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):
February
28, 2007
___________________________________________________________________
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
5.02
|
Departure
of Directors or Certain Officers; Election of Directors; Appointment
of
Certain
Officers; Compensatory Arrangements of Certain
Officers
|
On
February 28, 2007, the Compensation Committee of the Board of Directors (the
“Committee”) of Covenant Transport, Inc., a Nevada corporation (the “Company”),
approved the key terms of the Company’s 2007 Bonus Program (the “Program”),
which was approved under the Company’s 2006 Omnibus Incentive Plan (the “Plan”).
As set forth in the Plan, which was approved by the Company’s stockholders at
the 2006 annual meeting of stockholders, the Committee may choose from a
range
of defined performance measures. The Committee approved operating income
and
operating ratio targets (the “Performance Targets”) as the basis for bonuses to
be paid pursuant to the Program for each of the following service offerings
(or
combination of service offerings) and subsidiaries (each, a “Business Unit”) and
on a consolidated basis: Expedited, Dedicated, Covenant Regional/Over the
Road,
the total Covenant division (prior three service offerings), Southern
Refrigerated Transport, Inc., Star Transportation, Inc., and Covenant Transport
Solutions, Inc. The Performance Targets are generally consistent with the
Company’s goal to improve its consolidated operating ratio by 100 to 200 basis
points in 2007 versus 2006, although the Performance Targets for some Business
Units require significantly greater improvement and the Performance Targets
for
some Business Units allow for a decrease in performance versus
2006.
Under
the
Program and consistent with the objectives of the Plan, certain employees,
including the Company’s named executive officers, may receive bonuses upon
satisfaction of the Performance Targets established for 2007. Bonuses awarded
pursuant to the Program will be determined by a formula established by the
Committee that is tied to achievement of one or both of the Performance Targets.
The formula established by the Committee utilizes incremental levels of
achievement of the Performance Targets, subject to upward or downward adjustment
in defined circumstances. The applicable percentage of the Performance Target
that is achieved is then multiplied by the employee’s target bonus to determine
the employee’s bonus.
The
following chart highlights the method by which the bonus payments to the
Company’s named executive officers would be calculated should the Company meet
100% of the Performance Targets for 2007:
|
Named
executive officer
|
Target
bonus as a
percentage
(%) of
base
salary(1)
|
Basis
of
Performance
Targets(2)
|
|
David
R. Parker,
Chairman,
President, and Chief Executive Officer
|
50%
|
Consolidated
|
|
Michael
W. Miller,
Executive
Vice President—Procurement and Corporate Operations
Manager
|
50%
|
Consolidated
|
|
Joey
B. Hogan,
Executive
Vice President and
Chief
Financial Officer
|
50%
|
Consolidated
|
|
L.D.
“Micky” Miller, III,
Executive
Vice President—Sales and Marketing
|
50%
|
Consolidated
|
|
Tony
Smith,
President
of Southern Refrigerated Transport, Inc.
|
50%
|
Southern
Refrigerated Transport, Inc.
|
| (1) | Bonuses payable for 2007 (if any) will vary depending on the extent to which actual performance meets, exceeds, or falls short of the Performance Targets. Bonuses payable for the named executive officers can range from 15% to 130% of the employee’s target bonus. |
|
(2)
|
Performance
Targets are tied to the achievement of operating income and operating
ratio goals. Performance Targets for senior executive officers and
most
other participants with corporate-wide responsibility are tied to
operating income and operating ratio goals calculated on a consolidated
basis. Performance Targets for Business Unit managers and other
participants dedicated primarily to a single Business Unit are tied
to
operating income and operating ratio goals for the Business Unit.
|
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:
March 6, 2007
|
By:
|
/s/ Joey B. Hogan |
|
Joey
B. Hogan
Executive
Vice President and Chief Financial
Officer
|