Form 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 2000.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission file number 0-24960
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
COVENANT TRANSPORT, INC. 401 (K) AND PROFIT SHARING PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Covenant Transport, Inc.
400 Birmingham Highway
Chattanooga, Tennessee 37419
COVENANT TRANSPORT, INC.
401(k) and PROFIT SHARING PLAN
Financial Statements and Supplemental Schedules
December 31, 2000 (with comparative statement of Net Assets
Available for Plan Benefits for December 31, 1999)
with
Report of Independent Accountants
Report of Independent Accountants
To Participants and Plan Administrator
Covenant Transport, Inc.
401(k) and Profit Sharing Plan
In our opinion, the accompanying statements of net assets available for plan
benefits and the related statement of changes in net assets available for plan
benefits present fairly, in all material respects, the net assets available for
benefits of the Covenant Transport, Inc. 401(k) and Profit Sharing Plan (the
"Plan") at December 31, 2000 and 1999, and the changes in net assets available
for benefits for the year ended December 31, 2000 in conformity with accounting
principles generally accepted in the United States of America. These financial
statements are the responsibility of the Plan's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of Assets Held
for Investment Purposes and Reportable Transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. These supplemental
schedules are the responsibility of the Plan's management. The supplemental
schedules have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/S/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Knoxville, Tennessee
May 11, 2001
COVENANT TRANSPORT, INC.
401(k) and Profit Sharing Plan
Statements of Net Assets Available for Plan Benefits
For the years ended December 31, 2000 and 1999
2000 1999
Investments at fair value $ 12,306,809 $ 10,760,656
Receivables:
Employer contribution 3,762 -
Participant contribution 7,477 -
------------ -----------
11,239 -
------------ -----------
Net assets available for benefits $ 12,318,048 $ 10,760,656
============ ===========
The accompanying notes are an integral part of these financial statements.
2
COVENANT TRANSPORT, INC.
401(k) and Profit Sharing Plan
Statement of Changes in Net Assets Available for Plan Benefits
For the year ended December 31, 2000
Additions to net assets attributed to:
Investment income:
Interest and dividends $ 550,043
Net depreciation of investments (917,323)
Contributions:
Employer 978,501
Employees 3,576,164
----------
Total additions 4,187,385
Deductions from net assets attributed to:
Benefits paid to participants 2,625,597
Administrative expenses 4,396
----------
Total deductions 2,629,993
----------
Net increase in net assets 1,557,392
Net assets available for benefits;
Beginning of year 10,760,656
----------
End of year $ 12,318,048
==========
The accompanying notes are an integral part of these financial statements.
3
COVENANT TRANSPORT, INC.
401(k) and Profit Sharing Plan
Notes to Financial Statements
1. DESCRIPTION OF PLAN:
The following brief description of the Covenant Transport, Inc. 401(k) and
Profit Sharing Plan is provided for general information purposes only.
Participants should refer to the Plan agreement for more complete
information.
General - The Plan is a voluntary defined contribution savings plan
covering substantially all employees of Covenant Transport, Inc. It is
subject to the provisions of the Employee Retirement Income Security Act of
1974 (ERISA).
Funding - The Plan is funded by employee and employer contributions.
Participants may contribute up to, but not in excess of, 17% of their
annual compensation. Covenant Transport, Inc. may make discretionary
matching contributions to the plan not to exceed 6% of an employee's
compensation. Annual additions to a participant's account during any Plan
year, when combined with the total annual additions to the accounts of the
participant under any other qualified defined contribution plan maintained
by Covenant Transport, Inc., cannot exceed certain levels established by
federal tax codes.
Vesting - Participants are immediately vested in their voluntary
contributions plus actual earnings thereon. Vesting in the remainder of
their accounts is based on years of continuous service. A participant vests
20 percent annually and is 100 percent vested after five years of credited
service.
Payment of Benefits - On retirement or termination of service, a
participant may receive a lump-sum amount equal to the value of the vested
portion of their account.
Investment of Account - The Plan has eight funds in which individual
accounts may be invested. The funds are as follows:
o Fund A SunTrust Employee Benefit Stable Asset Fund - This fund is
managed by SunTrust Bank. The fund is a managed portfolio of insurance
company guaranteed investment contracts and short-term money market
instruments.
o Fund B STI Classic Investment Grade Bond Fund - This fund is managed
by SunTrust Bank. The fund is a bond fund, which invests primarily in
government and corporate obligations.
o Fund C STI Classic Value Income Fund - This fund is managed by
SunTrust Bank. The fund is a stock fund, which invests primarily in
equity securities.
o Fund D STI Classic Capital Growth Fund - This fund is managed by
SunTrust Bank. The fund is a managed portfolio of common stocks,
warrants, and convertible securities, which in the advisor's opinion
are undervalued.
o Fund E Covenant Transport 401(k) Unitized Stock Fund - This fund
invests in the stock of Covenant Transport, Inc.
4
Notes to Financial Statements, Continued
1. DESCRIPTION OF PLAN, continued:
o Fund F Vanguard 500 Index Fund - This fund is managed by the Vanguard
Group. This fund invests in the stocks included in the S&P 500 Index.
o Fund G Janus Aspen Aggressive Growth Retire Fund - This fund is
managed by Janus. This fund invests primarily in common stocks.
o Fund H STI Classic International Equity Index Fund - This fund is
managed by SunTrust Bank. This fund is a stock fund, which invests in
foreign stocks.
Allocation of Benefits - The Plan document requires that the assets of the
Plan be accounted for separately as to participant and employer
contributions and valued annually, allocating to each participant their
share of principal, income and forfeitures. Employer voluntary
contributions are allocated to all eligible employees based on the
employees' contributions for the period.
Forfeitures - Forfeiture of a terminated participant's nonvested account
occurs in plan years in which he receives a distribution of the full vested
value as defined in the Plan document. Forfeitures are used to reduce the
Company's future payments and are allocated in the same manner as matching
employer contributions. Forfeitures for the year ended December 31, 2000
were $148,538.
Administrative Expenses - The administrative expenses of the Plan are
primarily paid by the Company.
2. SIGNIFICANT ACCOUNTING POLICIES:
Method of Accounting - The Plan's financial statements have been prepared
using the accrual basis of accounting.
Investments - Investments are carried at fair value, as determined using
the quoted market prices.
Investment Income - The Plan presents, in the statement of changes in net
assets available for plan benefits, the realized gains or losses and the
unrealized appreciation (depreciation) in the fair value of its
investments. Realized gains (losses) are computed using the
weighted-average price per share as the cost of the asset.
Use of Estimates - The preparation of the financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of additions and deductions during the reporting periods. Actual
results could differ from these estimates.
5
3. ADMINISTRATION:
The Plan is administered by SunTrust Bank Trust and Investment Services,
the Plan Trustee, who has overall responsibility for the investment of
assets, accounting for financial transactions and distributions to
participants.
4. INVESTMENTS:
Investments held at December 31, 2000 and 1999, representing five percent
or more of the Plan's net assets, are as follows:
2000 1999
SunTrust Employee Benefit Stable Asset Fund,
107,787 and 92,952 shares, respectively $ 3,170,142 $ 2,569,199
STI Classic Investment Grade Bond Fund,
114,014 and 107,925 shares, respectively 1,138,996 1,079,251
STI Classic Value Income Fund,
175,451 and 166,102 shares, respectively 1,968,562 1,717,491
STI Classic Capital Growth Fund,
219,423 and 205,284 shares, respectively 3,282,561 3,401,561
Covenant Transport 401(k) Unitized Stock Fund,
193,627 and 115,461 shares, respectively 2,078,926 1,993,154
5. PLAN TERMINATION:
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of plan
termination, participants will become 100 percent vested in their accounts.
6. FEDERAL INCOME TAXES:
The Internal Revenue Service has determined and informed the Company by a
letter dated February 26, 1996, that the Plan and related trust are
designed in accordance with applicable sections of the Internal Revenue
Code (IRC). The Plan has been amended since receiving the determination
letter. However, the Plan administrator and the Plan's tax counsel believe
that the Plan is designed and is currently being operated in compliance
with the applicable requirements of the IRC.
6
COVENANT TRANSPORT, INC.
401(k) and Profit Sharing Plan
Schedule of Assets Held for Investment Purposes
December 31, 2000
c.
b. Description of investment including e.
Identity of issuer, borrower, maturity date, rate of interest, d. Current
lessor, or similar party collateral, par or maturity value Cost Value
SunTrust Bank* Employee Benefit Stable Asset Fund,
107,787 shares $ 2,883,009 $ 3,170,142
SunTrust Bank* STI Classic Investment Grade Bond Fund,
114,014 shares 1,160,775 1,138,996
SunTrust Bank* STI Classic Value Income Fund,
175,451 shares 2,023,811 1,968,562
SunTrust Bank* STI Classic Capital Growth Fund,
219,423 shares 3,502,928 3,282,561
SunTrust Bank* STI Classic International Index,
2,589 shares 34,045 32,105
Vanguard Vanguard 500 Index Fund,
2,771 shares 366,384 337,683
Janus Janus Advisor Aggressive Growth Fund,
8,476 shares 428,907 297,834
Covenant Transport, Inc.* Covenant Transport 401(k) Unitized 2,472,736 2,078,926
Stock Fund, 193,627 shares
*Party-in-interest.
NOTE - Column a. is not applicable.
See accompanying Report of Independent Accountants.
7
COVENANT TRANSPORT, INC.
401(k) and Profit Sharing Plan
Schedule of Reportable Transactions
For the year ended December 31, 2000
1. Single transactions exceeding 5% of total assets as of December 31, 2000.
None
2. Series of transactions involving property other than securities.
None
3. Series of transactions of same issue exceeding 5% of total assets as of
December 31, 2000.
h.
Current
Value of i.
a. c. d. g. Asset on Net
Identity of Party b. Purchase Selling Cost of Transaction Gain or
Involved Description of Asset Price Price Asset Date (Loss)
SunTrust Bank* Stable Asset Fund $1,726,346 $ - $1,726,346 $ - $ -
SunTrust Bank* Stable Asset Fund - 1,298,411 1,272,837 1,298,411 -
SunTrust Bank* Investment Grade Bond Fund 544,614 - 544,614 - -
SunTrust Bank* Investment Grade Bond Fund - 485,385 492,991 485,385 (7,606)
SunTrust Bank* Value Income Fund 753,174 - 753,174 - -
SunTrust Bank* Value Income Fund - 664,621 677,795 664,621 (13,174)
SunTrust Bank* Capital Growth Fund 1,536,569 - 1,536,569 - -
SunTrust Bank* Capital Growth Fund - 1,290,547 1,320,418 1,290,547 (29,871)
SunTrust Bank* 401(k) Unitized Stock Fund 1,380,099 - 1,380,099 - -
SunTrust Bank* 401(k) Unitized Stock Fund - 596,278 738,974 596,278 (142,696)
SunTrust Bank* International Index Fund 47,986 - 47,986 - -
SunTrust Bank* International Index Fund - 13,202 13,941 13,202 (739)
Janus Aggressive Growth Fund 588,568 - 588,568 - -
Janus Aggressive Growth Fund - 148,897 159,660 148,897 (10,763)
Vanguard 500 Index Fund 454,507 - 454,507 - -
Vanguard 500 Index Fund - 86,349 88,122 86,349 (4,473)
*Party-in-interest.
NOTE - Information required in columns e. and f. is not applicable.
4. Transactions in conjunction with same person involved in reportable single
transactions.
None
See accompanying Report of Independent Accountants.
8
COVENANT TRANSPORT, INC.
401(k) and Profit Sharing Plan
Schedule of Non-Exempt Transactions
December 31, 2000
c.
Description of transaction,
a. b. including maturity date, rate of d.
Identity of Relationship to plan, employer, interest, collateral, par, or Purchase
Party Involved or other party-in-interest maturity date Price
Covenant Transport, Inc. Plan sponsor Administrative error in transfer $30,578
of cash to the Plan. Error was
corrected and cash and estimated
investment earnings were
subsequently transferred to the
Plan. Purchase price is amount
of the incorrect transaction.
NOTE: Columns e. - j. are not applicable.
See accompanying Report of Independent Accountants.
9
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned hereunto
duly authorized.
COVENANT TRANSPORT, INC. 401 (K) AND
PROFIT SHARING PLAN
COVENANT TRANSPORT, INC.
Date: June 29, 2001
/S/ R.H. Lovin, Jr.
------------------------------
By: R.H. Lovin, Jr., Administrator