exhibit102.htm


    Exhibit
10.2

    


    Covenant
Transportation Group, Inc.

    2009
Voluntary Incentive Opportunity

    


    The
Compensation Committee of the Board of Directors annually reviews and considers
increases in the base salaries of our Chief Executive
Officer, Chief Financial Officer, and our three other must highly
compensated executive officers (collectively, the "Named Executive
Officers").  Messrs. David Parker and Joey Hogan voluntarily elected
to reduce their 2009 base salaries from $535,500 to $492,660 and from $275,000
to $253,000, respectively, with such salary reductions becoming effective as of
the first pay period in January 2009.  In March of 2009, in
conjunction with the 2009 Voluntary Incentive Opportunity (as defined below),
Messrs. Richard Cribbs, Tony Smith, and Jim Brower voluntarily elected to reduce
their 2009 base salaries from $175,000 to $168,437; from $250,000 to $231,250;
and from $200,000 to $192,500, respectively.  Additionally, Messrs.
Parker and Hogan elected to further reduce their 2009 base salaries, from
$492,660 to $484,627 and from $253,000 to $248,875, respectively.  The
March 2009 voluntary salary reductions became effective as of the first pay
period in April of 2009.  As set forth below, the stockholders of the
Company are being asked to approve the Amendment to the Incentive Plan at the
2009 Annual Meeting, which shall have the effect of making additional shares
available for the grant of awards under the Incentive Plan from and after the
effective date of the Amendment.  Such approval of the Amendment is
necessary to effectuate the grant of shares of restricted Class A common stock
to Messrs. Cribbs, Smith, and Brower under the 2009 Voluntary Incentive
Opportunity, and accordingly, maintain the reduced 2009 cash base salaries for
such Named Executive Officers discussed herein.  Based on the Named
Executive Officers' voluntary election to reduce their 2009 base salaries, the
Compensation Committee did not consider any increases in the base salaries of
our Named Executive Officers for 2009.

    


    In March
2009, after considering (i) certain of our goals, including our desire to
control costs and conserve cash, (ii) discussions with and the recommendations
of Messrs. Parker and Hogan, and (iii) our compensation philosophy and the
guidelines described above, the Compensation Committee approved a plan under
which individuals that voluntarily forfeited a portion of their 2009 base salary
(up to ten percent (10%)) would receive, in exchange for such forfeiture, a
special grant of restricted shares of our Class A common stock equal to (y) the
amount of 2009 base salary voluntarily forfeited by such individuals divided by
(z) the closing price of our Class A common stock two full trading days
following release of our first quarter 2009 earnings (the "2009 Voluntary
Incentive Opportunity").  Pursuant to the 2009 Voluntary Incentive
Opportunity, each individual electing to participate was required to make such
election by March 31, 2009.  As of March 31, 2009, all of the Named
Executive Officers had elected to participate in the 2009 Voluntary
Incentive Opportunity for a period of one year (the "Incentive Period") from
April 1, 2009, through March 31, 2010; provided, that the Incentive Period is
January 1, 2009, through December 31, 2009, for Messrs. Parker and Hogan, who
each, as discussed above, voluntarily reduced their 2009 base salaries effective
as of the first pay period in January 2009. At the expiration of the applicable
Incentive Period, each Named Executive Officer's salary will revert back to his
original 2009 base salary.

    


    Except as
explained herein with respect to Messrs. Parker and Hogan, the awards granted to
the Named Executive Officers under the 2009 Voluntary Incentive
Opportunity were contingent upon approval by our stockholders of
an amendment to the 2006 Omnibus Incentive Plan.  The amendment
was approved and, accordingly, this contingency has been removed.

    


    The
restricted shares granted to each Named Executive Officer as part of the 2009
Voluntarily Incentive Opportunity will vest in one-third increments when and to
the extent our Class A common stock trades at or above $4.00, $6.00, and
$8.00 for thirty consecutive trading days during the period beginning
January 1, 2010, and ending on December 31, 2011.  Any restricted
shares granted as part of an award under the 2009 Voluntary Incentive
Opportunity that have not vested as of December 31, 2011, will
automatically be forfeited without any obligation of ours to pay any amount to
the Named Executive Officers for such unvested shares, to return any forfeited
2009 base salary of the Named Executive Officers, or to make any other payment
or award whatsoever.  The Compensation Committee believes that the
2009 Voluntary Incentive Opportunity will assist us in reducing costs and
conserving cash, while at the same time creating an incentive for the Named
Executive Officers to maximize stockholder value.

     

    Back to Form
10-Q