| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
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On February 21, 2013, the Compensation Committee of the Board of Directors (the "Committee") of Covenant Transportation Group, Inc., a Nevada corporation (the "Company"), made certain compensation changes as described below.
Restricted Stock Grants
The Committee approved restricted stock grants to certain named executive officers of the Company in lieu of salary increases to such named executive officers. The following table sets forth such grants to such named executive officers:
| Named Executive Officer | Shares of Restricted Stock |
| David R. Parker | 5,350 |
| Joey B. Hogan | 2,750 |
| Tony Smith | 2,500 |
The Committee reviewed historical salaries of David R. Parker, Joey B. Hogan, and Tony Smith and noted none of these named executive officers had been granted salary increases since 2008, and all had voluntarily reduced their salaries in 2009 and 2010. The Committee also considered the benefits of equity grants in terms of retention and further aligning the long-term interests of management with those of stockholders. At the grant date closing price of $5.55, the grant values are approximately equal to a 5% increase in salary, although the grants are not necessarily annual in the manner of a salary increase. The grants set forth in the table above vest on the one-year anniversary of the grant date, or February 21, 2014, subject to continued employment.
2013 Bonus Plan
The Committee also approved performance-based bonus opportunities for the Company's senior management group (the "Program") under the Company's 2006 Omnibus Incentive Plan, as amended (the "Plan"). As set forth in the Plan, the Committee may choose from a range of defined performance measures.
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 fiscal 2013 consolidated earnings per share targets (and, for Tony Smith, the satisfaction of the fiscal 2013 operating income and operating ratio targets established for the Company's subsidiary, Southern Refrigerated Transport, Inc. ("SRT") (collectively, the "Performance Targets"). Each applicable Performance Target corresponds to a percentage bonus opportunity for the employee that is multiplied by the employee's base salary to determine the employee's bonus. Pursuant to the Program, (i) David Parker, Joey Hogan, and R.H. Lovin, as named executive officers, may receive between 25.0% and 100.0% of their respective base salary depending on the Performance Targets that are achieved, if any, (ii) Richard Cribbs, another named executive officer, may receive between 20.0% and 80.0% of his base salary depending on the Performance Targets that are achieved, if any, and (iii) Tony Smith, as the remaining named executive officer, may receive between 5.0% and 20.0% of his base salary depending on the Performance Targets achieved for the consolidated group, if any, and between 20.0% and 80.0% of his base salary based on Performance Targets achieved for SRT, if any.
