Document:

RAND ACQUISITION CORPORATION

                            MANAGEMENT BONUS PROGRAM

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                          RAND ACQUISITION CORPORATION
                            MANAGEMENT BONUS PROGRAM

1. ESTABLISHMENT AND PURPOSE

The Rand Acquisition Corporation Management Bonus Program (the "Plan") is
established by Rand Acquisition Corporation (the "Company") to retain persons
eligible to participate in the Plan; motivate Participants to achieve long-term
Company goals; and further align Participants' interests with those of the
Company's stockholders. The Plan is adopted as of March 3, 2006 (the "Effective
Date").

2. DEFINITIONS

For purposes of this Plan, the following terms are defined as set forth below:

      (a)   "Affiliate" means any "parent corporation" or "subsidiary
            corporation" of the Company as such terms are defined in Section
            424(e) and 424(f) of the Code.

      (b)   "Audited EBITDA" means the actual EBITDA as determined after each
            Fiscal Year in accordance with GAAP.

      (c)   A Participant's "Award" means an amount equal to such Participant's
            Vested Share multiplied by such Participant's Plan Account Balance.

      (d)   A Participant's "Base Amount" means the opening balance of such
            Participant's Plan Account Balance, as specified in "Attachment A".

      (e)   "Board" means the Board of Directors of the Company.

      (f)   "Budgeted EBITDA" means the anticipated EBITDA determined by the
            Board prior to each Fiscal Year.

      (g)   "Cause" means (i) conviction of the Participant of a criminal
            offence involving fraud, larceny, misappropriation of funds,
            embezzlement or dishonesty; (ii) receipt by or on behalf of the
            Participant or any member of the Participant's immediate family of
            any personal profit arising out of in connection with a transaction
            to which the Company or an Affiliate is party without making full
            prior disclosure to the Company or such Affiliate; (iii) any
            misfeasance, nonfeasance or malfeasance by the Participant in the
            performance of his or her duties which causes material harm to the

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            Company or an Affiliate; (iv) failure of the Participant to follow
            and carry out the lawful instructions of his superior after notice
            and reasonable opportunity for the Participant to cure such failure;
            (v) the Participant having been under the influence of drugs (other
            than prescription medicine or other medically-related drugs to the
            extent that they are taken in accordance with their directions) or
            alcohol during the performance of his or her duties (it being
            understood that the Participant may attend industry functions at
            which alcohol will be consumed by the Participant), or while
            otherwise under the influence of drugs or alcohol, engages in
            inappropriate conduct; or (vi) the Participant having engaged in
            behavior that would constitute grounds for liability for sexual
            harassment, discrimination. Notwithstanding the foregoing, if the
            Participant and the Company or an Affiliate have entered into an
            employment or services agreement which defines the term "Cause" (or
            a similar term), such definition shall govern for purposes of
            determining whether such Participant has incurred a Separation of
            Service for Cause for purposes of this Plan.

      (h)   "Code" means the Internal Revenue Code of 1986, as amended from time
            to time, and any successor thereto.

      (i)   "Commission" means the Securities and Exchange Commission or any
            successor agency.

      (j)   "Committee" means a committee of Directors appointed by the Board to
            administer this Plan.

      (k)   "Company" means Rand Acquisition Corporation, a Delaware
            corporation.

      (l)   "Director" means a member of the Company's Board of Directors.

      (m)   "Disability" means: (1) the Company has provided a written notice to
            the Participant supported by a written statement from a reputable
            independent physician selected by the Company to the effect that the
            Participant shall have become so incapacitated as to be unable to
            resume, within 90 days, his or her employment with the Company or an
            Affiliate by reason of physical or mental illness or injury; or (ii)
            the Company has provided written notice to the Participant that the
            Participant has been unable to substantially perform his or her
            duties to the Company or an Affiliate for 90 consecutive days
            (exclusive of any permitted vacation days) or for 120 days in any
            360 day period by reason of any physical or mental illness or
            injury.

      (n)   "EBITDA" or "Earnings Before Interest Taxes Depreciation and
            Amortization" means the sum, without duplication, of the net income
            of the Company determined in accordance with GAAP (consistently
            applied to the extent past practice qualifies as GAAP), as: (1)
            reduced by the amount of any (i) extraordinary income, (ii) net
            gains resulting from the sale or other disposition of assets not in
            the ordinary course of business and (iii) income attributable to
            adjustments relating to prior periods; all as the foregoing items
            are included in connection with the determination of net income and
            determined on a consolidated basis and in accordance with GAAP

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            (consistently applied to the extent past practice qualifies as
            GAAP); and as (2) increased by the amount of any (i) interest
            expense, (ii) taxes, (iii) depreciation expense, (iv) amortization
            expense, (v) extraordinary losses, (vi) net losses resulting from
            the sale or other disposition of assets not in the ordinary course
            of business, (vii) deductions or losses attributable to adjustments
            relating to prior periods; all as the foregoing items are deducted
            in connection with the determination of net income and determined on
            a consolidated basis and in accordance with GAAP (consistently
            applied to the extent past practice qualifies as GAAP).

      (o)   "Exchange Act" means the Securities Exchange Act of 1934, as amended
            from time to time, and any successor thereto.

      (p)   "Fiscal Year" means the twelve month period ended March 31 of each
            year.

      (q)   "GAAP" means United States generally accepted accounting principles
            set forth in the opinions and pronouncements of the Accounting
            Principles Board of the American Institute of Certified Public
            Accountants and statements and pronouncements of the Financial
            Accounting Standards Board or in such other statements by such other
            entity as may be approved by a significant segment of the accounting
            profession which are applicable to the circumstances from time to
            time.

      (r)   "Participant" means a person designated as such in accordance with
            Section 3.

      (s)   A Participant's "Plan Account Balance" means the Base Amount for
            such Participant, as adjusted in accordance with Section 5.

      (t)   "Representative" means (i) the person or entity acting as the
            executor or administrator of a Participant's estate pursuant to the
            last will and testament of a Participant or pursuant to the laws of
            the jurisdiction in which the Participant had his or her primary
            residence at the date of the Participant's death; (ii) the person or
            entity acting as the guardian or temporary guardian of a
            Participant; or (iii) the person or entity which is the beneficiary
            of the Participant upon or following the Participant's death.

      (u)   "Separation from Service" is given the same meaning as such term is
            defined under Section 409A of the Code and any regulation
            promulgated, or any guidance released, thereunder. A Participant
            shall not be considered to have incurred a Separation from Service
            on account of a transfer (i) from employment with the Company to
            employment with an Affiliate, (ii) from employment with an Affiliate
            to employment with the Company, or (iii) from employment with an
            Affiliate to employment with another Affiliate.

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      (v)   "Stock" means a share of the common stock, par value $.0001 per
            share, of the Company.

      (w)   A Participant's "Vested Share" means the portion of the Plan Account
            Balance for such Participant in which such Participant is vested as
            provided in Section 6.

In addition, certain other terms used herein have the definitions given to them
in the first places in which they are used.

3. ELIGIBILITY

Participation in the Plan shall be limited to the individuals listed on
"Attachment A" hereto (the "Participants").

4. AWARDS

Subject to Section 8(a), the Award granted to a Participant under this Plan
shall be equal to such Participant's Vested Share multiplied by such
Participant's Plan Account Balance as of the Payment Date.

5. PLAN ACCOUNT BALANCE

Following the Effective Date, each Participant's Plan Account Balance will be
adjusted as follows:

      As of March 31, 2007 and 2008, each Plan Account Balance will be increased
      or decreased pursuant to the following formula:

       Plan Account Balance at     Audited EBITDA for the Fiscal Year then ended
       the time of adjustment   X  ---------------------------------------------
                                   Audited EBITDA for the immediately preceding
                                   Fiscal Year

6. VESTING

Subject to the provisions of Section 8, on each of March 31, 2006, 2007 and
2008, each Participant then employed by the Company or an Affiliate shall vest
into one-third of such Participant's Plan Account Balance (such vested portion
thereafter being referred to as such Participant's "Vested Share").

7. DISTRIBUTION; REGISTRATION RIGHTS

All Awards under the Plan will be settled on July 31, 2008 (the "Payment Date").
All Awards may be settled in cash and/or in Stock (valued at the Stock's volume
weighted average price for the 20 trading days preceding March 31, 2008), or any
combination thereof, all in the discretion of the Administrator. Notwithstanding
any other provision of the Plan, if, as of the Payment Date, a Participant's
Plan Account Balance is greater than would result pursuant to the following
formula, such Participant's Plan Account Balance shall be reduced to the amount
determined pursuant to the following formula prior to the settlement of an Award
under the Plan:

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                          Stock's volume weighted average price for the
                          20 trading days preceding the Payment Date
         Base Amount  X   ---------------------------------------------
                          Stock's volume weighted average price for the
                          20 trading days preceding the Effective Date

The Company shall enter into the Registration Rights Agreement attached as
"Attachment B" hereto with any Participant that is issued Stock in settlement of
an Award under the Plan.

8. SEPARATION FROM SERVICE

The provisions of this Section 8 shall apply in the event a Participant incurs a
Separation from Service from the Company or an Affiliate at any time prior to
the date on which the Participant shall become fully vested in its Plan Account
Balance as set forth in Section 6:

      (a)   Should a Participant incur a Separation from Service from the
            Company or an Affiliate by reason of death, Disability or
            termination by the Company or an Affiliate without Cause (which
            shall include for Participants with whom the Company or an Affiliate
            is party to an employment or services agreement, a termination by
            the Participant for "Good Reason" (as defined in any such agreement)
            at any time prior to the date on which the Participant shall become
            fully vested in its Plan Account Balance as set forth in Section 6,
            then (i) such Participant shall, as of the effective date of such
            Separation from Service, become fully vested in its Plan Account
            Balance and (ii) such Participant (or such Participant's legal
            representative) shall have the option, exercisable by written notice
            to the Company within fourteen (14) days of the effective date of
            such Separation from Service, to elect to freeze the amount of such
            Participant's Award at an amount equal to the Award to which such
            Participant would be entitled if the Payment Date were the effective
            date of such Separation from Service (calculated in accordance with
            Section 7, including the limiting formula therein, and based on such
            Participant's Plan Account Balance as of the effective date of such
            Separation from Service). A Participant who does not timely deliver
            the notice referred to in this Section 8(a) shall be deemed to have
            elected not to have frozen an Award hereunder, and such
            Participant's Award shall be calculated in accordance with Section 4
            and settled in accordance with Section 7. All Awards, whether or not
            frozen pursuant to this Section 8(a), shall be settled on the
            Payment Date in accordance with Section 7.

      (b)   Should a Participant incur a Separation from Service from the
            Company or an Affiliate for Cause, or incur a Separation from
            Service from the Company or an Affiliate voluntarily (other than for
            Good Reason, if applicable, which shall be deemed a termination
            without Cause and be treated in the manner set forth in clause (a)
            of this Section 8) without providing the Company or the Affiliate,
            as applicable, 60 days advance notice of such voluntary Separation
            from Service, then such Participant's rights to its Plan Account
            Balance, including with respect to its Vested Share, shall be
            forfeited, and such Participant shall no longer have any rights in
            or to its Plan Account Balance or under the Plan.

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      (c)   A Participant that incurs a voluntary Separation from Service from
            the Company or an Affiliate (other than for Good Reason, if
            applicable, which shall be deemed a termination without Cause and be
            treated in the manner set forth in clause (a) of this Section 8) and
            who does provide the Company or such Affiliate, as applicable, with
            60 days advance notice of such voluntary Separation from Service,
            shall retain its Vested Share as of the effective date of such
            Separation from Service (and shall receive an Award based on such
            Vested Share on the Payment Date in accordance with Section 7) but
            shall, as of such effective date, cease to further vest in such
            Participant's Plan Account Balance.

      (d)   Any unvested portion of a Participant's Plan Account Balance
            resulting from a Separation from Service described in Section 8(c)
            shall be added to the Plan Account Balances of each then remaining
            Participant (other than Participants that have elected to freeze
            their Award pursuant to Section 8(a)) in proportion to the
            respective Plan Account Balance of each such remaining Participant,
            and with respect to each such remaining Participant, in proportion
            to each such Participant's vested and unvested Plan Account Balance.

9. ADMINISTRATION

The Plan shall be administered by a Committee; provided, however, that, if at
any time no Committee shall be in office, the Plan shall be administered by the
Board. As used herein, the term "Administrator" means the Board or any of its
Committees as shall be administering the Plan. The Administrator will enforce
the Plan in accordance with its terms and will have all powers necessary to
accomplish that purpose, including, but not limited to, the following
discretionary authority:

      (a)   to make determinations as to any Award granted under this Plan;

      (b)   to make such adjustments as are reasonably necessary to account for
            extraordinary or special events or circumstances, including
            adjustments to Budgeted EBITDA on account of acquisitions of assets
            or businesses out of the ordinary course of business or other
            extraordinary transactions not contemplated in estimating Budgeted
            EBITDA;

      (c)   to determine the amount and the permissible methods of payment under
            the Plan;

      (d)   to construe and interpret the Plan and the terms hereof;

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      (e)   to appoint and compensate agents, counsel, auditors or other
            specialists to aid it in the discharge of its duties and the
            administration of the Plan;

      (f)   to authorize all distributions in accordance with the provisions of
            the Plan;

      (g)   to keep records relating to the Participants and other matters
            applicable to the Plan;

      (h)   to prescribe procedures to be followed by the Participant in
            claiming benefits; and

      (i)   to prescribe and adopt the use of necessary forms including the
            forms to be utilized in connection with this Plan.

The Administrator shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable, to interpret the terms and provisions of the
Plan and any Award issued under the Plan and to otherwise supervise the
administration of the Plan.

Except to the extent prohibited by applicable law, the Administrator may
allocate all or any portion of its responsibilities and powers to any one or
more of its members and may delegate all or any portion of its responsibilities
and powers to any other person or persons selected by it. Any such allocation or
delegation may be revoked by the Administrator at any time. The Administrator
may authorize any one or more of their members or any officer of the Company to
execute and deliver documents on behalf of the Administrator.

Any determination made by the Administrator or pursuant to delegated authority
pursuant to the provisions of the Plan with respect to any Award shall be made
in the sole discretion of the Administrator or such delegate. All decisions made
by the Administrator or any appropriately delegated officer pursuant to the
provisions of the Plan shall be final and binding on all persons, including the
Company and Participants.

No member of the Administrator, and no officer of the Company, shall be liable
for any action taken or omitted to be taken by such individual or by any other
member of the Administrator or officer of the Company in connection with the
performance of duties under this Plan, except for such individual's own willful
misconduct or as expressly provided by law.

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10. MISCELLANEOUS

      (a)   Amendment. The Board may amend, alter, or discontinue the Plan, but
            no amendment, alteration or discontinuation shall be made which
            would adversely affect the vested or unvested rights of a
            Participant without the Participant's consent. No such amendment
            shall be made without the approval of the Company's stockholders to
            the extent such approval is required by law, agreement or the rules
            of any stock exchange or market on which the Stock is listed.

      (b)   Unfunded Status of Plan. It is intended that this Plan be an
            "unfunded" plan for incentive and deferred compensation. The
            Administrator may authorize the creation of trusts or other
            arrangements to meet the obligations created under this Plan to
            deliver Stock or make payments, provided that, unless the
            Administrator otherwise determines, the existence of such trusts or
            other arrangements is consistent with the "unfunded" status of this
            Plan. The Plan is intended to be maintained primarily for a select
            group of management or highly compensated employees, and shall be
            construed and administered in accordance with such intention.

      (c)   Non-transferability of Awards. Except as provided herein, the Awards
            payable hereunder, and any interest therein, shall not be
            transferable by a Participant, and a Participant shall not be
            permitted to anticipate, alienate, sell, assign, transfer, pledge or
            otherwise encumber his or her rights to an Award. Any attempted
            anticipation, alienation, sale, assignment, pledge or encumbrance
            shall be null and void ab initio. Except as provided in Section
            10(d)(vi), no interest or right to any Award may be taken for the
            satisfaction of debts of, or other obligations or claims against, a
            Participant.

      (d)   General Provisions.

            (i)   All certificates for shares of Stock or other securities
                  delivered under the Plan, if any, shall be subject to such
                  stop transfer orders and other restrictions as the
                  Administrator may deem advisable under the rules, regulations
                  and other requirements of the Commission, any stock exchange
                  or market on which the Stock is then listed and any applicable
                  Federal or state securities law, including, but not limited to
                  the Exchange Act, and the Administrator may cause a legend or
                  legends to be put on any such certificates to make appropriate
                  reference to such restrictions.

            (ii)  Nothing contained in the Plan shall prevent the Company or any
                  Affiliate from adopting other or additional compensation
                  arrangements for its employees.

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            (iii) The adoption of the Plan shall not confer upon any employee,
                  director, consultant or advisor any right to continued
                  employment, directorship or service, nor shall it interfere in
                  any way with the right of the Company or any Affiliate to
                  terminate the employment or service of any employee,
                  consultant or advisor at any time.

            (iv)  All Awards payable under the Plan shall be subject to
                  withholding by the Company on account of any Federal, state,
                  local or foreign taxes of any kind required by law to be
                  withheld with respect to such amount. Unless otherwise
                  determined by the Administrator, withholding obligations on
                  account of an Award settled in Stock may be settled with
                  Stock, including Stock that is part of the Award that gives
                  rise to the withholding requirement. The Administrator may
                  establish such procedures as it deems appropriate for the
                  settlement of withholding obligations with Stock.

            (v)   The Administrator shall establish such procedures as it deems
                  appropriate for a Participant to designate a beneficiary to
                  whom any amounts payable in the event of the Participant's
                  death are to be paid.

            (vi)  Any amounts owed to the Company or an Affiliate by a
                  Participant of whatever nature including, without limitation,
                  pursuant to that certain letter agreement dated the Effective
                  Date and executed by each Participant in favor of the Company
                  (the "Letter Agreement"), may be offset by the Company from
                  the value of any shares of Stock, cash or other thing of value
                  under this Plan, whether or not vested, including by
                  proportionate reduction of each Participant's Plan Account
                  Balance with respect to amounts owed pursuant to the Letter
                  Agreement, and no shares of Stock, cash or other thing of
                  value under this Plan shall be transferred to a Participant
                  unless and until all disputes between the Company and the
                  Participant have been fully and finally resolved and the
                  Participant has waived all claims to such against the Company
                  and its Affiliate.

            (vii) The grant of Stock shall in no way affect the right of the
                  Company or an Affiliate to adjust, reclassify, reorganize or
                  otherwise change its capital or business structure or to
                  merge, consolidate, dissolve, liquidate or sell or transfer
                  all or any part of its business or assets.

           (viii) If any payment or right accruing to a Participant under this
                  Plan (without the application of this Section 10(c)(viii)),
                  either alone or together with other payments or rights
                  accruing to the Participant from the Company or an Affiliate
                  ("Total Payments") would constitute a "parachute payment" (as
                  defined in Section 280G of the Code and regulations
                  thereunder), such payment or right shall be reduced to the
                  largest amount or greatest right that will result in no
                  portion of the amount payable or right accruing under this

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                  Plan being subject to an excise tax under Section 4999 of the
                  Code or being disallowed as a deduction under Section 280G of
                  the Code; provided, however, that the foregoing shall not
                  apply to the extent provided otherwise in an Agreement or in
                  the event the Participant is party to an agreement with the
                  Company or an Affiliate that explicitly provides for an
                  alternate treatment of payments or rights that would
                  constitute "parachute payments." The determination of whether
                  any reduction in the rights or payments under this Plan is to
                  apply shall be made by the Administrator in good faith after
                  consultation with the Participant, and such determination
                  shall be conclusive and binding on the Participant. The
                  Participant shall cooperate in good faith with the
                  Administrator in making such determination and providing the
                  necessary information for this purpose. The foregoing
                  provisions of this Section 10(c)(viii) shall apply with
                  respect to any person only if, after reduction for any
                  applicable Federal excise tax imposed by Section 4999 of the
                  Code and Federal income tax imposed by the Code, the Total
                  Payments accruing to such person would be less than the amount
                  of the Total Payments as reduced, if applicable, under the
                  foregoing provisions of this Plan and after reduction for only
                  Federal income taxes.

            (ix)  The headings contained in this Plan are for reference purposes
                  only and shall not affect the meaning or interpretation of
                  this Plan.

            (x)   If any provision of this Plan shall for any reason be held to
                  be invalid or unenforceable, such invalidity or
                  unenforceability shall not effect any other provision hereby,
                  and this Plan shall be construed as if such invalid or
                  unenforceable provision were omitted.

            (xi)  This Plan shall inure to the benefit of and be binding upon
                  each successor and assign of the Company. All obligations
                  imposed upon a Participant, and all rights granted to the
                  Company hereunder, shall be binding upon the Participant's
                  heirs, Representatives and successors.

            (xii) In the event there is an effective registration statement
                  pursuant to which shares of Stock shall be offered for sale in
                  an underwritten offering, a Participant shall not, during the
                  period requested by the underwriters managing the registered
                  public offering, effect any public sale or distribution of
                  shares of Stock received pursuant to an Award.

           (xiii) None of the Company, an Affiliate or the Administrator shall
                  have any duty or obligation to disclose affirmatively to a
                  record or beneficial holder of Stock and such holder shall
                  have no right to be advised of, any material information
                  regarding the Company or any Affiliate at any time prior to,
                  upon or in connection with receipt of Stock under this Plan.

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            (xiv) This Plan shall be governed by, and construed in accordance
                  with, the laws of the state of New York.

            (xv)  This Plan constitutes the entire agreement of the Company and
                  the Participants with respect to the subject matter hereof and
                  shall supersede any prior expressions of intent or
                  understanding with respect to this Plan.

                                            RAND ACQUISITION CORPORATION

                                            By: /s/ Laurence Levy
                                                --------------------------------
                                            Its: Chief Executive Officer

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                                  ATTACHMENT A

                    Participant                    Base Amount
                    -----------                    -----------
                    Scott Bravener                  $900,000
                    James Siddall                   $750,000
                    Mark Rohn                       $390,000
                    Jeffrey Botham                  $180,000
                    Anthony Walker                  $300,000
                    Robert Pierson                  $120,000
                    Frank Bravener                  $120,000
                    Dave Scruton                    $120,000
                    John Carlson                    $120,000Exhibit 10.12 

[Date] 

Incentive Stock Option Agreement 

To the Optionee (the "Optionee") executing the reference and signature page(s) (the "Signature Page") to this Incentive 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 1999 Stock Option and Incentive Plan (the "Plan"), as amended, Plan Prospectus, Insider Trading Policy and such additional documents as are approved by the Company, 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 granted herein is an incentive stock option and is subject to the provisions of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"). 

     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, Options 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 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. 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. A leave of absence (regardless of the reason therefor) shall be deemed to constitute the cessation of eligible employee status as of the commencement date of the leave. 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 such period to such extent that the Shares are vested. 

          (c) The Option Price of the Shares as to which the Option shall be exercised shall be paid in full at the time of exercise (i) in cash or by certified check or by bank draft; (ii) by the delivery of previously owned unrestricted shares of Common Stock which shall have an aggregate Fair Market Value determined in accordance with the Plan equal to the Option Price; (iii) with the prior written consent and approval of the Company, by the execution and delivery of the Optionee’s promissory note in the principal amount of the Option Price, with such term, interest rate and other terms and provisions, including, without limitation, requiring the Shares acquired upon exercise to be pledged to the Company to secure payment of the note, as the Compensation Committee of Board of Directors of the Company (the "Compensation Committee") may specify; (iv) by cancellation of indebtedness of the
Company to the Optionee; (v) by waiver of compensation due or accrued to the Optionee for services rendered; (vi) 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 National Association of Securities Dealers (a "NASD 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 NASD Dealer irrevocably commits to forward the Option Price directly to the Company in exchange for receipt of such Shares; (vii) provided that a public market for the Common Stock exists, through a "margin" commitment from the Optionee and a

2 

NASD Dealer whereby the Optionee irrevocably elects to exercise the Option and pledge the Shares so purchased to the NASD Dealer in a margin account as security for a loan from the NASD Dealer in the amount of the Option Price, and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to forward the Option Price directly to the Company, or (viii) any combination of the preceding. Except as provided in 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. 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 provided in the Plan, 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. Other Terminations or Expirations. In addition to any other event causing an expiration or termination of the Option, the Option shall expire and all rights to purchase Shares shall cease (to the extent not theretofore terminated or expired as herein provided) upon the effective date of the dissolution or liquidation of the Company or upon a merger, consolidation, acquisition of property or shares, separation or reorganization

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of the Company with one or more entities, corporate or otherwise, as a result of which the Company is not the surviving entity, or if the Company is the surviving entity and the ownership of the outstanding Common Stock following the transaction changes by 80% or more as a result of such transaction, or of a sale of substantially all of the property or shares of the Company to another entity, corporate or otherwise (collectively, a "Transaction"); provided, however, that the Company may, in its discretion, and immediately prior to any such Transaction, cause a new option to be substituted for the Option or cause the Option to be assumed by an employer entity or a parent or subsidiary of such entity; and, subject to the terms of the Plan, the terms and conditions of any such new option shall apply to all Shares issued in addition to or in substitution, replacement or modification of the Shares covered by any Option canceled or replaced. 

     7. Adjustments. The number and class of Shares subject to the Option, and the Option Price per Share (but not the total purchase price), and the minimum number of Shares as to which the Option may be exercised at any one time, shall all be proportionately adjusted in the event of any change or increase or decrease in the number of issued shares of Common Stock, without receipt of consideration by the Company, which result from a split-up or consolidation of shares, payment of a share dividend (in excess of two percent (2%)), a recapitalization, combination of shares or other like capital adjustment, so that, upon exercise of the Option, the Optionee shall receive the number and class of shares the Optionee would have received had the Optionee been the holder of the number of shares of Common Stock, for which the Option is being exercised, on the
date of such change or increase or decrease in the number of issued shares of Common Stock. Subject to reorganization, merger or consolidation, the Option shall be proportionately adjusted so as to apply to the securities to which the holder of the number of Shares of Common Stock subject to the Option would have been entitled. Adjustments under this Section 7 shall be made by the Compensation Committee whose determination with respect thereto shall be final and conclusive. No fractional share shall be issued under the Option or upon any such adjustment. 

     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, P.O. Box 1058, Greeneville, Tennessee 37744, 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). 

4 

     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 by payment in full of the Option Price pursuant to Section 3 above, 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 or 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. 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

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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. 

     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:  _____________________________

6 

Reference and Signature Page to
Forward Air Corporation
Incentive Stock Option Agreement
dated _____________

[Employee Name]
[Street Address]
[City, State Zip] 

Pursuant to the terms and conditions of the Forward Air Corporation 1999 Stock Option Plan (the "Plan"), you have been granted an Incentive Stock Option to purchase _________ shares (the "Option") of stock as outlined below. 
 

	Granted To:   	[Employee Name]      
	  	SSN _______________
	  
	Date of Grant:  	_______________
	  
	Options Granted:   	________
	Option Price per Share:   	$_______	Total Cost to Exercise:   $__________ 
	  
	Expiration Date:   	_______________
	  
	Vesting Schedule:   	____% per year for ____ years    
	  	______ on __/__/____    
	  	______ on __/__/____    

By my signature below, I hereby acknowledge receipt of the Option granted on the date shown above, which has been issued to me under the terms and conditions of the Plan. I further understand and agree that the Option is governed by the Plan, the Plan Prospectus, the Agreement, the Company's Insider Trading Policy, and that such documents have been furnished by or are available from the Company upon request. I also agree to conform to all of the terms and conditions of the Option and the Plan and understand that in order for the grant of the Option to be effective, I must indicate my acceptance of the Option by signing and delivering this Reference and Signature Page to the Forward Air Corporation Legal Department, P.O. Box 1058, Greeneville, TN 37744. 

Signature: ______________________________________      Date: ________________

	 	Note: If there are any discrepancies in the name, address or Social Security Number shown above, please make the appropriate corrections on this form.

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