DEF 14A of Knight-Swift Transportation Holdings Inc.
Filed Apr 14, 2017 · FY20160001564590-17-006554
TABLE OF CONTENTS
| | Page | | POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL | 49 | | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | 51 | | PROPOSAL NO. 2 ADVISORY VOTE ON THE COMPENSATION OF SWIFT’S NAMED EXECUTIVE OFFICERS | 54 | | PROPOSAL NO. 3 FREQUENCY OF FUTURE ADVISORY VOTES ON THE COMPENSATION OF SWIFT’S NAMED EXECUTIVE OFFICERS | 55 | | PROPOSAL NO. 4 RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 56 | | AUDIT COMMITTEE REPORT | 57 | | AUDIT AND NON AUDIT FEES | 58 | | PROPOSAL NO. 5 STOCKHOLDER PROPOSAL REGARDING DEVELOPMENT OF A RECAPITALIZATION PLAN | 59 | | PROPOSAL NO. 6 STOCKHOLDER PROPOSAL TO ADOPT PROXY ACCESS | 61 | | SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE | 64 | | OTHER MATTERS | 64 | | ADDITIONAL INFORMATION | 64 | | STOCKHOLDER PROPOSALS | 64 | | FORWARD-LOOKING STATEMENTS | 65 |
Director Nominees
Director Nominees Swift’s Board is comprised of six members. Under our Bylaws, directors are elected for one-year terms. The following table provides summary information about each director nominee standing for election to the Board for a one-year term expiring in 2018.
Director Nominees
| Name | Age | Professional Background | Independent | Committee Memberships | Other Current Company Boards | | Richard H. Dozer (Chairman) | 60 | Retired Chairman of GenSpring Family Officer; former President of Arizona Diamondbacks Major League Baseball team; Vice President and Chief Operating Officer of the Phoenix Suns National Basketball Association team; audit manager with Arthur Andersen. | Yes | Audit (Chair); Compensation; Nominating and Corporate Governance | Blue Cross Blue Shield of Arizona; Viad Corporation | | Glenn F. Brown | 73 | Retired Chief Executive Officer of Contract Freighters | Yes | Audit; Compensation; Nominating and Corporate Governance (Chair) | Freeman Health System | | José A. Cárdenas | 64 | Senior Vice President and Chief Legal Officer of Arizona State University; Former Managing Partner at Lewis and Roca law firm | Yes | Audit; Compensation; Nominating and Corporate Governance | Southwest Gas Corporation | | Jerry Moyes | 73 | Retired Chief Executive Officer of Swift | No | | | | William F. Riley, III | 70 | Chief Executive Officer of Thermo King West; former Executive Vice President and Chief Financial Officer of Swift | No | | | | David N. Vander Ploeg | 58 | Retired Executive Vice President and Chief Financial Officer of School Specialty, Inc.; former Executive Vice President and Chief Financial Officer of Schneider National, Inc.; senior auditor with Arthur Andersen | Yes | Audit; Compensation (Chair); Nominating and Corporate Governance | Energy Bank, Inc. |
Election of Directors (Proposal 1)
Election of Directors (Proposal 1) Each director shall be elected by a majority of the votes cast with respect to that director. This means that a director must receive more “for” than “against” votes 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 abstentions will have no effect on the outcome of this proposal.
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS The Company’s 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. 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 appoints members to fill new membership positions and vacancies in unexpired terms on the Board. Our Board has nominated Richard H. Dozer, Glenn F. Brown, José A. Cárdenas, Jerry Moyes, William F. Riley, III and David N. Vander Ploeg as directors to hold office for a term of one year, expiring at the close of the 2018 Annual Meeting of Stockholders or until their successors are elected and qualified or until their earlier resignation or removal. Messrs. Dozer, Brown, Cárdenas, Moyes, Riley and Vander Ploeg are incumbent directors standing for re-election. The Board believes that these directors are well-qualified and experienced to direct and manage the Company’s 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 under the caption “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
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
EACH OF THE DIRECTOR NOMINEES LISTED HEREIN
EACH OF THE DIRECTOR NOMINEES LISTED HEREIN
NOMINEES FOR DIRECTOR
NOMINEES FOR DIRECTOR If elected at the Annual Meeting, all terms expire in 2018.
NOMINEES FOR DIRECTOR
| | Richard H. Dozer (60) Mr. Dozer has served as a director of Swift since April 2008. He is: Chairman of the Board; Chairman of the Audit Committee; a member of the Compensation Committee; and member of the Nominating and Corporate Governance Committee. Mr. Dozer is the retired Chairman of GenSpring Family Office in Phoenix, Arizona where he served from May 2008 until January 2013. 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 and 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 where he is Chairman of the Board. Mr. Dozer is presently or has previously served on many boards, including: Teach for America in Phoenix, Arizona; Greater Phoenix Valley of the Sun Convention and Visitor’s Bureau; Greater Phoenix Leadership; Greater Phoenix Economic Council; ASU Dean’s Council of 100; Arizona State University MBA Advisory Council; Valley of the Sun YMCA, Nortrust of Arizona; and others. Mr. Dozer’s 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 former chair of the audit committee of Blue Cross Blue Shield of Arizona. Mr. Dozer also has financial experience from his audit manager position with Arthur Andersen from 1979 to 1987. In addition, Mr. Dozer has long-standing relationships within the business, political and charitable communities in the State of Arizona. | | | Glenn F. Brown (73) Mr. Brown was appointed to our Board on December 16, 2010 in connection with our initial public offering. He is the Chair of the Nominating and Corporate Governance Committee and a member of the Audit Committee and Compensation Committee. In 2005, Mr. Brown retired as CEO of Contract Freighters Inc. (“CFI”), 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 CFI, Mr. Brown also served as President and Chairman. Prior to working with CFI, 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. Brown’s qualifications to serve on our Board include his extensive experience gained in various roles within the transportation and logistics services industry. Those positions include 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. |
NOMINEES FOR DIRECTOR
| | José A. Cárdenas (64) Mr. Cárdenas was appointed to the Board in July 2014. Mr. Cárdenas has served as the Senior Vice President and General Counsel at Arizona State University (“ASU”) since January 2009. Since 2011, Mr. Cárdenas has served as a member of the Board of Directors of Southwest Gas Corporation where he has served on the following board committees: Audit; Nominating and Governance; Compensation; and Pension Plan Investment. In addition to serving as chief legal officer for ASU, he serves as a University representative on the boards of directors of ASU affiliated and related entities such as the ASU Foundation. From 1982 through 2008, Mr. Cárdenas was a partner in the Phoenix based law firm of Lewis and Roca. He was the firm’s Managing Partner (CEO) from 1999 to 2003 and then the firm’s Chairman from 2003 through 2008. Mr. Cárdenas is a native of Las Vegas, Nevada. He received his undergraduate degree from the University of Nevada, Las Vegas in 1974 and a law degree from Stanford University Law School in 1977. Mr. Cárdenas has been admitted to practice law in: Arizona; California; the Ninth Circuit Court of Appeals; and the United States Supreme Court. He is a member of various bar associations including the Hispanic National Bar Association. Mr. Cárdenas was a member of the board of directors of Meridian Bank N.A. until its acquisition in 2015. His many community activities include his service as a trustee of the Virginia G. Piper Charitable Trust. He is a past chairman of the boards of: Greater Phoenix Leadership; Valley of the Sun United Way; the Translational Genomics Research Institute; and O’Connor House. |
NOMINEES FOR DIRECTOR
| | Jerry Moyes (73) Mr. Moyes was Swift’s CEO from May 2007 until his retirement effective December 31, 2016. Mr. Moyes currently serves as a consultant to the Company with the title Founder and Chairman Emeritus. Mr. Moyes has been a director since 1966 when he 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 Company, 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 extensive 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 numerous other entities, including SME Industries, Southwest Premier Properties, Central Freight, and various commercial and residential real estate properties. Mr. Moyes previously held a majority ownership interest in, and served as Chairman of the Board and CEO, Central Refrigerated Transportation, Inc. (“Central Refrigerated”) and its subsidiaries until these entities were acquired by Swift Transportation Company on August 6, 2013. Mr. Moyes also served from September 2000 until April 2002 as Chairman of the Board of Simon Transportation Services, Inc. (“Simon Transportation”), 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 (“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 winding down pursuant to the Second Amended Plan dated December 1, 2010 (D.E. 1339), approved by the Court pursuant to the Findings of Fact, Conclusions of Law and Order Confirming the Second Amended Plan entered February 24, 2011. 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. |
NOMINEES FOR DIRECTOR
| | William F. Riley, III (70) Mr. Riley was appointed to the Board in July 2014. Mr. Riley is the current Chief Executive Officer and majority shareholder of Thermo King West, Inc., a distributor of Thermo King Corporation transport refrigeration products. Mr. Riley is also President and majority shareholder of Utility Crane and Equipment, Inc., a distributor of vehicle mounted aerial lift devices. In addition, Mr. Riley serves on the advisory board of Ag Trucking, Inc. Mr. Riley previously served in various positions at Swift Transportation from 1986 until 2005. He served as Vice President until 1990 when he was promoted to Executive Vice-President and Chief Financial Officer and then serving as Senior Executive Vice-President from 2000 until he retired from Swift Transportation in 2005. Prior to working at Swift Transportation, Mr. Riley was employed by Armour Food Company in various transportation and distribution positions, including manager of Business Planning. Mr. Riley received a Bachelor of Science degree in Business Management from Arizona State University. Mr. Riley also serves on the advisory boards of both Daylight Transport and UMB Bank of Arizona. | | | David N. Vander Ploeg (58) Mr. Vander Ploeg 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 Governance Committee. Mr. Vander Ploeg is the retired Executive Vice President and CFO of School Specialty, Inc. (“School Specialty”), where he served from April 2008 until December 31, 2013. In January 2013, School Specialty filed for bankruptcy under Chapter 11 of the United States Bankruptcy Code . Prior to that role, Mr. Vander Ploeg spent 24 years at Schneider National, Inc. (“Schneider”), a provider of transportation and logistics services and was Executive Vice President and CFO from 2004 until his departure in 2007. Prior to joining Schneider, Mr. Vander Ploeg was a senior auditor for Arthur Andersen. Mr. Vander Ploeg holds a Bachelor of Science degree in accounting and a Master’s degree in business administration from the University of Wisconsin- Oshkosh. Mr. Vander Ploeg currently serves on the boards of directors of Energy Bank, Inc., and Bellin Psychiatric Hospital. 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. Mr. Vander Ploeg’s qualifications to serve on our Board include his 24-year career at Schneider 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. |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION Swift pays only non-employee 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. The current compensation for nonemployee directors is as follows:
DIRECTOR COMPENSATION
| • | an annual retainer of $75,000, paid in cash to all non-employee Board members on a quarterly basis; |
DIRECTOR COMPENSATION
| • | an annual retainer of $75,000, paid in cash, to the Chairman of the Board; |
DIRECTOR COMPENSATION
| • | an annual retainer of $20,000, paid in cash, to the Audit Committee Chairman; |
DIRECTOR COMPENSATION
| • | an annual retainer of $15,000, paid in cash, to the Compensation Committee Chairman; |
DIRECTOR COMPENSATION
| • | an annual retainer of $10,000, paid in cash, to the Nominating and Corporate Governance Committee Chairman; |
DIRECTOR COMPENSATION
| • | an annual retainer of $10,000, paid in cash, to each member of the Audit Committee; |
DIRECTOR COMPENSATION
| • | an annual retainer of $7,500, paid in cash, to each member of the Compensation Committee; |
DIRECTOR COMPENSATION
| • | an annual retainer of $5,000, paid in cash, to each member of the Nominating and Corporate Governance Committee; |
DIRECTOR COMPENSATION
| • | a fee ranging from $500 to $2,500, depending on the length of the meeting, for special meetings of the Board; |
DIRECTOR COMPENSATION
| • | reimbursement of expenses to attend Board and committee meetings; and |
DIRECTOR COMPENSATION
| • | an annual grant of $100,000 in Class A restricted common stock of the Company to all independent non-employee Board members which vests on the first anniversary from the grant date. |
DIRECTOR COMPENSATION
The following table provides information for the fiscal year ended December 31, 2016, regarding all plan and non-plan compensation awarded to, earned by, or paid to, each person who served as a director for 2016:
DIRECTOR COMPENSATION
| Name | Fees Earned or Paid in Cash ($) | Stock Awards Cash Value ($)(3) | Total ($) | | Richard H. Dozer(2) | 172,500 | 100,000 | 272,500 | | Glenn F. Brown(2) | 97,750 | 100,000 | 197,750 | | José A. Cárdenas(2) | 87,750 | 100,000 | 187,750 | | Jerry Moyes(1) | — | — | — | | William F. Riley, III(2) | 67,750 | 100,000 | 167,750 | | David N. Vander Ploeg(2) | 105,250 | 100,000 | 205,250 |
DIRECTOR COMPENSATION
| (1) Employees of Swift who serve as directors receive no additional compensation, although we may reimburse them for travel and other expenses. See “Executive Compensation — 2016 Summary Compensation Table” below for disclosure of Mr. Moyes’ compensation as CEO for 2016. |
DIRECTOR COMPENSATION
| (2) Annual grant of Class A restricted common stock of the Company awarded on May 24, 2016; represents an award of restricted shares of Class A common stock granted under the Company’s 2014 Omnibus Incentive Plan. Subject to certain termination and forfeiture provisions, the restricted shares vest on the first anniversary of the date of grant. |
DIRECTOR COMPENSATION
| (3) Dollar value represents the aggregate grant date fair value of stock awards. The methodology and assumptions used to calculate these values are set forth in Note 19 (Stock Plans) to our consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2016. |
DIRECTOR COMPENSATION
As of December 31, 2016, the directors hold the following outstanding options and restricted Class A common stock:
DIRECTOR COMPENSATION
| | Options(#) | Shares of Restricted Class A Stock(#) | | Richard H. Dozer | 4,000 | 17,405 | | Glenn F. Brown | — | 21,687 | | José A. Cárdenas | — | 11,275 | | William F. Riley, III | — | 11,227 | | David N. Vander Ploeg | 4,000 | 21,687 |
2016 Incentive Compensation Highlights
| • | for the 2016 short term annual cash incentive plan, actual performance was below threshold and, accordingly, no incentive cash incentive was earned for 2016; and |
2016 Incentive Compensation Highlights
| • | For long term performance-based equity awards granted in 2014 for the three year period ending December 31, 2016, awards were earned at 42% of target. |
Processes and Procedures for Considering and Determining Executive Compensation
Processes and Procedures for Considering and Determining Executive Compensation Compensation committee. Our Compensation Committee is responsible for reviewing and approving the compensation of the CEO and the other NEOs. Compensation for our NEOs is established based upon the scope of their responsibilities, experience and individual as well as company performance. In addition, taking into account the compensation level from their recent prior employment, if applicable. The Compensation Committee’s responsibilities are described in the Section “The Board of Directors and Corporate Governance — Board Committees — Compensation Committee”. Role of compensation consultant. Since 2011, the Compensation Committee retained the services of Pearl Meyer to provide research and consultation around executive compensation. In 2013, Pearl Meyer provided the Compensation Committee with an extensive report that analyzed the company’s total compensation package for NEOs and compared these results to our industry peer groups. The comprehensive plan design that was developed and implemented in 2013 has remained substantially in effect through 2016. The Compensation Committee engaged Pearl Meyer again in late 2016 to conduct a comprehensive review and evaluation of the Company’s executive compensation program. Pearl Meyer provides no other services to the Company and the Compensation Committee determined that Pearl Meyer has no affiliations or relationships with any directors, officers or other employees of the Company that results in a conflict of interest. Benchmarking. In connection with its 2016 report and analysis, Pearl Meyer completed and prepared a competitive market analysis of the compensation of the Company’s executives to evaluate base salary, annual cash incentive awards, equity awards and long term incentives. The assessment involved the selection of a peer group for purposes of pay benchmarking, business performance comparison and industry practices and trends to determine if relative pay and relative performance are directionally aligned. The peer group selected by Pearl Meyer in its 2016 report and analysis is set forth below. This peer group is substantially the same as the peer group used for determining 2014, 2015 and 2016 executive compensation.
Objectives of our Compensation Programs
| • | Alignment with stockholder interests. Awards of long term equity incentives in the form of restricted stock units (“RSUs”), performance share units (“PUs”) and stock options encourage our executive officers to focus on long term growth and profitability so that executives’ interests are aligned with those of our stockholders; |
Objectives of our Compensation Programs
| • | Retention and Competitiveness. Compensation is designed to attract, retain and reward key leaders critical to our success over the long term by providing competitive total compensation; and |
Elements of our Compensation Program
| • | performance-based annual cash incentives; |
Elements of our Compensation Program
| • | performance-based equity awards; and |
Elements of our Compensation Program
| • | long-term incentives designed to promote long-term performance and key employee retention. |
Elements of our Compensation Program
Primary benefits for executives include: (i) participation in the Company’s 401(k) and Employee Stock Purchase plans; (ii) health, dental and vision plans; and (iii) various other insurance plans, including life and disability. All of these benefits are available to all other employees on a nondiscriminatory basis. The Company provides limited perquisites to executives as further described under the heading “Perquisites to our Named Executive Officers”. Base salary The Compensation Committee, with the assistance of our Chief Executive Officer, annually reviews the base salary of each NEO. If appropriate, adjustments are made to base salaries based upon individual performance. Annual salaries are based upon: experience; scope and complexity of the position; responsibilities; peer group comparison; our performance for the fiscal year and subjective evaluation of each executive’s contribution to that Company performance. For 2016, the base salaries of our NEOs were as follows: Mr. Stocking, $562,754; Ms. Henkels, $365,790; Mr. Dragash, $300,000; Mr. Runnels, $273,182; Mr. Van Kirk, $267,718 and Mr. Moyes, $636,540. Annual cash incentives. The Compensation Committee believes 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 linked to our earnings as well as other financial objectives for the year. The compensation structure is intended to compensate our NEOs for achievement of key performance measures. These measures are designed to enhance shareholder value. The annual incentive process involves the following steps:
Elements of our Compensation Program
| • | establishing our overall performance goals; |
Elements of our Compensation Program
| • | measuring our actual financial performance against the predetermined goals to determine incentive payouts; and |
Elements of our Compensation Program
| Executive | Base Salary | Target Cash Incentive Percentage | $ Amount of Cash Incentive at 100% Level of Attainment | 2016 Cash Incentive Earned | 2016 % of Salary at below threshold STIP Level of Attainment | | Richard Stocking | $562,754 | 75% | $422,066 | $— | —% | | Virginia Henkels | $365,790 | 60% | $219,474 | $— | —% | | Mickey R. Dragash | $300,000 | 50% | $150,000 | $— | —% | | Kenneth C. Runnels | $273,182 | 50% | $136,591 | $— | —% | | Steven Van Kirk | $267,718 | 50% | $133,859 | $— | —% | | Jerry Moyes | $636,540 | 90% | $572,886 | $— | —% |
Elements of our Compensation Program
Long-Term Incentive Plan (“LTIP”) for 2016 For the 2016 LTIP, the Company continued with the same principles and metrics as were used in prior years based upon the 2013 Pearl Meyer analysis. A summary of the key equity awards under the LTIP in 2016 include:
Elements of our Compensation Program
| • | RSUs — Each RSU represents a contingent right to receive one share of the Company’s Class A common stock. The RSUs vest in equal installments on each of the first three anniversaries of the May 24, 2016 grant date; |
Elements of our Compensation Program
| • | Stock Options — The stock options have an exercise price equivalent to the closing price on the NYSE of the Company’s Class A common stock on the May 24, 2016 date of grant, $15.51. The Stock Options vest in three equal installments over a three year period beginning with the first anniversary from the grant date. |
Elements of our Compensation Program
Vesting of RSUs, PUs and stock options shall automatically accelerate upon a Change of Control (as defined in the award agreements). Other than in connection with a Change in Control, as described above, upon a termination of employment all unvested RSUs, stock options and PUs shall be forfeited by the NEOs. In May 2016, the Compensation Committee established a total targeted LTIP grant value expressed as a percentage of base salary for each NEO. The Compensation Committee determined for Jerry Moyes, our former CEO, 50% of the LTIP would be granted in stock options and 50% of the LTIP would be granted in PUs. For the remaining NEOs, the Compensation Committee allocated approximately 1/3 of the LTIP value to each of the three award types which are stock options, RSUs and PUs. The table below indicates the total 2016 LTIP target values and the allocation of awards for each NEO:
Elements of our Compensation Program
| Named Executive Officer | Approximate Target LTIP(1) | Stock Options(2) | RSUs(3) | PUs(4) | | Richard Stocking | 175% | 44,888 | 21,589 | 20,954 | | Virginia Henkels | 100% | 16,673 | 8,019 | 7,783 | | Mickey R. Dragash | 75% | 10,526 | 4,932 | 4,787 | | Kenneth C. Runnels | 75% | 9,116 | 4,384 | 4,255 | | Steven Van Kirk | 75% | 6,062 | 2,916 | 2,830 | | Jerry Moyes | 235% | 103,306 | — | 48,223 |
Elements of our Compensation Program
| (2) Number of stock options awarded are determined by the percent of the Target LTIP award allocated to stock options and the fair value of each stock option as calculated on the May 24, 2016 grant date using the Black- Scholes-Merton option-pricing model, which uses a number of assumptions to determine the fair value of the options on the grant date. |
Elements of our Compensation Program
| (3) Value and number of RSUs awarded are determined by the percent of the Target LTIP to be awarded in the form of RSUs, and the closing price of the Company’s stock on the NYSE on the May 24, 2016 grant date. |
Elements of our Compensation Program
On May 24, 2016, the Compensation Committee and the Board approved the above awards of stock options, RSUs and PUs (collectively “Equity Incentive Awards”) to NEOs pursuant to our 2014 Omnibus Incentive Plan (the “Plan”).
Individual Agreements with our NEOs
Individual Agreements with our NEOs We have entered into an Executive Severance Protection Agreement with each of Richard Stocking, Virginia Henkels and Mickey R. Dragash (each, a "Severance Agreement", and collectively, the "Severance Agreements"). The Severance Agreements were entered into in connection with the leadership transition previously announced by the Company in September 2016. Each Severance Agreement provides the respective executive officer with the following severance benefit in the event of his or her termination of employment by the Company without "cause" (as defined in each Severance Agreement) or by the executive for "good reason" (as defined in each Severance Agreement):
Individual Agreements with our NEOs
| • | A bonus payable under the STIP to the extent an incentive award would have been payable to the executive under the terms of the STIP but for the executive’s separation of employment, prorated based on the number of days the executive was employed during the performance period compared to the total days in the performance period; |
Individual Agreements with our NEOs
| • | Any outstanding unvested stock options held by the executive on the separation date that are scheduled to vest during the 12-month period following the separation date will immediately vest and become exercisable as of the separation date and will remain exercisable through the earlier of the 12-month anniversary of the separation date or the expiration of the term of the stock option; |
Individual Agreements with our NEOs
| • | Any outstanding time-based restricted stock units held by the executive on the separation date that are scheduled to vest during the 12-month period following the separation date will immediately vest; and |
Individual Agreements with our NEOs
| • | Any outstanding performance-based restricted stock units held by the executive on the separation date will remain outstanding and, to the extent the applicable performance measures are achieved, the executive will receive a prorated award based on the number of days the executive was employed during the performance period compared to the total days in the performance period. |
Individual Agreements with our NEOs
Payment of the severance benefit to each executive is subject to the executive’s execution and delivery of a customary release and waiver of claim. The Severance Agreements also include customary confidentiality, non-competition and non-solicitation provisions. The term of the Severance Agreements continues through October 24, 2019; provided however, that the Severance Agreements shall automatically be extended for an additional 12-month period unless, not later than ninety (90) days prior to the expiration of the then current term, the Company or executive gives notice not to renew.
2016 SUMMARY COMPENSATION TABLE
2016 SUMMARY COMPENSATION TABLE The following table provides information about compensation awarded and earned during 2016, 2015 and 2014 by our CEO, CFO, and the three most highly compensated executive officers (other than the CEO and CFO).
2016 SUMMARY COMPENSATION TABLE
| Name and Principal Position | Year | Salary ($) | Stock Awards ($)(3) | Option Awards ($)(4) | Non-Equity Incentive Plan Compensation (5) | All Other Compensation ($)(6) | Total ($) | | Richard Stocking | 2016 | 562,754 | 659,842 | 324,840 | — | 7,911 | 1,555,347 | | President and Chief | 2015 | 560,232 | 672,518 | 331,391 | 211,033 | 6,104 | 1,781,278 | | Executive Officer | 2014 | 537,883 | 621,947 | 305,431 | 335,194 | 5,477 | 1,805,932 | | Virginia Henkels | 2016 | 365,790 | 245,089 | 120,657 | — | 7,911 | 739,447 | | Executive Vice-President and | 2015 | 364,151 | 249,791 | 123,084 | 109,737 | 6,104 | 852,867 | | Chief Financial Officer | 2014 | 349,624 | 230,996 | 113,450 | 176,716 | 5,477 | 876,263 | | Mickey R. Dragash(2) | 2016 | 300,000 | 150,741 | 74,219 | — | 14,306 | 539,266 | | Executive Vice-President, General Counsel and Secretary | | | | | | | | | Kenneth C. Runnels | 2016 | 273,182 | 133,991 | 65,970 | — | 8,151 | 481,294 | | Executive Vice-President | 2015 | 271,958 | 139,899 | 68,943 | 68,295 | 6,344 | 555,439 | | Fleet Operations | 2014 | 262,847 | 129,385 | 63,543 | 104,843 | 5,477 | 566,095 | | Steven Van Kirk | 2016 | 267,718 | 89,120 | 43,869 | — | 8,752 | 409,459 | | Executive Vice-President | 2015 | 266,518 | 131,627 | 64,863 | 62,000 | 6,344 | 531,352 | | Swift, President Intermodal | 2014 | 267,296 | 126,822 | 63,543 | 105,320 | 5,859 | 568,840 | | Jerry Moyes(1) | 2016 | 626,747 | 747,939 | 747,591 | — | 5,404 | 2,127,681 | | Former Chief Executive | 2015 | 535,759 | 762,315 | 762,656 | — | 9,691 | 2,070,421 | | Officer | 2014 | 614,538 | 726,145 | 724,014 | 454,972 | 2,744 | 2,522,413 |
2016 SUMMARY COMPENSATION TABLE
| (1) In September 2016, we announced that Jerry Moyes would retire from Swift effective December 31, 2016. Mr. Moyes continued to serve as Co-Chief Executive Officer through his retirement date, although the duties and authority normally associated with the office of CEO were immediately transitioned to Richard Stocking to allow him to fully assume the position during this transition period. Following the effective date of Mr. Moyes’ retirement, he began serving as a consultant with the title Founder and Chairman Emeritus and will continue as a member of the Board of Directors. |
2016 SUMMARY COMPENSATION TABLE
| (2) Mr. Dragash joined Swift in mid-2015 and was not a named executive officer in the prior year. |
2016 SUMMARY COMPENSATION TABLE
| (3) Represents the grant date fair value of award of 50% of target LTIP in the form of PUs for Mr. Moyes and the award of approximately 34% of the target LTIP in the form of RSUs and approximately 33% of the target LTIP in the form of PUs for Mr. Stocking, Ms. Henkels, and Messrs. Dragash, Runnels and Van Kirk. |
2016 SUMMARY COMPENSATION TABLE
| (4) Dollar value represents the aggregate grant date fair value of option awards. The methodology and assumptions used to calculate these values are set forth in Note 19 (Stock Plans) to our consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2016. |
2016 SUMMARY COMPENSATION TABLE
| (5) The amounts for a given year represent the amount of STIP compensation earned in that year, notwithstanding the year in which it was paid. The STIP compensation amounts were calculated based on our actual financial performance for 2014, 2015 and 2016 as compared with established targets. See “Executive Compensation — Compensation Discussion and Analysis — Elements of our Compensation Program — Establishing our performance goals” for further information. |
2016 SUMMARY COMPENSATION TABLE
| (6) This column represents all other compensation attributed to the named executive officers for employer 401(k) matches, executive long-term disability insurance, spousal travel benefits, identity theft protection and life insurance benefits, none of which individually exceeded $10,000. For Mr. Dragash, 2016 amount includes $8,791 of relocation benefits relating to Mr. Dragash’s move to Arizona upon his joining the Company in 2015. These relocation benefits include temporary housing costs, travel expenses, housing closing costs and $2,391 of tax reimbursements relating to the taxable portion of these benefits. |
GRANTS OF PLAN-BASED AWARDS IN 2016
GRANTS OF PLAN-BASED AWARDS IN 2016 The following table provides estimated information about non-equity and equity plan-based awards that were granted to the NEOs in 2016.
GRANTS OF PLAN-BASED AWARDS IN 2016
| Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of shares of stock or units (#)(3) | All Other Option Awards: Number of Securities Underlying options (#)(4) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and option Awards ($)(5) | | | | Thres hold ($) | Target (s) | Max ($) | Thres hold (#) | Target (#) | Max (#) | | | | | | Richard Stocking | | 211,033 | 422,066 | 1,266,198 | — | — | — | — | — | — | — | | | 5/24/16 | — | — | — | 10,477 | 20,954 | 41,908 | — | — | — | 324,997 | | | 5/24/16 | — | — | — | — | — | — | 21,589 | — | — | 334,845 | | | 5/24/16 | — | — | — | — | — | — | — | 44,888 | 15.51 | 324,840 | | Virginia Henkels | | 109,737 | 219,474 | 658,422 | — | — | | — | — | — | — | | | 5/24/16 | — | — | — | 3,892 | 7,783 | 15,566 | — | — | — | 120,714 | | | 5/24/16 | — | — | — | — | — | — | 8,019 | — | — | 124,375 | | | 5/24/16 | — | — | — | — | — | — | — | 16,673 | 15.51 | 120,657 | | Mickey R. Dragash | | 75,000 | 150,000 | 450,000 | — | — | | — | — | — | — | | | 5/24/16 | — | — | — | 2,394 | 4,787 | 9,574 | — | — | — | 74,246 | | | 5/24/16 | — | — | — | — | — | — | 4,932 | — | — | 76,495 | | | 5/24/16 | — | — | — | — | — | — | — | 10,526 | 15.51 | 74,219 | | Kenneth C. Runnels | | 68,295 | 136,591 | 409,773 | — | — | — | — | — | — | — | | | 5/24/16 | — | — | — | 2,128 | 4,255 | 8,510 | — | — | — | 65,995 | | | 5/24/16 | — | — | — | — | — | — | 4,384 | — | — | 67,996 | | | 5/24/16 | — | — | — | — | — | — | — | 9,116 | 15.51 | 65,970 | | Steven Van Kirk | | 66,930 | 401,577 | 267,718 | — | — | — | — | — | — | — | | | 5/24/16 | — | — | — | 1,415 | 2,830 | 5,660 | — | — | — | 43,893 | | | 5/24/16 | — | — | — | — | — | — | 2,916 | — | — | 45,227 | | | 5/24/16 | — | — | — | — | — | — | — | 6,062 | 15.51 | 43,869 | | Jerry Moyes | | 286,443 | 572,886 | 1,718,658 | — | — | — | — | — | — | — | | | 5/24/16 | — | — | — | 24,112 | 48,223 | 96,446 | — | — | — | 747,939 | | | 5/24/16 | — | — | — | — | — | — | — | 103,306 | 15.51 | 747,591 |
GRANTS OF PLAN-BASED AWARDS IN 2016
| (1) Represents the potential value of 2016 STIP payouts based upon the ECIP for each NEO and the Company achieving certain levels of attainment for 2016 for the Adjusted EPS goal as set forth in the CD&A under the heading “Executive Compensation — Compensation Discussion and Analysis — Elements of our Compensation Program — Establishing our performance goals”. These Levels of Attainment/ goals were approved by the Compensation Committee and the Board in February 2016. The Company did not achieve the threshold level of Adjusted EPS and accordingly no cash incentive compensation was earned or paid for 2016. |
GRANTS OF PLAN-BASED AWARDS IN 2016
| (2) These columns represent PUs that vest only if the Company meets its specified performance objectives related to RONA and its leverage ratio for a three year fiscal period beginning January 1, 2016 and ending on December 31, 2018. Each PU represents a contingent right to receive one share of the Company’s Class A common stock. For further information about these PU awards, see “Executive Compensation — Compensation Discussion and Analysis — Long-Term Incentive Plan (“LTIP”) for 2016.” |
GRANTS OF PLAN-BASED AWARDS IN 2016
| (3) This column represents time-based RSUs that vest in equal installments on each of the first three anniversaries of the grant date. Each RSU represents a contingent right to receive one share of the Company’s Class A common stock. |
GRANTS OF PLAN-BASED AWARDS IN 2016
| (4) This column represents stock options that vest in three equal installments over a three year period beginning with the first anniversary from the award date. |
GRANTS OF PLAN-BASED AWARDS IN 2016
| (5) Value of option awards are determined by each NEO’s Target LTIP, the percent of the Target LTIP to be awarded in the form of stock options and the fair value of each stock option grant as estimated on the date of grant using the Black-Scholes-Merton option-pricing model that uses a number of assumptions to determine the fair value of the options on the grant date. The value and number of RSUs and PUs awarded are determined by each NEO’s Target LTIP, the percent of the Target LTIP that is to be awarded in the form of RSUs and PUs, and the closing price of the Company’s stock on the NYSE on the grant date. The grant date fair value of the PUs is equal to the dollar amount of the “Target” award. On the grant date for these awards, the Company estimated that it was probable that the performance conditions necessary to earn the “Target” award would be satisfied. If the maximum performance level is achieved, the grant date fair value of the 2016 PUs for Mr. Stocking, Ms. Henkels and Messrs. Dragash, Runnels Van Kirk and Moyes would be: $649,994; $241,428; $148,492; $131,990; $87,786; and $1,495,878, respectively. |
OUTSTANDING EQUITY AWARDS AT 2016 FISCAL YEAR-END
OUTSTANDING EQUITY AWARDS AT 2016 FISCAL YEAR-END The following table provides information on the current equity holdings for each of the NEOs. This table includes unexercised and unvested options and unvested RSUs and PUs as of December 31, 2016. Each equity grant is shown separately for each NEO.
OUTSTANDING EQUITY AWARDS AT 2016 FISCAL YEAR-END
| | Option Awards | | | | Stock Awards | | | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Options (#) Unexercisable (1) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(2) | Market Value of Shares or Units of Stock That Have Not Vested ($)(4) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(3) | Equity Incentive Plan Awards: Market Value of Unearned Shares, Units or Rights That Have Not Vested ($)(4) | | Richard Stocking | 80,000 | — | 11.00 | 10/16/2017 | 40,839 | 994,846 | 41,862 | 1,019,750 | | | 40,000 | — | 8.61 | 12/31/2019 | — | — | — | — | | | 32,000 | — | 8.80 | 2/25/2020 | — | — | — | — | | | 54,722 | — | 13.36 | 2/22/2023 | — | — | — | — | | | 22,566 | 11,283 | 23.30 | 5/6/2024 | — | — | — | — | | | 14,702 | 29,405 | 24.84 | 5/20/2025 | — | — | — | — | | | — | 44,888 | 15.51 | 5/24/2026 | — | — | — | — | | Virginia Henkels | 78,000 | — | 11.00 | 8/27/2018 | 15,168 | 369,502 | 15,549 | 378,764 | | | 24,000 | — | 8.80 | 2/25/2020 | — | — | — | — | | | 20,325 | — | 13.36 | 2/22/2023 | — | — | — | — | | | 8,382 | 4,191 | 23.30 | 5/6/2024 | — | — | — | — | | | 5,460 | 10,922 | 24.84 | 5/20/2025 | — | — | — | — | | | — | 16,673 | 15.51 | 5/24/2026 | — | — | — | — | | Mickey R. Dragash | — | 10,256 | 15.51 | 5/24/2026 | 10,970 | 267,229 | 4,787 | 116,611 | | Kenneth C. Runnels | 4,694 | 2,348 | 23.30 | 5/6/2024 | 8,390 | 204,372 | 8,604 | 209,602 | | | 3,058 | 6,118 | 24.84 | 5/20/2025 | — | — | — | — | | | — | 9,116 | 15.51 | 5/24/2026 | — | — | — | — | | Steven Van Kirk | 4,600 | 2,301 | 23.30 | 5/6/2024 | 6,767 | 164,838 | 6,984 | 170,136 | | | 2,877 | 5,756 | 24.84 | 5/20/2025 | — | — | — | — | | | — | 6,062 | 15.51 | 5/24/2026 | — | — | — | — | | Jerry Moyes (5) | 132,270 | — | 13.36 | 3/31/2017 | 13,214 | 321,892 | 96,863 | 2,359,584 | | | 103,306 | — | 15.51 | 3/31/2017 | | | | | | | 53,492 | 26,746 | 23.30 | 12/31/2019 | — | — | — | — | | | 33,835 | 67,672 | 24.84 | 12/31/2019 | — | — | — | — |
OUTSTANDING EQUITY AWARDS AT 2016 FISCAL YEAR-END
| (1) Unvested and unexercisable stock options. Effective vesting dates are noted below. |
OUTSTANDING EQUITY AWARDS AT 2016 FISCAL YEAR-END
| Name | Option Shares Vesting | Grant Date | Vesting Date | Exercise Price | | Richard Stocking | 11,283 | 5/6/2014 | 5/6/2017 | 23.30 | | | 14,702 | 5/20/2015 | 5/20/2017 | 24.84 | | | 14,703 | 5/20/2015 | 5/20/2018 | 24.84 | | | 14,962 | 5/24/2016 | 5/24/2017 | 15.51 | | | 14,963 | 5/24/2016 | 5/24/2018 | 15.51 | | | 14,963 | 5/24/2016 | 5/24/2019 | 15.51 | | Virginia Henkels | 4,191 | 5/6/2014 | 5/6/2017 | 23.30 | | | 5,461 | 5/20/2015 | 5/20/2017 | 24.84 | | | 5,461 | 5/20/2015 | 5/20/2018 | 24.84 | | | 5,557 | 5/24/2016 | 5/24/2017 | 15.51 | | | 5,558 | 5/24/2016 | 5/24/2018 | 15.51 | | | 5,558 | 5/24/2016 | 5/24/2019 | 15.51 | | Mickey R. Dragash | 3,418 | 5/24/2016 | 5/24/2017 | 15.51 | | | 3,419 | 5/24/2016 | 5/24/2018 | 15.51 | | | 3,419 | 5/24/2016 | 5/24/2019 | 15.51 | | Kenneth C. Runnels | 2,348 | 5/6/2014 | 5/6/2017 | 23.30 | | | 3,059 | 5/20/2015 | 5/20/2017 | 24.84 | | | 3,059 | 5/20/2015 | 5/20/2018 | 24.84 | | | 3,038 | 5/24/2016 | 5/24/2017 | 15.51 | | | 3,039 | 5/24/2016 | 5/24/2018 | 15.51 | | | 3,039 | 5/24/2016 | 5/24/2019 | 15.51 | | Steven Van Kirk | 2,301 | 5/6/2014 | 5/6/2017 | 23.30 | | | 2,878 | 5/20/2015 | 5/20/2017 | 24.84 | | | 2,878 | 5/20/2015 | 5/20/2018 | 24.84 | | | 2,020 | 5/24/2016 | 5/24/2017 | 15.51 | | | 2,021 | 5/24/2016 | 5/24/2018 | 15.51 | | | 2,021 | 5/24/2016 | 5/24/2019 | 15.51 | | Jerry Moyes | 26,746 | 5/6/2014 | 5/6/2017 | 23.30 | | | 33,836 | 5/20/2015 | 5/20/2017 | 24.84 | | | 33,836 | 5/20/2015 | 5/20/2018 | 24.84 |
OUTSTANDING EQUITY AWARDS AT 2016 FISCAL YEAR-END
| (2) Column includes time-vested RSUs. Each RSU represents a contingent right to receive one share of the Company’s Class A common stock. The RSUs vest in equal installments on each of the first three anniversaries of the date of grant. Effective vesting dates are noted below. This column also includes PUs granted on May 6, 2014 for the three year performance period ending December 31, 2016 that were earned as of December 31, 2016 and vested on February 28, 2017. |
OUTSTANDING EQUITY AWARDS AT 2016 FISCAL YEAR-END
| Name: | RSU/Earned PU Shares Vesting | Grant Date | Vesting Date | | Richard Stocking | 5,574 | 5/6/2014 | 2/28/2017 | | | 4,516 | 5/6/2014 | 5/6/2017 | | | 4,580 | 5/20/2015 | 5/20/2017 | | | 4,580 | 5/20/2015 | 5/20/2018 | | | 7,196 | 5/24/2016 | 5/24/2017 | | | 7,196 | 5/24/2016 | 5/24/2018 | | | 7,197 | 5/24/2016 | 5/24/2019 | | Virginia Henkels | 2,070 | 5/6/2014 | 2/28/2017 | | | 1,677 | 5/6/2014 | 5/6/2017 | | | 1,701 | 5/20/2015 | 5/20/2017 | | | 1,701 | 5/20/2015 | 5/20/2018 | | | 2,673 | 5/24/2016 | 5/24/2017 | | | 2,673 | 5/24/2016 | 5/24/2018 | | | 2,673 | 5/24/2016 | 5/24/2019 | | Mickey R. Dragash | 3,019 | 11/9/2015 | 11/9/2017 | | | 3,019 | 11/9/2015 | 11/9/2018 | | | 1,644 | 5/24/2016 | 5/24/2017 | | | 1,644 | 5/24/2016 | 5/24/2018 | | | 1,644 | 5/24/2016 | 5/24/2019 | | Kenneth C. Runnels | 1,160 | 5/6/2014 | 2/28/2017 | | | 940 | 5/6/2014 | 5/6/2017 | | | 953 | 5/20/2015 | 5/20/2017 | | | 953 | 5/20/2015 | 5/20/2018 | | | 1,461 | 5/24/2016 | 5/24/2017 | | | 1,461 | 5/24/2016 | 5/24/2018 | | | 1,462 | 5/24/2016 | 5/24/2019 | | Steven Van Kirk | 1,137 | 5/6/2014 | 2/28/2017 | | | 921 | 5/6/2014 | 5/6/2017 | | | 896 | 5/20/2015 | 5/20/2017 | | | 897 | 5/20/2015 | 5/20/2018 | | | 972 | 5/24/2016 | 5/24/2017 | | | 972 | 5/24/2016 | 5/24/2018 | | | 972 | 5/24/2016 | 5/24/2019 | | Jerry Moyes | 13,214 | 5/06/2014 | 2/28/2017 |
OUTSTANDING EQUITY AWARDS AT 2016 FISCAL YEAR-END
| (3) PUs are performance and time-vested. The PUs vest only if the Company meets specified performance objectives relate to RONA and its leverage ratio for the respective three year fiscal performance period as noted below. |
OUTSTANDING EQUITY AWARDS AT 2016 FISCAL YEAR-END
| | PU Shares Vesting | Three Year Performance Period Ending | | Richard Stocking | 13,335 | 12/31/2017 | | | 20,954 | 12/31/2018 | | Ginnie Henkels | 4,953 | 12/31/2017 | | | 7,783 | 12/31/2018 | | Mickey R. Dragash | 4,787 | 12/31/2018 | | Kenneth C. Runnels | 2,774 | 12/31/2017 | | | 4,255 | 12/31/2018 | | Steven Van Kirk | 2,610 | 12/31/2017 | | | 2,830 | 12/31/2018 | | Jerry Moyes | 30,689 | 12/31/2017 | | | 48,223 | 12/31/2018 |
OUTSTANDING EQUITY AWARDS AT 2016 FISCAL YEAR-END
| (4) Values are based on the closing market price of $24.36 on December 30, 2016. |
OUTSTANDING EQUITY AWARDS AT 2016 FISCAL YEAR-END
| (5) In conjunction with the Company's September 8, 2016 announcement that Jerry Moyes would retire from his position as Chief Executive Officer effective December 31, 2016, the Company entered into an agreement with Mr. Moyes to memorialize the terms of his retirement. The Company modified the vesting terms and forfeiture conditions of Mr. Moyes' previously granted equity awards, which included accelerating the vesting date of 103,306 stock options granted in 2016 to immediately vest on September 8, 2016. |
OPTION EXERCISES AND STOCK VESTED IN 2016
OPTION EXERCISES AND STOCK VESTED IN 2016 The following NEOs exercised options and had the following RSUs vest:
OPTION EXERCISES AND STOCK VESTED IN 2016
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Acquired on Vesting ($) | | Richard Stocking | - | - | 38,202 | 661,202 | | Virginia Henkels | - | - | 14,190 | 245,601 | | Mickey R. Dragash | - | - | 3,019 | 71,701 | | Kenneth C. Runnels | 155,726 | 2,108,155 | 8,129 | 140,784 | | Steven Van Kirk | 11,492 | 130,926 | 7,931 | 137,425 | | Jerry Moyes | - | - | 52,769 | 944,037 |
NONQUALIFIED DEFERRED COMPENSATION
NONQUALIFIED DEFERRED COMPENSATION
NONQUALIFIED DEFERRED COMPENSATION
| Name | Executive Contributions in Last FY ($)(1) | Registrant Contributions in Last FY ($)(2) | Aggregate Earnings in Last FY(3) | Aggregate Withdrawals/ Distributions in Last FY ($) | Aggregate Balance at Last FYE(1) | | Jerry Moyes | — | — | — | — | — | | Richard Stocking | — | — | — | — | — | | Virginia Henkels | 265,198 | — | 41,287 | — | 470,834 | | Mickey R. Dragash | 38,654 | — | 3,840 | — | 53,987 | | Kenneth C. Runnels | — | — | — | — | — | | Steven Van Kirk | 33,291 | — | 7,123 | — | 83,455 |
NONQUALIFIED DEFERRED COMPENSATION
| (1) These amounts reflect compensation the NEOs earned in our 2016 fiscal year that they have voluntarily deferred. For each identified NEO, all amounts reported as contributions in the last fiscal year are included as compensation earned in the Summary Compensation Table for 2016 in the Salary column. In addition, all of the amounts, exclusive of cumulative earnings/losses, reported in the aggregate balance at fiscal year were reported as compensation to the NEO in our Summary Compensation Table in 2015 and prior years. |
NONQUALIFIED DEFERRED COMPENSATION
| (2) The Company does not provide matching contributions. |
NONQUALIFIED DEFERRED COMPENSATION
| (3) These amounts do not include any above-market or preferential earnings. Accordingly, these amounts are not reported in the Summary Compensation Table. |
NONQUALIFIED DEFERRED COMPENSATION
The Company maintains the Deferred Compensation Plan (“DCP”), which is a non-qualified deferred compensation plan, for executive officers and certain other employees allowing them the opportunity to defer future salary and/or bonus payments. Participants may elect to defer up to 75% of their future compensation, consisting of base salary and/or bonus. Amounts deferred under the DCP are credited with investment earnings and losses. The amounts are invested in one or more investment options as selected by the participants. The investment options offered currently include money market funds, bond funds, blended funds and stock funds. Participants are fully vested in all amounts deferred under the DCP at all times. Payment options include: (i) a lump sum; or (ii), annual installment payments over a specified period of time not to exceed ten years. The DCP is intended to comply with Section 409A of the Internal Revenue Code which means, among other things, that payment to certain employees in connection with a separation from service may not be made until six months after separation. Directors are not eligible to participate in the DCP. The participants’ accounts in the DCP are unfunded obligations of the Company and any life insurance policies, annuity contracts or other property held by the Company to assist it in satisfying its obligations to participants in the DCP will remain part of the general assets of the Company. For all purposes, participants in the DCP shall be treated as general unsecured creditors of the Company.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL As described under the heading “Executive Compensation — Compensation Discussion and Analysis — Elements of our Compensation Program — Long Term Incentive Plan (“LTIP”) for 2016, pursuant to the individual award agreements, stock options and RSUs granted to the NEOs all vest upon a change-in-control of Swift. Any PUs that were granted under the Company’s 2014 Omnibus Plan will be deemed to be fully earned at the target level of performance upon a change-in-control and shall immediately vest. Assuming a change-in-control occurred on December 31, 2016, and based on a closing price of $24.36 per share of our common stock on the NYSE on December 30, 2016, the value of unvested stock options, RSUs and the PUs that were issued for our NEOs would be as follows:
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
| | Option Awards | | RSU Awards | | PU Awards | | | | Name | Unvested Options (#) | Intrinsic Value of Unvested Options ($) | (#) | ($) | (#) | ($) | Total Value Upon Change in Control ($) | | Richard Stocking | 85,576 | 409,219 | 35,265 | 859,055 | 47,436 | 1,155,541 | 2,423,815 | | Virginia Henkels | 31,786 | 151,999 | 13,098 | 319,067 | 17,619 | 429,199 | 900,265 | | Mickey R. Dragash | 10,256 | 90,766 | 10,970 | 267,229 | 4,787 | 116,611 | 474,606 | | Kenneth C. Runnels | 17,582 | 83,165 | 7,230 | 176,123 | 9,764 | 237,851 | 497,139 | | Steven Van Kirk | 14,119 | 56,088 | 5,630 | 137,147 | 8,121 | 197,828 | 391,062 |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
As described under the heading “Executive Compensation—Compensation Discussion and Analysis—Individual Agreements with our NEOs”, we have entered into a Severance Agreement with each of Richard Stocking, Virginia Henkels and Mickey R. Dragash. Each Severance Agreement provides for certain cash payments and the acceleration and vesting of certain outstanding stock options, RSUs and PUs. Assuming a termination by the Company without “cause”, or by the executive for “good reason, occurred on December 31, 2016, under the Severance Agreements in place on December 31, 2016, and based on a closing price of $24.36 per share of our common stock on the NYSE on December 30, 2016, the total value of the severance benefits for our Mr. Stocking, Ms. Henkels and Mr. Dragash would be as follows:
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
| Name | Cash Payments ($) | Total Value of Options, RSU Awards and PU Awards ($) (1) | Total Value Received on Termination by the Company without “cause” or by the NEO for “good reason” ($) | | Richard Stocking | 2,144,132 | 414,217 | 2,558,349 | | Virginia Henkels | 877,896 | 153,851 | 1,031,747 | | Mickey R. Dragash | 675,000 | 38,870 | 713,870 |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
| (1) For PUs: PU awards granted on May 6, 2014 are assumed to be paid out at 42.4%, which is the actual amount of the award earned and paid out in February 2017; PU awards granted on May 20, 2015 are assumed to be paid out at 50%, based on the results of the first two years of the performance period; and PU awards granted on May 24, 2016 are assumed to be paid out at target (100%) as it is too early in the performance period to determined expected payout. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
As previously disclosed, in September 2016, we announced that Jerry Moyes would retire from Swift effective December 31, 2016. Following the effective date of Mr. Moyes’ retirement, he began serving as a consultant with the title Founder and Chairman Emeritus and will continue as a member of the Board of Directors. The following sets forth the payments, benefits received and yet to be received by Mr. Moyes in connection with his retirement:
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
| • | Commencing January 1, 2017 through December 31, 2019, Mr. Moyes will serve as a non-employee consultant for which he will receive compensation of $200,000 per month through December 31, 2019; |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
| • | Mr. Moyes retained and continues to vest in approximately 94,400 outstanding stock options; |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
| • | Additional outstanding stock options held by Mr. Moyes on September 8, 2016 were immediately vested; and |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
| • | Mr. Moyes’ outstanding PUs continued to vest, as if his employment continued. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
The agreement regarding Mr. Moyes’ consulting arrangement is subject to customary release, confidentiality, non-competition and non-solicitation provisions. The total value of the above benefits and payments is as follows:
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
| Cash Payments ($) | Total Value of Accelerated Options ($)(1) | Total Value of PUs($)(2) | Total Value Received ($) | | 4,800,000 | 914,258 | 962,658 | 6,676,916 |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
| (1) Intrinsic value of the 103,306 outstanding stock options that were accelerated. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
| (2) See note (1) to prior table. Based on the December 31, 2016 closing stock price of $24.36 per common share. |