Exhibit 10.16
 
[forwardair.jpg]
 
[Date]
 
 
Nonqualified Stock Option Agreement

To the Optionee (the "Optionee") executing the reference and signature page(s)
(the "Signature Page") to this Nonqualified Stock Option Agreement (this
"Agreement").

Dear Optionee:

This Agreement sets forth the terms under which Forward Air Corporation, a
Tennessee corporation (the "Company"), has awarded you an option to purchase
shares of the $0.01 par value common stock of the Company (the "Common
Stock").  This Agreement, along with the Company’s Amended and Restated Stock
Option and Incentive Plan (the "Plan"), as amended, which is incorporated herein
by reference, Plan Prospectus, Insider Trading Policy and such additional
documents as are furnished by the Company with this Agreement, constitute the
terms and conditions governing the grant of options hereunder.  Terms not
otherwise defined herein shall have the meanings set forth in the Plan.

This will confirm the agreement between the Company and the Optionee as follows:

1.         Grant of Option.  Pursuant to the Plan, the Company grants to the
Optionee the right and option (the "Option") to purchase all or any part of the
number of shares of Common Stock set forth on the Signature Page (the
"Shares").  The Option is a nonqualified stock option that is not intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), and this Agreement shall
be so construed.  The Company does not warrant any particular tax consequences
of the Option.

2.         Option Price.  The option price per Share shall be the "Option Price
per Share" as set forth on the Signature Page (the "Option Price"), representing
one hundred percent (100%) of the Fair Market Value of a share of Common Stock
as determined pursuant to the Plan as of the Grant Date set forth on the
Signature Page.

3.         Term of Option.  The term of the Option shall commence on the Grant
Date and all rights to purchase Shares hereunder shall cease at 11:59 p.m. on
the Expiration Date set forth on the Signature Page, subject to earlier
termination as provided in the Plan and this Agreement.  Except as may otherwise
be provided in the Plan or this Agreement, the Option granted hereunder may be
cumulative and exercised as follows:

(a)  Subject to the terms and conditions of the Plan and this Agreement, the
Option shall become vested and exercisable on the dates set forth on the
Signature Page, provided that the Optionee remains continually employed by the
Company throughout such period; provided further, that the Option shall expire
on the Expiration Date and must be exercised, if at all, on or before the
Expiration Date or its earlier termination.  If the Optionee dies while employed
by the Company or a parent or subsidiary of the Company (or within the period of
extended exercisability otherwise provided herein), or if the Optionee’s
employment terminates by reason of Disability, the Option will become fully
vested and exercisable (notwithstanding any terms of the Option providing for
delayed exercisability) and may be exercised by the Optionee, by the legal
representative of the Optionee’s estate, or by the legatee under the Optionee’s
will at any time until the Expiration Date set forth on the Signature Page.  The
Vesting Schedule for the Option is set forth on the Signature Page.

(b)  For the purpose of this Agreement, the Optionee shall be deemed to be an
eligible employee of the Company for so long as the Optionee is employed by the
Company or a parent or subsidiary of the Company.  Accordingly, the Option shall
be fully exercisable in accordance with this Section 3, provided the Optionee
continues to be an employee of the Company or a parent or subsidiary thereof
throughout the term of the Option, to such extent that the Shares are vested.

(c)  Unless otherwise determined by the Committee at or after the date of grant,
in the event that the employment of the Optionee terminates (other than by
reason of death, Disability, Retirement, or for Cause), the Option, to such
extent that it is vested, may be exercised for a period of 90 days from the date
of such termination or until the Expiration Date set forth on the Signature
Page, whichever period is shorter, and the Option to the extent that it is
unvested shall terminate on the date that the Optionee’s employment
terminates.  If the Optionee’s employment terminates by reason of Retirement,
the Option may thereafter be exercised, to the extent it is vested at the time
of such Retirement, at any time until the Expiration Date set forth on the
Signature Page, and the Option to the extent that it is unvested shall terminate
on the date that the Optionee’s employment terminates.  If the Optionee’s
employment terminates for Cause, the Option, to the extent not theretofore
exercised, shall terminate on the date of termination of employment regardless
of its vested status.

(d)  The Option Price of the Shares as to which the Option shall be exercised,
together will all withholding tax obligations that arise upon exercise, shall be
paid in full at the time of exercise (i) in cash or by certified check or by
bank draft; (ii) if the Committee in its sole discretion permits, by the
delivery of unrestricted shares of Common Stock which shall have an aggregate
Fair Market Value determined in accordance with the Plan equal to the Option
Price, including for this purpose shares otherwise issuable upon exercise of the
Option; (iii) by cancellation of indebtedness of the Company to the Optionee;
(iv) by waiver of compensation due or accrued to the Optionee for services
rendered; (v) provided that a public market for the Common Stock exists, through
a "same day sale" commitment from the Optionee and a broker-dealer that is a
member of the Financial Industry Regulatory Authority (a “FINRA Dealer”) whereby
the Optionee irrevocably elects to exercise his Option and to sell a portion of
the Shares so purchased to pay for the Option Price and whereby the FINRA Dealer
irrevocably commits to forward the Option Price directly to the Company in
exchange for receipt of such Shares; (vi) provided that a public market for the
Common Stock exists, through a "margin" commitment from the Optionee and a FINRA
Dealer whereby the Optionee irrevocably elects to exercise the Option and pledge
the Shares so purchased to the FINRA Dealer in a margin account as security for
a loan from the FINRA Dealer in the amount of the Option Price, and whereby the
FINRA Dealer irrevocably commits upon receipt of such Shares to forward the
Option Price directly to the Company, or (vii) any combination of the preceding.
Except as provided in Section 3 or Section 5 hereof, the Option may not be
exercised at any time unless the Optionee shall have been continuously, from the
Grant Date to the date of the exercise of the Option, an employee of the Company
or a parent or subsidiary of the Company.  Additionally, notwithstanding
anything in this Agreement to the contrary, the Option may be exercised at any
given time only as to those Shares covered by the Option which have “vested” at
such time, as set forth on the Vesting Schedule.  The holder of the Option shall
not have any of the rights of a shareholder with respect to Shares covered by
the Option until such time, if ever, as such Shares of Common Stock are actually
issued and delivered to the Optionee.

4.         Nontransferability.  The Option shall not be transferable otherwise
than by will or the laws of descent and distribution, and the Option may be
exercised, during the lifetime of the Optionee, only by the Optionee.  In the
event of the Optionee’s death, the Option may be exercised by the Optionee’s
executor, personal representative, or the person(s) to whom the Option is
transferred by will or the laws of descent and distribution.  More particularly
(but without limiting the generality of the foregoing), the Option may not be
assigned, transferred (except as provided in Section 6 hereof), pledged or
hypothecated in any way, shall not be assignable by operation of law and shall
not be subject to execution, attachment or similar process.  Any attempted
assignment, transfer, pledge, hypothecation or other disposition of the Option
contrary to the provisions hereof, and the levy of any execution, attachment or
similar process upon the Option, shall be null and void and without effect.

5.         Termination of Option.  Except as otherwise provided in the Plan or
this Agreement, this Option shall terminate on the date the Optionee ceases to
be an employee of the Company or a parent or subsidiary of the Company (the
"Termination Date").  The Optionee shall be considered to be an employee of the
Company for all purposes under this Section 5 if the Compensation Committee
determines that the Optionee is rendering substantial services as a part-time
employee to the Company or any parent or subsidiary of the Company.

6.         Effect of Certain Changes.
                           
                            (a)  In the event of the dissolution or liquidation
of the Company, any corporate separation or division of the Company, including
but not limited to, a split-up, split-off or spin-off, or other similar
transactions, the Committee may, in its sole discretion, provide that either:

(i)
the Optionee shall have the right to exercise the Option (at its then Option
Price) and receive such property, cash, securities, or any combination thereof
upon such exercise as would have been received with respect to the number of
shares of Common Stock for which the Option might have been exercised
immediately prior to such dissolution, liquidation, or corporate separation or
division; or

(ii)
the Option shall terminate as of a date to be fixed by the Committee and that
written notice of the date so fixed shall be given to the Optionee, who shall
have the right, within such period as may be specified by the Committee
preceding such termination, to exercise all or part of the Option.

(b)  In the event of a proposed sale of all or substantially all of the assets
of the Company or the merger of the Company with or into another corporation,
the Option, to the extent then outstanding, shall be assumed or an equivalent
award shall be substituted by such successor corporation or a parent or
subsidiary of such successor corporation, unless such successor corporation does
not agree to assume the award or to substitute an equivalent award, as
determined in the discretion of the Committee, in which case the Committee
shall, in lieu of such assumption or substitution, provide for the realization
of the Option in the manner set forth in Section 6(a)(i) or 6(a)(ii) above.

(c)  In the event of a “Change in Control” (as defined in the Plan), the Option,
to the extent not previously vested and exercisable, shall become fully vested
and exercisable as of the date of, and immediately before, such Change in
Control.  From and after such Change in Control, the Committee shall, in the
case of a merger, consolidation or sale or disposition of assets, promptly make
an appropriate adjustment to the amount and kind of shares or other securities
or property receivable upon exercise and the Option Price per Share, and the
Committee may, but is not required to, permit cancellation of the Option in
exchange for a cash payment in an amount equal to the “Spread” (as defined in
the Plan).

7.         Adjustments.  If there is any change in the shares of Common Stock
through the declaration of extraordinary cash dividends, stock dividends,
recapitalization, stock splits, or combinations or exchanges of such shares, or
other similar transactions, the number and class of Shares subject to the Option
and the Option Price per Share (but not the total purchase price) shall be
proportionately adjusted by the Committee to reflect such change in the issued
shares of Common Stock; provided, that any fractional shares resulting from such
adjustment shall be eliminated.  Adjustments under this Section 7 shall be made
by the Compensation Committee whose determination with respect thereto shall be
final and conclusive.

8.         Notice.  All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered or mailed, by United States certified or registered mail, prepaid, to
the parties or their assignees, if to the Company, addressed to Forward Air
Corporation, Attention:  Legal Department, 430 Airport Road, Greeneville,
Tennessee  37745, and if to the Optionee, at the address set forth on the
Signature Page (or such other address as shall be given in writing by either
party to the other).

9.         Method of Exercising Option.  Subject to the terms and conditions of
this Agreement, the Option may be exercised by written notice to the Company, at
its principal office in the State of Tennessee, which is set forth in Section 8
hereof.  Such notice shall state the election to exercise the Option and the
number of Shares in respect of which it is being exercised and be accompanied by
payment in full of the Option Price pursuant to Section 3 above and any
applicable withholding taxes, and the Company shall deliver a certificate or
certificates representing the Shares subject to such exercise as soon as
practicable after the notice shall be received.  The certificate or certificates
for the Shares as to which the Option shall have been so exercised shall be
registered in the name of the person so exercising the Option and shall be
delivered as provided above to or upon the written order of the person
exercising the Option.  In the event the Option shall be exercised by any person
other than the Optionee in accordance with the terms hereof, such notice shall
be accompanied by appropriate proof of right of such person to exercise the
Option.  All Shares that shall be purchased upon the exercise of the Option as
provided herein shall be fully paid and nonassessable.  The holder of the Option
shall not be entitled to the privileges of share ownership as to any shares of
Common Stock not actually issued and delivered to the Optionee.

10.       No Agreement to Employ.  Nothing in this Agreement shall be construed
to constitute or be evidence of any agreement or understanding, express or
implied, on the part of the Company to employ or retain the Optionee for any
specific period of time.

11.       Market Standoff Agreement.  The Optionee agrees in connection with any
registration of the Company’s securities that, upon the request of the Company
or the underwriters managing any public offering of the Company’s securities,
the Optionee will not sell or otherwise dispose of any Shares without the prior
written consent of the Company or such underwriters, as the case may be, for a
period of time (not to exceed 120 days) from the effective date of such
registration as the Company or the underwriters may specify.

12.       Stop-Transfer Notices.  The Optionee understands and agrees that, in
order to ensure compliance with the restrictions referred to herein, the Company
may issue appropriate "stop-transfer" instructions to its transfer agent, if
any, and that, if the Company transfers its own securities, it may make
appropriate notations to the same effect in its own records.

13.       Nonqualified Nature of the Option.  The Option is intended to be a
nonqualified stock option and is not intended to qualify as an incentive stock
option within the meaning of Code section 422.  The Optionee hereby acknowledges
that, upon exercise of the Option, the Optionee will recognize compensation
income in an amount equal to the excess of the then Fair Market Value of the
Shares over the Option Price of the Shares and must comply with the provisions
of Section 14 of this Agreement with respect to any tax withholding obligations
that arise as a result of such exercise.

14.       Withholding of Taxes.

(a)           At the time the Option is exercised, in whole or in part, or at
any time thereafter as requested by the Company, the Optionee hereby authorizes
withholding from payroll or any other payment of any kind due to the Optionee
and otherwise agrees to make adequate provision for foreign, federal, state and
local taxes required by law to be withheld, if any, which arise in connection
with the Option.  The Company may require the Optionee to make a cash payment to
cover any withholding tax obligation as a condition of exercise of the Option or
issuance of share certificates representing Shares.

(b)           The Committee may, in its sole discretion, permit the Optionee to
satisfy, in whole or in part, any withholding tax obligation which may arise in
connection with the Option either by electing to have the Company withhold from
the Shares to be issued upon exercise that number of Shares, or by electing to
deliver to the Company already-owned shares, in either case having a Fair Market
Value not in excess of the amount necessary to satisfy the statutory minimum
withholding amount due.

15.       Electronic Delivery of Documents.  The Company may electronically
deliver, via e-mail or posting on the Company’s website, this Agreement,
information with respect to the Plan or the Option, any amendments to the
Agreement, and any reports of the Company provided generally to the Company’s
stockholders.  The Optionee may receive from the Company, at no cost to the
Optionee, a paper copy of any electronically delivered documents.  Requests
should be made to the Secretary of the Company at 430 Airport Road, Greeneville,
Tennessee 37745 (Telephone: (423) 636-7000).

16.       Amendment.  This Agreement may be amended from time to time by the
Committee in its discretion; provided, however, that this Agreement may not be
modified in a manner that would have a materially adverse effect on the Option,
as determined in the discretion of the Committee, except as provided in the Plan
or in a written document signed by the Optionee and the Company.

17.       Section 409A.  This Agreement and the Option granted hereunder are
intended to comply with, or otherwise be exempt from, Section 409A of the Code
and shall be so construed.  Nothing in the Plan or this Agreement shall be
construed as including any feature for the deferral of compensation other than
the deferral of recognition of income until the exercise of the Option.  Should
any provision of the Plan or this Agreement be found not to comply with, or
otherwise be exempt from, the provisions of Section 409A of the Code, it may be
modified and given effect, in the sole discretion of the Committee and without
requiring the Optionee’s consent, in such manner as the Committee determines to
be necessary or appropriate to comply with, or to effectuate an exemption from,
Section 409A of the Code.  The foregoing, however, shall not be construed as a
guarantee by the Company of any particular tax effect to the Optionee.

18.       Governing Law.  The validity, construction, and effect of this
Agreement, and of any determinations or decisions made by the Committee relating
to this Agreement, and the rights of any and all persons having or claiming to
have any interest under this Agreement, shall be determined exclusively in
accordance with the laws of the State of Tennessee, without regard to its
provisions concerning the applicability of laws of other jurisdictions.  Any
suit with respect hereto will be brought in the federal or state courts in the
district which includes the city or town in which the Company’s principal
executive office is located, and the Optionee hereby agrees and submits to the
personal jurisdiction and venue thereof.

19.       General.  The Company shall at all times during the term of the Option
reserve and keep available such number of shares of Common Stock as will be
sufficient to satisfy the requirements of this Agreement, shall pay all original
issue and transfer taxes with respect to the issue and transfer of shares
pursuant hereto and all other fees and expenses necessarily incurred by the
Company in connection therewith, and will from time to time use its best efforts
to comply with all laws and regulations, which, in the opinion of counsel for
the Company, shall be applicable thereto.  To the extent that this Agreement
differs from the terms of the Plan, the terms of the Plan shall control.  The
headings in this Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Agreement.

If the foregoing correctly sets forth your understanding of the terms and
conditions governing the subject matter of this Agreement, please sign the
enclosed Signature Page to this Agreement in the place indicated and return it
to the corporate office.
 

    Very truly yours,     FORWARD AIR CORPORATION          By: 
 
   
Bruce A. Campbell
Chief Executive Officer and President