|
Arizona
|
000-24946
|
86-0649974
|
|
(State
or other jurisdiction
of
incorporation)
|
(Commission
File
Number)
|
(IRS
Employer
Identification
No.)
|
|
5601
W. Buckeye Road, Phoenix, AZ
|
85043
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
|
[
]
|
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
|
|
[ ]
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
[
]
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
|
|
[
]
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
|
|
Chief
Executive Officer
|
$540,000
|
|
Vice
Chairman
|
$227,500
|
|
President
|
$290,000
|
|
Executive
Vice President
|
$315,000
|
| § |
Subject
to approval by the Company's shareholders of an amendment to the
Company's
2003 Stock Option Plan to limit the maximum number of shares of stock
issuable in respect of stock grants that may be awarded to any participant
in any calendar year, the Committee approved a one-time grant to
the
Company’s Chief Executive Officer of an option to purchase 500,000 shares
of the Company’s common stock at an exercise price equal to the closing
price of the Company’s stock on the date of the grant, which option vested
immediately and remains exercisable for a term of ten (10) years
the date
of the grant.
|
|
§
|
The
Committee adopted a policy that any annual stock option granted to
the
Company’s Chief Executive Officer for years after 2005 will fall within a
range of 150% to 250% of the next highest annual stock option award
made
to the Company's senior executives, excluding the Chairman and Chief
Executive Officer.
|
| § |
The
Committee adopted a policy that the Company’s Chief Executive Officer will
receive, for the purpose of covering air travel expenses, a travel
allowance, which will be determined annually by the Committee and
which
for 2005 was fixed at $150,000 effective August 3 and prorated for
the
balance of 2005.
|
| § |
The
Committee approved a provision stating that the Company’s Chief Executive
Officer will be eligible to participate in all benefit programs made
available by the Company to its most senior
officers.
|
| § |
Eligibility.
For the remainder of 2005 (the "Initial Period") and for each year
after
2005, the participants in the Bonus Plan will be those key officers
and
employees who are designated by the Committee to participate in the
Bonus
Plan from time to time.
|
| § |
Business
criteria upon which performance goals will be based. Specific
performance goals for participating executives will be selected from
among
the business criteria described below. After the Initial Period,
these
goals must be established for each participant by the Committee prior
to
the 91st day
of each performance period, but no later than the expiration of the
first
twenty-five percent (25%) of a performance period having a duration
of
less than one year for determining the participant's business criteria
target. Under the Bonus Plan, the Committee must set one or more
performance goals for each participant for the Initial Period and
each
subsequent year, or portion thereof, using one or more such goals
established by the Committee, which will be based on the attainment
of
specified levels of one or any variation or combination of the following:
revenues (including, without limitation, measures such as revenue
per mile
(loaded or total) or revenue per tractor), net revenues, fuel surcharges,
accounts receivable collection or days sales outstanding, measures
based
on the Company's "economic engine" identified from time-to-time in
the
Company's strategic plan, cost reductions and savings (or limits
on cost
increases), safety and claims (including, without limitation, measures
such as accidents per million miles and number of significant accidents),
operating income, operating ratio, income before taxes, net income,
earnings before interest and taxes (EBIT), earnings before interest,
taxes, depreciation, and amortization (EBITDA), adjusted net income,
earnings per share, adjusted earnings per share, stock price, working
capital measures, return on assets, return on revenues, debt-to-equity
or
debt-to-capitalization (in each case with or without lease adjustment),
productivity and efficiency measures (including, without limitation,
measures such as driver turnover, trailer to tractor ratio, and tractor
to
non-driver ratio), cash position, return on shareholders' equity,
return
on invested capital, cash flow measures (including, without limitation,
free cash flow), market share, shareholder return, economic value
added,
number of operations centers, number of new operations centers, or
completion of acquisitions (either with or without specified size).
In
addition, the Committee may establish, as an additional performance
measure, the attainment by a participant in the Bonus Plan of one
or more
personal objectives and/or goals that the Committee deems appropriate,
including but not limited to implementation of Company policies,
negotiation of significant corporate transactions, development of
long-term business goals or strategic plans for the Company, or the
exercise of specific areas of managerial responsibility. The Committee
will not have discretion to increase bonus amounts over the level
determined by application of the performance goal formula(s) and
will be
required to certify, prior to payment, that the performance goals
underlying the bonus payments have been satisfied. The performance
goals
set by the Committee may be expressed on an absolute and/or relative
basis, and may include comparisons with the past performance of the
Company (including one or more divisions thereof, if any) and/or
the
current or past performance of other
companies.
|
| § |
Benefits
under the Cash Bonus Plan.
In
general, the benefits under the Bonus Plan will consist of a cash
bonus
payable to participants provided the performance goals established
by the
Committee are met (and, if met, the extent to which such goals are
met.)
The bonus opportunity for each participant under the Bonus Plan each
performance period will be related by a specific formula to the
participant's base salary at the start of such performance period,
provided that the maximum bonus paid under the Bonus Plan to any
individual in respect of any year will not exceed $2
million.
|
| § |
Administration
of the Cash Bonus Plan.
The Bonus Plan will be administered by the Committee, which at all
times
will be composed solely of at least two directors who are "outside
directors" within the meaning of Section 162(m). All determinations
of the
Committee with respect to the Cash Bonus Plan will be in its discretion
and be binding. The expenses of administering the Cash Bonus Plan
will be
borne by the Company.
|
| § |
The
Company’s Chief Executive Officer will have the opportunity to earn a cash
bonus of up to sixty percent (60%) of base salary, with the actual
bonus
dependent on the extent of achievement of performance criteria related
to
revenue and earnings per share (“EPS”) growth and the success of certain
specified divisions of the Company.
|
| § |
The
Company’s Vice Chairman will have the opportunity to earn a cash bonus of
up to thirty percent (30%) of base salary, with the actual bonus
dependent
on the extent of achievement of performance criteria related to revenue
and EPS growth, accounts receivable collection, days sales outstanding,
and management development.
|
| § |
The
Company’s President will have the opportunity to earn an annual cash bonus
of up to forty percent (40%) of base salary, with the actual bonus
dependent on the extent of achievement of performance criteria related
to
revenue and EPS growth, the success of certain specified divisions
of the
Company, and improved safety.
|
| § |
The
Company’s Executive Vice President will have the opportunity to earn a
cash bonus of up to thirty percent (30%) of base salary, with the
actual
bonus dependent on the extent of achievement of performance criteria
related to revenue and EPS growth, accounts receivable collection,
and
days sales outstanding.
|
|
|
|
KNIGHT
TRANSPORTATION, INC.
|
|
|
|
|
|
Date:
August 19, 2005
|
By:
|
/s/
David A. Jackson
|
|
|
|
David
A. Jackson
|
|
|
|
Chief
Financial Officer
|