Edgar Filing: KNIGHT TRANSPORTATION INC

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a)
of the Securities and Exchange Act of 1934

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KNIGHT TRANSPORTATION, INC.
(Name of Registrant as Specified In Its Charter)

N/A
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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KNIGHT TRANSPORTATION, INC.
5601 West Buckeye Road
Phoenix, Arizona 85043

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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 21, 2004

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To our Shareholders:

You are cordially invited to attend the 2004 Annual Meeting of Shareholders
(the "Annual Meeting") of KNIGHT TRANSPORTATION, INC. (the "Company") to be held
at 10:00 A.M., Phoenix time, on May 21, 2004, at the Arizona Biltmore, 2400 East
Missouri, Phoenix, Arizona 85016. The purposes of the Annual Meeting are to:

1. Elect three Class III Directors, each director to serve a term of
three years; and

2. Transact such other business as may properly come before the Annual
Meeting.

The Board of Directors has fixed the close of business on March 22, 2004,
as the Record Date for determining those shareholders who are entitled to
receive notice of and vote at the Annual Meeting or any adjournment of that
meeting. Shares of Knight Common Stock can be voted at the Annual Meeting only
if the holder is present at the Annual Meeting in person or by valid proxy. A
copy of the Company's 2003 Annual Report to Shareholders, which includes audited
consolidated financial statements, is enclosed.

YOUR VOTE IS IMPORTANT. TO ENSURE YOUR REPRESENTATION AT THE ANNUAL
MEETING, YOU ARE REQUESTED TO PROMPTLY DATE, SIGN AND RETURN THE ACCOMPANYING
PROXY IN THE ENCLOSED ENVELOPE.

By Order of the Board of Directors,

/s/ Timothy M. Kohl
Timothy M. Kohl,
Secretary
Phoenix, Arizona
April 14, 2004

TABLE OF CONTENTS
Page

GENERAL INFORMATION....................................................................................... 1
Voting Rights.......................................................................................... 1
Quorum Requirement..................................................................................... 1
Required Vote; Cumulative Voting....................................................................... 2
Right To Attend Annual Meeting; Revocation of Proxy.................................................... 2
Costs of Solicitation.................................................................................. 2
Annual Report.......................................................................................... 2
How To Read this Proxy Statement....................................................................... 2
PROPOSAL NO. 1 - ELECTION OF CLASS III DIRECTORS.......................................................... 3
CONTINUING DIRECTORS...................................................................................... 4
CORPORATE GOVERNANCE...................................................................................... 6
The Board of Directors and Its Committees.............................................................. 6
Board of Directors................................................................................... 6
Committees of the Board of Directors................................................................. 6
The Audit Committee................................................................................ 7
Report of the Audit Committee.................................................................... 8
The Nominating Committee........................................................................... 9
The Compensation Committee......................................................................... 10
The Executive Committee............................................................................ 10
Director Compensation................................................................................ 10
Executive Officers of the Company...................................................................... 11
Code of Ethics......................................................................................... 12
Compliance with Section 16(a) of the Exchange Act...................................................... 12
EXECUTIVE COMPENSATION.................................................................................... 13
Summary Compensation Table............................................................................. 13
Options/SAR Grants in Last Fiscal Year................................................................. 14
Aggregated Options/SAR Exercises in Last Fiscal Year and Fiscal Year-End
Option/SAR Value Table............................................................................... 15
Employment Agreements.................................................................................. 15
Stock Option Plan...................................................................................... 16
401(k) Plan............................................................................................ 16
Compensation Committee Interlocks and Insider Participation............................................ 16
Compensation Committee Report on Executive Compensation................................................ 17
STOCK PERFORMANCE GRAPH................................................................................... 19
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT......................................................................................... 20
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS............................................................ 22
Lease of Property from Affiliate....................................................................... 22
Investments in Affiliates.............................................................................. 22
Other Transactions with Affiliates..................................................................... 23
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS.......................................................... 24
Change in Independent Public Accountants in 2004....................................................... 24
Change in Independent Public Accountants in 2002....................................................... 25
Principal Accounting Fees and Services................................................................. 25
SHAREHOLDER PROPOSALS..................................................................................... 27
OTHER MATTERS............................................................................................. 27

KNIGHT TRANSPORTATION, INC.
5601 West Buckeye Road
Phoenix, Arizona 85043

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PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 21, 2004

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GENERAL INFORMATION

This Proxy Statement is furnished in connection with the solicitation of
proxies from the shareholders of Knight Transportation, Inc. to be voted at the
Annual Meeting of Shareholders (the "Annual Meeting") to be held on May 21,
2004. THE ENCLOSED PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY.
If not otherwise specified, all proxies received pursuant to this solicitation
will be voted (i) FOR the Director Nominees named below; and (ii) with respect
to any other matters properly brought before the Annual Meeting, in accordance
with the recommendations of the Board of Directors, or, if no recommendations
are given, in accordance with the judgment of the proxy holders.

The Proxy Statement, proxy card, and our Annual Report was first mailed on
or about April 14, 2004, to shareholders of record at the close of business on
March 22, 2004 (the "Record Date").

The terms "we," "our," "us" or the "Company" refer to Knight
Transportation, Inc. and its subsidiaries.

Voting Rights

Only holders of record of our Common Stock, par value $0.01 per share
("Common Stock"), at the close of business on the Record Date are entitled to
vote at the Annual Meeting, either in person or by valid proxy. Except in the
election of directors, shareholders are entitled to one vote for each share held
of record on each matter of business to be considered at the Annual Meeting. In
the election of directors, cumulative voting is required by law. See "Required
Vote; Cumulative Voting," below. As of the Record Date, there were approximately
37,520,187 shares of our Common Stock issued and outstanding. Votes cast at the
Annual Meeting will be tabulated by the Inspector of Elections and the results
of all items voted upon will be announced at the Annual Meeting.

Quorum Requirement

In order to transact business at the Annual Meeting, a quorum must be
present. A quorum is present if a majority of the issued and outstanding shares
of Common Stock as of the Record Date are represented at the Annual Meeting in
person or by proxy. Shares that are entitled to vote but that are not voted at
the direction of the holder (called "abstentions") and shares that are not voted
by a broker or other record holder due to the absence of instructions from the
beneficial owner (called "broker non-votes") will be counted for the purpose of
determining whether a quorum is present.

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Required Vote; Cumulative Voting

Election of Directors. Directors are elected by plurality of the votes
cast, which means that the director nominees receiving the highest number of
votes for their election will be elected as directors. Abstentions and broker
non-votes are not counted as votes for the election of any director nominee.
Under the Constitution of the State of Arizona, as well as Section 10-728 of the
Arizona Revised Statutes, shareholders have cumulative voting rights in electing
directors of an Arizona corporation. Cumulative voting means that each
shareholder, when electing directors, has the right to cast as many votes in the
aggregate as he has voting shares multiplied by the number of directors to be
elected. For example, this year three Class III directors will be elected. If a
shareholder has 100 shares of Common Stock, the shareholder is entitled to 300
votes and may cast the entire 300 votes for a single director nominee or
distribute those votes among the director nominees as the shareholder
determines.

Other Matters. Approval of any other matter submitted to shareholders for
consideration and action at the Annual Meeting requires that the number of votes
cast for the matter exceeds the number of votes cast against the matter.
Abstentions and broker non-votes will be disregarded in determining whether a
matter has been approved. In other words, abstentions and broker non-votes will
neither be counted as votes for nor as votes against a matter.

Right To Attend Annual Meeting; Revocation of Proxy

Returning a proxy card now will not interfere with your right to attend the
Annual Meeting or to vote your shares personally at the Annual Meeting, if you
wish to do so. Shareholders who execute and return proxies may revoke them at
any time before they are exercised by giving written notice to the Secretary of
the Company at our address, by executing a subsequent proxy and delivering it to
the Secretary of the Company, or by attending the Annual Meeting and voting in
person.

Costs of Solicitation

We will bear the cost of solicitation of proxies, which we expect to be
nominal and will include reimbursements for the charges and expenses of
brokerage firms and others for forwarding solicitation material to beneficial
owners of our outstanding Common Stock. Proxies will be solicited by mail, and
may be solicited personally by directors, officers or our regular employees, who
will not receive any additional compensation for any such services.

Annual Report

The information included in this Proxy Statement should be reviewed in
conjunction with the Consolidated Financial Statements, Notes to Consolidated
Financial Statements, Independent Public Accountants' Report and other
information included in our 2003 Annual Report to Shareholders that was mailed
on or about April 14, 2004, together with this Notice of Annual Meeting and
Proxy Statement, to all shareholders of record as of the Record Date.

How To Read this Proxy Statement

Set forth below are the proposals to be considered by shareholders at the
Annual Meeting, as well as important information concerning, among other things:
our management and our Board of Directors; executive compensation; transactions
between the Company and our officers, directors and affiliates; the stock
ownership of management and other large shareholders; the services provided to
us by and fees of KPMG LLP, our independent accountants for 2003; and how
shareholders may make proposals at the Annual Meeting. Each shareholder should
read this information before completing and returning the enclosed proxy card.

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PROPOSAL NO. 1. - ELECTION OF CLASS III DIRECTORS

Our Board of Directors presently consists of ten members. The directors are
divided into three classes, with each class serving a three-year term. The
shareholders elect approximately one-third of the Board of Directors each year.
Three Class III directors will be elected at the Annual Meeting. The term of our
Class I directors expires at the 2005 Annual Meeting of Shareholders, and the
term of our Class II directors expires at the 2006 Annual Meeting of
Shareholders.

Upon the recommendation of the Nominating Committee, the Board of Directors
has nominated Kevin P. Knight, Randy Knight, and Michael Garnreiter for election
as Class III directors at the Annual Meeting. Each nominee will be elected to
serve until the 2007 Annual Meeting of Shareholders or until his successor shall
have been duly elected and qualified or his resignation or removal, whichever
occurs first. Keith Knight is not standing for re-election as a Class III
director at the Annual Meeting, and we have reduced the size of our entire Board
of Directors to nine effective as of the date of the Annual Meeting.

Each of the director nominees has consented to serve a three-year term. If
any of them should become unavailable to serve as a director, the Board of
Directors may designate a substitute nominee. In that case, the proxy holders
will vote for the substitute nominee designated by the Board.

Kevin Knight and Keith Knight are brothers and are cousins of Randy Knight
and Gary Knight, who also are brothers.

Information concerning the nominees standing for election as Class III
directors follows:

Kevin P. Knight, 47 Director Since 1990

Kevin P. Knight has served as our Chairman of the Board since May 1999, has
served as our Chief Executive Officer since 1993, and has been an officer and
director of the Company since 1990. From 1975 to 1984 and again from 1986 to
1990, Mr. Knight was employed by Swift Transportation Co., Inc. ("Swift"), a
long-haul truckload carrier, where he was an Executive Vice President and
President of Cooper Motor Lines, Inc., a Swift subsidiary. Mr. Knight has served
on the board of directors of Universal Technical Institute, Inc., a provider of
post-secondary education, since February 2004.

Randy Knight, 55 Director Since 1989

Randy Knight has been a director of the Company since its inception in 1989
and is presently a consultant to the Company. Mr. Knight served as an officer of
the Company from 1989 until July 31, 1999, when he resigned as an officer of the
Company. Mr. Knight served as Chairman of the Board from 1993 to July 1999. From
1985 to the present, Mr. Knight has held a significant ownership interest in and
served as Chairman of Total Warehousing, Inc. ("Total Warehousing"), a
commercial warehousing and local transportation business located in Phoenix,
Arizona. Mr. Knight was employed by Swift or related companies from 1969 to
1985, where he was a Vice President and shareholder.

Michael Garneiter, 55 Director Since 2003

Michael Garnreiter became a director of the Company in September 2003.
Since April 2002, Mr. Garnreiter has served as the Executive Vice President,
Treasurer, and Chief Financial Officer of Main Street and Main Incorporated
("Main Street"), a publicly-held restaurant operating company. Prior to joining
Main Street, Mr. Garnreiter served as a general partner of Arthur Andersen LLP
("Arthur Andersen"). Mr. Garnreiter began his career with Arthur Andersen in
1974 following with a Bachelor of Science degree in

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accounting from California State University at Long Beach. In 1986, he became
the managing partner of Arthur Andersen's Tucson, Arizona office. Mr. Garnreiter
is a Certified Public Accountant in California, New Mexico, and Arizona.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" EACH OF THE
DIRECTOR NOMINEES.

CONTINUING DIRECTORS

Class I Directors

Set forth below is certain information regarding our current Class I
directors who were elected in 2002 for terms expiring at our 2005 Annual Meeting
of Shareholders:

Timothy M. Kohl, 56 Director Since 2001

Timothy M. Kohl joined us in 1996. Mr. Kohl was elected to our Board of
Directors in May 2001. Mr. Kohl has served as our President since January 2004
and as our Secretary since October 2000. He served as the Chief Financial
Officer of the Company from October 2000 to January 2004. Mr. Kohl served as our
Vice President of Human Resources from January 1996 through May 1999. From May
1999 through October 2000, Mr. Kohl served as Vice President of our Southeast
Region. Prior to his employment with us, Mr. Kohl was employed by Burlington
Motor Carriers as Vice President of Human Resources. Prior to his employment
with Burlington Motor Carriers, Mr. Kohl served as Vice President of Human
Resources for JB Hunt.

Donald A. Bliss, 71 Director Since 1995

Donald A. Bliss has served as a director of the Company since February
1995. Until December 1994, Mr. Bliss was Vice President and Chief Executive
Officer of U.S. West Communications, a U.S. West company. Mr. Bliss has also
been a Director of Bank of America Arizona since 1988 and was a Director of U.S.
West Communications from 1987 to 1994. Mr. Bliss has been a Director of
Continental General since 1990 and a Director of Western-Southern Insurance
Company since April 1, 1998. Mr. Bliss is currently the Chairman of the Western
Region Advisory Board of AON Risk Services of Arizona, Inc.

Mark Scudder, 41 Director Since 1999

Mark Scudder has served as a director of the Company since November 1999.
Mr. Scudder is a principal of Scudder Law Firm, P.C., L.L.O. ("Scudder Law
Firm"), in Lincoln, Nebraska and has been involved in the private practice of
law since 1988. Mr. Scudder is also a member of the board of directors of
Covenant Transport, Inc., a publicly held, long-haul trucking company, and
Genesee & Wyoming Inc., a publicly held, international, short-line railroad.

Class II Directors

Set forth below is certain information regarding our current Class II
directors who were elected in 2003 for terms expiring at our 2006 Annual Meeting
of Shareholders:

Gary J. Knight, 52 Director Since 1990

Gary J. Knight has served as the Vice Chairman of our Board of Directors
since January 2004. Mr. Knight served as our President from 1993 to January
2004, and has been an officer and director of the Company since 1990. From 1975
until 1990, Mr. Knight was employed by Swift, where he was an Executive

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Vice President.

G.D. Madden, 64 Director Since 1997

G.D. Madden has served as a director of the Company since January 1997.
Since 1996, Mr. Madden has been President of Madden Partners, a consulting firm
he founded, which specializes in transportation technology and strategic issues.
Prior to founding Madden Partners, he was President and Chief Executive Officer
of Innovative Computing Corporation, a subsidiary of Westinghouse Electric
Corporation. Mr. Madden founded Innovative Computing Corporation ("ICC"), a
privately held company, which grew to be the largest supplier of fully
integrated management information systems to the trucking industry. Mr. Madden
sold ICC to Westinghouse in 1990 and continued to serve as its President and
Chief Executive Officer until 1996.

Matt Salmon, 46 Director Since 2001

Matt Salmon was elected to our Board in May 2001. Mr. Salmon is the
Executive Vice President of APCO Worldwide, a Washington, D.C. based consulting
firm specializing in worldwide strategic communications and public affairs
matters with 25 offices around the globe, including Europe and China. As an
executive of APCO, Mr. Salmon provides clients with strategic communications and
governmental affairs advice. Since 2002, Mr. Salmon has also provided consulting
services for Upstream Consulting, a governmental affairs consultant. Prior to
joining APCO and Upstream Consulting, Mr. Salmon was a member of the United
States House of Representatives from Arizona from 1994 through 1999. Prior to
that time, he served four years in the Arizona State Senate and for 13 years as
a telecommunications executive with U.S. West Communications. While a member of
the United States House of Representatives, Mr. Salmon served on the
International Relations Committee and as Chairperson and Founding Member of the
House Renewable Energy Caucus.

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CORPORATE GOVERNANCE

The Board of Directors and Its Committees

Board of Directors

Meetings of the Board of Directors. During the year ended December 31,
2003, our Board of Directors met on five occasions. Each of the directors
attended 75% or more of the meetings of the Board of Directors and the meetings
held by all of the committees of the Board on which he served, with the
exception of Mr. Garnreiter, who was appointed to the Board on September 19,
2003. Mr. Garnreiter attended the sole meeting of the Board of Directors held in
2003 following his appointment. In addition, the Company encourages the members
of its Board of Directors to attend its Annual Meetings of Shareholders. All
nine of the Company's then-current directors attended the 2003 Annual Meeting of
Shareholders.

Director Independence. The Company's Common Stock is listed on the Nasdaq
National Market, and therefore it is subject to the listing standards, including
standards relating to corporate governance, embodied in applicable rules
promulgated by the National Association of Securities Dealers, Inc. (the
"NASD"). Pursuant to NASD Rule 4350(c)(1), the Board of Directors has determined
that the following directors and nominees are "independent" under NASD Rule
4200(a)(15): Donald A. Bliss; G.D. Madden; Michael Garnreiter; Matt Salmon; and
Mark Scudder. In accordance with NASD Rule 4350(c)(2), the Company's independent
directors will hold regularly scheduled meetings, referred to as "executive
sessions," at which only the independent directors are present. We anticipate
that beginning in 2004 the independent directors will meet in executive session
at least twice per year.

Shareholder Communications. Our Board of Directors provides a process for
shareholders to send written communications to the entire Board or individual
directors. Information concerning the manner in which shareholders can send
communications to the entire Board or individual directors is available on the
Company's website, located at http://www.knighttrans.com.

Committees of the Board of Directors

The Board of Directors has standing Audit, Nominating, Compensation and
Executive Committees. The Board does not maintain any other standing committees.
The table below sets forth the current membership of each of the standing
committees of the Board of Directors.

Audit Nominating Compensation Executive
Name Committee Committee Committee Committee
------------------------------- ---------- ---------- ---------- ----------

Donald A. Bliss X X
G.D. Madden X X X
Michael Garnreiter X
Mark Scudder X X X
Matt Salmon X
Kevin P. Knight X
Gary J. Knight X
Timothy M. Kohl X

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The Audit Committee

Purpose, Functions, Composition, and Meetings of the Audit Committee. The
Audit Committee is responsible for the appointment, compensation, retention, and
oversight of the work of the independent public accountants engaged by the
Company for the purpose of preparing or issuing an audit report or performing
other audit or similar services for the Company. The Audit Committee meets with
the Company's independent public accountants to discuss the Company's financial
statements and matters relating to their independence, as well as to ensure that
the scope of their activities has not been restricted and that adequate
responses to their recommendations and inquiries have been received. The Audit
Committee also periodically meets with management to discuss the Company's
financial statements and the adequacy of the Company's internal financial
controls. In addition, the Audit Committee reviews and approves transactions
between the Company and related parties, in the absence of the appointment of a
special committee for that purpose.

The Audit Committee currently is comprised of Donald A. Bliss, Matt Salmon,
G.D. Madden, and Michael Garnreiter. Mr. Bliss serves as the Chairman of the
Audit Committee. Each member of the audit committee satisfies the independence
and audit committee membership criteria set forth in NASD Rule 4350(d)(2).
Specifically, each member of the audit committee:

o is independent under NASD Rule 4200(a)(15);

o meets the criteria for independence set forth in Rule 10A-3(b)(1)
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act");

o did not participate in the preparation of the financial statements of
the Company or any current subsidiary of the Company at any time
during the past three years; and

o is able to read and understand fundamental financial statements,
including the Company's balance sheet, income statement, and cash flow
statement.

The Audit Committee met five times during 2003. Each member of the Audit
Committee attended all of the Audit Committee meetings during 2003, with the
exception of Mr. Garnreiter, who was appointed to the Audit Committee on
November 4, 2003. No meetings of the Audit Committee were held in 2003 following
Mr. Garnreiter's appointment.

Audit Committee Financial Expert. The Board of Directors has determined
that at least one "audit committee financial expert," as defined under Item
401(h) of Regulation S-K, currently serves on the Audit Committee. The Board of
Directors has identified Michael Garnreiter as an audit committee financial
expert. Mr. Garnreiter is independent, as independence for audit committee
members is defined under applicable NASD rules.

Audit Committee Charter. Since 1994, the Audit Committee has operated
pursuant to a written charter detailing its powers and duties. In October, 2002,
the Audit Committee amended and restated its charter to comply with certain
requirements of the Sarbanes-Oxley Act of 2002. A copy the Audit Committee's
Amended and Restated Charter was attached as Exhibit 2 to the Company's
definitive proxy statement relating to its 2003 Annual Meeting of Shareholders
filed with the Securities and Exchange Commission ("SEC") on April 4, 2003. A
copy of the charter is available to shareholders on the Company's website,
located at http://www.knighttrans.com.

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Report of the Audit Committee. In performing its duties, the Audit
Committee, as required by applicable rules and regulations promulgated by the
SEC, issues a report recommending to the Board of Directors that our audited
financial statements be included in our Annual Report on Form 10-K, and certain
other matters, including the independence of our outside public accountants. The
Report of the Audit Committee is set forth below.

The Report of the Audit Committee shall not be deemed to be incorporated by
reference into any filing made by us under the Securities Act of 1933 or the
Exchange Act, notwithstanding any general statement contained in any such
filings incorporating this Proxy Statement by reference, except to the extent we
incorporate such report by specific reference.

Report of the Audit Committee

The Audit Committee oversees the accounting and financial reporting
processes of the Company and the audit of the financial statements of the
Company. Management of the Company has primary responsibility for the
Company's financial statements and the overall reporting process, including
maintenance of the Company's system of internal controls. The Company
retains independent auditors who are responsible for conducting an
independent audit of the Company's financial statements, in accordance with
generally accepted auditing standards, and issuing a report thereon.

In undertaking its responsibilities, the Audit Committee has discussed
the Company's financial statements with management and the Company's
independent auditors and, in issuing this report, has relied upon the
responses and information provided to the Audit Committee by management and
the independent auditors.

For the fiscal year ended December 31, 2003, the Audit Committee has
reviewed and discussed the audited financial statements with management and
KPMG LLP, the Company's independent auditors. Specifically, the Audit
Committee has discussed with the independent auditors the matters required
to be discussed by SAS 61 (Codification of Statements on Auditing
Standards, AU Section 380, Communication with Audit Committees or Others
with Equivalent Authority and Responsibility), which include, among other
things:

o methods used to account for significant unusual transactions;

o the effect of significant accounting policies in controversial or
emerging areas for which there is a lack of authoritative
guidance or consensus;

o the process used by management in formulating particularly
sensitive accounting estimates and the basis for the auditor's
conclusions regarding the reasonableness of those estimates; and

o disagreements with management over the application of accounting
principles, the basis for management's accounting estimates, and
the disclosures in the financial statements.

The Audit Committee has received the written disclosures and the
letter from the independent accountants required by Independence Standards
Board Statement No. 1 (Independence Discussions with Audit Committees) and
discussed with the independent accountants the independent accountants'
independence.

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Based on the foregoing reviews and discussions, the Audit Committee
recommended to the Board of Directors that the audited financial statements
be included in the Annual Report on Form 10-K for the year ended December
31, 2003, for filing with the Securities and Exchange Commission.

Donald A. Bliss, Chairman
Matt Salmon, Member
G.D. Madden, Member
Michael Garnreiter, Member

February 10, 2004

The Nominating Committee

Purpose, Composition, and Meetings of the Nominating Committee. In February
2003, the Board of Directors established a Nominating Committee to recommend to
the Board potential candidates for election to the Board of Directors for 2004
and thereafter. The original members of the Nominating Committee were Randy
Knight and Mark Scudder. During 2003, the Nominating Committee held one
telephonic meeting to recommend the appointment of Michael Garnreiter as a
director. In February 2004 the Board of Directors appointed G.D. Madden to
replace Mr. Knight as a member of the Nominating Committee and to serve as its
Chairman. At such time, a written charter for the Nominating Committee was
adopted pursuant to which the duties of the Nominating Committee were expanded
to include, among other things, making recommendations to the Board concerning
an annual self-evaluation process, succession planning, director orientation and
training, and other issues related to corporate governance. All current members
of the Nominating Committee are independent, as independence for nominating
committee members is defined under applicable NASD rules. The Nominating
Committee met in February 2004 and recommended that the Board of Directors
nominate Kevin P. Knight, Randy Knight, and Michael Garnreiter for election as
Class III directors. Each nominee for election as a director is an executive
officer of the Company, standing for reelection, or both.

Nominating Committee Charter. A written charter for the Nominating
Committee was adopted in February 2004. A copy of the charter is available to
shareholders on the Company's website, located at http://www.knighttrans.com.

Process for Identifying and Evaluating Director Nominees. Director nominees
are chosen by the entire Board of Directors, after considering the
recommendations of the Nominating Committee. As a matter of course, the members
of the Nominating Committee review the qualifications of various persons to
determine whether they might make candidates for consideration for membership on
the Board of Directors. The Nominating Committee also accepts recommendations of
director candidates from other outside directors, executive officers of the
Company, advisors of the Company, and shareholders. The Nominating Committee
will review all candidate recommendations, including those properly submitted by
shareholders, in accordance with the mandate contained in its charter. This will
include a review of the person's judgment, integrity, experience, independence,
knowledge of the Company's industry or other industries related to the Company's
business, and such other factors as the Nominating Committee determines are
relevant in light of the needs of the Board of Directors and the Company. With
regard to specific qualities and skills, the Nominating Committee believes it
necessary that: (i) at least a majority of the members of the Board of Directors
qualify as "independent" under NASD Rule 4200(a)(15); (ii) at least three
members of the Board of Directors satisfy the audit committee membership
criteria specified in NASD Rule 4350(d)(2); and (iii) at least one member of the
Board of Directors eligible to serve on the Audit Committee has sufficient
knowledge, experience, and training concerning accounting and financial matters
so as to qualify as an "audit committee financial expert" within the meaning of
Item 401(h) of Regulation S-K. The Company does not pay a fee to any third party
to identify

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or evaluate or assist in identifying or evaluating potential nominees.

Consideration of Director Candidates Recommended by Shareholders. The
Nominating Committee will consider director candidates recommended by
shareholders, provided that the following procedural requirements are satisfied.
Candidate recommendations should be mailed via certified mail, return receipt
requested, and addressed to the Nominating Committee, Knight Transportation,
Inc., c/o Timothy M. Kohl - Secretary, 5601 West Buckeye Road, Phoenix, Arizona
85043. In order to be considered, a shareholder recommendation must: (i) be
received at least 120 days prior to the first anniversary of the date of the
proxy statement for the prior year's Annual Meeting (by December 15, 2004 for
director candidates to be considered for nomination for election at the 2005
Annual Meeting of Shareholders); (ii) contain sufficient background information,
such as a resume and references, to enable the committee to make a proper
judgment regarding his or her qualifications; (iii) be accompanied by a signed
consent of the proposed nominee to serve as a director if elected, and a
representation that such proposed nominee qualifies as "independent" under NASD
Rule 4200(a)(15) or, if the proposed nominee does not qualify, a description of
the reason(s) he or she is not "independent"; (iv) state the name and address of
the person submitting the recommendation and the number of shares of the
Company's Common Stock owned of record or beneficially by such person; and (v)
if submitted by a beneficial shareholder, be accompanied by evidence that the
person making the recommendation beneficially owns shares of the Company's
Common Stock.

The Compensation Committee

The Compensation Committee is comprised of G.D. Madden and Mark Scudder,
with Mr. Scudder serving as Chairman. The Compensation Committee reviews all
aspects of executive compensation, including salary, bonus, and equity
compensation of the Chief Executive officer and other executive officers, and
makes recommendations on such matters to the Board of Directors. The
Compensation Committee also administers the Company's stock option plan and
reviews and approves stock options granted by the Company to other officers and
employees. The Compensation Committee met formally twice in 2003 to make
recommendations regarding executive compensation to issue its Report on
Executive Compensation for inclusion in the proxy statement relating to the 2003
Annual Meeting of Shareholders. The Compensation Committee, by written action
taken without a meeting, also approved stock option grants that the Company
proposed to make to certain officers and employees and approved changes in the
salary compensation of, and the adoption of a bonus program for, the executive
officers of the Company. Additional information concerning the Compensation
Committee and Compensation Committee interlocks, as well as the Committee's
Report on Executive Compensation, are set forth under "Executive Compensation"
below.

The Executive Committee

The Executive Committee of the Board was established in November 2000. The
Executive Committee is authorized to act on behalf of the Board of Directors
when the Board of Directors is not in session. The members of the Executive
Committee are Kevin P. Knight, Gary J. Knight, Timothy M. Kohl, Donald A. Bliss,
and Mark Scudder. The Executive Committee did not meet in 2003.

Director Compensation

Directors who are not 10% shareholders, officers, or employees of the
Company ("Outside Directors") currently receive annual compensation of $6,000,
plus a fee of $550 for attendance at each meeting of the Board of Directors, a
fee of $350 for attendance of Audit Committee meetings, a fee of $300 for
attendance of Compensation Committee meetings, and a fee of $250 for attendance
of all other Board committee meetings. We also reimburse directors for travel
and other related expenses incurred in attending a meeting. In addition, the
Audit Committee Chairman receives an annual fee of $1,500, in addition to other
director fees, and the

-10-

Compensation Committee Chairman receives an annual fee of $500, in addition to
other director fees.

Outside Directors have the option to accept shares of our Common Stock in
lieu of cash compensation and fees for their service on the Board and its
committees. If this option is elected, we issue Common Stock on February 15 and
August 15 of each year in payment of accrued compensation and fees for the
preceding six month periods ending December 31 and June 30, respectively. The
number of shares issued is determined by dividing the amount of the accrued
compensation and fees by the closing market price of our Common Stock as of the
trading day prior to issuance.

Upon their election or appointment to the Board, Outside Directors also
receive an automatic non-qualified stock option grant covering 2,500 shares of
Common Stock. The exercise price of these options is 85% of the fair market
value on the date of grant. In addition, in 2003 we adopted an annual stock
option grant program for Outside Directors. Under this program, Outside
Directors receive a non-qualified stock option grant covering 500 shares of
Common Stock on June 1 of each calendar year. The exercise price of these
options is the fair market value on the date of grant. In connection with this
program, Outside Directors who had served on the Board for at least three years
as of December 31, 2002, were granted a catch-up, non-qualified stock option for
1,000 shares of Common Stock at an exercise price equal to the fair market value
on June 2, 2003, the date of grant. Except for the 1,000 share catch-up option
described in the preceding sentence, all non-qualified stock options granted to
an Outside Director are forfeitable if the Outside Director resigns within one
year of the date of grant.

Directors who are employees or 10% shareholders of the Company do not
receive compensation for Board or committee service. We do, however, reimburse
them for travel and other related expenses.

Executive Officers and Certain Significant Employees of the Company

The table below sets forth, as of March 31, 2004, certain information
regarding our executive officers and Casey Comen, a significant employee of the
Company. Although Mr. Comen is expected to make significant contributions to our
business, we do not regard him to be an executive officer because he reports to
Gary Knight, who heads our sales function.

Name Age Position
----------------------- ----- -----------------------------------------------------

Kevin P. Knight 47 Chairman of the Board and Chief Executive Officer

Timothy M. Kohl 56 President and Secretary

Gary J. Knight 52 Vice Chairman of the Board

Keith T. Knight 49 Executive Vice President

David A. Jackson 28 Chief Financial Officer

Casey Comen 50 Executive Vice President of Sales

Keith T. Knight has served as our Executive Vice President since 1993, and
has been an officer of the Company since 1990. He has served as a director of
the Company since 1990. From 1977 until 1990, Mr. Knight was employed by Swift,
where he was a Vice President and Manager of Swift's Los Angeles terminal.

-11-

David A. Jackson joined us in April 2000. He has served as our Chief
Financial Officer since January 2004. Prior to his appointment as Chief
Financial Officer, Mr. Jackson served as our Corporate Purchasing Manager from
April 2000 until July 2002, and as the Owner Operator Program Director from July
2002 until January 2004. Mr. Jackson graduated from Arizona State University in
2000 with a degree in Global Business with a Specialization in Finance.

Casey Comen has served as our Executive Vice President of Sales since March
2004. Prior to joining the Company, Mr. Comen was employed by Swift, where he
most recently served as the Vice President of Sales and Marketing from 1997
through January 2004.

See "Proposal No. 1 - Election of Class III Directors," above, for
information concerning the business experience of Kevin P. Knight. See
"Continuing Directors," above, for information concerning the business
experience of Timothy M. Kohl and Gary J. Knight.

Code of Ethics

The Board of Directors has adopted a Code of Ethical Conduct that applies
to all directors, officers, and employees of the Company. In addition, the
Company maintains a Policy Governing Responsibilities of Financial Managers and
Senior Officers (the "Financial Responsibilities Policy") that applies to our
senior executive officers (Executive Vice President or above), Chief Financial
Officer, Controller, and any other employees who are responsible for the
management of the Company's funds or for the operation and maintenance of the
Company's financial accounting and reporting system. The Code of Ethical Conduct
and Financial Responsibilities Policy include provisions applicable to the
Company's principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions, that
constitute a "code of ethics" within the meaning of Item 406(b) of Regulation
S-K. Copies of the Code of Ethical Conduct and Financial Responsibilities Policy
are available to shareholders on the Company's website, located at
http://www.knighttrans.com.

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Exchange Act requires our directors and executive
officers, and persons who own more than 10% of a registered class of our equity
securities, to file with the SEC and the Nasdaq Stock Market reports of
ownership and changes in ownership of Common Stock and other equity securities
of the Company. Officers, directors and greater than 10% beneficial owners are
required by SEC regulations to furnish us with copies of all Section 16(a) forms
they file. Based solely upon a review of the copies of such reports furnished to
the Company, or written representations that no other reports were required, we
believe that during the 2003 fiscal year, all Section 16(a) filing requirements
applicable to our directors, executive officers and greater than 10% beneficial
owners were complied with, except that: (i) G.D. Madden did not timely report on
Form 4 his receipt of shares of Common Stock in lieu of director fees in
February 2003 and a grant of stock options in June 2003; (ii) Mark Scudder did
not timely report on Form 4 his receipt of shares of Common Stock in lieu of
director fees in February 2003, and (iii) Michael Garnreiter did not timely file
a Form 3 following his appointment as a director in September 2003. All such
transactions have been reported in subsequent filings. In addition, during 2003
each of Messrs. Madden and Scudder filed two late Forms 5 to report his receipt
of shares of Common Stock in lieu of director fees in the years ended December
31, 2000 and 2002. Copies of Section 16(a) forms that our directors and
executive officers file with the SEC are accessible through our website at
http://www.knighttrans.com.

-12-

EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth information concerning the annual and
long-term compensation for services rendered in all capacities to the Company
during each of the three fiscal years ended December 31, 2003, 2002, and 2001,
of those persons who were, at December 31, 2003, (i) our Chief Executive Officer
and (ii) our three other most highly compensated executive officers with an
aggregate annual salary and bonus exceeding $100,000 for the fiscal year ended
December 31, 2003 (collectively, the "Named Executive Officers").

Long-Term Compensation
---------------------------------------
Annual Compensation Awards Payouts
------------------------------------------------- ------------------------- -----------
Restricted Securities
Other Annual Stock Underlying LTIP All Other
Name and Salary Bonus Compensation Award(s) Options/ Payouts Compensation(1)
Principal Position Year ($) ($) ($) ($) SARs (#) ($) ($)
--------------------- ---- ------- ------- ------------ ---------- ---------- ------------ ----------------

Kevin P. Knight, 2003 308,249 78,000 -- -- -- -- 625
Chairman and 2002 265,000 -- -- -- -- -- 1,785
Chief Executive 2001 265,000 -- -- -- -- -- 1,725
Officer

Gary J. Knight, 2003 279,422 58,000 -- -- -- -- 625
President(2) 2002 265,000 -- -- -- -- -- 2,365
2001 265,000 -- -- -- -- -- 2,840

Keith T. Knight, 2003 273,647 56,000 -- -- -- -- 625
Executive Vice 2002 265,000 -- -- -- -- -- 1,965
President 2001 265,000 -- -- -- -- -- 1,665

Timothy M. Kohl, 2003 187,320 50,000 -- -- 10,000 -- 1,210
Chief Financial 2002 140,310 25,000 -- -- 12,500 -- 1,462
Officer and 2001 136,067 20,000 -- -- 22,500 -- 1,130
Secretary(3)

--------------------
(1) In 2003, 2002, and 2001, compensation included in the category of "All
Other Compensation" for each of the Named Executive Officers includes
Company contributions in the amount of $625, for each year, to the Knight
Transportation, Inc. 401(k) Plan. The balance of the compensation included
in "All Other Compensation" for 2002 and 2001 for each of the Knights
represents the annual economic benefit derived from $2,000,000 split-dollar
life insurance policies maintained for each of the Knights. In connection
with the enactment of Section 402 of the Sarbanes-Oxley Act of 2002, the
Company ceased making premium payments under these insurance policies as of
July 30, 2002. The balance of the compensation included in "All Other
Compensation" for Mr. Kohl represents the annual economic benefit derived
from a $1,000,000 key man life insurance policy under which the Company and
Mr. Kohl's spouse are each 50% beneficiaries.
(2) Gary J. Knight was appointed as Vice Chairman of the Board of Directors of
the Company, and ceased serving as President, effective as of January 1,
2004.
(3) Timothy M. Kohl was appointed as President of the Company, and ceased
serving as Chief Financial Officer, effective as of January 1, 2004.

-13-

Options/SAR Grants in Last Fiscal Year

The following table sets forth stock options granted to Named Executive
Officers in the fiscal year ended December 31, 2003:

Potential Realizable Value At
Assumed Annual Rates of Stock
Individual Grants Price Appreciation for Option Term
---------------------------------------------------------------------- -----------------------------------
Number of Percentage
Securities of Total Market
Underlying Options/SARs Price At
Option/SARs Granted to Exercise or Dates of
Granted Employees in Base Price Grant Expiration 5% 10%
Name (#) Fiscal Year ($/Share) ($/Share) Date ($) ($)
-------------------- ------------ ------------- ------------ ------------ ---------- ------- -------

Timothy M. Kohl 10,000(1) 3.2% 24.83 24.83 5/20/13 156,100 395,500

---------------------------------
(1) The option is exercisable with respect to one-third of the shares covered
thereby on May 20, 2006, exercisable with respect to two-thirds of the
shares covered thereby on May 20, 2007, and fully exercisable on May 20,
2008.

Except as set forth above, no stock options or stock appreciation rights
(SARs) were granted during the 2003 fiscal year to any of the Named Executive
Officers.

-14-

Aggregated Options/SAR Exercises in Last Fiscal Year and Fiscal Year-End Option
/SAR Value Table

The table below sets forth information with respect to the exercise of
stock options during the fiscal year ended December 31, 2003 by the Named
Executive Officers. The number of options and the option exercise prices
reflect:

o a 3-for-2 stock split treated as a dividend, effected on June 1, 2001,
of one share of Common Stock for every two shares of Common Stock
outstanding; and

o a 3-for-2 stock split treated as a dividend, effected on December 28,
2001, of one share of Common Stock for every two shares of Common
Stock outstanding.

Number of Securities Value of Unexercised In-the-
Underlying Unexercised Money Options/SARs
Options/SARs at Fiscal Year-End
at Fiscal Year-End ($)
-------------------------------- --------------------------------
Shares
Acquired on Value
Exercise Realized
Name (#)(1) ($)(2) Exercisable(3) Unexercisable(4) Exercisable(5) Unexercisable(5)
--------------------- ----------- -------- -------------- ---------------- -------------- ----------------

Kevin P. Knight -- -- -- -- -- --

Gary J. Knight -- -- -- -- -- --

Keith T. Knight -- -- -- -- -- --

Timothy M. Kohl 7,125 110,028 15,000 68,250 283,376 865,564

--------------------------
(1) Represents shares of Common Stock acquired pursuant to the exercise of
stock options. The exercise price for such options was $6.89 per share.

(2) Based on the actual sales price of $22.33 per share on April 21, 2003.

(3) Includes (i) options to purchase 4,500 shares at an exercise price of $7.56
per share granted to Mr. Kohl in March 1999 and (ii) options to purchase
10,500 shares at an exercise price of $6.42 per share granted to Mr. Kohl
in October 2000.

(4) Includes (i) options to purchase 2,250 shares at an exercise price of $7.56
per share granted to Mr. Kohl in March 1999 that vest in March 2004, (ii)
options to purchase 21,000 shares at an exercise price of $6.42 per share
granted to Mr. Kohl in October 2000 that vest one-half in October 2004 and
one-half in October 2005, (iii) options to purchase 22,500 shares at an
exercise price of $11.00 per share granted to Mr. Kohl in September 2001
that vest in annual, one-third increments beginning in September 2004, (iv)
options to purchase 12,500 shares at an exercise price of $19.00 per share
granted to Mr. Kohl in June 2002 that vest in annual, one-third increments
beginning in June 2005, and (v) options to purchase 10,000 shares at an
exercise price of $24.83 per share granted to Mr. Kohl in June 2003 that
vest in annual, one-third increments beginning in May 2006.

(5) Based on the $25.65 last reported sale price of the Common Stock on the
Nasdaq National Market on December 31, 2003.

Employment Agreements

We currently do not have any employment contracts, severance, or
change-of-control agreements with any of our Named Executive Officers.

-15-

Upon Randy Knight's retirement as Chairman in 1999, we entered into a
consulting agreement with Mr. Knight. The consulting agreement provides for our
payment to Mr. Knight of annual consulting fee of $50,000, and is terminable at
any time by either party. Mr. Knight presently provides consulting services
under the agreement through a limited liability company that he controls.

Stock Option Plan

At the 2003 Annual Meeting, our shareholders approved the 2003 Stock Option
Plan (the "2003 Plan"). The 2003 Plan replaced our prior stock plan, and is
designed to enable directors, officers and certain key and critical line
employees of the Company, including drivers and other employees, to participate
in the ownership of the Company. The 2003 Plan is administered by the
Compensation Committee, and permits the grant of incentive and non-qualified
stock options, as well as restricted stock awards. In authorizing option grants
under the 2003 Plan, the Compensation Committee has sought to align the
interests of employees with our shareholders and has sought to make stock grants
to those key employees and operating personnel whose performance is important to
our success. One million shares of Common Stock were originally reserved for
issuance under the 2003 plan. As of March 22, 2004, there were 662,025 shares of
our Common Stock subject to outstanding option grants under the 2003 Plan, and
337,975 shares of Common Stock were available for future grants. Although Kevin,
Gary, and Keith Knight are eligible to receive option grants or restricted stock
under the 2003 Plan, in the past our Compensation Committee has not made stock
option grants or restricted stock awards to these individuals, due primarily to
their substantial Common Stock holdings. At March 22, 2004, of the total number
of shares covered by outstanding options under the 2003 Plan and our prior stock
option plans, 94.5% are issuable to employees and only 5.5% are issuable to
executive officers and directors.

401(k) Plan

We also sponsor a 401(k) Plan (the "401(k) Plan"). The 401(k) Plan is a
profit sharing plan that permits voluntary employee contributions on a pre-tax
basis under section 401(k) of the Internal Revenue Code. Under the 401(k) Plan,
a participant may elect to defer a portion of his compensation and have us
contribute a portion of his compensation to the 401(k) Plan. We make a
discretionary matching contribution. For fiscal 2003, our maximum contribution
was $625 per participant. The 401(k) Plan's assets are held and managed by an
independent trustee. Under the 401(k) Plan, eligible employees have the right to
direct the investment of employee and employer contributions among several
mutual funds. The 401(k) Plan also allows its participants to direct the trustee
to purchase shares of our Common Stock on the open market up to a maximum of 20%
of their 401(k) Plan account balance. Our senior executives and certain other
key employees are not permitted to participate in the 401(k) Plan feature that
allows them to purchase our Common Stock in their 401(k) Plan accounts.

Amounts we contribute for a participant vest over five years and are held
in trust until distributed pursuant to the terms of the 401(k) Plan. An employee
is eligible to participate in the 401(k) Plan if he has attained age 19 and
completed 1,000 hours of service within a 12 month period. Distributions from
participant accounts are not permitted before age 59-1/2, except in the event of
death, disability, separation from service, or certain financial hardships.

Compensation Committee Interlocks and Insider Participation

The Compensation Committee is comprised of Mark Scudder and G.D. Madden,
with Mr. Scudder serving as Chairman. Neither member of the Compensation
Committee is or has been an officer or employee of the Company. Mr. Scudder is a
principal of Scudder Law Firm, which provided legal services to the Company in
2003 and which will provide such services in 2004. The amount of fees paid to
Scudder Law Firm by the Company did not exceed 5% of Scudder Law Firm's gross
revenues for the year ended

-16-

December 31, 2003. There are no interlocking relationships between the executive
officers and directors of the Company and other entities that might affect the
compensation of the Company's executive officers. See "Certain Relationships and
Related Transactions," below, for a description of certain transactions between
us and our other directors, executive officers, or their affiliates, and
"Corporate Governance - The Board of Directors and Its Committees - Director
Compensation," above, for a description of compensation of the members of the
Compensation Committee.

Compensation Committee Report on Executive Compensation

The Compensation Committee Report on Executive Compensation and the
Performance Graph that follow shall not be deemed to be incorporated by
reference into any filing made by us under the Securities Act of 1933 or the
Exchange Act, notwithstanding any general statement contained in any such
filings incorporating this Proxy Statement by reference, except to the extent we
incorporate such report or graph by specific reference.

The Compensation Committee of the Board of Directors has furnished the
following Report on Executive Compensation:

Compensation Committee Report on Executive Compensation

The Compensation Committee annually reviews the compensation of the
Company's executive officers and makes recommendations regarding such
compensation to the Board of Directors. The compensation program for the
Company's executive officers is administered in accordance with a
pay-for-performance philosophy to link executive compensation with the
values, objectives, business strategy, management incentives, and financial
performance of the Company.

In May 2003, the Compensation Committee recommended a salary increase
for each of the Company's senior executive officers pursuant to which Kevin
P. Knight's base salary increased from $265,000 to $340,000, Gary J.
Knight's base salary increased from $265,000 to $290,000, Keith T. Knight's
salary increased from $265,000 to $280,000, and Timothy M. Kohl's base
salary increased from approximately $170,000 to $200,000. Additionally, the
Committee recommended the establishment of a cash bonus program under which
each of the foregoing senior executive officers would be eligible to
receive a maximum cash bonus for fiscal 2003 equal to 30% of his new base
salary. One-third of each senior executive's maximum bonus amount would be
based upon each of the following:

o earnings per share growth of at least 10% versus fiscal 2002;

o a reduction in accounts receivable days sales outstanding (DSO)
to a specified target for the fourth quarter of 2003; and

o in the Committee's discretion based on its evaluation of the
overall performance of the executive.

The Compensation Committee determined that the first objective performance
criterion was met, that the second objective criterion was not met, and
that each senior executive's individual performance merited a full award
under the subjective component of the bonus program. With regard to the
subjective component, the Committee considered numerous factors, including,
but not limited to, the successful opening of two new operations centers,

-17-

strong revenue and earnings per share growth, and better than anticipated
operating margins. Consequently, the Committee recommended the award of
cash bonuses for fiscal 2003 under the plan to the senior executive
officers in the following amounts: Kevin Knight - $68,000; Gary Knight -
$58,000; Keith Knight - $56,000; and Timothy Kohl - $40,000. The Committee
also recommended that Kevin Knight and Timothy Kohl each be awarded an
additional, discretionary cash bonus in the amount of $10,000 for their
contributions to the Company's fiscal 2003 financial performance.

Because the most senior executive officers of the Company each have
substantial holdings of the Company's Common Stock or stock options,
corporate performance directly affects these executive officers. The
Committee believes that stock ownership by the Company's most senior
executive officers aligns the interests of management with the interests of
shareholders in the enhancing of shareholder value. With the exception of
Mr. Kohl, who receives an annual stock option grant, the Company's senior
executive officers historically have not received stock-based awards. With
respect to Mr. Kohl and other executive officers without substantial
holdings of the Company's Common Stock, the objectives of the Company's
compensation program are to align, through the grant of stock options,
executive and shareholder long-term interests by creating a strong and
direct link between executive pay and shareholder return. The Company's
stock option program is intended to enable executives to develop and
maintain a significant, long-term stock ownership position in the Company's
Common Stock. The Committee believes that the 2003 Plan is an effective
tool for accomplishing this objective.

In reviewing and making recommendations with regard to the base
salaries and other compensation of executive officers for 2003, including
the compensation of the Company's Chief Executive Officer, the Compensation
Committee reviewed and considered: (i) compensation information disclosed
by similarly-sized publicly held truckload motor carriers; (ii) the
financial performance of the Company, as well as the role and contribution
of particular executive with respect to such performance; (iii)
non-financial performance related to the individual executive's
contributions; and (iv) the particular executive's stock holdings.

The Compensation Committee believes that the annual salaries and other
compensation of the Company's Chief Executive Officer and other executive
officers are reasonable compared to similarly situated executives of other
truckload motor carriers.

Mark Scudder, Chairman
G. D. Madden, Member

February 10, 2004
-18-

STOCK PERFORMANCE GRAPH

The following graph compares the cumulative total shareholder return of the
Company's Common Stock with the cumulative total shareholder return of the
Nasdaq Stock Market (U.S. Companies) and the Nasdaq Trucking & Transportation
Stocks commencing December 31, 1998, and ending December 31, 2003.

[GRAPH APPEARS HERE IN PRINTED FORM]

-------------------------------------------------------------------------------------------------------------------------
Legend
Symbol CRSP Total Returns Index for: 12/1998 12/1999 12/2000 12/2001 12/2002 12/2003
------ ----------------------------- ------- ------- ------- ------- ------- -------

_____________ Knight Transportation, Inc. 100.0 64.2 72.1 158.3 177.0 216.3

- - - - - - Nasdaq Stock Market (U.S. Companies) 100.0 185.4 111.8 88.8 61.4 91.8

------------- Nasdaq Trucking & Transportation Stocks 100.0 95.3 86.6 102.4 104.3 149.4
SIC 3700-3799, 4200-4299, 4400-4599, 4700-4799 U.S. and Foreign

Notes:
A. The lines represent monthly index levels derived from compounded daily returns that include all dividends
B. The indexes are reweighted daily, using the market capitalization on the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a trading day, the preceding trading day is used.
D. The index level for all series was set to $100.0 on 12/31/1998.
-------------------------------------------------------------------------------------------------------------------------

Prepared by CRSP (http://www.crsp.uchicago.edu), Center for Research in Security
Prices, Graduate School of Business, The University of Chicago. Used with
permission. All rights reserved.

The stock performance graph assumes $100 was invested on December 31, 1998.
There can be no assurance that the Company's stock performance will continue
into the future with the same or similar trends depicted in the graph above. The
Company will not make or endorse any predictions as to future stock performance.
The CRSP Index for Nasdaq Trucking & Transportation Stocks includes all publicly
held truckload motor carriers traded on the Nasdaq Stock Market, as well as all
Nasdaq companies within the Standard Industrial Code Classifications 3700-3799,
4200-4299, 4400-4599, and 4700-4799 US & Foreign.

-19-

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT

The following table sets forth, as of March 22, 2004, the number and
percentage of outstanding shares of our Common Stock beneficially owned by each
person known by us to beneficially own more than 5% of such stock, by each
director and Named Executive Officer of the Company, and by all directors and
executive officers of the Company as a group. Share numbers and other
information for Wasatch Advisors, Inc. ("Wasatch") included in the table and
notes below are as of December 31, 2002, and solely based upon a Schedule 13G/A
filed with the SEC on February 18, 2004. Share numbers and other information for
T. Rowe Price Associates, Inc. ("T. Rowe Price") included in the table and notes
below are as of December 31, 2002, and solely based upon a Schedule 13G filed
with the SEC on February 9, 2004. According to the Company's transfer agent, the
Company had outstanding 37,520,187 shares of Common Stock as of March 22, 2004.

Amount and Nature of
Name and Address of Beneficial Owner(1) Beneficial Ownership(2) Percent of Class(2)
----------------------------------------------------------------- ------------------------ --------------------

Kevin P. Knight(3) 3,273,864 8.7%
Gary J. Knight(4) 3,535,209 9.4%
Keith T. Knight(5) 3,299,440 8.8%
Randy Knight(6) 2,951,045 7.9%
Timothy M. Kohl(7) 26,568 *
Donald A. Bliss(8) 13,816 *
G.D. Madden(9) 13,755 *
Matt Salmon(10) 6,125 *
Mark Scudder(11) 4,079 *
Michael Garnreiter(12) 2,623 *
Wasatch Advisors, Inc. (13) 2,224,848 5.9%
T. Rowe Price Associates, Inc. (14) 2,006,200 5.4%

All directors and executive officers as a group (11 persons)(15) 13,127,274 35.0%

---------------------
* Represents less than 1.0% of the outstanding Common Stock.

(1) The address of each Named Executive Officer and director is 5601 West
Buckeye Road, Phoenix, Arizona 85043. The address of Wasatch is 150 Social
Hall Avenue, Salt Lake City, Utah 84111. The address of T. Rowe Price is
100 E. Pratt Street, Baltimore, Maryland 21202.

(2) In accordance with applicable rules under the Securities Exchange Act of
1934, as amended, the number of shares indicated as beneficially owned by a
person includes shares of Common Stock underlying options that are
currently exercisable or will be exercisable within 60 days from March 22,
2004. Shares of Common Stock underlying stock options that are currently
exercisable or will be exercisable within 60 days from March 22, 2004, are
deemed to be outstanding for purposes of computing the percentage ownership
of the person holding such options and the percentage ownership of any
group of which the holder is a member, but are not deemed outstanding for
purposes of computing the percentage ownership of any other person.

(3) Includes: (a) 2,979,975 shares held directly by Kevin P. Knight; (b)
256,402 shares beneficially owned by Kevin P. Knight over which he and his
wife, Sydney Knight, exercise sole voting and investment power pursuant to
a revocable living trust; (c) 20,000 shares beneficially owned by Kevin P.
Knight held by an entity which he controls; (d) 15,800 shares held by Kevin
P. and Sydney B. Knight Family Foundation over which Kevin P. Knight and
his wife, Sydney Knight, as officers of the Foundation, exercise sole
voting and investment power on behalf of the Foundation; and (e) 1,687
shares owned by a minor child who shares the same household.

(4) Includes: (a) 3,530,146 shares beneficially owned by Gary J. Knight over
which he exercises sole voting and investment power as a trustee under a
revocable trust agreement; and (b) 5,063 shares owned by minor children who
share the same household.

-20-

(5) Includes: (a) 3,294,377 shares beneficially owned by Keith T. Knight over
which he and his wife, Fawna Knight, exercise sole voting and investment
power as trustees under a revocable trust agreement; and (b) 5,063 shares
owned by minor children who share the same household.

(6) Includes: (a) 2,205,332 shares beneficially owned by Randy Knight over
which he exercises sole voting and investment power as a trustee under a
revocable trust agreement; (b) 734,891 shares held by a limited liability
company for which Mr. Knight acts as manager and whose members include Mr.
Knight and trusts for the benefit of his four children; (c) 9,222 shares
owned by a child who shares the same household and over which Mr. Knight
exercises voting power; and (d) 1,600 shares held by Mr. Knight and his
mother as joint tenants with right of survivorship.

(7) Includes: (a) 9,318 shares held directly by Timothy M. Kohl; and (b) 17,250
shares covered by stock options granted to Mr. Kohl that are currently
exercisable or that will become exercisable within 60 days.

(8) Includes: (a) 12,316 shares beneficially owned by Donald A. Bliss over
which he exercises sole voting and investment powers under a revocable
trust agreement; and (b) 1,500 shares covered by stock options granted to
Mr. Bliss that are currently exercisable or that will become exercisable
within 60 days.

(9) Includes: (a) 3,817 shares held directly by G.D. Madden; and (b) 9,938
shares covered by stock options granted to Mr. Madden that are currently
exercisable or that will become exercisable within 60 days.

(10) Includes 6,125 shares covered by stock options granted to Mr. Salmon that
are currently exercisable or that will become exercisable within 60 days.

(11) Includes; (a) 2,579 shares held directly by Mark Scudder; and (b) 1,500
shares covered by stock options granted to Mr. Scudder that are currently
exercisable or that will become exercisable within 60 days.

(12) Includes: (a) 123 shares held directly by Michael Garnreiter; and (b) 2,500
shares covered by stock options granted to Mr. Garnreiter that are
currently exercisable or that will become exercisable within 60 days.

(13) Wasatch has sole voting power and sole dispositive power over 2,224,848
shares. It has shared voting power and shared dispositive power over no
shares.

(14) T. Rowe Price has sole voting power over 318,400 shares and sole
dispositive power over 2,006,200 shares. It has shared voting power and
shared dispositive power over no shares.

(15) The only current executive officer of the Company, other than the Named
Executive Officers, is David A. Jackson, our Chief Financial Officer. The
information included in the calculation security ownership of all directors
and executive officers as a group includes 750 shares covered by stock
options granted to Mr. Jackson that are currently exercisable or that will
become exercisable within 60 days.

-21-

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

We have adopted a policy that transactions with affiliated persons or
entities will be on terms no less favorable to us than those that could be
obtained from unaffiliated third parties on an arm's length basis, and that any
such transaction must be reviewed and approved by our Audit Committee or another
committee of the Board comprised entirely of directors who are independent under
NASD Rule 4200(a)(15).

Lease of Property from Affiliate

Our headquarters and principal place of business is located at 5601 West
Buckeye Road, Phoenix, Arizona, on approximately 65 acres, approximately 57 of
which are owned by the Company and 8 of which are leased from Randy Knight, a
director and principal shareholder of the Company. The property we lease from
Randy Knight includes terminal and operating facilities.

In March 1999, we exercised our option to extend our lease with Randy
Knight for five (5) years, until April 30, 2004. We have an additional option to
extend the lease term for an additional five (5) years. The current monthly base
rent under the lease is $6,900. Under the lease, base rent increases by 3% on
the first day of each option term, and the third anniversary of the commencement
date of each option term. In addition to base rent, the lease requires us to pay
our share of all expenses, utilities, taxes and other charges. The lease
provides that Total Warehousing, a commercial warehousing and local
transportation business in which Randy Knight holds a significant ownership
interest, is permitted to jointly occupy and use a portion of the leased
premises. We have granted Randy Knight access and utility easements over our
owned and leased properties. The purchase and lease agreements we have entered
with Randy Knight include cross-indemnities relating to liabilities and expenses
arising from the use and occupancy of the property by the parties to the
agreements.

We made total payments under this lease of approximately $83,000 to, or on
behalf of, Mr. Knight and Total Warehousing during 2003.

Investments in Affiliates

We periodically examine investment opportunities in areas related to the
truckload carrier business. Our investment strategy is to add to shareholder
value by investing in industry-related businesses that will assist us in
strengthening our overall position in the transportation industry, minimize our
exposure to start-up risk, and provide us with an opportunity to realize a
substantial return on our investment.

Concentrek. In April 1999, we invested $200,000 to acquire a 17% equity
interest in Concentrek, Inc. ("Concentrek"), formerly known as KNGT Logistics,
Inc., with the intent of investing in the non-asset transportation business.
Kevin Knight, Gary Knight, Keith Knight, and Randy Knight also are investors in
Concentrek, and collectively hold approximately 43% of Concentrek's issued and
outstanding stock. Our investment in Concentrek was approved by a majority of
our Outside Directors. We hold non-voting Class A Preferred Stock in Concentrek,
which is preferred in the event of liquidation, dissolution, sale or merger and
with respect to the payment of dividends over all other classes of stock,
including the stock held by members of the Knight family. The Class A Preferred
Stock has preferential rights in the event that Concentrek issues additional
shares of stock under certain circumstances, and limited voting rights with
respect to any merger, consolidation, sale of substantially all of Concentrek's
assets, and certain other major corporate events.

We have made loans to Concentrek to fund a portion of its start-up costs.
These loans are evidenced by two promissory notes having an outstanding
principal amount of approximately $2.0 million at December 31, 2003. The first
note, which is convertible into Concentrek's Class A Preferred Stock, evidences
a loan of $824,500 by the Company through an affiliated limited liability
company. The second note evidences a loan by the Company directly to Concentrek.
At December 31, 2003, approximately $1.2 million was

-22-

outstanding on the second note. The two notes are on parity with one another and
secured by a first priority lien on Concentrek's assets. Kevin Knight, Gary
Knight, Keith Knight, and Randy Knight, along with other unrelated Concentrek
shareholders, have personally guaranteed repayment of the second note. Through
the same limited liability company utilized by the Company in connection with
the first note described above, Kevin, Gary, Keith and Randy Knight also have
made loans to Concentrek to fund start-up costs. At December 31, 2003, the
aggregate amount outstanding on these loans by the Knights was approximately
$4.0 million. Both of the notes representing the Company's loans have priority
over the loans made by the Knights. As such, we believe our investment has been
structured to limit our exposure to Concentrek start-up losses and business
risk.

Knight Flight. In November 2000, we acquired a 19% interest in Knight
Flight Services, LLC ("Knight Flight"), which acquired and operates a Cessna
Citation 560 XL jet aircraft. The aircraft is leased to Pinnacle Air Charter,
L.L.C., an unaffiliated entity, which leases the aircraft on behalf of Knight
Flight. The cost of the aircraft to Knight Flight was $8.9 million. We invested
$1.7 million in Knight Flight to assure access to charter air services for the
Company. In 2003, we recorded a $330,000 reduction in the carrying value of this
investment to more closely reflect the fair value of the aircraft. We have a
priority use right for the aircraft and are not obligated to make additional
capital contributions to Knight Flight. The remaining 81% interest in Knight
Flight is owned by Kevin, Gary, Keith, and Randy Knight, who have personally
guaranteed the balance of the purchase price (including debt incurred to finance
the acquisition of the aircraft) and agreed to contribute any capital required
to meet any cash short falls. Under the Knight Flight Operating Agreement,
losses are allocated first to Kevin Knight, Gary Knight, Keith Knight and Randy
Knight. The acquisition of our interest in Knight Flight was approved by a
disinterested majority of our Board of Directors. We believe that our interest
in Knight Flight allows us to obtain any access to needed charter air services
for Company business at prices equal to or less than is available from unrelated
charter companies. Knight Flight also makes the aircraft available for charter
to third parties through a licensed aircraft charter company. During 2003, we
paid approximately $404,000 to Knight Flight for travel services for our
employees.

Other Transactions with Affiliates

The Knight family has been involved in the transportation business for a
number of years and members of the families of Kevin Knight, Gary Knight, Keith
Knight and Randy Knight have been employed by us since our inception and are
employed on the same terms and conditions as non-related employees. During 2003,
we employed and compensated in excess of $60,000 in total compensation seven
individuals who are related to our principal shareholders and senior executive
officers. The aggregate total compensation paid to these seven individuals in
2003 was $594,481.

See "Executive Compensation - Compensation Committee Interlocks and Insider
Participation," above, for a description of transactions between us and members
of our Compensation Committee or their affiliates.

-23-

RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS

The principal independent public accounting firm utilized by the Company
during fiscal 2003 was KPMG LLP, independent certified public accountants
("KPMG"). KPMG was engaged by the Company in that capacity from April 2002 until
its resignation in March 2004. On April 12, 2004, our Audit Committee approved
the engagement of Deloitte & Touche LLP ("Deloitte & Touche") as the Company's
principal independent accounting firm for fiscal 2004. A representative of
Deloitte & Touche is expected to be present at the Annual Meeting and to be
available to respond to appropriate questions, and such representative will have
an opportunity to make a statement at the Annual Meeting if he or she desires to
do so. No representative of KPMG is expected to be present at the Annual
Meeting.

Change in Independent Public Accountants in 2004

As previously reported in our Current Report on Form 8-K filed with the SEC
on March 23, 2004, on March 16, 2004, KPMG resigned as our principal independent
public accountant. The resignation related to an inability of KPMG and the Audit
Committee of the Company's Board of Directors to reach an agreement on audit and
related fees for fiscal 2004.

The report issued by KPMG in connection with our financial statements for
each of its two most recent fiscal years ended December 31, 2003, and December
31, 2002, respectively, did not contain an adverse opinion or a disclaimer of
opinion, nor was either such report qualified or modified as to uncertainty,
audit scope, or accounting principles, except the fiscal 2003 audit report of
KPMG contained the following explanatory paragraph:

The consolidated financial statements of Knight Transportation, Inc.
and subsidiaries as of December 31, 2001 and for the year then ended were
audited by other auditors who have ceased operations. As described in Note
1, these consolidated financial statements have been revised to include the
transitional disclosures required by Statement of Financial Accounting
Standards No. 142, Goodwill and Other Intangible Assets, which was adopted
by the Company as of January 1, 2002. In our opinion, the disclosures for
2001 in Note 1 are appropriate. However, we were not engaged to audit,
review, or apply any procedures to the 2001 consolidated financial
statements of Knight Transportation, Inc. and subsidiaries other than with
respect to such disclosures and, accordingly, we do not express an opinion
or any other form of assurance on the 2001 consolidated financial
statements taken as a whole.

During our two most recent fiscal years ended December 31, 2003, and
December 31, 2002, and the subsequent interim period preceding KPMG's
resignation on March 16, 2004, there was no disagreement with KPMG on any matter
of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure, which disagreement, if not resolved to the
satisfaction of KPMG, would have caused KPMG to make a reference to the subject
matter of such disagreement in connection with its reports, and there occurred
no "reportable events" within the meaning of Item 304(a)(1)(v) of Regulation
S-K.

We have provided KPMG with a copy of the foregoing statements. A copy of
KPMG's letter to the SEC, dated March 23, 2004, stating its agreement with such
statements was filed as Exhibit 16.1 to our Current Report on Form 8-K filed
with the SEC on March 23, 2004.

As previously reported in our Current Report on Form 8-K filed with the SEC
on April 12, 2004, on that date the Audit Committee approved the engagement of
Deloitte & Touche as the our principal independent public accountants for fiscal
2004. During our two most recent fiscal years ended December 31, 2003 and
December 31, 2002, and the subsequent interim period through the date of our
engagement of Deloitte &

-24-

Touche, neither us nor anyone on our behalf consulted with Deloitte & Touche
regarding any of the matters or events set forth in Item 304(a)(2)(i) and (ii)
of Regulation S-K.

Change in Independent Public Accountants in 2002

As previously reported in our Current Report on Form 8-K filed with the SEC
on May 3, 2002, on April 29, 2002, we dismissed Arthur Andersen LLP ("Arthur
Andersen") as our independent public accountant, and engaged KPMG to replace
Arthur Andersen. These actions were approved by our Board of Directors upon the
recommendation of our Audit Committee. KPMG audited the consolidated financial
statements of the Company for the year ending December 31, 2002.

The reports issued by Arthur Andersen in connection with our financial
statements for the fiscal years ended December 31, 2001, and December 31, 2000,
respectively, did not contain an adverse opinion or disclaimer of opinion, nor
were these reports qualified or modified as to uncertainty, audit scope, or
accounting principles.

During the two fiscal years ended December 31, 2001, and December 31, 2000,
and the subsequent interim periods through the date of Arthur Andersen's
dismissal, there were no disagreements between us and Arthur Andersen, as
defined in Item 304 of Regulation S-K, on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of Arthur Andersen, would
have caused Arthur Andersen to make reference to the subject matter of the
disagreements in connection with its reports, and there occurred no "reportable
events" as defined in Item 304(a)(1)(v) of Regulation S-K.

We have provided Arthur Andersen with a copy of the foregoing statements. A
copy of Arthur Andersen's letter to the SEC, dated May 3, 2002, stating its
agreement with such statements was filed as Exhibit 16 to our Current Report on
Form 8-K filed with the SEC on May 3, 2002.

During the two fiscal years ended December 31, 2001 and 2000, through the
date of Arthur Andersen's dismissal, neither us nor anyone on our behalf
consulted with KPMG regarding any of the matters or events set forth in Item
304(a)(2)(i) and (ii) of Regulation S-K.

Principal Accounting Fees and Services

The following table shows the fees for professional services provided by
KPMG and Arthur Andersen for the audit of our annual financial statements for
each of the fiscal years ended December 31, 2003 and 2002, and the review of
financial statements included in our quarterly reports on Form 10-Q during those
periods, as well as fees billed by KPMG and Arthur Andersen for other services
rendered during those periods:

Fiscal 2003 Fiscal 2002
------------------- ------------------------------------------------------------------
KPMG KPMG Arthur Andersen(1) Total
------------------- -------------------- --------------------- ---------------------

Audit Fees(2) $ 108,700 $ 104,009 $ 18,131 $ 122,140
Audit-Related Fees(3) -- -- -- --
Tax Fees(4) $ 302,707 $ 331,316 -- $ 331,316
All Other Fees(5) -- -- -- --

-------------
(1) All amounts are for services provided prior to Arthur Andersen's dismissal
on April 29, 2002.

(2) Audit Fees represent fees billed for professional services rendered by the
principal independent public accountant for the audit of our annual
financial statements and review of financial statements included in our
quarterly reports on Form 10-Q, or services that are normally provided by
such accountant in connection with statutory or regulatory

-25-

filings or engagements for those fiscal years.

(3) Audit-Related Fees represent fees billed for assurance and related services
by the principal independent public accountant that are reasonably related
to the performance of the audit or review of financial statements. For
fiscal 2003 and 2002, we were not billed for any Audit-Related Fees.

(4) Tax Fees represent fees billed for professional services rendered by the
principal independent accountant for tax compliance, tax advice, and tax
planning. For each of fiscal 2003 and 2002, Tax Fees were comprised of fees
in respect of advice and the preparation of an opinion letter in connection
with a technology investment, state tax advice and planning services, and
advice in connection with the establishment of an insurance subsidiary.

(5) All Other Fees represent fees billed for products and services provided by
the principal independent public accountant, other than Audit Fees,
Audit-Related Fees, and Tax Fees. For fiscal 2003 and 2002, we were not
billed for any Other Fees.

Since July 30, 2002, our Audit Committee has maintained a policy pursuant
to which it pre-approves all audit, audit-related, tax, and other permissible
non-audit services provided by our principal independent accountant in order to
assure that the provision of such services is compatible with maintaining the
accountant's independence. Under this policy, the Audit Committee pre-approves,
on an annual basis, specific types or categories of engagements constituting
audit, audit-related, tax, or other permissible non-audit services to be
provided by the principal independent public accountant. Pre-approval of an
engagement for a specific type or category of services generally is provided for
up to one year and typically is subject to a budget comprised of a range of
anticipated fee amounts for the engagement. Management and the independent
public accountant are required to periodically report to the Audit Committee
regarding the extent of services provided by the principal independent
accountant in accordance with the annual pre-approval, and the fees for the
services performed to date. To the extent that management believes that a new
service or the expansion of a current service provided by the principal
independent accountant is necessary or desirable, such new or expanded services
are presented to the Audit Committee for its review and approval prior to the
engagement of the principal independent accountant to render such services. No
audit-related, tax, or other non-audit services were approved by the Audit
Committee pursuant to the de minimus exception to the pre-approval requirement
under Rule 2-01, paragraph (c)(7)(i)(C), of Regulation S-X during the fiscal
year ended December 31, 2003.

-26-

SHAREHOLDER PROPOSALS

To be eligible for inclusion in the Company's proxy materials relating to
the 2005 Annual Meeting of Shareholders, shareholder proposals intended to be
presented at that meeting must be received in writing by the Company on or
before December 15, 2004. The inclusion of any such shareholder proposals in
such proxy materials will be subject to the requirements of the proxy rules
adopted under the Exchange Act, including Rule 14a-8.

The Company must receive in writing any shareholder proposals intended to
be considered at its 2005 Annual Meeting of Shareholders, but not included in
the Company's proxy materials relating to that meeting, by February 28, 2005.
Pursuant to Rule 14(a)-4(c)(1) under the Exchange Act, the proxy holders
designated by an executed proxy in the form accompanying the Company's 2005
proxy statement will have discretionary authority to vote on any shareholder
proposal that is considered at the Annual Meeting, but not received on or prior
to the deadline described above.

All shareholder proposals should be sent via certified mail, return receipt
requested, and addressed to Timothy M. Kohl, Secretary, Knight Transportation,
Inc., 5601 West Buckeye Road, Phoenix, Arizona 85043.

See "Corporate Governance - The Board of Directors and Its Committees -
Committees of the Board of Directors - The Nominating Committee," above, for
information regarding how shareholders can recommend director candidates for
consideration by the Nominating Committee.

OTHER MATTERS

The Board of Directors does not intend to present at the Annual Meeting any
matters other than those described herein and does not presently know of any
matters that will be presented by other parties. If any other matters are
properly brought before the Annual Meeting or any adjournment thereof, the proxy
holders named in the accompanying for of proxy will have discretionary authority
to vote proxies on such matters in accordance with the recommendations of the
Board of Directors, or, if no recommendations are given, in accordance with
their judgment, unless the person executing any such proxy indicates that such
authority is withheld.

Knight Transportation, Inc.

/s/ Kevin P. Knight
Kevin P. Knight
Chairman of the Board and Chief Executive Officer

April 14, 2004

-27-

KNIGHT TRANSPORTATION, INC.
5601 West Buckeye Road, Phoenix, Arizona 85043

THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
FOR THE 2004 ANNUAL MEETING OF SHAREHOLDERS

Friday, May 21, 2004, 10:00 a.m., Phoenix Time

By executing this Proxy, the shareholder constitutes and appoints the Chairman
and Chief Executive Officer, Kevin P. Knight, and the President and Secretary,
Timothy M. Kohl, and each of them, as proxies for the shareholder (or if only
one proxy is present, that one shall have all power granted here), with full
power of substitution, who may, and by a majority of such proxies, represent the
shareholder and vote all shares of Common Stock which the shareholder is
entitled to vote at the Annual Meeting of Shareholders of Knight Transportation,
Inc. to be held on May 21, 2004, at 10:00 a.m., Phoenix Time, at the Arizona
Biltmore, 2400 East Missouri, Phoenix, Arizona 85016, or at any adjournment
thereof, on all matters described in the Notice and Proxy Statement for the
Annual Meeting dated April 14, 2004, as set forth below. Cumulative voting will
be applied in the election of directors. See the Proxy Statement furnished for
an explanation of cumulative voting.

--------------------------------------------------------------------------------
Detach here from proxy voting card

As a Knight Transportation, Inc. shareholder, you can view your shareholder
account on a secured internet web site.

By accessing Investor Service DirectSM at www.melloninvestor.com, you can view
your account profile, stock detail, and historical Knight Transportation, Inc.
stock price information. You can also change your address.

In addition, you can use this site to consent to future access of Knight's
annual reports and proxy materials electronically via the internet.

Knight also provides access to shareholder information, including its annual
report and proxy statement, through its web site at www.knighttrans.com.

Please mark
your votes as
indicated in
this example [X]

1. Proposal No. 1: Election of Class III Directors

NOMINEES FOR DIRECTOR:

01-Kevin P. Knight
02-Randy Knight
03-Michael Garnreiter

[ ] VOTE for all Nominees listed above.

[ ] WITHHOLD authorization to vote for all Nominees listed above.

[ ] WITHHOLD authorization to vote for any individual Nominee.
Write the number of each Nominee(s) for whom authorization is
withheld:____________________________________________________

OR - If you wish to allocate your votes among director nominees
using cumulative voting, indicate the number of votes you wish to cast
for each director nominee, as shown below (the maximum number of votes
you may allocate is the number of shares you own multiplied by the
number of director nominees).

Nominee Shares Voted
--------------------------------------------------------------

[ ] Kevin P. Knight--------------------------------- _______

[ ] Randy Knight ----------------------------------- _______

[ ] Michael Garnreiter ----------------------------- _______

[ ] WITHHOLD authorization to vote for any individual Nominee.
Write number the of each Nominee(s) for whom authorization is
withheld:____________________________________________________

2. Other Action. In their discretion, the proxies are also authorized
to vote upon such matters as may properly come before the Annual Meeting
or any adjournments thereof.

Signature*: ____________________________________________

Printed Signature:____________________________________________

Title: ____________________________________________

Signature: ____________________________________________

Title: ____________________________________________

DATED: _________________, 2004

* Signatures should conform to name in which you hold your shares.

Address Change?
Indicate changes here:

________________________________________
________________________________________

--------------------------------------------------------------------------------
Detach here from proxy voting card

The shareholder acknowledges receipt of the Notice and Proxy Statement dated
April 14, 2004, grants authority to any of said proxies, or their substitutes,
to act in the absence of others, with all the powers which the shareholder would
possess if personally present at such meeting, and hereby ratifies and confirms
all that said proxies, or their substitutes, may lawfully do in the
shareholder's name, place and stead.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF KNIGHT
TRANSPORTATION, INC., AND THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN
ACCORDANCE WITH YOUR INSTRUCTIONS. IF NO CHOICE IS SPECIFIED BY YOU, THIS PROXY
WILL BE VOTED FOR THE ELECTION OF NOMINEES NAMED IN PROPOSAL NO. 1.

Please mark, sign, date and return the Proxy Card promptly, using the enclosed
envelope, which requires no postage when mailed in the United States.

Please sign above exactly as your name appears. When shares are held by joint
tenants, both shall sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by president or other authorized officer. If a
partnership, please sign in partnership name by authorized person.