Exhibit 10.2


    EXHIBIT
      10.2

    


    P.A.M.
      TRANSPORTATION SERVICES, INC.

    EXECUTIVE
      INCENTIVE PLAN

    


    INTRODUCTION

    


    The
      P.A.M. Transportation Services, Inc. Executive Incentive Plan ("Plan")
      is an
      annual incentive plan for executive officers of P.A.M. Transportation Services,
      Inc. and designated officers and senior management of P.A.M. Transportation
      Services, Inc. and its subsidiaries. The Plan is intended to provide cash-based
      incentive opportunities to such executive officers and designated officers
      and
      senior management of the Company and its subsidiaries. Plan payments, if any,
      will be conditioned on attainment of one or more Performance Measures for each
      fiscal year as established by the Committee. 

    


    I.
      PURPOSE

    


    
      	1.  	
              The
                purpose of the Plan is to allow the Company to attract, motivate
                and
                retain highly qualified executive employees; to obtain from each
                employee
                the best possible performance; to establish performance goals that
                support
                the Company's long-term business strategies; and to provide consistency
                in
                and alignment with the Company's approach to performance-based pay
                and
                overall executive compensation
                strategy.

            


    

    


    II.
      DEFINITIONS

    


    For
      purposes of the Plan, the following terms shall have the following
      meanings:

    


    
      	A.  	
              Board
                of Directors.
                The Board of Directors of the
                Company.

            


    

    


    
      	B.  	
              Committee.
                The Compensation and Stock Option Committee of the Board of Directors
                of
                the Company or any successor
                thereto.

            


    

    


    
      	C.  	
              Company.
                P.A.M. Transportation Services, Inc., a Delaware
                corporation.

            


    

    


    
      	D.  	
              Covered
                Employee.
                Any Participant who is, or is determined by the Committee to be likely
                to
                become, a "covered employee" within the meaning of Section 162(m)
                of the
                Internal Revenue Code of 1986, as amended, as such section may be
                amended
                ("Section
                162(m)").

            


    

    


    
      	E.  	
              Incentive
                Compensation Award.
                Any cash-based award paid pursuant to the
                Plan.

            


    

    


    
      	F.  	
              Participant.
                All executive officers of the Company shall be Participants in this
                Plan.
                In addition, a Participant shall include an officer or a member of
                senior
                management of the Company or one or more of its subsidiaries, or
                a person
                who has agreed to commence serving in such capacity, and who is designated
                to participate in the Plan by the
                Committee.

            


    

    


    
      	G.  	
              Performance
                Measures.
                This term is defined in Section V of the
                Plan.

            


    

    


    
      	H.  	
              Retirement.
                A
                Participant's voluntary termination of employment with the Company
                or any
                of its subsidiaries on or after attainment of age
                60.

            


    

    


    III.
      EFFECTIVE DATE

    


    The
      Plan
      has been adopted effective as of May 24, 2006 and will apply to Incentive
      Compensation Awards made for fiscal years ending on or after December 31, 2006.
      

    


    IV.
      DETERMINATION OF AMOUNTS OF AND ELIGIBILITY FOR INCENTIVE COMPENSATION
      AWARDS

    


    
      	A.  	
              Participants
                will be eligible to receive Incentive Compensation Awards conditioned
                on
                achievement of Performance Measure(s) as approved by the
                Committee.

            


    

    


    
      	B.  	
              Incentive
                Compensation Awards will be paid in amounts at levels determined
                by the
                Committee pursuant to the Plan and the Performance Measures adopted
                by the
                Committee for the fiscal year. The maximum Incentive Compensation
                Award
                that can be paid to a Covered Employee with respect to any fiscal
                year is
                $1 million.

            


    


    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    


    


    
      	C.  	
              If
                the Incentive Compensation Award is treated as performance-based
                compensation under Section 162(m), then no Incentive Compensation
                Award
                shall be paid to Covered Employees prior to the certification in
                writing
                by the Committee that the Performance Measures have been achieved
                for the
                relevant fiscal year.

            


    

    


    
      	D.  	
              The
                Committee will determine the final amounts of Incentive Compensation
                Awards to Participants in conformity with the terms of the Plan.
                .

            


    

    


    
      	E.  	
              For
                years after 2006, a Participant who is designated to participate
                in the
                Plan effective after the beginning of a particular fiscal year will
                participate on a prorated basis during such fiscal year and will
                receive
                an Incentive Compensation Award prorated on the basis of the ratio
                of the
                number of weeks of actual participation during such fiscal year to
                the
                aggregate number of weeks in such fiscal year. However, the proration
                described in the preceding sentence will not be made if proration
                is a
                determining factor in the Performance Measures, for example, if the
                Incentive Compensation Award is based on annual salary paid during
                the
                fiscal year. If applicable, the proration provided for in the first
                sentence of this paragraph shall also apply to any employee designated
                as
                a Participant in 2006 after the effective date of this Plan. Such
                prorated
                Incentive Compensation Award will be paid on the dates that all other
                Participants are paid such awards. For the year ending December 31,
                2006,
                Participants who are employed on January 1, 2006, subject to the
                provisions of Paragraph VIII, shall participate for the entire fiscal
                year. 

            


    

    


    V.
      PERFORMANCE MEASURES

    


    
      	A.  	
              Payment
                of Incentive Compensation Awards is conditioned on the attainment
                of
                Performance Measures as established by the Committee. With the exception
                of the fiscal year ending December 31, 2006, Performance Measures
                applicable to a fiscal year for Covered Employees must be established
                in
                writing no later than ninety (90) days after the beginning of the
                fiscal
                year. In its sole discretion, the Committee may choose not to establish
                Performance Measures for any particular fiscal year and in such event,
                no
                Incentive Compensation Awards shall be made to any employee under
                this
                Plan for such year. If the Incentive Compensation Award is intended
                to
                qualify as performance-based compensation under Section 162(m), the
                Performance Measures applicable to Covered Employees must be limited
                to
                criteria and objectives related to:

            


    

    


    
      	(1)  	
              The
                consolidated performance of the Company or the performance of one
                or more
                of its subsidiaries or divisions, where performance is determined
                as set
                forth in (2) below.

            


    

    


    
      	(2)  	
              Performance
                shall be determined solely by reference to levels of and/or growth
                in one
                or more of the following business criteria as measured over the fiscal
                year:

            


    

    


    
      	(i)  	
              Total
                shareholder return, including its components of stock price appreciation,
                dividends and/or dividend yield;

            


    

    


    
      	(ii)  	
              Return
                on assets, equity, invested capital, cash flow, investment, or
                sales;

            


    

    


    
      	(iii)  	
              Operating
                ratio;

            


    

    


    
      	(iv)  	
              Pre-tax
                or after-tax profit levels, including: earnings per share; earnings
                before
                interest and taxes; earnings before interest, taxes, depreciation
                and
                amortization; net operating profits after tax, and net
                income;

            


    

    


    
      	(v)  	
              Operating
                profits, as determined under generally acceptable accounting principles,
                including or excluding interest, bonuses, income taxes, profit/loss
                on
                stock, option expense, and any other non-operating profit/expense
                items;
                

            


    

    


    
      	(vi)  	
              Cash
                flow and cash flow return on
                investment;

            


    

    


    
      	(vii)  	
              Economic
                profit and/or cost of capital;

            


    

    


    
      	(viii)  	
              Turnover
                of assets, capital, or inventory;

            


    

    


    
      	(ix)  	
              Levels
                of operating expense or other expense items as reported on the income
                statement, including operating and maintenance
                expense;

            


    


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    


    


    
      	(x)  	
              Measures
                of customer satisfaction and customer service as surveyed from time
                to
                time, including the relative improvement therein;
                

            


    

    


    
      	(xi)  	
              Improvement
                in safety performance; or

            


    

    


    
      	(xii)  	
              Market
                share.

            


    

    


    
      	B.  	
              In
                establishing Performance Measures for Participants, the Committee
                may
                include or exclude the impact of specified objective events, including
                any
                of the following, after considering whether the action would result
                in the
                loss of an otherwise available exemption under Section 162(m), if
                applicable: expenses as a result of restructuring or productivity
                initiatives; non-operating items; acquisition or divestiture expenses;
                and
                any items of gain, loss or expense that are determined to be extraordinary
                or unusual in nature or infrequent in occurrence or related to the
                acquisition or disposal of assets or all or a portion of a business
                or to
                a change of accounting principles.

            


    

    


    
      	C.  	
              The
                Committee may modify Performance Measures applicable to Participants,
                after considering whether the action would result in the loss of
                an
                otherwise available exemption under Section 162(m), if applicable,
                if it
                determines that the Performance Measures have become unsuitable as
                a
                result of events such as those outlined in Paragraph V.B above, or
                adjustments are needed to achieve the original objective of the Incentive
                Compensation Awards for a particular fiscal year.
                

            


    

    


    VI.
      FORM OF INCENTIVE COMPENSATION AWARDS

    


    Incentive
      Compensation Awards shall be paid in cash.

    


    VII.
      PAYMENT OF INCENTIVE COMPENSATION AWARDS

    


    
      	A.  	
              After
                the Committee determines that the Performance Measure(s) have been
                satisfied for a fiscal year, the Company shall cause the Incentive
                Compensation Award to be paid to each Participant as follows: (a)
                50% of
                the Incentive Compensation Award shall be paid as soon as reasonably
                practicable after the end of the fiscal year in which the Committee
                determines that the Performance Measure(s) have been satisfied, but
                in no
                event later than two and one-half months after the fiscal year ends;
                and
                (b) 50% of the Incentive Compensation Award shall be paid as soon
                as
                reasonably practicable after the end of the immediately following
                fiscal
                year, but in no event later than two and one-half months after the
                end of
                the such fiscal year. 

            


    

    


    
      	B.  	
              The
                Participant must be employed by the Company or one of its subsidiaries
                at
                the time payment is made in order to receive payment of an Incentive
                Compensation Award (including both payments described in the preceding
                paragraph), unless employment is terminated due to death, disability,
                or
                Retirement before the designated payment date.


            


    

    


    
      	C.  	
              If
                a Participant dies before the end of the fiscal year or the designated
                payment date, and is entitled to receive an Incentive Compensation
                Award,
                then payment shall be made to the Participant's surviving spouse
                or, if
                none, to his or her estate. 

            


    

    


    VIII.
      TERMINATION OF SERVICE OR DEMOTION

    


    
      	A.  	
              If
                a Participant terminates employment with the Company and its subsidiaries
                before the end of a fiscal year due to death, disability, or Retirement,
                the Participant's Incentive Compensation Award for such fiscal year
                will
                be prorated on the basis of the ratio of the number of weeks of
                participation during such fiscal year to the aggregate number of
                weeks in
                the fiscal year. However, the proration described in the preceding
                sentence will not be made if proration is a determining factor in
                the
                Performance Measures, for example, if the Incentive Compensation
                Award is
                based on annual salary paid during the fiscal year. Payment of such
                prorated Incentive Compensation Award will be made on the dates that
                other
                Participants receive payment of such Incentive Compensation
                Awards.

            


    

    


    
      	B.  	
              If
                a Participant voluntarily terminates employment, or if his or her
                employment with the Company and its subsidiaries is terminated by
                the
                Company or any such subsidiary for any reason other than for death,
                disability, or Retirement before the last day of the fiscal year,
                the
                Participant will not be entitled to any Incentive Compensation Award
                for
                any such fiscal year, unless otherwise determined by the Committee.
                

            


    


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    


    


    
      	C.  	
              If
                a Participant is demoted to a position that at the time of such demotion
                is not eligible to be designated for participation in the Plan before
                the
                end of the fiscal year, the Participant's Incentive Compensation
                Award for
                the fiscal year in which the demotion occurs will be prorated on
                the basis
                of the ratio of the number of weeks of participation prior to demotion
                during such fiscal year to the aggregate number of weeks in such
                fiscal
                year, unless otherwise determined by the Committee. Payment of the
                prorated Incentive Compensation Award will be made on the dates that
                other
                Participants receive payment of such Incentive Compensation
                Award.

            


    

    


    IX.
      SPECIAL AWARDS AND OTHER PLANS

    


    
      	A.  	
              Nothing
                contained in this Plan shall prohibit the Company or any of its
                subsidiaries from granting special performance or recognition awards,
                under such conditions and in such form and manner as it sees fit,
                to
                employees (including Participants) for meritorious service of any
                nature.

            


    

    


    
      	B.  	
              In
                addition, nothing contained in this Plan shall prohibit the Company
                or any
                of its subsidiaries from establishing other incentive compensation
                plans
                providing for the payment of incentive compensation to employees
                (including Participants).

            


    

    


    X.
      ADMINISTRATION, AMENDMENT AND INTERPRETATION OF THE PLAN

    


    
      	A.  	
              The
                Company has no obligation to continue this Plan and it may be amended
                or
                terminated as described in this paragraph.


            


    

    


    
      	(1)  	
              The
                Committee shall have the right, in its sole discretion, to amend
                the Plan
                from time to time; provided, however, that no amendment of the Plan
                made
                after May 31 of any year having the effect of materially reducing
                the
                amount of an Incentive Compensation Award for that year shall be
                effective
                with respect to a Participant for that year without his or her consent.
                Notwithstanding the foregoing, if a Participant fails to consent
                to an
                amendment described in the previous sentence, the Committee may make
                such
                amendment and prorate the application of the amendment for such fiscal
                year on the basis of the ratio of the number of weeks in such fiscal
                year
                prior to such amendment to the aggregate number of weeks in such
                fiscal
                year, and the Incentive Compensation Award will be paid only after
                the end
                of such fiscal year, as set forth in Paragraph VII.A.
                

            


    

    


    
      	(2)  	
              The
                Committee may terminate this Plan, in its sole discretion, on or
                before
                May 31 of any year, and in such event, no Incentive Compensation
                Awards
                shall be payable under this Plan for such year. In the event this
                Plan is
                terminated on or after June 1 of any year, Incentive Compensation
                Awards
                payable for such fiscal year will be prorated on the basis of the
                ratio of
                the number of weeks in such fiscal year prior to such termination
                to the
                aggregate number of weeks in such fiscal year and will be paid only
                after
                the end of such fiscal year, which will be deemed to continue until
                the
                expiration thereof as if this Plan had not been terminated. Payment
                will
                be made as set forth in Paragraph VII.A.


            


    

    


    
      	B.  	
              This
                Plan will be administered by the Committee. Any power or authority
                of the
                Committee may also be exercised by the Board, except to the extent
                that
                the grant or exercise of such power or authority would cause any
                Incentive
                Compensation Award intended to qualify for treatment as performance-based
                compensation under Section 162(m) not to qualify for such treatment.
                To
                the extent that any permitted action taken by the Board conflicts
                with
                action taken by the Committee, the Board action shall control. The
                Committee has the authority, in its discretion, to construe and interpret
                the terms of the Plan and the Performance Measures, to consider the
                impact
                of Section 162(m) on the Incentive Compensation Awards, and to make
                all
                other determinations deemed necessary or advisable in administering
                the
                Plan. The decision of the Committee or the Board of Directors with
                respect
                to any questions arising in connection with the administration or
                interpretation of the Plan shall be final, conclusive and
                binding.

            


    

    


    
      	C.  	
              No
                member or former member of the Committee or the Board of Directors
                shall
                be personally responsible or liable for any act or omission in connection
                with the performance of powers or duties or the exercise of discretion
                or
                judgment in the administration and implementation of the Plan. Each
                person
                who is or was a member of the Committee or the Board of Directors
                shall be
                indemnified and held harmless by the Company from and against any
                cost,
                liability or expense imposed or incurred in connection with such
                person,
                the Committee or the Board of Directors taking or failing to take
                any
                action under the Plan or the exercise of discretion or judgment in
                the
                administration and implementation of the Plan.


            


    


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    


    


    XI.
      MISCELLANEOUS

    


    
      	A.  	
              All
                expenses and costs in connection with the operation of the Plan shall
                be
                borne by the Company.

            


    

    


    
      	B.  	
              All
                Incentive Compensation Awards under the Plan are subject to withholding
                for applicable federal, state and local
                taxes.

            


    

    


    
      	C.  	
              Unless
                otherwise determined by the Board of Directors, all Incentive Compensation
                Awards will be paid from the Company's general assets, and nothing
                contained in this Plan will require the Company to set aside or hold
                in
                trust any funds for the benefit of any Participant, who will have
                the
                status of a general unsecured creditor of the
                Company.

            


    

    


    
      	D.  	
              This
                Plan will not confer upon any Participant any right with respect
                to
                continuance of employment or other service with the Company or any
                subsidiary, nor will it interfere in any way with any right the Company
                or
                any subsidiary would otherwise have to terminate or modify the terms
                of
                such Participant's employment or other service at any
                time.

            


    

    


    
      	E.  	
              Except
                as otherwise provided in this Plan, no right or benefit under this
                Plan
                will be subject to anticipation, alienation, sale, assignment, pledge,
                encumbrance, or charge, and any attempt to anticipate, alienate,
                sell,
                assign, pledge, encumber, or charge such right or benefit will be
                void. No
                such right or benefit will in any manner be liable for or subject
                to the
                debts, liabilities, or torts of a
                Participant.

            


    

    


    
      	F.  	
              If
                any provision in this Plan is held to be invalid or unenforceable,
                no
                other provision of this Plan will be affected
                thereby.

            


    

    


    
      Adopted:
        May 24, 2006

    

     

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