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Exhibit 10.24

 
COVENENT TRANSPORT, INC.
2006 OMNIBUS INCENTIVE PLAN

AWARD NOTICE

 
GRANTEE:
   
 
TYPE OF AWARD:
 
 
Incentive Stock Option (See below and refer to the Plan and your Section 10(a)
prospectus for limitations)
 
NUMBER OF SHARES:
   
 
EXERCISE PRICE PER SHARE:
   
 
DATE OF GRANT:
   
 
EXPIRATION DATE:
   

1. Grant of Option. This Award Notice serves to notify you that Covenant
Transport, Inc., a Nevada corporation (the “Company”), hereby grants to you,
under the Company’s 2006 Omnibus Incentive Plan (the “Plan”), an option (the
“Option”) to purchase, on the terms and conditions set forth in this Award
Notice and the Plan, up to the number of shares set forth above (the “Option
Shares”) of the Company’s Class A Common Stock, par value $0.01 per share (the
“Common Stock”), at the price per Share set forth above. It is the Company’s
intention that the Option qualify as an incentive stock option, as defined in
Section 422 of the Code to the extent possible. To the extent the entire Option
will not so qualify (for example because the value of the portion of the Option
first vesting in any year exceeds the dollar limitation for incentive stock
options) then the maximum portion of the Option (each year) shall be deemed an
incentive stock option and the remainder shall be deemed a non-qualified stock
option. The Plan is incorporated herein by reference and made a part of this
Award Notice. A copy of the Plan is available from the Company’s Chief Financial
Officer upon request. You should review the terms of this Award Notice and the
Plan carefully.

2.  Term. Unless the Option is previously terminated pursuant to the terms of
the Plan, the Option will expire at the close of business on the expiration date
set forth above (the “Expiration Date”).

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3.  Vesting. Subject to the terms and conditions set forth in this Award Notice
and the Plan, the Option will vest and become exercisable commencing on _______,
in accordance with the following schedule:
 
Vesting Date
 
Cumulative Percentage of
Option Shares Vested

 
No vesting shall occur following termination of your employment with the Company
or any Subsidiary.

4.  Exercise.

(a)  Method of Exercise. To the extent exercisable under Section 3, the Option
may be exercised in whole or in part, provided that the Option may not be
exercised for less than one (1) share of Common Stock in any single transaction.
The Option shall be exercised by your giving written notice of such exercise to
the Company specifying the number of Option Shares that you elect to purchase
and the Exercise Price to be paid. Upon determining that compliance with this
Award Notice has occurred, including compliance with such reasonable
requirements as the Company may impose pursuant to the Plan and payment of the
Exercise Price, the Company shall issue to you a certificate for the Option
Shares purchased on the earliest practicable date (as determined by the Company)
thereafter.

(b)  Payment of Exercise Price. To the extent permissible under the Plan, the
Exercise Price may be paid as follows:

(i)  In United States dollars in cash or by check, bank draft, or money order
payable to the Company;

(ii) At the sole discretion of the Committee, through the delivery of shares of
Common Stock with an aggregate Fair Market Value at the date of such delivery
equal to the Exercise Price;

(iii)  Subject to any and all limitations imposed by the Committee from time to
time (which may not be uniform), through a "cashless exercise," whereby you (i)
irrevocably instruct a broker or dealer to sell, on your behalf, shares of
Common Stock to be issued upon exercise pursuant to this Award Notice and to
deliver cash sale proceeds therefrom to the Company in payment of the Exercise
Price, and (ii) direct the Company to deliver shares of Common Stock to be
issued upon such exercise of this Option directly to such broker or dealer; or

(iv) Any other method approved or accepted by the Committee in its sole
discretion, subject to any and all limitations imposed by the Committee from
time to time (which may not be uniform).

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The Committee in its sole discretion shall determine acceptable methods for
surrendering Common Stock or options as payment upon exercise of the Option and
may impose such limitations and conditions on the use of Common Stock or options
to exercise the Option as it deems appropriate. Among other factors, the
Committee will consider the restrictions of Rule 16b-3 of the Exchange Act and
Section 402 of the Sarbanes-Oxley Act, and any successor laws, rules, or
regulations.

(c)  Withholding. The exercise of the Option is conditioned upon your making
arrangements satisfactory to the Company for the payment of the amount of all
taxes required by any governmental authority to be withheld and paid over by the
Company or any Subsidiary to the governmental authority on account of the
exercise. The payment of such withholding taxes to the Company or any Subsidiary
may be made by one or any combination of the following methods: (i) in cash or
by check, (ii) by the Company withholding such taxes from any other compensation
owed to you by the Company or any Subsidiary, (iii) pursuant to a cashless
exercise program as contemplated in Section 4(b)(iii) above, or (iv) or any
other method approved or accepted by the Committee in its sole discretion,
subject, in the case of Section 4(c)(iii) and 4(c)(iv), to any and all
limitations imposed by the Committee from time to time (which may not be
uniform) as contemplated in Section 4(b)(iii) and Section 4(b)(iv) above.

5.  Effect of Death. In the event of your death prior to the complete exercise
of the Option, the remaining portion of the Option may be exercised in whole or
in part, subject to all of the conditions on exercise imposed by the Plan and
this Award Notice, within one (1) year after the date of your death, but only:
(a) by the beneficiary designated on your beneficiary designation form filed
with the Company, or in the absence of same, by your estate or by or on behalf
of the person or persons to whom the Option passes under your will or the laws
of descent and distribution, (b) to the extent that the Option was vested and
exercisable on the date of your death, and (c) prior to the close of business on
the Expiration Date of the Option.

6.  Effect of Disability. In the event of your Disability (as defined below)
prior to the complete exercise of the Option, the remaining portion of the
Option may be exercised in whole or in part, subject to all of the conditions on
exercise imposed by the Plan and this Award Notice, within one (1) year after
the date of your Disability, but only: (a) to the extent that the Option was
vested and exercisable on the date of your Disability, and (b) prior to the
close of business on the Expiration Date of the Option. The term “Disability”
means you are permanently and totally disabled within the meaning of Section
22(e)(3) of the Code.

7.  Effect of Other Termination.

(a)  With Cause. Upon your termination by the Company or any Subsidiary for
Cause (as defined below) prior to the complete exercise of the Option, the
remaining portion of the Option, whether or not then exercisable, shall be
forfeited as of the date of such termination and shall no longer be exercisable
on or after such date of termination.

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(b)  Without Cause. Upon your termination for a reason other than death,
Disability, or Cause (as defined below) prior to the complete exercise of the
Option, the remaining portion of the Option may be exercised in whole or in
part, subject to all of the conditions on exercise imposed by the Plan and this
Award Notice, within three (3) months after the date of such termination, but
only: (i) to the extent that the Option was vested and exercisable on the date
such termination, and (ii) prior to the Expiration Date of the Option.

(c)  “Cause” Defined. The term “Cause” means (i) your willful and continued
failure to substantially perform your duties with the Company or a Subsidiary
after written warnings identifying the lack of substantial performance are
delivered to you to specifically identify the manner in which the Company or
Subsidiary believes that you have not substantially performed your duties, (ii)
your willful engaging in illegal conduct which is materially and demonstrably
injurious to the Company or any Subsidiary, (iii) your commission of a felony,
(iv) your material breach of a fiduciary duty owed by you to the Company or any
Subsidiary, (v) your intentional, unauthorized disclosure to any person of
confidential information or trade secrets of a material nature relating to the
business of the Company or any Subsidiary, or (vi) your engaging in any conduct
that the Company’s or a Subsidiary’s written rules, regulations, or policies
specify as constituting grounds for discharge.

8.  Effect of Change In Control. 

(a)  In General. Upon the occurrence of a Change In Control (as defined below),
the unvested portion of the Option shall immediately vest and become exercisable
as of the date of the occurrence of such event.

(b)  “Change In Control” Defined. The term “Change In Control” means a change in
control of the Company of a nature that would be required to be reported in
response to Item 5.01 of a Current Report on Form 8-K, as in effect on December
31, 2004, pursuant to Section 13 or 15(d) of the Exchange Act; provided that,
without limitation, a Change In Control shall be deemed to have occurred at such
time as:

(i)  Any “person” within the meaning of Section 14(d)(2) of the Exchange Act and
Section 13(d)(3) of the Exchange Act, other than a Permitted Holder becomes the
“beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, directly or
indirectly, of fifty percent (50%) or more of the combined voting power of the
outstanding securities of the Company ordinarily having the right to vote in the
election of directors; provided, however, that the following will not constitute
a Change In Control: any acquisition by any corporation if, immediately
following such acquisition, more than seventy-five percent (75%) of the
outstanding securities of the acquiring corporation (or the parent thereof)
ordinarily having the right to vote in the election of directors is beneficially
owned by all or substantially all of those persons who, immediately prior to
such acquisition, were the beneficial owners of the outstanding securities of
the Company ordinarily having the right to vote in the election of directors;

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(ii)  Individuals who constitute the Board at the date of the adoption of the
Plan (the “Incumbent Board”) have ceased for any reason to constitute at least a
majority thereof, provided that any person becoming a director subsequent to the
date of the adoption of the Plan, whose election, or nomination for election by
the Company’s stockholders, was approved by a vote of at least three-fourths
(3/4) of the directors comprising the Incumbent Board, either by a specific vote
or by approval of the proxy statement of the Company in which such person is
named as a nominee for director without objection to such nomination (other than
an election or nomination of an individual whose initial assumption of office is
in connection with an actual or threatened “election contest” relating to the
election of directors of the Company, as such terms are used in Rule 14a-11
under the Exchange Act as in effect on January 23, 2000, or “tender offer,” as
such term is used in Section 14(d) of the Exchange Act), shall be, for purposes
of the Plan, considered as though such person were a member of the Incumbent
Board;

(iii)  Upon the consummation by the Company of a reorganization, merger, or
consolidation, other than one with respect to which all or substantially all of
those persons who were the beneficial owners, immediately prior to such
reorganization, merger or consolidation, of outstanding securities of the
Company ordinarily having the right to vote in the election of directors own,
immediately after such transaction, more than seventy-five percent (75%) of the
outstanding securities of the resulting corporation ordinarily having the right
to vote in the election of directors; or

(iv)  Upon the approval by the Company’s stockholders of a complete liquidation
and dissolution of the Company or the sale or other disposition of all or
substantially all of the assets of the Company other than to a Subsidiary.

(c)  “Permitted Holder” Defined. The term “Permitted Holder” means: (i) the
Company or a Subsidiary, (ii) any employee benefit plan sponsored by the Company
or any Subsidiary, or (iii) David or Jacqueline Parker or their siblings,
children, or grandchildren (“Family Members”) or a trust, corporation,
partnership, limited partnership, limited liability company, or other such
entity, so long as at least eighty percent (80%) of the beneficial interests of
the entity are held by Mr. or Mrs. Parker and/or one or more Family Members,
where such person(s) or entity acquired their Company stock from Mr. or Mrs.
Parker.

9.  Notice of Disposition of Shares. You hereby agree that you shall promptly
notify the Company of the disposition of any of the Option Shares acquired upon
exercise of the Option, including a disposition by sale, exchange, gift, or
transfer of legal title, if such disposition occurs within two (2) years from
the Date of Grant or within one (1) year from the date that you exercise the
Option and acquire such Option Shares.

10.  Nonassignability. The Option may not be alienated, transferred, assigned,
or pledged (except by will or the laws of descent and distribution). Except as
otherwise provided by Section 5 of this Award Notice, the Option is only
exercisable by you during your lifetime.

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11.  Limitation of Rights. You will not have any rights as a stockholder with
respect to the Option Shares until you become the holder of record of such
shares by exercising the Option. Neither the Plan, the granting of the Option,
nor this Award Notice gives you any right to remain in the employment of the
Company or any Subsidiary.

12.  Rights of the Company and Subsidiaries. This Award Notice does not affect
the right of the Company or any Subsidiary to take any corporate action
whatsoever, including without limitation its right to recapitalize, reorganize,
or make other changes in its capital structure or business, merge or
consolidate, issue bonds, notes, shares of Common Stock, or other securities,
including preferred stock, or options therefor, dissolve or liquidate, or sell
or transfer any part of its assets or business.

13.  Restrictions on Issuance of Shares. If at any time the Company determines
that the listing, registration, or qualification of the Option Shares upon any
securities exchange or quotation system, or under any state or federal law, or
the approval of any governmental agency, is necessary or advisable as a
condition to the exercise of the Option, the Option may not be exercised in
whole or in part unless and until such listing, registration, qualification, or
approval shall have been effected or obtained free of any conditions not
acceptable to the Company.

14.  Plan Controls; Definitions. The Option is subject to all of the provisions
of the Plan, which is hereby incorporated by reference, and is further subject
to all the interpretations, amendments, rules, and regulations that may from
time to time be promulgated and adopted by the Committee pursuant to the Plan.
Except as set forth in the last sentence of this Section 14, in the event of any
conflict among the provisions of the Plan and this Award Notice, the provisions
of the Plan will be controlling and determinative. The capitalized terms used in
this Award Notice and not otherwise defined herein are defined in the Plan;
provided, however, that when the defined term "Company" is used in the Plan in
Sections 2.1(c), 2.1(d), 2.1(g), 2.1(o), 2.1(r), 2.1(cc), 4.2(h) (second usage),
4.3, 6.1, 6.2, 11.3, 13.2 (second usage), 16.2, and 16.4, the term "Company"
shall be interpreted to mean only Covenant Transport, Inc., a Nevada corporation
(and not also its Subsidiaries).

15.  Amendment. Except as otherwise provided by the Plan, the Company may only
alter, amend, or terminate the Option with your consent.

16.  Governing Law. This Award Notice shall be governed by and construed in
accordance with the laws of the State of Nevada, except as superseded by
applicable federal law, without giving effect to its conflicts of law
provisions.

17.  Obligation to Maintain Stock Ownership. Your ability to dispose of common
stock may be limited by stock ownership guidelines adopted by the Company for
certain officers and key employees, and the Company is authorized to place a
restrictive legend on such shares, issue stop-transfer instructions to the
transfer agent, or take such other actions as may be advisable, in the
Committee’s sole discretion, to enforce such ownership guidelines. Please
determine whether you are subject to the guidelines and how many shares of
common stock may be disposed of prior to attempting to dispose of any shares.

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18.  Notices. All notices and other communications to the Company required or
permitted under this Award Notice shall be written, and shall be either
delivered personally or sent by registered or certified first-class mail,
postage prepaid and return receipt requested, addressed to the Company’s office
at 400 Birmingham Highway, Chattanooga, Tennessee 37419, Attention: Chief
Financial Officer. Each such notice and other communication delivered personally
shall be deemed to have been given when delivered. Each such notice and other
communication delivered by mail shall be deemed to have been given when it is
deposited in the United States mail in the manner specified herein.
 
 
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ACKNOWLEDGEMENT

The undersigned acknowledges receipt of, and understands and agrees to be bound
by, this Award Notice and the Plan. The undersigned further acknowledges that
this Award Notice and the Plan set forth the entire understanding between him or
her and the Company regarding the incentive stock options granted by this Award
Notice and that this Award Notice and the Plan supersede all prior oral and
written agreements on that subject.

Dated: ___________, 20__

 
Grantee:
                 
Covenant Transport, Inc.
             
By:
   
Name:
 
 
Title:
 

 
Back to Form 10-Q [form10q.htm]
 
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