote?
If your shares are held in street name (the shares
are held by a bank, brokerage firm or other nominee
the record holder), it is critical that you cast
your vote if you want it to count in the election of directors.
Recent regulatory changes have taken away the ability of your
record holder to vote your uninstructed shares in non-routine
matters on a discretionary basis. Proposals to elect directors,
stockholder advisory votes concerning executive compensation and
votes on the frequency of stockholder advisory votes on
executive compensation are not considered routine matters.
Therefore, your shares will not be voted without your specific
instructions. Thus, if you hold your shares in street name and
you do not instruct your record holder how to vote in the
election of directors (Proposal 1), the advisory vote to
approve the compensation of Swifts named executive
officers (Proposal 2) and the advisory vote on the
frequency of a future advisory votes on the compensation of
Swifts named executive officers (Proposal 3), no
votes will be cast on your behalf. Your record holder will,
however, continue to have discretion to vote your shares in its
discretion on the ratification of the appointment of the
independent registered public accounting firm (Proposal 4).
What
is the Difference between Holding Shares as a Registered
Owner and a Beneficial Owner?
Most of Swifts Class A stockholders hold their shares
through a broker, bank or other nominee rather than directly in
their own name. As summarized below, there are some distinctions
between registered shares and those owned beneficially:
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Registered Owners If your shares are registered
directly in your name with our transfer agent, Wells Fargo
Shareowner Services, you are, with respect to those shares, the
stockholder of record. As the stockholder of record, you have
the right to grant your voting proxy directly to the Company or
to vote in person at the Annual Meeting.
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Beneficial Owners If your shares are held in a
brokerage account, bank or by another nominee, you are, with
respect to those shares, the beneficial owner of
shares held in street name. As the beneficial owner, you have
the right to direct your broker, bank or other nominee on how to
vote or to vote in person at the Annual Meeting. However, since
you are not a stockholder of record, you may not vote these
shares in person at the Annual Meeting unless you obtain a
legal proxy from your broker, bank or other nominee
(who is the stockholder of record) giving you the right to vote
the shares.
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What
is a Broker Non-Vote?
Generally, a broker non-vote occurs when a broker,
bank or other nominee that holds shares in street
name for a customer is precluded from exercising voting
discretion on a particular proposal because (i) the
beneficial owner has not instructed the nominee on how to vote,
and (ii) the nominee lacks discretionary voting power to
vote such issues.
Under the rules of the New York Stock Exchange
(NYSE), a nominee does not have discretionary voting
power with respect to the approval of non-routine
matters absent specific voting instructions from the beneficial
owners of such shares.
What
Stockholder Approval is Necessary for Approval of the
Proposals?
Election
of Directors (Proposal 1)
Each director shall be elected by a vote of the majority of
votes cast with respect to that director. This means that a
director must receive for votes from more than 50%
of the number of shares voted with respect to that director.
However, if the number of nominees is greater than the number of
directors to be elected, the directors will be elected by the
vote of a plurality of the shares represented in person or by
proxy at any stockholder meeting. Broker non-votes and withhold
votes will have no effect on the outcome of this proposal.
3
Advisory
Vote to Approve the Compensation of Swifts Named Executive
Officers (Proposal 2)
Approval of this resolution requires the affirmative vote of a
majority of the votes cast at the Annual Meeting. Broker
non-votes and abstentions will have no effect on the outcome of
this proposal. While this vote is required by law, it is not
binding on the Company or the Board. However, the Compensation
Committee will take into account the outcome of the vote when
considering future executive compensation decisions.
Advisory
Vote on the Frequency of Future Advisory Votes on the
Compensation of Swifts Named Executive Officers
(Proposal 3)
Generally, approval of any matter presented to stockholders
requires a majority of votes cast. However, because this vote is
advisory and nonbinding, if none of the frequency options
receives a majority of the votes cast, the option receiving the
greatest number of votes will be considered the frequency
recommended by the Companys stockholders. Broker non-votes
and abstentions will have no effect on the outcome of this
proposal. Even though this vote is not binding on the Company or
the Board, the Board will take into account the outcome of this
vote in making a determination on the frequency with which
future advisory votes on executive compensation will be included
in Swifts proxy statement.
Ratification
of the Appointment of KPMG as Swifts Independent
Registered Public Accounting Firm (Proposal 4)
The ratification of the Audit Committees appointment of
KPMG LLP as Swifts independent registered public
accounting firm requires the affirmative vote of a majority of
the shares of our common stock cast at the Annual Meeting.
Broker non-votes and abstentions will have no effect on the
outcome of this proposal. Stockholder ratification is not
required for the appointment of Swifts independent
registered public accounting firm. However, we are submitting
the proposal to solicit the opinion of our stockholders.
May I
Vote my Shares in Person at the Annual Meeting?
If you are the registered owner of shares of Swifts common
stock on the record date, you have the right to vote your shares
in person at the Annual Meeting.
If you are the beneficial owner of shares of Swifts common
stock on the record date, you may vote these shares in person at
the Annual Meeting if you have requested a legal proxy from your
broker, bank or other nominee (the stockholder of record) giving
you the right to vote the shares at the Annual Meeting, complete
such legal proxy and present it to Swift at the Annual Meeting.
Even if you plan to attend the Annual Meeting, we recommend that
you submit your proxy card or voting instructions so that your
vote will be counted if you later decide not to attend the
Annual Meeting.
How
can I Vote my Shares without Attending the Annual
Meeting?
If you are a registered owner, you may instruct the named proxy
holders on how to vote your shares by completing, signing,
dating and returning the enclosed proxy card in the postage-paid
envelope provided with this proxy statement, or by using the
Internet voting site or the toll-free telephone number listed on
the proxy card. Specific instructions for using the Internet and
telephone voting systems are on the proxy card. The Internet and
telephone voting systems will be available until 11:59 p.m.
Mountain Standard Time on Thursday, June 2, 2011 (the day
before the Annual Meeting).
If you are the beneficial owner of shares held in street name,
you should instruct your broker, bank or other nominee on how to
vote your shares. Your broker, bank or other nominee has
enclosed with this proxy statement a voting instruction card for
you to use in directing your nominee on how to vote your shares.
The instructions from your nominee will indicate whether
Internet or telephone voting is available and, if so, will
provide details regarding how to use those systems.
4
How
will my Proxy be Voted?
Shares represented by a properly executed proxy (in paper form,
by Internet or by telephone) that is received in a timely
manner, and not subsequently revoked, will be voted at the
Annual Meeting or any adjournment or postponement thereof in the
manner directed on the proxy. James Fry and Ginnie Henkels are
named as proxies in the proxy form and have been designated by
the Board as the directors proxies to represent you and
vote your shares at the Annual Meeting. All shares represented
by a properly executed proxy on which no choice is specified
will be voted:
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(1)
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FOR the election of the nominees for director named in
this proxy statement;
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(2)
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FOR the resolution approving the compensation of
Swifts named executive officers;
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(3)
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FOR holding future stockholder advisory votes on the
compensation of Swifts named executive officers every year;
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(4)
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FOR the ratification of the appointment of KPMG LLP as
Swifts independent registered public accounting firm for
the 2011 calendar year; and
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(5)
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in accordance with the proxy holders best judgment as to
any other business that properly comes before the Annual Meeting.
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May I
Revoke my Proxy and Change my Vote?
Yes. You may revoke your proxy and change your vote at any time
prior to the vote at the Annual Meeting.
If you are the registered owner, you may revoke your proxy and
change your vote by:
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submitting a new proxy bearing a later date (which automatically
revokes the earlier proxy),
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giving notice of your changed vote to us in writing mailed to
the attention of James Fry, Corporate Secretary, at our
executive offices,
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attending the Annual Meeting and giving oral notice of your
intention to vote in person, or
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re-voting by telephone or Internet.
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You should be aware that simply attending the Annual Meeting
will not in and of itself constitute a revocation of your proxy.
Will
my Vote be kept Confidential?
Yes, your vote will be kept confidential and not disclosed to
the Company unless:
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required by law;
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you expressly request disclosure on your proxy; or
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there is a proxy contest.
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Who
will Pay the Costs of Soliciting Proxies?
Swift will bear all costs of this proxy solicitation. In
addition to soliciting proxies by this mailing, our directors,
officers and regular employees may solicit proxies personally or
by mail, telephone, facsimile or other electronic means, for
which solicitation they will not receive any additional
compensation. Swift will reimburse brokerage firms, custodians,
fiduciaries and other nominees for their
out-of-pocket
expenses in forwarding solicitation materials to beneficial
owners upon our request.
What
other Business will be Presented at the Annual
Meeting?
As of the date of this proxy statement, the Board knows of no
other business that may properly be, or is likely to be, brought
before the Annual Meeting. If any other matters should arise at
the Annual Meeting, the persons named
5
as proxy holders, James Fry and Ginnie Henkels will have the
discretion to vote your shares on any additional matters
properly presented for a vote at the meeting. If, for any
unforeseen reason, any of the director nominees are not
available to serve as a director, the named proxy holders will
vote your proxy for such other director candidate or candidates
as may be nominated by the Board.
Where
can I Find the Voting Results of the Annual
Meeting?
Swift will publish final voting results of the Annual Meeting on
Form 8-K
within four business days after the Annual Meeting.
What
Should I do if I Receive more than One Set of Voting
Materials?
You may receive more than one set of voting materials, including
multiple copies of this proxy statement and multiple proxies or
voting instruction cards. For example, if you hold your shares
in more than one brokerage account, you may receive a separate
voting instruction card for each brokerage account. If you are a
registered owner and your shares are registered in more than one
name, you will receive more than one proxy card. Please vote
each proxy and instruction card that you receive.
Who
can Help Answer my Questions?
If you have questions concerning a proposal or the Annual
Meeting, if you would like additional copies of this proxy
statement, or if you need directions to or special assistance at
the Annual Meeting, please call the Corporate Secretary at
1-800-800-2200,
extension 9073574 or jim_fry@swifttrans.com. In addition,
information regarding the Annual Meeting is available via the
Internet at our website, www.swifttrans.com.
THE BOARD
OF DIRECTORS AND CORPORATE GOVERNANCE
Corporate
Governance Documents
In furtherance of its goals of providing effective governance of
Swifts business and affairs for the long-term benefit of
stockholders and promoting a culture and reputation of the
highest ethics, integrity and reliability, the Board has adopted
Corporate Governance Guidelines, charters for each of its Board
committees, and a Code of Business Conduct and Ethics for
directors, officers and employees of the Company. Each of these
documents is available in the corporate governance section of
the Investor Relations page of our Web site at
www.swifttrans.com.
Risk
Management and Oversight
Our full Board oversees our risk management process. Our Board
oversees a company-wide approach to risk management, carried out
by our management. Our full Board determines the appropriate
risk for us generally, assesses the specific risks faced by us,
and reviews the steps taken by management to manage those risks.
While the full Board maintains the ultimate oversight
responsibility for the risk management process, its committees
oversee risk in certain specified areas. In particular, our
Compensation Committee is responsible for overseeing the
management of risks relating to our executive compensation plans
and arrangements, and the incentives created by the compensation
awards it administers. Our Audit Committee oversees management
of enterprise risks as well as financial risks, and is
responsible for overseeing potential conflicts of interests. Our
Nominating and Corporate Governance Committee is responsible for
overseeing the management of risks associated with the
independence of our Board. Pursuant to the Boards
instruction, management regularly reports on applicable risks to
the relevant committee or the full Board, as appropriate, with
additional review or reporting on risks conducted as needed or
as requested by our Board and its committees.
Composition
of Board and Board Leadership Structure
Our Board currently consists of five members, William Post,
Jerry Moyes, Richard H. Dozer, David Vander Ploeg and Glenn
Brown, all of whom other than Mr. Moyes qualify as
independent directors under the corporate governance standards
of the NYSE and the independence requirements of
Rule 10A-3
of the Securities Exchange
6
Act of 1934 (the Exchange Act). Our Board requires
the separation of the offices of the Chairman of our Board and
our Chief Executive Officer (CEO). Currently, our
independent Chairman of the Board is William Post. Our Board
will be free to choose the Chairman in any way that it deems
best for us at any given point in time, provided that the
Chairman not be our CEO or any other employee of Swift. If the
Chairman of the Board is not an independent director, our
Boards independent directors will designate one of the
independent directors on the Board to serve as lead independent
director. In addition, so long as our CEO is a permitted holder
or a
Moyes-affiliated
person under our certificate of incorporation, the Chairman of
our Board must be an independent director. Conversely, so long
as our Chairman is a permitted holder or a
Moyes-affiliated
person under our certificate of incorporation, our CEO may not
be a permitted holder or a
Moyes-affiliated
person thereunder. The duties of the Chairman, or the lead
independent director if the Chairman is not independent, include:
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presiding at all executive sessions of the independent directors;
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presiding at all meetings of our Board and the stockholders (in
the case of the lead independent director, where the Chairman is
not present);
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in the case of the lead independent director or the Chairman who
is an independent director, coordinating the activities of the
independent directors;
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preparing Board meeting agendas in consultation with the CEO and
lead independent director or Chairman, as the case may be, and
coordinating Board meeting schedules;
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authorizing the retention of outside advisors and consultants
who report directly to the Board;
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requesting the inclusion of certain materials for Board meetings;
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consulting with respect to, and where practicable receiving in
advance, information sent to the Board;
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collaborating with the CEO and lead independent director or
Chairman, as the case may be, in determining the need for
special meetings;
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in the case of the lead independent director, acting as liaison
for stockholders between the independent directors and the
Chairman, as appropriate;
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communicating to the CEO, together with the chairman of the
Compensation Committee, the results of the Boards
evaluation of the CEOs performance;
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responding directly to stockholder and other stakeholder
questions and comments that are directed to the Chairman of the
Board, or to the lead independent director or the independent
directors as a group, as the case may be; and
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performing such other duties as our Board may delegate from time
to time.
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In the absence or disability of the Chairman, the duties of the
Chairman (including presiding at all meetings of our Board and
the stockholders) shall be performed and the authority of the
Chairman may be exercised by an independent director designated
for this purpose by our Board. The Chairman of our Board (if he
or she is an independent director) or the lead independent
director, if any, may only be removed from such position with
the affirmative vote of a majority of the independent directors,
only for the reasons set forth in our bylaws, including a
determination that the Chairman, or lead independent director,
as the case may be, is not exercising his or her duties in the
best interests of Swift and our stockholders.
Board
Diversity
As indicated in the director biographies, the Board prefers a
mix of background and experience among its members. The Board
does not follow any ratio or formula to determine the
appropriate mix. Rather, it uses its judgment to identify
nominees whose backgrounds, attributes and experiences, taken as
a whole, will contribute to the high standards of Board service
to the Company. The effectiveness of this approach is evidenced
by the directors participation in insightful and robust
yet mutually respectful deliberation that occurs at Board and
committee meetings.
7
Board
Meetings
The Board held ten meetings during the 2010 calendar year. All
directors attended all of the Board meetings and committee
meetings on which each served during 2010.
Director
Attendance at Annual Meeting
Swift was not a public company at the time of the 2010 annual
meeting and all shares were owned by Jerry Moyes and the various
Moyes childrens trusts. We will report how many directors
attended the 2011 annual meeting in our 2012 proxy statement.
Stock
Ownership Guidelines
To encourage director ownership in the Company, upon reaching
five years of service, all non-employee directors of the Board
are required to own Swift Class A common stock in an amount
equal to their annual compensation.
Board
Committees
As a result of Mr. Moyes and the various Moyes
childrens trusts controlling a majority of our voting
common stock, we qualify as a controlled company
within the meaning of the corporate governance standards of the
NYSE. As such, we have the option to elect not to comply with
certain of such listing standards. However, consistent with our
goal to implement strong corporate governance standards, we do
not, and do not intend to, elect to be treated as a
controlled company under the rules of the NYSE.
Our Board has an Audit Committee, Compensation Committee, and
Nominating and Corporate Governance Committee, each of which is
composed entirely of independent directors, each of whom is a
non-employee director as defined in
Rule 16b-3(b)(3)
under the Exchange Act, and an outside director
within the meaning of Section 162(m)(4)(c)(i) of the
Internal Revenue Code.
Members serve on these committees until their respective
resignations or until otherwise determined by our Board. Our
Board may from time to time establish other committees.
Committee memberships are as follows:
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Nominating and Corporate
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Audit Committee
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Compensation Committee
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Governance Committee
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Richard H. Dozer (Chairman)
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David Vander Ploeg (Chairman)
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William Post (Chairman)
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William Post
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William Post
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Richard Dozer
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David Vander Ploeg
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Richard Dozer
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David Vander Ploeg
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Glenn Brown
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Glenn Brown
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Audit
Committee
The Audit Committee, which held ten meetings in 2010, performs
the following functions:
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reviews the audit plans and findings of our independent
registered public accounting firm and our internal audit and
risk review staff, as well as the results of regulatory
examinations, and tracks managements corrective action
plans where necessary;
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reviews our financial statements, including any significant
financial items
and/or
changes in accounting policies, with our senior management and
independent registered public accounting firm;
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reviews our financial risk and control procedures, compliance
programs, and significant tax, legal, and regulatory matters;
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has the sole discretion to appoint annually our independent
registered public accounting firm, evaluate its independence and
performance, and set clear hiring policies for employees or
former employees of the independent registered public accounting
firm; and
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regularly reviews matters and monitors compliance with
procedures with Swifts internal audit department.
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The Board has determined that all members of the Audit
Committee, Richard Dozer, David Vander Ploeg and William Post
are audit committee financial experts as such term is defined in
item 407(d)(5) of
Regulation S-K,
promulgated by the Securities and Exchange Commission
(SEC).
Compensation
Committee
The Compensation Committee, which held four meetings in 2010,
performs the following functions:
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annually reviews corporate goals and objectives relevant to the
compensation of our executive officers and evaluates performance
in light of those goals and objectives;
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approves base salary and other compensation of our executive
officers;
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adopts, oversees, and periodically reviews the operation of all
of Swifts equity-based employee (including management and
director) compensation plans and incentive compensation plans,
programs and arrangements, including stock option grants and
other perquisites and fringe benefit arrangements;
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periodically reviews the outside directors compensation
arrangements to ensure their competitiveness and compliance with
applicable laws; and
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approves corporate goals and objectives and determines whether
such goals are met.
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Nominating
and Corporate Governance Committee
The Nominating and Corporate Governance Committee, which held
four meetings in 2010, performs the following functions:
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is responsible for identifying, screening, and recommending
candidates to the Board for Board membership;
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advises the Board with respect to the corporate governance
principles applicable to us; and
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oversees the evaluation of the Board and management.
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Corporate
Governance Policy
Our Board has adopted a corporate governance policy to assist
the Board in the exercise of its duties and responsibilities and
to serve the best interests of us and our stockholders. A copy
of this policy has been posted on our website,
www.swifttrans.com. These guidelines, which provide a
framework for the conduct of the Boards business, provide
that:
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directors are responsible for attending Board meetings and
meetings of committees on which they serve and to review in
advance of meetings material distributed for such meetings;
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the Boards principal responsibility is to oversee and
direct our management in building long-term value for our
stockholders and to assure the vitality of Swift for our
customers, clients, employees, and the communities in which we
operate;
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at least two-thirds of the Board shall be independent directors,
and other than our CEO and up to one additional non-independent
director, all of the members of our Board will be independent
directors;
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our Nominating and Corporate Governance Committee is responsible
for nominating members for election to our Board and will
consider candidates submitted by stockholders;
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our Board believes that it is important for each director to
have a financial stake in Swift to help align the
directors interests with those of our stockholders;
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although we do not impose a limit to the number of other public
company boards on which a director serves, our Board expects
that each member be fully committed to devoting adequate time to
his or her duties to us;
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the independent directors meet in executive session on a regular
basis, but not less than quarterly;
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each of our Audit Committee, Compensation Committee, and
Nominating and Corporate Governance Committee must consist
solely of independent directors;
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new directors participate in an orientation program and all
directors are encouraged to attend, at our expense, continuing
educational programs to further their understanding of our
business and enhance their performance on our Board; and
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our Board and its committees will sponsor annual
self-evaluations to determine whether members of the Board are
functioning effectively.
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In addition, our governance policy includes a resignation policy
requiring sitting directors to tender resignations if they fail
to obtain a majority vote in uncontested elections.
Nomination
of Director Candidates
The Nominating and Corporate Governance Committee will consider
director nominees proposed by stockholders. To recommend a
prospective director candidate for the Nominating and Corporate
Governance Committees consideration, stockholders may
submit the candidates name, qualifications, and other
relevant biographical information in writing to: Swift
Transportation Company, Nominating and Corporate Governance
Committee,
c/o Corporate
Secretary, 2200 S. 75th Ave., Phoenix, AZ 85043.
Swifts Bylaws require stockholders to give advance notice
of stockholder proposals, including nominations of director
candidates. For more information, please see Additional
Information Stockholder Proposals for 2012 Annual
Meeting.
The Board is responsible for recommending director candidates
for election by the stockholders and for electing directors to
fill vacancies or newly created directorships. The Board has
delegated the screening and evaluation process for director
candidates to the Nominating and Corporate Governance Committee,
which identifies, evaluates and recruits highly qualified
director candidates and recommends them to the Board. The
Nominating and Corporate Governance Committee considers
potential candidates for director, who may come to the attention
of the Nominating and Corporate Governance Committee through
current directors, management, professional search firms,
stockholders or other persons. The Nominating and Corporate
Governance Committee considers and evaluates a director
candidate recommended by a stockholder in the same manner as a
nominee recommended by a Board member, management, search firm
or other sources.
If the Nominating and Corporate Governance Committee determines
that an additional or replacement director is necessary or
advisable, the Nominating and Corporate Governance Committee may
take such measures that it considers appropriate in connection
with its evaluation of a potential director candidate, including
interviewing the candidate, engaging an outside firm to gather
additional information and making inquiries of persons with
knowledge of the candidates qualifications and character.
In its evaluation of potential director candidates, including
the members of the Board eligible for reelection, the Nominating
and Corporate Governance Committee considers the current size,
composition and needs of the Board and each of its committees.
Majority-Voting
Standard for Director Elections
Swifts Bylaws require that we use a majority-voting
standard in uncontested director elections and contain a
resignation requirement for directors who fail to receive the
required majority vote. Under the majority-voting standard, a
director nominee must receive more votes cast for
than against his or her election in order to be
elected to the Board. In accordance with the majority-voting
standard and resignation requirement, each director must tender
his or her irrevocable resignation from the Board if the
director does not receive more votes cast for than
against his or her election at the annual meeting,
which will take effect if the Board accepts the resignation.
Business
Code of Ethics
The Audit Committee and our Board have adopted a Business Code
of Ethics (within the meaning of Item 406(b) of
Regulation S-K)
that applies to our Board and all executive officers, including
our CEO, CFO, Controller, and such other persons designated by
our Board or an appropriate committee thereof. The Board
believes that these individuals must set an exemplary standard
of conduct for us, particularly in the areas of
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accounting, internal accounting control, auditing, and finance.
The Business Code of Ethics sets forth ethical standards the
designated officers must adhere to. The code of ethics is posted
on our website at www.swifttrans.com.
Executive
Sessions of Non-Management Directors
Non-management Board members meet without management present at
least once per year in executive sessions. At least once a year,
such meetings include only the independent members of the Board.
The Chairman of the Nominating and Corporate Governance
Committee presides over meetings of the non-employee and
independent directors.
Communications
with Directors by Stockholders
Stockholders and other interested parties may communicate
directly with any member or committee of the Board by writing
to: Swift Transportation Company Board of Directors,
c/o Corporate
Secretary, 2200 S. 75th Ave., Phoenix, AZ 85043.
Please specify to whom your letter should be directed. The
Corporate Secretary of Swift will review all such correspondence
and regularly forward to the Board a summary of all such
correspondence and copies of all correspondence that, in his
opinion, deals with the functions of the Board or its committees
or that he otherwise determines requires the attention of any
member, group or committee of the Board. Board members may at
any time review a log of all correspondence received by Swift
that is addressed to Board members and request copies of any
such correspondence.
COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 2009, Mr. Moyes was a member of our Compensation
Committee while also serving as our CEO and President.
Mr. Moyes no longer serves as a member of our Compensation
Committee and none of the members of our Compensation Committee
is an officer or employee of Swift. None of our executive
officers other than Mr. Moyes currently serves, or in the
past year has served, as a member of the Board or Compensation
Committee of any entity that has one or more executive officers
serving on our Board or Compensation Committee. During fiscal
2010, none of the members of the Compensation Committee had any
relationship requiring disclosure under Item 404 of
Regulation S-K.
RELATIONSHIPS
AND RELATED TRANSACTIONS
Overview
We have in place a written policy regarding the review and
approval of all transactions between Swift and any of our
executive officers, directors, and their affiliates. The policy
may only be amended by an affirmative vote of a majority of our
independent directors, including the affirmative vote of the
Chairman of our Board if the Chairman is an independent
director, or the lead independent director if the Chairman is
not an independent director.
Prior to entering into the related person transaction, the
related person must provide written notice to our legal
department and our Chief Financial Officer describing the facts
and circumstances of the proposed transaction.
If our legal department determines that the proposed transaction
is permissible, unless such transaction is required to be
approved by our Board under our certificate of incorporation or
any indenture or other agreement, the proposed transaction will
be submitted for consideration to our nominating and corporate
governance committee (exclusive of any member related to the
person effecting the transaction) at its next meeting or, if not
practicable or desirable, to the chair of such committee.
Such committee or chair will consider the relevant facts and
circumstances, including but not limited to: the benefits to us;
the impact on a directors independence; the availability
of other sources for comparable products or services; the terms
of the transaction; and arms length nature of the
arrangement. The nominating and corporate governance committee
or the chair will approve only those transactions that are in,
or are not inconsistent with, the best interests of us and our
stockholders.
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In addition, our amended and restated certificate of
incorporation provides that for so long as
(1) Mr. Moyes, Vickie Moyes, and their respective
estates, executors, and conservators, (2) any trust
(including the trustee thereof) established for the benefit of
Mr. Moyes, Vickie Moyes, or any children (including adopted
children) thereof, (3) any such children upon transfer from
Mr. Moyes or Vickie Moyes, or upon distribution from any
such trust or from the estates of Mr. Moyes or Vickie
Moyes, and (4) any corporation, limited liability company,
or partnership, the sole stockholders, members, or partners of
which are referred to in (1), (2), or (3) above, or
collectively, the permitted holders, hold in excess of 20% of
the voting power of Swift, Swift shall not enter into any
contract or transaction with any permitted holder or any
Moyes-affiliated entities unless such contract or transaction
shall have been approved by either (i) at least 75% of the
independent directors, including the affirmative vote of the
Chairman of our Board if the Chairman is an independent
director, or the lead independent director if the Chairman is
not an independent director or (ii) the holders of a
majority of the outstanding shares of Class A common stock
held by persons other than permitted holders or any
Moyes-affiliated entities. Independent director
means a director who is not a permitted holder or a director,
officer, or employee of any Moyes-affiliated entity and is
independent, as that term is defined in the listing
rules of the NYSE as such rules may be amended from time to time.
Transactions
with Moyes-Affiliated Entities
We provide and receive freight services, facility leases,
equipment leases, and other services, including repair and
employee services to and from several companies controlled by
and/or
affiliated with Mr. Moyes. Competitive market rates based
on local market conditions are used for facility leases.
The rates we charge for freight services to each of these
companies for transportation services are market rates, which
are comparable to what we charge third-party customers. The
transportation services we provide to affiliated entities
provide us with an additional source of operating revenue at our
normal freight rates. Freight services received from affiliated
entities are brokered out at rates lower than the rate charged
to the customer, therefore allowing us to realize a profit.
These brokered loads make it possible for us to provide freight
services to customers even in areas that we do not serve,
providing us with an additional source of income.
Other services that we provided to Moyes-affiliated entities
included employee services provided by our personnel, including
accounting-related services and negotiations for parts
procurement, repair and other truck stop services, and other
services. The daily rates we charge for employee-related
services reflect market salaries for employees performing
similar work functions. Other payments we make to and receive
from Moyes-affiliated entities include fuel tank usage, employee
expense reimbursement, executive air transport, and
miscellaneous repair services. Unless noted below, these
relationships and transactions continue in fiscal 2011.
Central
Freight Lines,
Inc.
Mr. Moyes and the Moyes-affiliated entities are the
principal stockholders of Central Freight Lines, Inc., or
Central Freight. For the year ended December 31, 2010, the
services we provided to Central Freight included
$7.4 million for freight services and $0.5 million for
facility leases. For the same period, the services we received
from Central Freight included $0.1 million for freight
services and $0.4 million for facility leases. As of
December 31, 2010, amounts owed to us by Central Freight
totaled $0.3 million.
Central
Refrigerated Holdings, LLC
Mr. Moyes and the Moyes-affiliated entities are the
members of Central Refrigerated Holdings, LLC, or Central
Holdings. For the year ended December 31, 2010, the
services we provided to Central Refrigerated Service, Inc., or
Central Refrigerated, an indirect subsidiary of Central
Holdings, included $0.1 million for freight services. For
the same period, the services we received from Central
Refrigerated included $1.9 million for freight services.
In addition to the above referenced transactions in November
2010, Central Refrigerated acquired a membership interest in Red
Rock Risk Retention Group (Swifts subsidiary captive
insurance entity) for a $100,000 capital investment in order to
participate in a common interest motor carrier risk retention
group, which required the participation by a second carrier,
through which Central Refrigerated will also insure up to
$2 million in auto liability claims. Under this auto
liability insurance policy, Central Refrigerated will be
responsible for the first $1 million in claims and 25% of
any claims between $1 million and $2 million, with Red
Rock insuring 75% of any
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claims in this $1 million to $2 million layer. Central
Refrigerated will obtain insurance from other third-party
carriers for claims in excess of $2 million. Red Rock will
provide this coverage to Central Refrigerated for an annual
premium of approximately $500,000. After reasonable
investigation and market analysis, the terms of Central
Refrigerateds participation in Red Rock and the pricing of
the auto liability coverage provided thereunder is comparable to
the market price of similar insurance coverage offered by
third-party carriers in the industry. The inclusion of the
similar risk of this third party supports the standing of our
risk retention group with the insurance regulators.
Transpay
Our subsidiary, Interstate Equipment Leasing (IEL),
contracts its employees from a third party, Transpay, Inc., or
Transpay, which is partially owned by Mr. Moyes. Transpay
is responsible for all payroll-related liabilities and employee
benefits administration for IEL. For the year ended
December 31, 2010, we paid Transpay $0.8 million, for
the employee services and administration fees. As of
December 31, 2010 the Company had no outstanding balance
owing to Transpay for these services.
Swift
Motor Sports
An entity affiliated with the
Moyes-affiliated
entities was an obligor on a $1.7 million obligation with
IEL at December 31, 2009, which obligation was cancelled by
the Company prior to the consummation of its IPO in December
2010. The obligation was guaranteed by Jerry Moyes. The
obligation accrued interest at 7.0% per annum with monthly
installments equal to $38 thousand through October 10, 2013
when the remaining balance was due.
Other
Affiliated Entities
For the year ended December 31, 2010, the services provided
by us to other affiliated entities of Mr. Moyes, including
SME Industries, Inc. and Swift Air LLC, included
$0.3 million for freight services.
Scudder
Law Firm
We have obtained legal services from Scudder Law
Firm, P.C., L.L.O., or Scudder Law Firm. Earl Scudder, a
director of Swift until July 21, 2010, is a member of
Scudder Law Firm. The rates charged to the Company for legal
services reflect market rates charged by unrelated law firms for
comparable services. For the year ended December 31, 2010,
Swift incurred fees for legal services from Scudder Law Firm, a
portion of which were provided by Mr. Scudder, in the
amount of $1.4 million. As of December 31, 2010, the
Company had $0.5 million outstanding balance owing to
Scudder Law Firm for these services.
Stockholder
Loans Receivable
On May 10, 2007, the Company entered into a Stockholder
Loan Agreement with its stockholders. Under the agreement, the
Company loaned the stockholders $560 million to be used to
satisfy their indebtedness owed to Morgan Stanley Senior
Funding, Inc. (Morgan Stanley). The proceeds of the
Morgan Stanley loan had been used to repay all indebtedness of
the stockholders secured by the common stock of Swift
Transportation Co. owned by the Moyes affiliates prior to the
contribution by them of that common stock to Swift Corporation
on May 9, 2007 in conjunction with our going private
transaction.
In connection with an amendment of the Companys previous
credit facility on October 2009, Mr. Moyes agreed to cancel
$125.8 million of the Companys senior notes he held
in return for a $325.0 million reduction of the stockholder
loan. The floating rate notes held by Mr. Moyes, totaling
$36.4 million in principal amount, were cancelled at
closing on October 13, 2009 and, correspondingly, the
stockholder loan was reduced by $94.0 million. The fixed
rate notes held by Mr. Moyes, totaling $89.4 million
in principal amount, were cancelled in January 2010 and the
stockholder loan was reduced further by an additional
$231.0 million. The amount of the stockholder loan
cancelled in exchange for the contribution of notes was
negotiated by Mr. Moyes with the steering committee of
lenders, comprised of a number of the largest lenders (by
holding size) and the Administrative Agent of the Credit
Agreement.
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The $244.6 million remaining balance of the stockholder
loan, $6.2 million of which was attributable to interest on
the principal amount, was cancelled by the Company prior to the
consummation of its IPO in December 2010. Due to the
classification of the stockholder loan as contra-equity, the
reductions in the stockholder loan did not reduce the
Companys stockholders equity.
PROPOSAL NO. 1:
ELECTION
OF DIRECTORS
Our Board nominates William Post, Jerry Moyes, Richard H. Dozer,
David Vander Ploeg and Glenn Brown as directors to hold office
for a term of one year, expiring at the close of the 2012 Annual
Meeting of Stockholders or until their successors are elected
and qualified or until their earlier resignation or removal. The
Board believes that these incumbent directors standing for
re-election are well-qualified and experienced to direct and
manage the Companys operations and business affairs and
will represent the interests of the stockholders as a whole.
Biographical information on each of these nominees is set forth
below in Directors and Executive Officers of the Company -
Nominees for Director.
If any director nominee becomes unavailable for election, which
is not anticipated, the named proxies will vote for the election
of such other person as the Board may nominate, unless the Board
resolves to reduce the number of directors to serve on the Board
and thereby reduce the number of directors to be elected at the
Annual Meeting.
THE BOARD
OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
FOR
EACH OF THE DIRECTOR NOMINEES LISTED HEREIN
Number
of Directors and Term of Directors and Executive
Officers
The Companys Bylaws provide that the number of directors
shall not be less than one or more than fifteen, with the exact
number to be fixed by the Board. Directors serve a term of one
year from their election date to the annual meeting of
stockholders. At least two-thirds of directors shall consist of
persons who are not employees of the Company or of any
subsidiary of the Company, provided that there shall not be at
any time more than two directors who are employees of the
Company.
Directors are elected by a majority of votes cast with respect
to each director, provided that the number of nominees does not
exceed the number of directors to be elected, in which case the
directors will be elected by the vote of a plurality of the
shares represented in person or by proxy at any stockholder
meeting.
The stockholders of the Company elect at the annual meeting
successors for directors whose terms have expired. The Board
elects members to fill new membership positions and vacancies in
unexpired terms on the Board. Executive officers are elected by
the Board and hold office until their successors are elected and
qualified or until their earlier death, retirement, resignation
or removal.
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Nominees
for Director
If elected at the Annual Meeting, all terms expire in 2012.
William
Post
Mr. Post, 60, was appointed Chairman of our Board on
December 16, 2010 in connection with our initial public
offering. He is a member of the Audit Committee, Compensation
Committee and is Chair of the Nominating and Governance
Committee. In 2009, Mr. Post retired as Chairman and CEO of
Pinnacle West Capital Corporation (Pinnacle West),
in April 2009 and retired from its board of directors in 2010.
He joined Arizona Public Service (the largest subsidiary of
Pinnacle West and the largest electric utility in Arizona) in
1973 and held various officer positions at Arizona Public
Service beginning in 1982, including Vice President and
Controller, Vice President of Finance and Regulation, then in
1997 Chief Operating Officer, and President and CEO in 1999.
Mr. Post joined the board of Arizona Public Service in 1994
and the board of Pinnacle West in 1997. He became Chairman of
the Board of Pinnacle West in 2001 and retired from the boards
of both APS and Pinnacle West in 2010. Mr. Post received a
bachelor of science degree from Arizona State University in
1973. He currently serves on the boards of First Solar, Inc.,
Translational Genomics Research Institute, and the Thunderbird
School of International Management. Mr. Posts
qualifications to serve as Chairman of our Board includes his
substantial experience serving as Chairman on numerous boards of
directors, including his current roles as Chairman of both Blue
Cross Blue Shield of Arizona and the Board of Trustees of
Arizona State University, and as a past Chairman on the boards
of Suncor Development Company, Stagg Information Systems,
Nuclear Assurance Corporation, Nuclear Electric Insurance
Limited, the Institute of Nuclear Power, and El Dorado
Investment Company. Mr. Post also served as a director of
Phelps Dodge Corporation from 2001 to 2007.
In addition to his corporate work, Mr. Post has also been
very active in the community serving as Chairman of the Boards
of the Business Coalition, Greater Phoenix Leadership, Greater
Phoenix Economic Council, Greater Phoenix Chamber of Commerce,
and the United Way campaign. Mr. Post also received a
bachelor of science degree from Arizona State University in 1973.
Mr. Post has received numerous awards and honors including
the National Americanism Award from the Anti-Defamation League,
the Arizona Heritage Award and an Honorary Doctorate of Letters
from Northern Arizona University.
Jerry
Moyes
Mr. Moyes, 66, is CEO and a member of our Board. He served
as CEO, President and Chairman of our Board from May 2007 when
Mr. Moyes took the Company private, until Mr. Post was
appointed as Chairman of the Board
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on December 16, 2010 in connection with our initial public
offering. In 1966, Mr. Moyes formed Common Market
Distribution Corp., which was later merged with Swift
Transportation which he also founded. In 1986, Mr. Moyes
became Chairman of the Board, President, and CEO of Swift
Transportation, positions he held until 2005. In October 2005,
Mr. Moyes stepped down from his executive positions at
Swift Transportation, although he continued to serve as a Board
member. Mr. Moyes has a history of leadership and
involvement with the transportation and logistics industry, such
as serving as past Chairman and President of the Arizona
Trucking Associations, board member and Vice President of the
American Trucking Associations, and a board member of the
Truckload Carriers Association. Also, Mr. Moyes is a highly
regarded, frequently sought after speaker at logistics and
transportation forums. Mr. Moyes experience,
comprehensive knowledge of the transportation and logistics
services industry and inside perspective of our
day-to-day
operations provides essential insight and guidance to our Board.
Mr. Moyes holds complete or significant ownership interest
in, and serves as Chairman of the board of directors of,
numerous other entities, including Central Refrigerated
Services, Inc., Central Freight Lines, Inc., SME Industries,
Southwest Premier Properties, and various commercial and
residential real estate properties. Mr. Moyes also served
from September 2000 until April 2002 as Chairman of the board of
Simon Transportation Services, Inc., a former publicly traded
trucking company providing nationwide, predominantly temperature
controlled, transportation services for major shippers.
Mr. Moyes graduated from Weber State University in 1966
with a bachelor of science degree in business administration.
The Weber State College of Education is named after
Mr. Moyes.
Mr. Moyes was a member of the board of directors of the
Phoenix Coyotes of the National Hockey League, or the NHL, from
2002 until 2009 and was the majority owner of the Phoenix
Coyotes from September 2006 until November 2, 2009, when
the assets of the team were purchased by the NHL out of a
bankruptcy filed on May 5, 2009. The bankruptcy proceedings
are continuing and a plan of reorganization has been filed but
has not been approved. On March 5, 2010, the NHL filed a
complaint against Mr. Moyes in New York state court
alleging breach of contract and aiding and abetting breach of
fiduciary duty claims arising out of the bankruptcy filing and
an attempt to sell the Coyotes without NHL consent. The NHL is
claiming damages of at least approximately $60 million. The
lawsuit has since been removed to federal court in New York and
transferred to the bankruptcy court for the federal court in
Arizona. Mr. Moyes has filed a motion to dismiss the
NHLs claims and is vigorously defending this action.
Mr. Moyes also served from September 2000 until April 2002
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 Inc. filed for
protection under Chapter 11 of the United States Bankruptcy
Code on February 25, 2002, and was subsequently purchased
from bankruptcy by Central Refrigerated Services, Inc. In
September 2005, the SEC filed a complaint in federal court in
Arizona alleging that Mr. Moyes purchased an aggregate of
187,000 shares of Swift stock in May 2004 while he was
aware of material non-public information. Mr. Moyes timely
filed the required reports of such trades with the SEC, and
voluntarily escrowed funds equal to his putative profits into a
trust established by the company. After conducting an
independent investigation of such purchases and certain other
repurchases made by Swift Transportation that year at
Mr. Moyes direction under its repurchase program,
Swift instituted a stricter insider trading policy and a
pre-clearance process for all trades made by insiders.
Mr. Moyes stepped down as President in November 2004 and as
CEO in October 2005. Mr. Moyes agreed, without admitting or
denying any claims, to settle the SEC investigation and to the
entry of a decree permanently enjoining him from violating
securities laws, and paid approximately $1.5 million in
disgorgement, prejudgment interest, and penalties.
16
Richard
Dozer
Mr. Dozer, 54, has served as a director of Swift since
April 2008. He is Chair of the Audit Committee and a member of
the Compensation Committee and Nominating and Corporate
Governance Committee. Mr. Dozer is currently Chairman of
GenSpring Family Office Phoenix. Prior to this role,
Mr. Dozer served as principal of CDK Partners from 2006
until 2008. Mr. Dozer served as President of the Arizona
Diamondbacks Major League Baseball team from its inception in
1995 until 2006, and Vice President and Chief Operating Officer
of the Phoenix Suns National Basketball Association team from
1987 until 1995. Early in his career, he was an audit manager
with Arthur Andersen and served as its Director of Recruiting
for the Phoenix, Arizona office. Mr. Dozer holds a bachelor
of science degree in business administration
accounting from the University of Arizona and is a former
certified public accountant. Mr. Dozer currently serves on
the boards of directors of Blue Cross Blue Shield of Arizona and
Viad Corporation, a publicly traded company that provides
exhibition, event, and retail marketing services, as well as
travel and recreation services in North America, the United
Kingdom, and the United Arab Emirates. Mr. Dozer is
presently or has previously served on many boards, including
Teach for America Phoenix, Phoenix Valley of the Sun
Convention and Visitors Bureau, Greater Phoenix
Leadership, Greater Phoenix Economic Council, ASU-Board of the
Deans Council of 100, Arizona State University MBA
Advisory Council, Valley of the Sun YMCA, Nortust of Arizona,
and others. Mr. Dozers qualifications to serve on our
Board include his experience serving as a director of Viad
Corporation, a publicly traded company and his service as the
chair of the audit committee of Blue Cross Blue Shield of
Arizona, as a member of the audit committee of Viad Corporation.
Mr. Dozer also has financial experience from his audit
manager position and other positions with Arthur Andersen from
1979 to 1987, during which time he held a certified public
accountant license. In addition, Mr. Dozer has
long-standing relationships within the business, political, and
charitable communities in the State of Arizona.
David
Vander Ploeg
Mr. Vander Ploeg, 52, has served as a director of Swift
since September 2009. He is the Chair of the Compensation
Committee and a member of the Audit Committee and Nominating and
Corporate Governance Committee. Mr. Vander Ploeg has served
as the Executive Vice President and CFO of School Specialty,
Inc. since April 2008. Prior to this role, Mr. Vander Ploeg
served as Chief Operating Officer of Dutchland Plastics Corp.,
from 2007 until April 2008. Prior to that role, Mr. Vander
Ploeg spent 24 years at Schneider National, Inc., a
provider of transportation and logistics services, and was
Executive Vice President CFO from 2004 until his
departure in 2007. Prior to joining Schneider National, Inc.,
Mr. Vander Ploeg was a senior auditor for Arthur Andersen.
Mr. Vander Ploeg holds a bachelor of science degree in
accounting and a masters degree in business administration
from the University of Wisconsin-Oshkosh. He is a past board
member at Dutchland Plastics and a member of the American
Institute of Certified Public Accountants and the Wisconsin
Institute of Certified Public Accountants.
17
Mr. Vander Ploegs qualifications to serve on our
Board include his
24-year
career at Schneider National, Inc., where he advanced through
several positions of increasing responsibility and gained
extensive experience in the transportation and logistics
services industry. His involvement with a public company board
at School Specialty also provides us with valuable insight on
public company governance practices.
Glenn
Brown
Mr. Brown, 67, was appointed to our Board on
December 16, 2010 in connection with our initial public
offering. He is a member of the Compensation Committee and the
Nominating and Corporate Governance Committee. In
2005,Mr. Brown retired as CEO of Contract Freighters Inc.,
a
U.S.-Mexico
truckload carrier that was sold to Con-way Inc. in 2007, where
Mr. Brown worked since 1976. During his tenure at Contract
Freighters, Mr. Brown also served as President and
Chairman. Prior to working with Contract Freighters,
Mr. Brown was employed by Tri-State Motor Transit from 1966
through 1976. Mr. Brown serves on the boards of directors
of Freeman Health System and the Joplin (Missouri) Humane
Society. Mr. Browns qualifications to serve on our
Board include his extensive experience gained in various roles
within the transportation and logistics services industry,
including his service as a past Vice-Chairman of the American
Trucking Associations, Inc., and as a board member of the
Truckload Carriers Association and the Missouri Trucking
Association.
DIRECTOR
COMPENSATION
Swift pays only nonemployee directors for their services as
directors. Directors who are also officers or employees of the
Company are not eligible to receive any of the compensation
described below.
In calendar year 2010, compensation for nonemployee directors
was as follows:
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an annual retainer of $20,000, paid in Company stock, cash or
any combination thereof,
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an annual retainer of $10,000, paid in cash, to the Audit
Committee Chairman,
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an annual retainer of $5,000, paid in cash, to the Compensation
Committee Chairman,
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an annual retainer of $5,000, paid in cash, to the Nominating
and Corporate Governance Committee Chairman,
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$1,500 for each Board meeting attended,
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$1,500 for each committee meeting attended,
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$500.00 each for each meeting attended telephonically, and
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reimbursement of expenses to attend Board and committee meetings.
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During the fourth quarter of 2010, the Compensation Committee
reviewed a summary of various compensation packages awarded to
directors of various public companies and determined that the
Boards compensation would be changed to the following for
2011:
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an annual retainer of $75,000 paid in cash to the Chairman of
the Board,
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an annual retainer of $50,000 paid in cash to non-employee Board
members,
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an annual retainer of $10,000, paid in cash, to the Audit
Committee Chairman,
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18
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an annual retainer of $5,000, paid in cash, to the Nominating
and Corporate Governance Committee Chairman,
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an annual retainer of $5,000 paid in cash to the Compensation
Committee Chairman,
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$5,000 for each Board meeting attended in person,
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an annual grant of $35,000 in Class A common stock of the
Company, subject to four year holding requirement from the date
of grant,
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$1,000 for each Board meeting attended telephonically,
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$3,000 for each Audit Committee meeting attended,
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$1,250 for each Compensation Committee meeting attended,
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$1,250 for each Nominating and Corporate Governance Committee
meeting attended, and
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reimbursement of expenses to attend Board and committee meetings.
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The following table provides information for the fiscal year
ended December 31, 2010, regarding all plan and non-plan
compensation awarded to, earned by, or paid to, each person who
served as a director for some portion or all of 2010:
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Fees Earned
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Name
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or Paid in Cash ($)
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Total ($)
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Jerry Moyes(1)
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William Post
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Glen Brown
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Richard H. Dozer(2)
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91,500
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91,500
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David Vander Ploeg(2)
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77,500
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77,500
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Earl Scudder(3)
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12,000
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12,000
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Jeff A. Shumway(4)
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15,000
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15,000
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(1) |
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Jerry Moyes served as our Chairman and CEO up to
December 16, 2010 and previously served as our Chairman,
CEO and President until July 2010. Employees of Swift who serve
as directors receive no additional compensation, although we may
reimburse them for travel and other expenses. See
Executive Compensation 2010 Summary
Compensation Table below for disclosure of
Mr. Moyes compensation as CEO and President for 2010. |
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(2) |
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$91,500 earned in 2010, but paid in 2011 for Mr. Dozer and
$77,500 earned in 2010 and paid in 2011 to Mr. Vander Ploeg. |
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(3) |
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Earl Scudder resigned from our Board and all committees
effective July 21, 2010. |
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(4) |
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Jeff A. Shumway resigned from our Board and all committees
effective July 21, 2010. |
As of December 31, 2010, each of our non-employee
directors, except for Messrs. Post and Brown, held options
to acquire 4,000 shares of our common stock. In connection
with a
four-for-five
reverse stock split effective on November 29, 2010, the
number of shares of our common stock underlying options held by
our non-employee directors and the corresponding exercise prices
of such options have been proportionately adjusted.
19
MANAGEMENT
Executive
Officers
The following table sets forth the names, ages, and positions of
our executive officers as of December 31, 2010:
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Name
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Age
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Position
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Jerry Moyes
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66
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Chief Executive Officer and Director
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Richard Stocking
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41
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President
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Virginia Henkels
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42
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Executive Vice President, Chief Financial Officer, and Treasurer
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James Fry
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49
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Executive Vice President, General Counsel, and Corporate
Secretary
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Mark Young
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53
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Executive Vice President Swift Transportation Co. of
Arizona, LLC, President Swift Intermodal
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Kenneth C. Runnels
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46
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Executive Vice President, Eastern Region Swift
Transportation Co. of Arizona, LLC
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Rodney Sartor
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55
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Executive Vice President, Western Region Swift
Transportation Co. of Arizona, LLC
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Chad Killebrew
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36
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Executive Vice President, Business Transformation
Swift Transportation Co. of Arizona, LLC
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Jerry Moyes is CEO and a member of our Board.
Biographical information about Mr. Moyes business
experience and other matters is included under the heading
Nominees for Director.
Richard Stocking has served as our President since
July 2010 and as President and Chief Operating Officer of our
trucking subsidiary, Swift Transportation Co. of Arizona, LLC,
since January 2009. Mr. Stocking served as Executive Vice
President, Sales of Swift from June 2007 until July 2010.
Mr. Stocking previously served as Regional Vice President
of Operations of Swifts Central Region from October 2002
to March 2005, and as Executive Vice President of the Central
Region from March 2005 to June 2007. Prior to these roles,
Mr. Stocking held various operations and sales management
positions with Swift over the preceding 13 years.
Virginia Henkels has served as our Executive Vice
President, Treasurer, and CFO since May 2008 and as our
Corporate Secretary through May 2010. Ms. Henkels joined
Swift in 2004 and, prior to her current position, was most
recently the Assistant Treasurer and Investor Relations Officer.
Prior to joining Swift, Ms. Henkels served in various
finance and accounting leadership roles for Honeywell during a
12-year
tenure. During her last six years at Honeywell, Ms. Henkels
served as Director of Financial Planning and Reporting for its
global industrial controls business segment, Finance Manager of
its building controls segment in the United Kingdom, and Manager
of External Corporate Reporting. Ms. Henkels completed her
bachelor of science degree in finance and real estate at the
University of Arizona, obtained her masters degree in
business administration from Arizona State University, and
passed the May 1995 certified public accountant examination.
James Fry has served as our Executive Vice
President, General Counsel, and Corporate Secretary since May
2010. Mr. Fry joined Swift in January 2008 and prior to his
current position he served as corporate counsel for us through
August 2008 when he became General Counsel and Vice President.
For the five-year period prior to joining us, Mr. Fry
served as General Counsel for the publicly-traded company,
Global Aircraft Solutions, Inc. and its wholly-owned
subsidiaries, Hamilton Aerospace and Worldjet Corporation. In
addition to the foregoing general counsel positions,
Mr. Fry also served for eight years as in-house corporate
counsel for both public and private aviation companies and
worked in private practice in Pennsylvania for seven years prior
to his in-house positions. Mr. Fry also served as a hearing
officer for the county court in Pennsylvania. Mr. Fry
received a bachelors degree with honors from the
Pennsylvania State University and obtained his Juris Doctor from
the Temple University School of Law. Mr. Fry is admitted to
practice law in the State of Pennsylvania and is admitted as
in-house counsel in the State of Arizona.
20
Mark Young has served as Executive Vice President
of Swift and President of our subsidiary, Swift Intermodal, LLC,
since November 2005. Mr. Young joined us in 2004 and, prior
to his current position, he served as Vice President of Swift
Intermodal, LLC. Prior to joining us, Mr. Young worked in
transportation logistics with Hub Group for five years as Vice
President of National Sales, President of Hub Group in Texas,
and President of Hub Group in Atlanta. Mr. Young was also
employed by CSX Intermodal as Director of Sales for the
southeast, southwest, and Mexico regions for eight years prior
to his employment with Hub Group. Before joining CSX Intermodal,
Mr. Young worked for ABF Freight System, Inc. where he held
a variety of sales, operating, and management positions.
Mr. Young received a bachelor of science in business
administration from the University of Arkansas and is a graduate
of the executive program, Darden School of Business, University
of Virginia. Mr. Young is a member of the Intermodal
Association of North America, National Freight Transportation
Association, National Defense Transportation Association, and
the Traffic Club of New York.
Kenneth C. Runnels has served as our Executive
Vice President, Eastern Region Operations of Swift
Transportation Co. of Arizona, LLC since November 2007.
Mr. Runnels previously served as Vice President of Fleet
Operations, Regional Vice President, and various operations
management positions from 1983 to June 2006. From June 2006
until his return to Swift, Mr. Runnels was Vice President
of Operations with U.S. Xpress Enterprises, Inc.
Rodney Sartor has served as Executive Vice
President, Western Region Operations of Swift Transportation Co.
of Arizona, LLC since returning to Swift in May 2007.
Mr. Sartor initially joined us in May 1979. He served as
our Executive Vice President from May 1990 until November 2005,
as Regional Vice President from August 1988 until May 1990, and
as Director of Operations from May 1982 until August 1988. From
November 2005 until May 2007, Mr. Sartor served as Vice
President of Truckload Linehaul Operations for Central Freight
Lines, Inc.
Chad Killebrew has served as our Executive Vice
President of Business Transformation since March 2008.
Mr. Killebrew most recently served as President of IEL from
2005 to 2008, and as Vice President of our owner-operator
division since 2007. He has held various positions in finance,
operations, and recruiting with Swift and Central Refrigerated
Services, Inc. from 1997 to 2005. Mr. Killebrew received a
bachelor of science degree in finance from the University of
Utah and a masters degree in business administration from
Westminster College. Mr. Killebrew is the nephew of Jerry
Moyes.
Experience,
Qualifications, Attributes and Skills
In addition to the business, financial and industry experience
set forth in the biographical information of each director
nominee, each director nominee possesses the following
experience, qualifications, attributes and skills, which are
required of all candidates nominated for election or reelection
to the Board:
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The highest level of personal and professional ethics, integrity
and values;
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An inquiring and independent mind;
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Practical wisdom and mature judgment;
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Broad training and experience at the policy-making level in
business, finance and accounting, government, education or
technology;
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Expertise that is useful to Swift and complementary to the
background and experience of other Board members, so that an
optimal balance of Board members can be achieved and maintained;
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Willingness to devote the required time to carrying out the
duties and responsibilities of Board membership;
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Commitment to serve on the Board for several years to develop
knowledge about Swifts business;
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Willingness to represent the best interests of all stockholders
and objectively appraise management performance; and
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Involvement only in activities or interests that do not conflict
with the directors responsibilities to Swift and its
stockholders
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21
COMPENSATION
COMMITTEE REPORT
The Compensation Committee has reviewed and discussed with
management the Compensation Discussion and Analysis included in
this proxy statement. Based on its review and discussions with
management, the Compensation Committee recommended to the Board,
and the Board approved, that the Compensation Discussion and
Analysis be included in this proxy statement and in the
Companys Annual Report to Stockholders for the fiscal year
ended December 31, 2010.
This report is submitted by the Compensation Committee.
David Vander Ploeg Chairman
William Post
Richard Dozer
Glenn Bown
The foregoing Compensation Committee Report does not
constitute soliciting material and should not be deemed filed or
incorporated by reference to any Company filing under the
Securities Act of 1933 as amended (the Securities
Act), or the Exchange Act, except to the extent the
Company specifically incorporates this report.
EXECUTIVE
COMPENSATION
Compensation
Discussion and Analysis
Introduction
The purpose of this compensation discussion and analysis, or
CD&A, is to provide information about the compensation
earned by our named executive officers (as such term is defined
in the Summary Compensation Table section below) and
to explain our compensation process and philosophy and the
policies and factors that underlie our decisions with respect to
the named executive officers compensation. As we describe
in more detail below, the principal objectives of our executive
compensation strategy are to attract and retain talented
executives, reward strong business results and performance, and
align the interest of executives with our stockholders. In
addition to rewarding business and individual performance, the
compensation program is designed to promote both annual
performance objectives and longer-term objectives.
Processes
and Procedures for Considering and Determining Executive
Compensation
Our Compensation Committee is responsible for reviewing and
approving the compensation of the CEO and the other named
executive officers. Compensation for our named executive
officers is established based upon the scope of their
responsibilities, experience, and individual and company
performance, taking into account the compensation level from
their recent prior employment, if applicable. Since
July 21, 2010, the Compensation Committee consists entirely
of non-employee directors as defined in
Rule 16b-3(b)(3)
under the Exchange Act, outside directors within the
meaning of Section 162(m)(4)(c)(i) of the Internal Revenue
Code, and independent directors as defined under the
rules of the NYSE.
The Compensation Committees responsibilities include, but
are not limited to:
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administering all of Swifts stock-based and other
incentive compensation plans;
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annually reviewing corporate goals and objectives relevant to
the compensation of our named executive officers and evaluating
performance in light of those goals and objectives;
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approving base salary and other compensation of our named
executive officers;
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overseeing and periodically reviewing the operation of all of
Swifts stock-based employee (including management and
director) compensation plans;
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reviewing and adopting all employee (including management and
director) compensation plans, programs, and arrangements,
including stock option grants and other perquisites, and fringe
benefit arrangements;
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22
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periodically reviewing the outside directors compensation
arrangements to ensure their competitiveness and compliance with
applicable laws; and
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approving corporate goals and objectives and determining whether
such goals have been met.
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Role of compensation consultants. The
Compensation Committee has the authority to obtain advice and
assistance from outside legal, accounting, or other advisors and
consultants as deemed appropriate to assist in the continual
development and evaluation of compensation policies and
determination of compensation awards. We did not utilize outside
consultants in evaluating our compensation policies and awards
during 2010, 2009, or 2008.
Role of management in determining executive
compensation. Our CFO and our President provide
information to the Compensation Committee on our financial
performance for consideration in determining the named executive
officers compensation. Our CFO and our President also
assist the Compensation Committee in recommending salary levels
and the type and structure of other awards.
Objectives
of our Compensation Programs
The principal objectives of our executive compensation programs
are to attract, retain, and motivate talented executives, reward
strong business results and performance, and align the
executives interests with stockholder interests. The
objectives are based on the following core principles, which we
explain in greater detail below:
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Business performance
accountability. Compensation should be tied to
our performance in key areas so that executives are held
accountable through their compensation for our performance.
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Individual performance
accountability. Compensation should be tied to an
individuals performance so that individual contributions
to our performance are rewarded.
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Alignment with stockholder
interests. Compensation should be tied to our
performance through stock incentives so that executives
interests are aligned with those of our stockholders.
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Retention. Compensation should be designed to
promote the retention of key employees.
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Competitiveness. Compensation should be
designed to attract, retain, and reward key leaders critical to
our success by providing competitive total compensation.
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Elements
of our Compensation Program
In general, our compensation program consists of three major
elements: base salary, performance-based annual cash incentives,
and long-term incentives designed to promote long-term
performance and key employee retention. Our named executive
officers are not employed pursuant to employment agreements.
Base salary. The Compensation Committee, with
the assistance of our CEO with respect to the other named
executive officers, annually reviews the base salary of each
named executive officer. If appropriate, adjustments are made to
base salaries as a result. Annual salaries are based on our
performance for the fiscal year and subjective evaluation of
each executives contribution to that performance.
The following base annual salaries were effective in 2010 for
the named executive officers (including car allowance benefit):
Mr. Moyes $508,400;
Mr. Stocking $408,400;
Ms. Henkels $283,400;
Mr. Runnels $226,400; and
Mr. Sartor $226,384.
Annual cash incentives. Annual incentives in
our compensation program are cash-based. The Compensation
Committee believes that annual cash incentives promote superior
operational performance, disciplined cost management, and
increased productivity and efficiency that contribute
significantly to positive results for our stockholders. Our
compensation structure provides for annual performance
incentives that are linked to our earnings objectives for the
year and intended to compensate our named executive officers
(other than Mr. Moyes) for our overall financial
performance. Mr. Moyes was not eligible for the annual
performance incentives prior to the completion of our initial
public offering in December 2010. The annual incentive process
involves the following basic steps:
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establishing our overall performance goals;
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23
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setting target incentives for each individual; and
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measuring our actual financial performance against the
predetermined goals to determine incentive payouts.
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The steps for the 2010 annual bonus are described below:
(1) Establishing our performance
goals. For the 2010 annual bonus, the
Compensation Committee set company-wide performance goals for
the 2010 fiscal year, which were approved by the Board on
May 20, 2010. Such goals were set in order to incentivize
management to improve profitability and thereby increase
long-term stockholder value. The bonus payout percentages were
determined based on our meeting specified Adjusted EBITDA
levels. Adjusted EBITDA for this purpose means net income or
loss plus (i) depreciation and amortization,
(ii) interest and derivative interest expense, including
other fees and charges associated with indebtedness, net of
interest income, (iii) income taxes, (iv) non-cash
impairments, (v) non-cash equity compensation expense,
(vi) other unusual non-cash items, and
(vii) excludable transaction costs. The 2010 bonus payout
percentages upon attainment of certain levels of Adjusted EBITDA
were as follows:
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Level of Attainment:
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Threshold
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Target
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Stretch
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Maximum
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(Dollars in thousands)
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Adjusted EBITDA
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$
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440,000
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$
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450,000
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$
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475,000
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$
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500,000
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Bonus Payout %
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50
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%
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100
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%
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150
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%
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200
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%
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(2) Setting a target incentive. The 2010
target incentive amounts for each named executive officer (other
than the CEO), expressed as a percentage of the executives
base salary, were based on the executives job grade. The
actual payments were based on achievement of the specified
levels of Adjusted EBITDA set forth above and individual
performance. The actual payments these named executive officers
received corresponds to the percentage of their individual
target incentive multiplied by the percentage of the
corresponding bonus payout, which may have been adjusted based
on overall team performance, terminal or department performance,
and individual performance. The target incentive for each of the
named executive officers (other than the CEO) for 2010 were as
follows: 70% for Mr. Stocking and 50% for Ms. Henkels
and Messrs. Sartor and Runnels.
(3) Measuring performance. The
Compensation Committee reviewed Swifts actual performance
against the established goals and determined that the
performance targets to qualify for a 2010 bonus were met and,
accordingly, bonuses were paid in 2010.
Long-term incentives. Long-term incentives in
our compensation program are principally stock-based. Our
stock-based incentives in 2010 consisted of stock options
granted under our 2007 Omnibus Incentive Plan (2007
Plan) and are designed to promote long-term performance
and the retention of key employees. The Compensation Committee
grants stock options to individual employees and executives in
the form of stock option grants, in amounts determined based on
pay grade. The objective of the program is to align compensation
over a multi-year period with the interests of our stockholders
by motivating and rewarding the creation and preservation of
long-term stockholder value. The level of long-term incentive
compensation is determined based on an evaluation of competitive
factors in conjunction with total compensation provided to the
named executive officers and the goals of the compensation
program described above.
The options granted to individuals having a salary grade of 31
or above (including all of our named executive officers), or
Tier I options, will vest (i) upon the occurrence of a
sale or a change in control of Swift or, if earlier,
(ii) over a five-year vesting period at a rate of
331/3%
beginning with the third anniversary date of the grant, subject
to continued employment. The options granted to individuals
having a salary grade of 30 and below, or Tier II options,
will vest upon a five-year vesting period at a rate of
331/3%
beginning with the third anniversary date of the grant, subject
to continued employment. To the extent vested, both Tier I
options and Tier II options become exercisable
simultaneously with the closing of the earlier of a sale, or a
change in control of Swift (subject to any applicable blackout
period).
Under our 2007 Plan, our Board approved in October 2007 option
awards to a group of employees based on salary grade. In August
2008 and December 2009, additional option awards were approved
by our Board and granted to groups of employees based on salary
grade that were hired or promoted subsequent to the 2007 grant,
including a December 2009 grant of options for
40,000 shares of our common stock to Mr. Stocking in
connection
24
with his promotion to Chief Operating Officer. Effective
February 25, 2010, the Board approved and granted options
for 1.4 million shares of our common stock to certain
employees at an exercise price of $8.80 per share, which equaled
the fair value of the common stock on the date of grant. Fair
market value was determined by a third-party valuation analysis
performed within 90 days of the date of grant and
considered a number of factors, including our discounted,
projected cash flows, comparative multiples of similar
companies, the lack of liquidity of our common stock, and
certain risks we faced at the time of the valuation. The options
granted on February 25, 2010 included options for the
following number of shares of our common stock for our named
executive officers: Mr. Moyes 0;
Mr. Stocking 32,000;
Ms. Henkels 24,000; Mr. Sartor
12,000; and Mr. Runnels 24,000. On
November 29, 2010, our Board approved the conversion of all
of Ms. Henkels Tier II options into Tier I
options. In connection with the
four-for-five
reverse stock split effective November 29, 2010, the number
of shares of our common stock underlying the options held by our
named executive officers and the corresponding exercise prices
of such options were proportionately adjusted. Upon the closing
of our initial public offering in December 2010, all outstanding
options held by our named executive officers converted into
options to purchase shares of Class A common stock of Swift
Transportation Company and the exercise price for any options
with an exercise price greater than the initial offering price
of $11.00 per share were decreased to the $11.00 per share IPO
price. Future options may be approved and granted by the
Compensation Committee and the Board.
Compensation
Arrangements for 2011
We intend to continue to grant equity awards under our 2007 Plan
and our Compensation Committee will determine the specific
criteria for future equity grants under our 2007 Plan. Our 2011
annual cash incentive bonus program is described below:
(1) Establishing our performance
goals. For the 2011 annual bonus, the
Compensation Committee set company-wide performance goals for
the 2011 fiscal year, which were approved by the Board in
February 2011. Such goals were set in order to incentivize
management to improve profitability and thereby increase
long-term stockholder value. The bonus payout percentages were
determined based on our meeting specified Adjusted EPS levels.
Adjusted EPS for this purpose means (1) income (loss)
before income taxes plus (i) amortization of the
intangibles from our 2007 going-private transaction,
(ii) non-cash impairments, (iii) other unusual
non-cash items, (iv) excludable transaction costs,
(v) the
mark-to-market
adjustment on our interest rate swaps that is recognized in the
statement of operations in a given period, and (vi) the
amortization of previous losses recorded in accumulated other
comprehensive income related to the interest rate swaps we
terminated upon our IPO and refinancing transactions in December
2010; (2) reduced by income taxes at 39%, our normalized
effective tax rate; (3) divided by weighted average diluted
shares outstanding. The 2011 bonus payout percentages upon
attainment of certain levels of Adjusted EPS would be as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level of Attainment:
|
|
Threshold
|
|
Target
|
|
Stretch
|
|
Maximum
|
|
|
(Dollars in thousands)
|
|
Adjusted EPS
|
|
$
|
0.83
|
|
|
$
|
0.94
|
|
|
$
|
1.03
|
|
|
$
|
1.12
|
|
Bonus Payout %
|
|
|
50
|
%
|
|
|
100
|
%
|
|
|
150
|
%
|
|
|
200
|
%
|
(2) Setting a target incentive. The 2011
target incentive amounts for each named executive officer,
expressed as a percentage of the executives base salary,
are based on the executives job grade. The actual payments
will be based on achievement of the specified levels of Adjusted
EPS set forth above and individual performance. The actual
payments these named executive officers receive corresponds to
the percentage of their individual target incentive multiplied
by the percentage of the corresponding bonus payout, which may
be adjusted based on overall team performance, terminal or
department performance, and individual performance. The target
incentive for each of the named executive officers for 2011 are
as follows: 70% for Mr. Stocking and 50% for
Ms. Henkels and Messrs. Sartor and Runnels.
Individual
Agreements with our Named Executive Officers
We have not entered and do not anticipate entering into
employment, change in control or severance agreements with any
of our named executive officers.
25
Material
Perquisites to our Named Executive Officers
We do not offer any material perquisites.
Alignment
of each Element of Compensation and our Decisions regarding that
Element with Overall Compensation Objectives and affect
Decisions regarding other Elements
Before establishing or recommending executive compensation
payments or awards, the Compensation Committee considers all the
components of such compensation, including current pay (salary
and bonus), annual and long-term incentive awards, and prior
grants. The Compensation Committee considers each element in
relation to the others when setting total compensation, with a
goal of setting overall compensation at levels that the
Compensation Committee believes are appropriate.
Impact of
Taxation and Accounting Considerations on the Decisions
regarding Executive Compensation
The Compensation Committee also takes into account tax and
accounting consequences of the total compensation program and
the individual components of compensation, and weighs these
factors when setting total compensation and determining the
individual elements of an officers compensation package.
We do not believe that the compensation paid to our named
executive officers is or will be subject to limits of
deductibility under the Internal Revenue Code.
2010
SUMMARY COMPENSATION TABLE
The following table provides information about compensation
awarded and earned during 2010, 2009, and 2008 by our CEO, CFO,
and the three most highly compensated executive officers (other
than the CEO and CFO), or collectively, the named executive
officers.
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option
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|
Non-Equity
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|
|
|
|
|
|
|
|
|
|
Bonus
|
|
Awards
|
|
Incentive Plan
|
|
All Other
|
|
Total
|
Name and Principal Position
|
|
Year
|
|
Salary ($)
|
|
($)(1)
|
|
($)(2)
|
|
Compensation ($)(3)
|
|
Compensation ($)(4)
|
|
($)
|
|
Jerry Moyes,
|
|
|
2010
|
|
|
|
501,292
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,274
|
|
|
|
513,566
|
|
Chief Executive Officer
|
|
|
2009
|
|
|
|
490,385
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,256
|
|
|
|
500,641
|
|
|
|
|
2008
|
|
|
|
500,000
|
|
|
|
87,500
|
|
|
|
|
|
|
|
|
|
|
|
10,256
|
|
|
|
597,756
|
|
Virginia Henkels
|
|
|
2010
|
|
|
|
276,292
|
|
|
|
|
|
|
|
100,560
|
|
|
|
283,400
|
|
|
|
9,156
|
|
|
|
669,408
|
|
Executive Vice President and
|
|
|
2009
|
|
|
|
269,711
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,256
|
|
|
|
279,967
|
|
Chief Financial Officer
|
|
|
2008
|
|
|
|
235,385
|
|
|
|
34,375
|
|
|
|
776,250
|
|
|
|
|
|
|
|
14,751
|
|
|
|
1,060,761
|
|
Richard Stocking,
|
|
|
2010
|
|
|
|
401,292
|
|
|
|
|
|
|
|
134,080
|
|
|
|
571,600
|
|
|
|
9,001
|
|
|
|
1,115,973
|
|
President and Chief Operating
|
|
|
2009
|
|
|
|
386,707
|
|
|
|
|
|
|
|
169,500
|
|
|
|
|
|
|
|
11,447
|
|
|
|
567,654
|
|
Officer
|
|
|
2008
|
|
|
|
231,985
|
|
|
|
27,248
|
|
|
|
|
|
|
|
|
|
|
|
13,252
|
|
|
|
272,485
|
|
Rodney Sartor,
|
|
|
2010
|
|
|
|
219,276
|
|
|
|
|
|
|
|
50,280
|
|
|
|
226,384
|
|
|
|
10,146
|
|
|
|
506,086
|
|
Executive Vice President
|
|
|
2009
|
|
|
|
213,792
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,256
|
|
|
|
224,048
|
|
|
|
|
2008
|
|
|
|
217,984
|
|
|
|
27,248
|
|
|
|
|
|
|
|
|
|
|
|
10,676
|
|
|
|
255,908
|
|
Kenneth Runnels,
|
|
|
2010
|
|
|
|
219,292
|
|
|
|
|
|
|
|
100,560
|
|
|
|
226,400
|
|
|
|
9,306
|
|
|
|
555,558
|
|
Executive Vice President
|
|
|
2009
|
|
|
|
213,808
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,909
|
|
|
|
224,717
|
|
|
|
|
2008
|
|
|
|
218,000
|
|
|
|
27,250
|
|
|
|
931,500
|
|
|
|
|
|
|
|
55,311
|
|
|
|
1,232,061
|
|
|
|
|
(1) |
|
Amounts in this column represent discretionary cash bonuses paid
in 2008 to the respective named executive officers as described
in Note 3 below. |
|
(2) |
|
This column represents the grant date fair value of stock
options under Topic 718 granted to each of the named executive
officers in 2010, 2009, and 2008. For additional information on
the valuation assumptions with respect to the 2010, 2009, and
2008 grants, refer to Note 19 of Swift Corporations
audited consolidated financial statements. See
Grants of Plan-Based Awards in 2010
below for information on options granted in 2010. |
|
(3) |
|
This column represents the cash incentive compensation amounts
approved by the Compensation Committee and CEO paid to the named
executive officers. The amounts for a given year represent the
amount of incentive compensation earned with respect to such
year. The bonuses were calculated based on our actual financial
performance for 2010, 2009 and 2008, as compared with
established targets. The performance targets to qualify |
26
|
|
|
|
|
for a 2010 bonus were met and, accordingly, awards were paid in
2010. The performance targets to qualify for a 2009 bonus were
not met and, accordingly, no awards were paid in 2009. For the
2008 cash bonuses, the CEO determined in December 2008 that,
even though we would not achieve the 2008 performance targets in
order to qualify for payout under the 2008 bonus plan, Swift
would make a discretionary payout in amounts generally equal to
25% of what each employees target bonus was under the 2008
bonus plan. These cash bonuses were paid to the named executive
officers at the end of 2008 and are reflected in the
Bonus column rather than the Non-Equity
Incentive Plan Compensation column. |
|
(4) |
|
This column represents all other compensation paid to the named
executive officers for employer 401(k) matches, executive
disability insurance, car allowance, and other benefits, none of
which individually exceeded $10,000. |
GRANTS OF
PLAN-BASED AWARDS IN 2010
The following table provides information about equity and
non-equity plan-based awards granted to the named executive
officers in 2010.
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
Exercise
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option
|
|
or Base
|
|
|
|
|
|
|
|
|
Estimated Future Payouts Under
|
|
Awards:
|
|
Price of
|
|
Grant Date
|
|
|
|
|
Board
|
|
Non-Equity Incentive Plan Awards(1)
|
|
Number of Securities
|
|
Option
|
|
Fair Value of
|
|
|
Grant
|
|
Approval
|
|
|
|
Target
|
|
|
|
Underlying Options
|
|
Awards
|
|
Option
|
Name
|
|
Date
|
|
Date
|
|
Threshold ($)
|
|
($)
|
|
Maximum ($)
|
|
(#)(2)
|
|
($/SH)(3)
|
|
Awards
|
|
Jerry Moyes(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Virginia Henkels
|
|
02/28/2010
|
|
11/24/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,000
|
|
|
|
8.80
|
|
|
$
|
100,560
|
|
|
|
|
|
|
|
|
70,850
|
|
|
|
141,700
|
|
|
|
283,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard Stocking
|
|
02/28/2010
|
|
11/24/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,000
|
|
|
|
8.80
|
|
|
$
|
134,080
|
|
|
|
|
|
|
|
|
142,940
|
|
|
|
285,880
|
|
|
|
571,760
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rodney Sartor
|
|
02/28/2010
|
|
11/24/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,000
|
|
|
|
8.80
|
|
|
$
|
50,280
|
|
|
|
|
|
|
|
|
56,596
|
|
|
|
113,192
|
|
|
|
226,384
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kenneth Runnels
|
|
02/28/2010
|
|
11/24/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,000
|
|
|
|
8.80
|
|
|
$
|
100,560
|
|
|
|
|
|
|
|
|
56,600
|
|
|
|
113,200
|
|
|
|
226,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
These columns represent the potential value of 2010 annual cash
incentive payouts for each named executive officer, for which
target amounts were approved by the Compensation Committee in
May 2010. As discussed in Note 3 to the Summary
Compensation Table, the 2010 performance targets to
qualify for a payout under the 2010 plan were met and,
accordingly, awards were paid under this plan. Although eligible
under the 2007 Plan, Mr. Moyes elected not to participate
in the annual cash incentive program for 2010. |
|
(2) |
|
This column shows the number of stock options granted in 2010 to
the named executive officers. The options granted to
Ms. Henkels, Mr. Stocking. Mr. Sartor and
Mr. Runnels are Tier I options and will vest
(i) upon the occurrence of the earlier of a sale or a
change in control of Swift or, if earlier (ii) a five-year
vesting period at a rate of
331/3%
beginning with the third anniversary date of the grant. To the
extent vested, these options become exercisable simultaneously
with the closing of the earlier of (i) a sale, or
(ii) change in control of Swift. |
|
(3) |
|
This column shows the exercise price for the stock options
granted, as determined by our Board, which equaled the fair
value of the common stock on the date of grant. |
|
(4) |
|
No plan-based awards were made to Mr. Moyes in 2010. |
27
OUTSTANDING
EQUITY AWARDS AT 2010 FISCAL YEAR-END
The following table provides information on the current holdings
of stock options of the named executive officers. This table
includes unexercised and unvested options as of
December 31, 2010. Each equity grant is shown separately
for each named executive officer.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Securities
|
|
Number of Securities
|
|
|
|
|
|
|
Underlying
|
|
Underlying
|
|
|
|
|
|
|
Unexercised Options
|
|
Unexercised Options
|
|
Option Exercise
|
|
Option Expiration
|
Name
|
|
(#) Exercisable
|
|
(#) Unexercisable
|
|
Price (3)($)
|
|
Date
|
|
Jerry Moyes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Virginia Henkels
|
|
|
6,666
|
(1)
|
|
|
13,334
|
(1)
|
|
|
11.00
|
|
|
|
10/16/2017
|
|
|
|
|
|
|
|
|
100,000
|
(2)
|
|
|
11.00
|
|
|
|
08/27/2018
|
|
|
|
|
|
|
|
|
24,000
|
(2)
|
|
|
8.80
|
|
|
|
02/28/2020
|
|
Richard Stocking
|
|
|
40,000
|
(2)
|
|
|
80,000
|
(2)
|
|
|
11.00
|
|
|
|
10/16/2017
|
|
|
|
|
|
|
|
|
40,000
|
(2)
|
|
|
8.61
|
|
|
|
12/31/2019
|
|
|
|
|
|
|
|
|
32,000
|
(2)
|
|
|
8.80
|
|
|
|
02/28/2020
|
|
Rodney Sartor
|
|
|
40,000
|
(2)
|
|
|
80,000
|
(2)
|
|
|
11.00
|
|
|
|
10/16/2017
|
|
|
|
|
|
|
|
|
12,000
|
(2)
|
|
|
8.80
|
|
|
|
02/28/2020
|
|
Kenneth Runnels
|
|
|
|
|
|
|
120,000
|
(2)
|
|
|
11.00
|
|
|
|
08/27/2018
|
|
|
|
|
|
|
|
|
24,000
|
(2)
|
|
|
8.80
|
|
|
|
02/28/2020
|
|
|
|
|
(1) |
|
The stock options are Tier II options and will vest upon a
five-year vesting period at a rate of
331/3%
beginning with the third anniversary date of the grant,. The
grant date for Ms. Henkels award of 20,000 stock
options was October 16, 2007. To the extent vested, the
options become exercisable simultaneously with the closing of
the earlier of (i) a sale, or (ii) a change in control
of Swift. On November 29, 2010, the Compensation Committee
approved the conversion of Ms. Henkels outstanding
Tier II options to Tier I options, which vest as
discussed under note (2). |
|
(2) |
|
The stock options are Tier I options and will vest upon the
occurrence of the earliest of (i) a sale or a change in
control of Swift or (ii) a five-year vesting period at a
rate of
331/3%
beginning with the third anniversary date of the grant. The
grant date for Ms. Henkels award of 100,000 stock
options was August 27, 2008. The grant dates for
Mr. Stockings awards of 120,000 stock options and
40,000 stock options were October 16, 2007 and
December 31, 2009, respectively. The grant date for
Mr. Sartors award of 120,000 stock options was
October 16, 2007. The grant date for Mr. Runnels
award of 120,000 stock options was August 27, 2008. To the
extent vested, the options become exercisable simultaneously
with the closing of the earlier of (i) an initial public
offering, (ii) a sale, or (iii) a change in control of
Swift. |
|
(3) |
|
We repriced our outstanding stock options that had strike prices
above the initial public offering price per share to $11.00, the
initial public offering price per share. |
Option
Exercises and Stock Vested in 2010, 2009, and 2008
No named executive officer exercised stock options in 2010,
2009, or 2008.
Potential
Payments Upon Termination or
Change-in-Control
We do not currently have employment,
change-in-control,
or severance agreements with any of our named executive officers.
As described under the heading Elements of our
Compensation Program long term incentives,
pursuant to the named executive officers individual option
award agreements, options held by the named executive officers,
all vest upon a
change-in-control
of Swift. Assuming a
change-of-control
occurred on December 31, 2010, the intrinsic value of
unvested options for our named executive officers would be as
follows: Ms. Henkels $260,173;
Mr. Stocking $395,520;
Mr. Sartor $165,320; and
Mr. Runnels $270,240. The above amounts are
based on a closing price of $12.51 per share of our common stock
on the NYSE on December 31, 2010.
Retirement
and Deferred Compensation
We do not provide any retirement benefits or deferred
compensation arrangements to our named executive officers other
than our 401(k) plan, which is available to all employees
meeting the plans basic eligibility requirements.
28
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information with respect to the
beneficial ownership of shares of our Class A common stock
and Class B common stock as of April 12, 2011 for:
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all of our executive officers and directors as a group;
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each of our named executive officers;
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each of our directors; and
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each beneficial owner of more than 5% of any class of our
outstanding shares.
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The percentage of beneficial ownership of our common stock is
based on 60,116,713 shares of Class B common stock
issued and outstanding and 79,359,344 shares of
Class A Common Stock issued and outstanding for a total of
139,476,057 shares of common stock issued and outstanding
as of April 12, 2011.
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Shares Beneficially
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Owned After the Offering
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Class of Common
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Percent of Total
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Percent of Total
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Name and Address of Beneficial Owner(1)(2)
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Stock
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Number
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Common Stock(3)
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Voting Power(4)
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Named Executive Officers and Directors:
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Jerry Moyes(5)(6)
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B
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19,704,618
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14.8
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%
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20.4
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%
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Virginia Henkels
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A
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16,000
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*
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*
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Richard Stocking
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A
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40,000
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Rodney Sartor
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A
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40,000
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Kenneth Runnels
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A
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William Post
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A
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2,336
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*
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Richard H. Dozer
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A
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2,336
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*
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David Vander Ploeg
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A
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2,336
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*
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Glenn Brown
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A
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2,336
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*
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All executive officers and directors as a group (12 persons)
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19,809,962
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14.8
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%
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20.4
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%
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Other 5% Stockholders:
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Various Moyes Childrens Trusts(6)(7)
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B
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16,120,528
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12.1
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%
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16.7
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%
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Cactus Holding Company, LLC(8)
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B
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13,001,567
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9.7
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%
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13.4
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%
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Cactus Holding Company II, LLC(9)
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B
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11,290,000
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8.5
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%
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11.7
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%
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Wellington Management Company, LLP(10)
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A
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10,262,000
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12.93
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%
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280 Congress Street
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Boston, MA 02210
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Third Point LLC(11)
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A
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4,251,500
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5.36
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%
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390 Park Avenue
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New York, New York 10022
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Invesco Ltd.(12)
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A
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4,896,030
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6.7
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%
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1555 Peachtree Street NE
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Atlanta, GA 30309
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TIAA-CREF Investment Management, LLC and Teachers Advisors,
Inc.(13)
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A
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3,805,537
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5.19
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%
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730 Third Avenue
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New York, NY
10017-3206
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29
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Shares Beneficially
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Owned After the Offering
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Class of Common
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Percent of Total
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Percent of Total
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Name and Address of Beneficial Owner(1)(2)
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Stock
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Number
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Common Stock(3)
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Voting Power(4)
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Valinor Management, LLC and David Gallo(14)
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A
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5,380,312
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7.3
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%
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90 Park Avenue, 40th Floor
New York, New York 10016
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SAB Capital Advisors, L.L.C., SAB Capital Management,
L.P., SAB Capital Management, L.L.C., and Scott A.
Bommer(15)
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A
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4,835,842
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6.6
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%
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767 Fifth Avenue, 21st Floor
New York, New York 10153
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FMR LLC(16)
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A
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13,445,311
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17.674
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%
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82 Devonshire Street, Boston,
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Massachusetts 02109
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* |
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Represents less than 1% of the outstanding shares of our common
stock. |
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(1) |
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Except as otherwise indicated, addresses are
c/o Swift,
2200 South 75th Avenue, Phoenix, Arizona 85043. |
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(2) |
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Beneficial ownership is determined in accordance with the rules
of the SEC. In computing the number of shares beneficially owned
by a person and the percentage ownership of that person, shares
of our common stock subject to options or warrants held by that
person that are currently exercisable or exercisable within
60 days of April 12, 2011 are deemed outstanding, but
are not deemed outstanding for computing the percentage
ownership of any other person. These rules generally attribute
beneficial ownership of securities to persons who possess sole
or shared voting power or investment power with respect to such
securities. |
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(3) |
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Percent of total common stock represents the percentage of total
shares of outstanding Class A common stock and Class B
common stock. |
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(4) |
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Percent of total voting power represents voting power with
respect to all shares of our Class A common stock and
Class B common stock, as a single class. Each holder of
Class A common stock is generally entitled to one vote per
share of Class A common stock and each holder of
Class B common stock is generally entitled to two votes per
share of Class B common stock on all matters submitted to
our stockholders for a vote. |
|
(5) |
|
Consists of shares owned by Mr. Moyes, Mr. Moyes and
Vickie Moyes, jointly, and the Jerry and Vickie Moyes Family
Trust dated December 11, 1987, including 72,215 shares
over which Mr. Moyes has sole voting and dispositive power
and 19,632,403 shares over which Mr. Moyes has shared
voting and dispositive power. Excludes 16,120,528 shares
owned by the various Moyes childrens trusts,
13,001,567 shares owned by Cactus Holding Company, LLC
which is solely managed by the Jerry and Vickie Moyes Family
Trust, and 11,290,000 shares owned by Cactus Holding
Company II, LLC which is solely managed by the Jerry and Vickie
Moyes Family Trust. |
|
(6) |
|
Consists of (x) 2,710,274 shares owned by the Todd
Moyes Trust, 2,710,274 shares owned by the Hollie Moyes
Trust, 2,710,274 shares owned by the Chris Moyes Trust,
2,629,636 shares owned by the Lyndee Moyes Nester Trust,
and 2,649,796 shares owned by the Marti Lyn Moyes Trust,
for each of which Michael J. Moyes is the trustee and for which
he has sole voting and dispositive power and
(y) 2,710,274 shares owned by the Michael J. Moyes
Trust. Lyndee Moyes Nester is the trustee of the Michael J.
Moyes Trust and has sole voting and dispositive power with
respect to shares held by the trust. |
|
(7) |
|
This amount includes of Class B common stock pledged to the
Trust, as defined and discussed below in this footnote (7).
Concurrently with our IPO in December 2010, Mr. Moyes and
the various Moyes childrens trusts completed a private
placement by a newly formed, unaffiliated trust, or the Trust,
of $250.0 million of its mandatory common exchange
securities (or $262.3 million of its mandatory common
exchange securities following the exercise by the initial
purchasers of their option to purchase additional securities in
January 2011), herein referred to as the Stockholder
Offering. Subject to certain exceptions, the Trusts
securities will be exchangeable into shares of our Class A
common stock or alternatively settled in cash equal to the value
of those shares of Class A common stock three years
following December 15, 2010, the closing date of the
Stockholder Offering. In connection with the Stockholder
Offering, Mr. Moyes and the various Moyes childrens
trusts pledged to the Trust 23.8 million shares of
Class B common stock deliverable upon exchange |
30
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|
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|
|
of the Trusts securities (or a number of shares of
Class B common stock representing $262.3 million in
value of shares of Class A common stock) three years
following December 15, 2010, the closing of the Stockholder
Offering, subject to Mr. Moyes and the Moyes
Affiliates option to settle their obligations to the Trust
in cash. Although Mr. Moyes and the and the various Moyes
childrens trusts may settle their obligations to the Trust
in cash three years following the closing date of the
Stockholder Offering, any or all of the pledged shares could be
converted into Class A common stock and delivered on such
date in exchange for the Trusts securities. |
|
(8) |
|
Cactus Holding Company, LLC is solely managed by
Jerry & Vickie Moyes Family Trust. Mr. Moyes has
shared voting and dispositive power as to the
13,001,567 shares owned by Cactus Holding Company, LLC. |
|
(9) |
|
Cactus Holding Company II, LLC is solely managed by
Jerry & Vickie Moyes Family Trust. Mr. Moyes has
shared voting and dispositive power as to the
11,290,000 shares owned by Cactus Holding Company II, LLC. |
|
(10) |
|
Wellington Management Company, LLP Schedule 13G/A filing,
dated April 11, 2011, reports beneficial ownership
collectively of 10,262,000 shares, with sole voting power
as to 5,982,032 shares and sole dispositive power as to
10,262,000. |
|
(11) |
|
Third Point LLC Schedule 13G filing, dated
February 11, 2011, reports beneficial ownership of
4,251,500 shares, with sole voting and dispositive power. |
|
(12) |
|
Invesco Ltd. Schedule 13G filing, dated February 11,
2011, reports beneficial ownership of 4,896,030 shares,
with sole voting and dispositive power. |
|
(13) |
|
TIAA-CREF Investment Management, LLC and Teachers Advisors, Inc.
Schedule 13G filing, dated February 11, 2011, reports
beneficial ownership collectively of 3,805,537 shares, with
sole voting power and sole dispositive power as to
2,150,043 shares in TIAA-CREF Investment Management, LLC
and sole voting power and sole dispositive power as to
1,655,494 shares in Teachers Advisors, Inc. |
|
(14) |
|
Valinor Management, LLC and David Gallo Schedule 13G
filing, dated January 25, 2011, reports beneficial
ownership collectively of 5,380,312 shares, with sole
voting and dispositive power. |
|
(15) |
|
SAB Capital Advisors, L.L.C., SAB Capital Management,
L.P., SAB Capital Management, L.L.C., and Scott A. Bommer
Schedule 13G filing, dated January 24, 2011, reports
beneficial ownership collectively of 4,835,842 shares, with
sole voting power and sole dispositive power as to
2,841,849 shares in SAB Capital Partners, L.P., sole
voting power and sole dispositive power as to
108,286 shares in SAB Capital Partners II, L.P. and
sole voting power and sole dispositive power as to 1,885,707 in
SAB Overseas Master Fund, L.P. |
|
(16) |
|
FMR LLC Schedule 13G filing, dated January 10, 2011,
reports beneficial ownership collectively of
13,445,311 shares, with sole voting power as to
7,624,114 shares and sole dispositive power as to
13,445,311. |
PROPOSAL NO. 2:
ADVISORY
VOTE ON THE COMPENSATION OF SWIFTS NAMED EXECUTIVE
OFFICERS
The recently enacted Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010, or Dodd-Frank Act, enables our
stockholders to vote to approve, on an advisory (nonbinding)
basis, the compensation of our named executive officers as
disclosed in this proxy statement in accordance with SEC rules.
Accordingly, we are providing a vote on the resolution set forth
below as required by the Dodd-Frank Act and Section 14A of
the Securities Exchange Act of 1934.
As discussed in our Compensation Discussion and Analysis, the
principal objectives of our executive compensation programs are
to attract, retain, and motivate talented executives, reward
strong business results and performance, and align the
executives interests with stockholder interests. The
objectives are based on the certain core principles, which we
explain in greater in the CD&A section of this proxy
statement.
We believe that the Companys executive compensation
programs have been effective in incenting the achievement of our
positive results. We are asking our stockholders to indicate
their support for our named executive officers compensation as
described in this proxy statement. This proposal, commonly known
as a say on pay proposal, gives you as a stockholder
the opportunity to express your views regarding our fiscal year
2010 executive compensation policies and procedures for named
executive officers. The vote is not intended to address any
specific item of compensation, but rather the overall
compensation of our named executive officers and the
31
policies and procedures described in this proxy statement.
Accordingly, we ask our stockholders to vote FOR the
following resolution at the Annual Meeting:
RESOLVED, that the stockholders of Swift Transportation
Company approve, on an advisory basis, the compensation of the
named executive officers as disclosed pursuant to Item 402
of
Regulation S-K
in the Compensation Discussion and Analysis, compensation tables
and related narrative discussion in the Companys proxy
statement for the 2011 Annual Meeting of Stockholders.
Although this is an advisory vote that will not be binding on
the Compensation Committee or the Board, we will carefully
review the results of the vote.
THE BOARD
OF DIRECTORS UNANIMOUSLY
RECOMMENDS A VOTE
FOR
PROPOSAL TWO
PROPOSAL NO. 3:
FREQUENCY
OF FUTURE ADVISORY VOTES ON THE COMPENSATION OF
SWIFTS NAMED EXECUTIVE OFFICERS
In addition to the nonbinding advisory vote on the compensation
of Swifts named executive officers, the Dodd-Frank Act
also enables our stockholders to express their preference for
having future say on pay votes every one, two or
three years. This nonbinding frequency vote is
required at least once every six years beginning with our 2011
Annual Meeting. It is the Companys belief, and the
Boards recommendation, that this vote should occur every
year.
The Companys executive compensation practices need to
remain flexible and reflect the state of the Company and the
industry. The Board believes that providing the Companys
stockholders with an advisory vote on executive compensation
every year is consistent with the Compensation Committees
approach to regularly evaluate executive compensation policies
and procedures.
For the above reasons, the Board recommends that the
stockholders vote to hold future advisory votes on executive
compensation every year. Each stockholders vote, however,
is not to approve or disapprove the Boards recommendation.
When voting on this Proposal Three, each stockholder has
four choices, vote on executive pay every year, every two years,
every three years, or abstain from voting. As an advisory vote,
the vote on Proposal Three is not binding upon the Board or
the Company. However, the Compensation Committee and the Board
will consider the outcome of the vote when determining the
frequency of future stockholder advisory votes on executive
compensation.
THE BOARD
OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE OF
EVERY YEAR
ON PROPOSAL THREE
PROPOSAL NO. 4:
RATIFICATION
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Appointment
of Independent Registered Public Accounting Firm
KPMG LLP audited Swifts annual financial statements for
the fiscal year ended December 31, 2010. The Audit
Committee has appointed KPMG LLP to be Swifts independent
registered public accounting firm for the fiscal year ending
December 31, 2011. The stockholders are asked to ratify
this appointment at the Annual Meeting. Representatives of KPMG
LLP will be present at the meeting to respond to appropriate
questions and to make a statement if they so desire.
32
Policies
Regarding Independent Auditor
The Audit Committee is directly responsible for the appointment,
compensation and oversight of the independent registered public
accounting firm. The Audit Committee preapproves all audit
services and non-audit services to be provided to Swift by its
independent registered public accounting firm. The Audit
Committee may delegate to one or more of its members the
authority to grant the required approvals, provided that any
exercise of such authority is presented at the next Audit
Committee meeting.
The Audit Committee may preapprove for up to one year in advance
the provision of particular types of permissible routine and
recurring audit-related, tax and other non-audit services, in
each case described in reasonable detail and subject to a
specific annual monetary limit also approved by the Audit
Committee. The Audit Committee must be informed about each such
service that is actually provided. In cases where a service is
not covered by one of those approvals, the service must be
specifically preapproved by the Audit Committee or a delegated
member thereof.
Each audit or non-audit service that is approved by the Audit
Committee will be reflected in a written engagement letter or
writing specifying the services to be performed and the cost of
such services, which will be signed by either a member of the
Audit Committee or by an officer of Swift authorized by the
Audit Committee to sign on behalf of Swift.
The Audit Committee will not approve any prohibited non-audit
service or any non-audit service that individually or in the
aggregate may impair, in the Audit Committees opinion, the
independence of the independent registered public accounting
firm.
Vote
Required For Ratification
The Audit Committee is responsible for selecting Swifts
independent registered public accounting firm. Accordingly,
stockholder approval is not required to appoint KPMG LLP as
Swifts independent registered public accounting firm for
fiscal year 2011. The Board believes, however, that submitting
the appointment of KPMG LLP to the stockholders for ratification
is a matter of good corporate governance. If the stockholders do
not ratify the appointment, the Audit Committee will review its
future selection of the independent registered public accounting
firm.
The ratification of the appointment of KPMG LLP as Swifts
independent registered public accounting firm requires the
affirmative vote of a majority of the shares cast an the Annual
Meeting.
THE BOARD
OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
FOR
THE RATIFICATION OF THE APPOINTMENT OF KPMG LLP
AS THE COMPANYS INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM FOR THE 2011 CALENDAR YEAR
AUDIT
COMMITTEE REPORT
The Audit Committee, which was established in accordance with
section 3(a)(58)(A) of the Exchange Act, is composed of
Richard Dozer, Chairman, William Post and David Vander Ploeg.
Messrs Dozer and Vander Ploeg each served as a member of the
Audit Committee during calendar year 2010 and Mr. Post was
appointed to the Audit committee on December 16, 2010 in
connection with Swifts initial public offering.
Swifts Board has determined that all members of the Audit
Committee satisfy the independence and other requirements for
audit committee membership pursuant to the NYSE corporate
governance listing standards and has also made the determination
that Messrs. Vander Ploeg, Post and Dozer each has the
attributes of an audit committee financial expert as defined by
SEC requirements. Information about Messrs. Vander Ploeg,
Post and Dozers past business and educational experience
is included in his biography in this proxy statement under the
caption Directors and Executive Officers of the
Company Nominees for Director.
The Audit Committee assists the Board in its oversight of
Swifts financial reporting process. The Audit
Committees responsibilities are more fully described in
its charter, which is available on Swifts Web site at
www.swifttrans.com.
33
Management has the primary responsibility for the financial
statements and the financial reporting process, including
internal control over financial reporting. Swifts
independent registered public accounting firm is responsible for
performing an audit of Swifts consolidated financial
statements and expressing an opinion on the fair presentation of
those financial statements in conformity with United States
generally accepted accounting principles. The independent
registered public accounting firm also is responsible for
performing an audit of and expressing an opinion on the
effectiveness of Swifts internal control over financial
reporting.
In fulfilling its oversight responsibilities, the Audit
Committee reviewed and discussed with management the audited
consolidated financial statements for the fiscal year ended
December 31, 2010, including a discussion of, among other
things:
|
|
|
|
|
the acceptability and quality of the accounting principles;
|
|
|
|
the reasonableness of significant accounting judgments and
critical accounting policies and estimates;
|
|
|
|
the clarity of disclosures in the financial statements; and
|
|
|
|
the adequacy and effectiveness of Swifts financial
reporting procedures, disclosure controls and procedures and
internal control over financial reporting.
|
The Audit Committee also discussed with the CEO, CFO and
Principal Accounting Officer of Swift their respective
certifications with respect to Swifts Annual Report on
Form 10-K
for the fiscal year ended December 31, 2010.
The Audit Committee discussed with the independent registered
public accounting firm the audited consolidated financial
statements for the fiscal year ended December 31, 2010, the
firms judgments as to the acceptability and quality of
Swifts accounting principles and such other matters as are
required to be discussed with the Audit Committee under the
standards of the Public Company Accounting Oversight Board
(United States) (the PCAOB), including those matters
required to be discussed by Statement on Auditing Standards
No. 61, Communication with Audit Committees, as
amended (AICPA, Professional Standards, Vol. 1, AU
section 380), as adopted by the PCAOB in Rule 3200T.
In addition, the Audit Committee received the written
disclosures and the letter from the independent registered
public accounting firm required by applicable requirements of
the PCAOB regarding the firms communications with the
Audit Committee concerning independence, and discussed with the
independent registered public accounting firm the firms
independence.
The Audit Committee discussed with Swifts internal audit
department and independent registered public accounting firm the
overall scope and plans for their respective audits. The Audit
Committee meets with the internal auditor and the independent
registered public accounting firm, with and without management
present, to discuss the results of their examinations, their
evaluations of Swifts internal controls and the overall
quality of Swifts financial reporting.
In reliance on the reviews and discussions referred to above,
and the receipt of an unqualified opinion from KPMG LLP dated
March 29, 2011, with respect to the consolidated financial
statements of Swift as of and for the fiscal year ended
December 31, 2010, the Audit Committee recommended to the
Board, and the Board approved, that the audited consolidated
financial statements be included in Swifts Annual Report
on
Form 10-K
for the fiscal year ended December 31, 2010.
This report is submitted by the Audit Committee.
Richard Dozer Chairman
William Post
David Vander Ploeg
The foregoing report of the Audit Committee does not
constitute soliciting material and should not be deemed filed or
incorporated by reference into any Company filing under the
Securities Act or the Exchange Act, except to the extent the
Company specifically incorporates this report.
34
AUDIT AND
NON AUDIT FEES
Audit
Fees
The aggregate fees billed to Swift by KPMG LLP for 2010 and 2009
for professional services rendered for the audit of Swifts
annual financial statements for fiscal years 2010 and 2009 and
the reviews of the financial statements included in Swifts
quarterly reports were $1,308,920 and $1,452,430, respectively.
Audit-Related
Fees
The aggregate fees billed to Swift by KPMG LLP in 2010 and 2009
for assurance and related services that are reasonably related
to the performance of the audit or review of financial
statements and are not reported in the preceding paragraph were
$0 and $0, respectively.
Tax
Fees
The aggregate fees billed to Swift by KPMG LLP in 2010 and 2009
for professional services rendered for tax compliance, tax
advice, and tax planning were $288,743 and $65,194, respectively.
All
Other Fees
The aggregate fees billed to Swift by KPMG LLP in 2010 and 2009
for products and services provided, other than the services
reported in the preceding three paragraphs, were $936,010 and
$83,838, respectively, which consisted of litigation support,
initial public offering, and credit agreement and indenture
amendments related costs.
Pre-Approval
Policy for Audit and Non Audit Fees
All audit and non audit services performed by our independent
auditors are pre-approved by the Audit Committee. The respective
approving parties concluded that the provision of such services
by KPMG LLP was compatible with the maintenance of that
firms independence in the conduct of its auditing
functions.
The Audit Committee may delegate preapproval authority to one or
more of its members. The member(s) to whom such authority is
delegated must report, for informational purposes only, the
preapproval decisions to the Audit Committee at its next
scheduled meeting.
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Executive officers, directors and beneficial owners
of more than ten percent of our common stock must file initial
reports of ownership and changes in ownership with the SEC under
Section 16(a) of the Exchange Act. SEC regulations require
these reporting persons to furnish us with copies of all
Forms 3, 4 and 5, and amendments thereto, that they file
with the SEC. Based solely on our review of the copies of such
forms furnished to us, or representations that no forms were
required, we believe that during 2010 and through the date of
this filing all of our officers, directors and greater than ten
percent beneficial owners complied with all filing requirements
of Section 16(a) of the Exchange Act.
OTHER
MATTERS
We are not aware of any other matters to be conducted at the
meeting. The Companys Bylaws require stockholders to give
advance notice of any proposal intended to be presented at the
Annual Meeting. The deadline for this notice has passed and we
did not receive any such notices. If any other matter properly
comes before the stockholders for a vote at the meeting, the
proxy holders will vote your shares in accordance with their
best judgment.
ADDITIONAL
INFORMATION
Upon request, the Company will provide by first class mail,
to each stockholder of record on the record date, without
charge, a copy of this proxy statement and all attachments
hereto, the proxy card, and the Companys Annual Report on
Form 10-K
for the fiscal year ended December 31, 2010, including the
required financial statements and financial statement schedules.
Written requests for this information should be directed to:
Corporate Secretary, Swift Transportation Company, 2200 South
75th Avenue, Phoenix, Arizona 85043.
35
Stockholder
Proposals for 2012 Annual Meeting
Stockholder proposals intended to be presented at the 2012
annual meeting of stockholders must be received by the Company
no later than December 30, 2011 to be eligible for
inclusion in the Companys proxy statement and form of
proxy for next years meeting. If any stockholder intends
to present a proposal at the 2012 annual meeting of stockholders
without inclusion of such proposal in our proxy materials, we
must receive notice of such proposal no earlier than
February 4, 2010 and no later than March 5, 2012. Any
notice received prior to February 4, 2010 or after
March 5, 2012 is untimely. Proposals must concern a matter
that may be properly considered and acted upon at the Annual
Meeting in accordance with applicable laws, regulations and the
Companys Bylaws and policies, and must otherwise comply
with
Rule 14a-8
of the Exchange Act and we reserve the right to reject, rule out
of order, or take other appropriate action with respect to any
proposal that does not comply with these requirements. Proposals
should be addressed to Swift Transportation Company, Attention:
Corporate Secretary, 2200 S. 75th Ave., Phoenix, AZ
85043.
FORWARD
LOOKING STATEMENTS
This proxy statement contains forward-looking
statements as that term is defined in the Private
Securities Litigation Reform Act of 1995. These statements are
based on managements current expectations and involve
substantial risks and uncertainties, which may cause results to
differ materially from those set forth in the statements. The
forward-looking statements may include, but are not limited to,
statements made in the Compensation Discussion and Analysis
section of this proxy statement regarding future actions and
benefits relating to our executive compensation programs. The
Company undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new
information, future events, or otherwise. Forward-looking
statements should be evaluated together with the many
uncertainties that affect our business, particularly those
mentioned under the heading Risk Factors in our
annual report on
Form 10-K
(accompanying this report), and in the periodic reports that we
file with the SEC on
Form 10-Q
and
Form 8-K.
36
Shareowner ServicesSM P.O. Box 64945 St. Paul, MN 55164-0945 Address Change? Mark
box, sign, and indicate changes below: ¦ COMPANY # TO VOTE BY INTERNET OR
TELEPHONE, SEE REVERSE SIDE OF THIS PROXY CARD. TO VOTE BY MAIL AS THE BOARD OF
DIRECTORS RECOMMENDS ON ALL ITEMS BELOW, SIMPLY SIGN, DATE, AND RETURN THIS PROXY
CARD. The Board of Directors Recommends a Vote FOR each of the Directors listed
below: 1. Election of 01 William Post 04 David Vander Ploeg ¦ Vote FOR all nominees ¦
Vote WITHHELD directors: 02 Jerry Moyes 05 Glenn Brown (except as marked) from all
nominees 03 Richard Dozer (Instructions: To withhold authority to vote for any
indicated nominee, write the number(s) of the nominee(s) in the box provided to the
right.) Please fold here Do not separate The Board of Directors recommends a
vote FOR Proposal 2: 2. Advisory vote on the compensation of Swifts named executive
officers. ¦ For ¦ Against ¦ Abstain The Board of Directors recommends a vote FOR 1
year: 3. To recommend, by non-binding vote, the frequency of future advisory votes on
the compensation of Swifts named executive officers. ¦ 1 Year ¦ 2 Years ¦ 3 Years ¦
Abstain The Board of Directors recommends a vote FOR Proposal 4: 4. Advisory vote to
ratify the appointment of KPMG, LLP as Swifts independent public accountants for
calendar year 2011. ¦ For ¦ Against ¦ Abstain To conduct any other business that may
properly come before the meeting or any adjournment or postponement thereof. THIS
PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN,
WILL BE VOTED AS THE BOARD RECOMMENDS. Date ___________________________ Signature(s)
in Box Please sign exactly as your name(s) appears on Proxy. If held in joint
tenancy, all persons should sign. Trustees, adminis- trators, etc., should include title
and authority. Corporationsshould provide full name of corporation and title of
authorizedofficer signing the Proxy. |
SWIFT TRANSPORTATION COMPANY ANNUAL MEETING OF STOCKHOLDERS Friday, June 3, 2011
9:00 a.m. MST 2200 S. 75th Ave. Phoenix, AZ 85043 Swift Transportation Company 2200 S.
75th Ave. Phoenix, AZ 85043 proxy This proxy is solicited by the Board of Directors
for use at the Annual Meeting on June 3, 2011. The shares of stock you hold in
your account will be voted as you specify on the reverse side. If no choice is
specified, the proxy will be voted FOR Proposals 1, 2 and 4 and 1 year for Proposal
3. By signing the proxy, you revoke all prior proxies and appoint James Fry and
Ginnie Henkels, and each of them with full power of substitution, to vote your shares
on the matters shown on the reverse side and any other matters which may come
before the Annual Meeting and all adjournments. Vote by Internet, Telephone or Mail
24 Hours a Day, 7 Days a Week Your phone or Internet vote authorizes the named
proxies to vote your shares in the same manner as if you marked, signed and returned
your proxy card. INTERNET PHONE MAIL www.eproxy.com/swft 1-800-560-1965 Mark,
sign and date your proxy Use the Internet to vote your proxy Use a touch-tone
telephone to card and return it in the until 12:00 p.m. (CT) on vote your proxy
until 12:00 p.m. postage-paid envelope provided. June 2, 2011. (CT) on June 2, 2011. If
you vote your proxy by Internet or by Telephone, you do NOT need to mail back your
Proxy Card. |