UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
___________________________________________________________________
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date
of
Report (Date of earliest event reported):
May
23,
2006
___________________________________________________________________
COVENANT
TRANSPORT, INC.
(Exact
name of registrant as specified in its charter)
|
Nevada
|
000-24960
|
88-0320154
|
|
(State
or other jurisdiction
of
incorporation)
|
(Commission
File
Number)
|
(IRS
Employer
Identification
No.)
|
|
400
Birmingham Hwy., Chattanooga, TN
|
37419
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
(423)
821-1212
(Registrant's
telephone number, including area code)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
|
[ ]
|
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
|
|
[
]
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
[
]
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
|
|
[
]
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
|
|
Item
1.01
|
Entry
into a Material Definitive Agreement.
|
|
Stockholder
Approval of the 2006 Omnibus Incentive Plan
On
May 23, 2006, the stockholders of Covenant Transport, Inc., a Nevada
corporation (the "Company"), upon the recommendation of the Company's
Board of Directors (the "Board"), approved the 2006 Omnibus Incentive
Plan
(the "2006 Plan"). The 2006 Plan replaces the Company's 2003 Incentive
Stock Plan, Amended and Restated Incentive Stock Plan, Outside
Director
Stock Option Plan, and 1998 Non-Officer Incentive Stock Plan. A
summary of
certain provisions of the 2006 Plan is included on pages 21 through
27 of
the Company's Definitive Proxy Statement filed with the Securities
and
Exchange Commission on April 17, 2006 (the "Proxy Statement"),
and a copy
of the 2006 Plan is attached as Appendix A to the Proxy Statement.
Awards
of Restricted Common Stock and Option to Purchase Common Stock
to Certain
Officers
On
May 23, 2006, the Compensation Committee of the Board, upon receiving
stockholder approval of the 2006 Plan, granted thereunder (i) annual
and
special awards of restricted shares of the Company's Class A common
stock,
$0.01 par value per share ("Common Stock"), and (ii) an option
to purchase
shares of Common Stock to certain officers of the Company, as set
forth in
the table below.
|
|
Officer
|
Title
|
Annual
Award of Restricted Common Stock
|
Special
Award of Restricted Common Stock
|
Award
of Option to Purchase Common Stock
|
|
|
Jeffery
Acuff
|
Vice
President and General Manager, Expedited Service Offering
|
3,000
|
25,000
|
N/A
|
|
|
Richard
Cribbs
|
Corporate
Controller
|
1,500
|
N/A
|
2,500
|
|
|
Joey
Hogan
|
Executive
Vice President and Chief Financial Officer
|
4,000
|
33,333
|
N/A
|
|
|
David
Hughes
|
Treasurer
and Director of Business Development
|
3,000
|
25,000
|
N/A
|
|
|
R.H.
Lovin
|
Senior
Vice President - Administration
|
3,000
|
25,000
|
N/A
|
|
|
L.D.
Miller
|
Executive
Vice President - Sales and Marketing
|
3,000
|
33,333
|
N/A
|
|
|
Michael
Miller
|
Executive
Vice President and Chief Operating Officer
|
4,000
|
33,333
|
N/A
|
|
|
David
Parker
|
Chairman,
President, and Chief Executive Officer
|
4,000
|
50,000
|
N/A
|
|
|
Jeffrey
Paulsen
|
Vice
President and General Manager, Over-the-Road Service
Offering
|
3,000
|
25,000
|
N/A
|
|
|
Mary
Roseman
|
Director
of Accounts Receivable
|
1,200
|
8,333
|
N/A
|
|
|
Tony
Smith
|
President,
Southern Refrigerated Transport, Inc.
|
3,000
|
25,000
|
N/A
|
|
|
Jeffrey
Taylor
|
Vice
President and General Manager, Temperature-Controlled Service
Offering
|
3,000
|
25,000
|
N/A
|
|
|
Richard
Towe
|
Senior
Vice President - Driver Recruiting and Retention
|
3,000
|
8,333
|
N/A
|
|
Annual
Award of Restricted Common Stock.
As part of the annual award, the Compensation Committee granted a
total of
38,700 shares of restricted Common Stock to certain officers of the
Company. Such shares will vest in equal increments over the four-year
period beginning on the first anniversary of the award date, subject
to
the Company's reaching of the earnings-per-share targets of $0.75
in 2006,
$1.05 in 2007, $1.35 in 2008, and $1.55 in 2009. Any percentage that
fails
to vest as a result of failure to reach a particular target will
vest if
the Company meets a subsequent target. As a condition to selling
any
vested shares of restricted Common Stock, the recipients are required
to
maintain an equivalent of 200% of their respective annual salaries
on the
date of the proposed sale in the combination of (i) Common Stock,
and (ii)
50% of the value of (a) unexercised options to purchase Common Stock,
and
(b) restricted Common Stock; provided that the recipients may sell
such
portion of the restricted shares that is necessary to cover the federal
and state taxes the holder incurs upon vesting of the shares. The
granted
shares are subject to additional terms set forth in the 2006 Plan
and the
Officer Restricted Stock Award Notice substantially in the form that
will
be filed as an exhibit to the Company's Quarterly Report on Form
10-Q for
the quarterly period ended June 30, 2006.
Special
Award of Restricted Common Stock.
In connection with the Company's internal realignment and goal to
return
to a 90% operating ratio or better, the Compensation Committee made
a
special grant to individuals with key roles in the Company's performance.
The grant is conditioned upon achieving a goal of $2.00 per share
by 2010.
The special award included a total of 316,665 shares of restricted
Common
Stock. Such shares will vest completely in any year between 2007
and 2010
in which the Company has reached an earnings-per-share target of
$2.00.
The earnings-per-share target excludes the effect of the vesting
of the
awards on earnings per share as well as extraordinary gains. The
recipients must hold the shares for one year after vesting; provided
that
the recipients may sell such portion of the restricted shares that
is
necessary to cover the federal and state taxes the holder incurs
upon
vesting of the shares. The shares are subject to additional terms
set
forth in the 2006 Plan and the Restricted Stock Special Award Notice
substantially in the form that will be filed as an exhibit to the
Company's Quarterly Report on Form 10-Q for the quarterly period
ended
June 30, 2006.
Award
of Option to Purchase Common Stock.
The Compensation Committee granted an option to purchase 2,500 shares
of
Common Stock to an officer in connection with his appointment as
the
Company's Controller. The option was granted at an exercise price
of
$12.79, the closing price of Common Stock on the award date, vests
in
equal increments over the three-year period beginning on the first
anniversary of the award date, and expires on the tenth anniversary
of the
award date. The option is subject to additional terms set forth in
the
2006 Plan and the Incentive Stock Option Award Notice substantially
in the
form that will be filed as an exhibit to the Company's Quarterly
Report on
Form 10-Q for the quarterly period ended June 30,
2006.
|
|
Changes
in Compensation of, and Awards of Common Stock to, Outside
Directors
Changes
in Outside Director Compensation.
On May 23, 2006, the Board, acting pursuant to a recommendation of
the
Compensation Committee, increased the annual retainer of the Company's
outside directors from $15,000 to $25,000, payable quarterly, and
eliminated all of the fees payable to the outside directors per Board
or
committee meeting attended. The Board also increased the additional
annual
retainer of the Audit Committee Chairman and the Compensation Committee
Chairman from $5,000 and $3,000 to $7,500 and $5,000, respectively.
In
addition, the Board established a new additional annual retainer
in the
amount of (i) $3,000 for the Nominating and Corporate Governance
Committee
Chairman, and (ii) $5,000, $4,000, and $2,500 for each member of
the Audit
Committee, Compensation Committee, and Nominating and Corporate Governance
Committee, respectively.
Award
of Common Stock to Outside Directors.
On the same date, each outside director was granted 1,955 shares
of Common
Stock, with an approximate $25,000 cash value based on the closing
price
of Common Stock on the award date. A total of 11,730 of shares of
Common
Stock were granted. The award is not subject to any additional conditions
and is effective on the award date. This award is in lieu of stock
options
that had previously been a part of outside director compensation.
The
directors can only sell the shares if, after the sale, they maintain
a
minimum of $100,000 in value of Common Stock.
|
|
|
Item
7.01
|
Regulation FD
Disclosure.
|
|
Extension
of Stock Repurchase Program
On
May 23, 2006, the Board extended the Company's existing stock repurchase
program until June 30, 2007. Under the program the Company has the
authority to repurchase up to 1,154,100 shares of Common Stock in
open
market or negotiated transactions.
Appointment
of Corporate Controller
On
May 15, 2006, Richard Cribbs joined the Company as Controller. Mr.
Cribbs
has over 15 years of accounting experience. Mr. Cribbs previously
served
as corporate controller of a company with publicly traded debt and
chief
financial officer of a large private company. He is a certified public
accountant with four years of experience at Arthur
Andersen LLP from 1992 to 1996.
The
information reported under this item shall not be deemed "filed"
for
purposes of Section 18 of the Securities Exchange Act of 1934, as
amended
(the "Exchange Act"), or incorporated by reference in any filing
under the
Securities Act of 1933, as amended, or the Exchange Act, except as
shall
be expressly set forth by specific reference in such a filing. The
furnishing of this information does not constitute an admission as to
the materiality of any such
information.
|
|
Item
9.01
|
Financial
Statements and Exhibits.
|
|
|
(c)
|
Exhibits.
|
|
|
EXHIBIT
NUMBER
|
EXHIBIT
DESCRIPTION
|
|
|
10.21
|
2006
Omnibus Incentive Plan (incorporated by reference to Appendix A to
the
Company's Definitive Proxy Statement filed April 17, 2006, File No.
000-24960)
|
|
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
COVENANT
TRANSPORT, INC.
|
||
|
Date:
May 26, 2006
|
By:
|
/s/
Joey B. Hogan
|
|
Joey
B. Hogan
Executive
Vice President and Chief Financial
Officer
|
EXHIBIT
INDEX
|
EXHIBIT
NUMBER
|
EXHIBIT
DESCRIPTION
|
|
|
10.21
|
2006
Omnibus Incentive Plan (incorporated by reference to Appendix A to
the
Company's Definitive Proxy Statement filed April 17, 2006, File No.
000-24960)
|
|