exhibit_10-3.htm


    EXHIBIT
10.3

    


    P.A.M.
TRANSPORTATION SERVICES, INC.

    INCENTIVE
COMPENSATION PLAN

    CALENDAR
YEAR 2010

    


    


    THIS IS
THE INCENTIVE COMPENSATION PLAN of P.A.M. Transportation Services, Inc., a
Delaware Corporation (the “Company”), under which a bonus may be granted to
Daniel H. Cushman subject to the limitations, provisions and requirements
hereinafter stated.  The Plan is as follows:

    


    1.           ADMINISTRATION
OF PLAN.  This Plan shall be administered by the Compensation
Committee of the Company’s Board of Directors (the “Committee”).

    


    2.           MECHANICS
OF THE PLAN.  The Plan will award Mr. Cushman for profitability
as measured by the Company’s operating ratio.  This Plan is an “annual
plan” and incentive award shall be based on audited results of operations for
January 1, 2010 through December 31, 2010.

    


    “Annual
Base Salary” multiplied by the “Bonus Percentage” per the attached Exhibit
A.  However, no bonus shall be payable if the Company’s Consolidated
Operating Ratio exceeds 99%.

    


    
      	
              (a)  

            	
              Payment of
      Awards.  Upon review and approval of the bonus
      calculation by the Committee, payments for the bonus that is awarded for
      the 2010 calendar year shall be made as
follows:

            


    

    
      	
              i.  

            	
              fifty
      percent (50%) of the bonus shall be paid on or before March 31,
      2011;

            


    

    
      	
              ii.  

            	
              twenty-five
      percent (25%) of the bonus shall be paid on or before March 31, 2012;
      and

            


    

    
      	
              iii.  

            	
              twenty-five
      percent (25%) of the bonus shall be paid on or before March 31,
      2013.

            


    

    


    Dan H.
Cushman must be an active or retired employee to receive payout.

    


    
      	
              (b)  

            	
              Annual Base
      Salary.  For purposes of calculating the bonus award
      hereunder, “Annual Base Salary” of Mr. Cushman shall mean the annual base
      salary as of December 31, 2010.

            


    

    


    3.           NONASSIGNABILITY.  Mr.
Cushman shall not have the right to assign or transfer any of his benefits or
expected benefits under the Plan except by will or by the laws of descent and
distribution.

    


    4.           Annual Revenue and
Expenses:  The calendar year 2010 revenues generated and
expenses incurred by the Company as reported in the Company’s 2010 audited
financial statement. Revenue shall not include interest income, other
non-operating income or extraordinary items.  Expenses shall not
include any bonuses expensed hereunder, interest expense or income taxes but
shall include loss (gain) on sale of equipment.

    


    Consolidated Operating
Ratio: The calendar year expenses divided by calendar year
revenue.

    


    Percentage:  All
percentages shall be determined to the nearest 1/100th.

    



    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


    This Plan
has been adopted and approved at a meeting of the Board of Directors of the
Company on the 13th day of July, 2009 and shall be effective for the calendar
year 2010, unless otherwise amended by the Board of Directors.

    


    This plan
shall be limited to calendar year 2010 and any new plan for 2011 or beyond will
require further board approval.

    


    


    EXHIBIT
A

    


    P.A.M.
TRANSPORTATION SERVICES, INC.

    INCENTIVE
COMPENSATION PLAN

    


    CONSOLIDATED
OPERATING RATIOS AND

    CORRESPONDING
BONUS PERCENTAGES

    FOR 2010
CALENDAR YEAR

    


    


    Consolidated Operating
Ratio                                                           Bonus
Percentage

    99.0%                                                                                                20.0%

    98.0%                                                                                                30.0%

    97.0%                                                                                                40.0%

    96.0%                                                                                                50.0%

    95.0%                                                                                                60.0%

    94.0%                                                                                                70.0%

    93.0%                                                                                                80.0%

    92.0%                                                                                                90.0%

    91.0%                      or
less                                                             100.0%