<PAGE>
                                                                   EXHIBIT 10.13


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                               LANDAIR CORPORATION

                                SECTION 125 PLAN






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Effective January 1, 2001

<PAGE>



                               LANDAIR CORPORATION
                                SECTION 125 PLAN

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                             PAGE
                                                                             ----
<S>                                                                          <C>
FORWARD AND PURPOSE............................................................1

Article I         DEFINITIONS..................................................1
         Administrator.........................................................1
         Benefit Description...................................................1
         Change in Status......................................................1
         Code..................................................................2
         Dependent.............................................................2
         Effective Date........................................................2
         Election Change.......................................................2
         Eligible Employee.....................................................3
         Employee..............................................................3
         Employer..............................................................3
         ERISA.................................................................3
         Flexible Pay..........................................................3
         FMLA Leave............................................................3
         Health Benefits.......................................................3
         Health Plan...........................................................4
         Participant...........................................................4
         Participating Employer................................................4
         Participation Year....................................................4
         Plan..................................................................4
         Plan Year.............................................................4
         Premiums..............................................................4
         Pre-Tax Benefits......................................................4

Article II        ELIGIBILITY, PARTICIPATION, AND BENEFITS.....................4
         2.1      General......................................................4
         2.2      Incorporation by Reference...................................5
         2.3      Premiums.....................................................5

Article III       PARTICIPATION AND ENROLLMENT.................................5
         3.1      Participation................................................5
         3.2      Enrollment...................................................6
         3.3      Termination of Enrollment....................................6
         3.4      Enrollment Periods...........................................6
         3.5      Limitation on Enrollment Changes............................12
         3.6      COBRA Coordination..........................................12
</TABLE>


                                       i



<PAGE>


<TABLE>
<S>                                                                           <C>
Article IV        CONTRIBUTIONS...............................................12
         4.1      Contributions Withheld......................................12
         4.2      Carryover Prohibited........................................13
         4.3      Enrollment..................................................13
         4.4      Premium Rebates and Policy Dividends........................13
         4.5      Effect of Change in Dependent Status........................13
         4.6      Cash Benefit................................................13
         4.7      Cost Changes................................................14
         4.8      Coverage Changes............................................14

Article V         ADMINISTRATION..............................................15
         5.1      Allocation of Responsibility................................15
         5.2      Administration..............................................16
         5.3      Expenses....................................................16
         5.4      Denial of Claims............................................16
         5.5      Claims Review Procedure.....................................16
         5.6      Other Administrative Powers and Duties......................18
         5.7      Rules and Decisions.........................................18
         5.8      Forms and Requests for Information..........................18

Article VI        AMENDMENT OF THE PLAN.......................................19

Article VII       TERMINATION OF THE PLAN.....................................19

Article VIII      MISCELLANEOUS...............................................19
         8.1      Employment Rights...........................................19
         8.2      Spendthrift Clause..........................................19
         8.3      No Guarantee of Nontaxability...............................20
         8.4      Cafeteria Plan Nondiscrimination............................20
         8.5      Health Care Nondiscrimination...............................21
         8.6      Delegation of Authority.....................................21
         8.7      Headings and Construction...................................21
         8.8      Entire Plan Stated..........................................21
         8.9      Applicable Law..............................................21
         8.10     Exclusive Benefit Rule......................................21
         8.11     Communication to Employees..................................21
         8.12     Adoption by Other Employers.................................22

ARTICLE IX        SIGNATURE...................................................22
</TABLE>

                                       ii




<PAGE>



                               FORWARD AND PURPOSE

        This Plan is made and adopted by Landair Corporation ("Landair").

                               W I T N E S S E T H:

        WHEREAS, Landair desires to establish the Landair Corporation Section
125 Plan (the "Plan"); and

        WHEREAS, it is intended that the Plan qualify as a cafeteria plan, an
accident and health plan, and a group life insurance plan under Code Sections
79, 105, 106, and 125 and shall be interpreted in a manner consistent with the
requirements of Code Sections 79, 105, 106, and 125.

        NOW THEREFORE, Landair hereby establishes the Plan effective as of
January 1, 2001, to provide as follows:

                                    ARTICLE I

                                   DEFINITIONS

        The following words and phrases have meanings set forth below, unless a
different meaning is plainly required by the context:

                "ADMINISTRATOR" means Landair Corporation or its successor or
        successors, which shall have the authority to administer the Plan as
        provided in Article V.

                "BENEFIT DESCRIPTION" means the certificate of coverage,
        insurance policy, membership handbook, or summary plan description, as
        applicable, for each benefit or any successor certificate of coverage,
        insurance policy, membership handbook, or summary plan description
        listed in Appendix A and such successor documents as the Administrator
        may designate.

                "CHANGE IN STATUS" means a change in status event as defined in
        Treasury Regulations promulgated under Code Section 125, and to the
        extent consistent therewith, means the following:

                        (1) LEGAL MARITAL STATUS. Events that change an Eligible
                Employee's legal marital status, including marriage, death of
                spouse, divorce, legal separation, and annulment;



                                        1


<PAGE>



                        (2) NUMBER OF DEPENDENTS. Events that change an Eligible
                Employee's number of Dependents, including birth, death,
                adoption, and placement for adoption;

                        (3) EMPLOYMENT STATUS. Any of the following events that
                change the employment status of the Eligible Employee, the
                Eligible Employee's spouse, or the Eligible Employee's
                Dependent: a termination or commencement of employment; a
                commencement of or return from an unpaid leave of absence; and a
                change in worksite. In addition, if the eligibility conditions
                of the Plan or other employee benefit plans of the Employer of
                the Eligible Employee or the employer of the spouse or Dependent
                depend on the employment status of that individual and there is
                a change in that individual's employment status with the
                consequence that the individual becomes (or ceases to be)
                eligible, then that change constitutes a change in employment
                status;

                        (4) DEPENDENT SATISFIES OR CEASES TO SATISFY THE
                REQUIREMENTS. Events that cause an Eligible Employee's Dependent
                to satisfy or cease to satisfy the eligibility requirements for
                coverage on account of attainment of age, student status, or any
                similar circumstance; and

                        (5) RESIDENCE. A change in the place of residence of the
                Eligible Employee, spouse, or Dependent.

                "CODE" means the Internal Revenue Code of 1986, as amended from
        time to time. Reference to any section or subsection of the Code
        includes reference to any comparable or succeeding provisions of any
        legislation that amends, supplements, or replaces such section or
        subsection.

                "DEPENDENT" means a Participant's legal spouse or any dependent
        as defined under the applicable benefit.

                "EFFECTIVE DATE" means the date on which this Plan is effective,
        January 1, 2001.

                "ELECTION CHANGE" means a Participant's revocation of an
        election during a Participation Year and new election for the remaining
        portion of the Participation Year.



                                       2
<PAGE>

                "ELIGIBLE EMPLOYEE" means an Employee who is eligible to
        participate in any of the benefits listed in Appendix A.

                "EMPLOYEE" means any person who is classified by the Employer as
        an employee of the Employer and who is receiving remuneration for
        personal services rendered to the Employer, excluding any individual
        whom the Employer classifies as a contract employee, an independent
        contractor or an employee of a contractor or an independent contractor,
        a nonresident alien, or covered by a collective bargaining agreement
        (unless that agreement, by a specific reference to this Plan or to one
        of the benefits offered under this Plan, provides for coverage under
        this Plan and/or one of the benefits offered under this Plan. These
        groups of individuals are excluded from coverage under this Plan based
        on the Employer's classification even if the Internal Revenue Service or
        any other agency or court determines that the Employer's classification
        was incorrect or reclassifies that individual as an employee for
        employment tax purposes or for any other purpose.

                "EMPLOYER" means Landair Corporation ("Landair"), all
        subsidiaries and affiliates of Landair that would be treated as a single
        employer under Code Sections 414(b) and (c), and any Participating
        Employers.

                "ERISA" means Public Law 93-406, the Employee Retirement Income
        Security Act of 1974, 29 U.S.C. ss. 1001 et seq., as amended.

                "FLEXIBLE PAY" means the amount of a Participant's compensation
        that, pursuant to Section 4.1, is applied on behalf of the Participant
        to pay his Premiums for Pre-Tax Benefits or that (to the extent not
        otherwise applied) he may elect to receive as additional cash
        compensation. For each Participation Year, the maximum amount of
        Flexible Pay available to any Participant for application to his
        Premiums under the Plan shall be the sum of the costs of all Pre-Tax
        Benefits available to any Participant under the Plan.

                "FMLA LEAVE" means a leave of absence that the Employer is
        required to allow by the terms of the Family and Medical Leave Act.

                "HEALTH BENEFITS" means for purposes of COBRA continuation
        coverage under Code Section 4980B or ERISA Section 601 et seq., a "group
        health plan" as defined in ERISA Section 607(1). For purposes of FMLA
        Leave, "Health Benefits" means a "group health plan" as defined in
        Section 104(c)(1) of the Family and Medical Leave Act of 1993, 29 U.S.C.
        ss.ss. 2601 et. seq. For all other purposes under this Plan, the term
        "Health Benefits" means a "health plan" within the



                                       3
<PAGE>

        meaning of proposed Treasury Regulation Section 1.125-2, Q&A-6,
        comparable or succeeding provisions of any proposed regulations that
        amend, supplement, or replace such section or parallel provisions of
        final regulations issued pursuant to Code Section 125.

                "HEALTH PLAN" means Landair Corporation Health and Dental Care
        Benefit Plan.

                "PARTICIPANT" means an Eligible Employee who has commenced
        participation in the Plan and has not terminated participation as
        provided in Section 2.1 with respect to all benefits other than the
        cafeteria plan benefits and as provided in Section 3.1 with respect to
        the cafeteria plan benefits.

                "PARTICIPATING EMPLOYER" means any other corporations or
        entities that adopt this Plan in accordance with Section 8.12.

                "PARTICIPATION YEAR" with respect to any Participant means the
        twelve-month period beginning on February 1 and ending on the following
        January 31.

                "PLAN" means the Landair Corporation Section 125 Plan as set
        forth herein, together with any and all amendments and supplements
        thereto.

                "PLAN YEAR" means the twelve-month period beginning each January
        1 and ending on the following December 31.

                "PREMIUMS" means the amount the Participant is required or
        elects to pay for the benefits under the Plan.

                "PRE-TAX BENEFITS" means the benefits a Participant may elect to
        receive on a pre-tax basis through the Plan and that are listed in
        Appendix A.

                                   ARTICLE II

                    ELIGIBILITY, PARTICIPATION, AND BENEFITS

        2.1 GENERAL. With respect to each of the benefits offered under the
Plan, the applicable Benefit Description shall determine an Eligible Employee's
or Dependent's:

                (A) Eligibility to participate;



                                        4


<PAGE>



                (B) Commencement, recommencement, and termination of
        participation; and

                (C) Terms of Coverage.

        2.2 INCORPORATION BY REFERENCE. This Plan shall constitute the Plan
document for each of the benefits listed in Appendix A. The terms of the Benefit
Descriptions are incorporated into this Plan as if those terms were fully set
forth in this Plan document.

        2.3 PREMIUMS. The Participant shall pay on a pre-tax basis the cost (if
any) of any Pre-Tax Benefit he chooses under this Plan. The Participant shall
pay on an after-tax basis the cost (if any) of any other benefits he chooses
under this Plan.

                                   ARTICLE III

                          PARTICIPATION AND ENROLLMENT

        3.1 PARTICIPATION.

                (A) COMMENCEMENT OF PARTICIPATION. An Eligible Employee shall
        commence (or recommence) participation in the Plan on the later of the
        Effective Date or the date he commences or recommences participation in
        any of the benefits listed in Appendix A.

                (B) NO AFTER-TAX OPTION FOR PRE-TAX BENEFITS. If an Eligible
        Employee chooses to participate in a Pre-Tax Benefit and if the Eligible
        Employee is receiving remuneration from the Employer from which Premiums
        can be deducted, the Eligible Employee shall be deemed to have elected
        to pay the Premium for that Pre-Tax Benefit on a pre-tax basis through
        the Plan. An Eligible Employee shall not have the option of paying the
        Premium for any of the Pre-Tax Benefits on an after-tax basis unless the
        individual is not receiving remuneration from the Employer from which
        the Premiums may be deducted. Otherwise, all such Premiums for Pre-Tax
        Benefits must be paid on a pre-tax basis under this Plan.

                (C) TERMINATION OF PARTICIPATION. A Participant shall continue
        to participate in the Plan until the Participant terminates
        participation in all of the benefits offered under the Plan. However,
        any such Participant who otherwise would terminate participation may
        elect to remain a Participant under the limitations and conditions set
        forth in Section 3.6.



                                       5
<PAGE>

                (D) TERMS AND CONDITIONS OF PARTICIPATION. Additional terms and
        conditions governing eligibility for, participation and termination of
        participation in, and the terms of each of the benefits offered under
        the Plan are set forth in the applicable Benefits Description.

        3.2 ENROLLMENT. An Eligible Employee may enroll in, re-enroll in, or
change his or her benefit elections by submitting to the Administrator an
enrollment form that specifies the benefits he has chosen for the Participation
Year, which will constitute his agreement to use the necessary part of his
Flexible Pay or other compensation to pay any Premiums and that meets such other
standards for completeness and accuracy the Administrator establishes. The
enrollment form must be submitted during an enrollment period described in
Section 3.4 below. A Participant's enrollment form shall not be effective before
the date such form is submitted to the Administrator. An Eligible Employee may
not enroll in a benefit unless he meets the eligibility requirements applicable
to that benefit.

        3.3 TERMINATION OF ENROLLMENT. A Participant who enrolls in any of the
Pre-Tax Benefits must maintain that coverage in effect until the end of the
Participation Year, except that any enrollment form submitted by a Participant
in accordance with this Article III shall remain in effect until the earlier of:

                (A) The date the Participant terminates participation in all of
        the benefits provided under the Plan;

                (B) The effective date (as determined by the Administrator) of a
        subsequently filed enrollment form as provided in Section 3.4; or

                (C) The date the Plan no longer offers any benefits.

        3.4 ENROLLMENT PERIODS.

                (A) INITIAL ENROLLMENT PERIOD. An Eligible Employee shall have
        an initial enrollment period that begins on the first day he becomes an
        Employee. An Eligible Employee's initial enrollment period ends on the
        first day of the month after the date (or on the date) the Eligible
        Employee completes 90 consecutive days of employment as an Eligible
        Employee. Enrollment forms submitted during an initial enrollment period
        are effective as of the last day of the initial enrollment period.

                (B) FAILURE TO ENROLL - INITIAL ENROLLMENT. An Eligible Employee
        who fails to return a completed enrollment form to the Administrator on
        or before the specified due date for his initial enrollment period shall
        be deemed to have elected for the remainder of the Participation Year to
        receive the same benefits (if any) as the Eligible Employee received
        from


                                       6
<PAGE>

        the Employer during the preceding Participation Year. Thus, a newly
        hired Employee who fails to return a completed enrollment form before
        the end of his initial enrollment period will be deemed to have elected
        not to participate in the Plan and shall receive no benefits under the
        Plan for the remainder of the Participation Year. Likewise, an Employee
        who, prior to his initial enrollment period, received none of the
        benefits offered under the Plan and who fails to return a completed
        enrollment form before the end of his initial enrollment period will be
        deemed to have elected not to participate in the Plan and shall receive
        no benefits under the Plan for the remainder of the Participation Year.

                (C) ANNUAL ENROLLMENT PERIOD. Each Eligible Employee shall have
        an annual enrollment period during which to make elections for each
        Participation Year. The Administrator will designate an annual
        enrollment period for each Participation Year before the first day of
        that Participation Year. The annual enrollment period for any
        Participation Year shall terminate on the date specified by the
        Administrator, but not later than the last day of the immediately
        preceding Participation Year. Enrollment forms submitted during an
        annual enrollment period shall be effective on the first day of the next
        Participation Year.

                (D) FAILURE TO ENROLL - ANNUAL ENROLLMENT. An Eligible Employee
        failing to return a completed enrollment form to the Administrator on or
        before the specified due date for an annual enrollment period for any
        subsequent Participation Year shall be deemed to have made the same
        benefit choices (if any) as were in effect just before the end of the
        preceding Participation Year. A Participant shall also be deemed to have
        authorized the Administrator to withhold from his compensation an amount
        of Flexible Pay or other compensation equal to his Premiums for the
        benefits chosen.

                (E) SPECIAL ENROLLMENT PERIOD. If a Participant incurs a special
        enrollment event as defined below, then with respect to the Health Plan
        only, the Participant will have a special enrollment period that begins
        on the date of the special enrollment event and ends 30 days later.
        Enrollment forms submitted during a special enrollment period shall be
        effective as of the first day of the calendar month coinciding with or
        immediately following the date the special enrollment form is submitted;
        except that in the case of a Dependent's birth, such form shall be
        effective as of the date of the birth; and in the case of a Dependent's
        adoption or placement for adoption, such form shall be effective as of
        the date of such adoption or placement for adoption.


                                       7



<PAGE>

                       (1) SPECIAL ENROLLMENT EVENT: LOSING OTHER COVERAGE. An
                Eligible Employee who is not enrolled in the Health Plan (or a
                Dependent of such an Eligible Employee if the Dependent is
                eligible but not enrolled in the Health Plan) may enroll in the
                Health Plan if the following conditions are met:

                                (I) The Eligible Employee or Dependent was
                        covered under a group health plan or had health
                        insurance coverage at the time coverage was previously
                        offered to the Eligible Employee or Dependent.

                                (II) The Eligible Employee or Dependent stated
                        in writing at the time coverage was previously offered
                        to the Eligible Employee or Dependent that coverage
                        under a group health plan or health insurance coverage
                        was the reason the Eligible Employee declined
                        enrollment.

                                (III) The Eligible Employee's or Dependent's
                        coverage described in paragraph (i):

                                        (A) Was under a COBRA continuation
                                provision and the coverage under such provision
                                was exhausted; or

                                        (B) Was not under such a provision and
                                either the coverage was terminated as a result
                                of loss of eligibility for coverage (including
                                as a result of legal separation, divorce, death,
                                termination of employment, or reduction in the
                                number of hours of employment), or contributions
                                toward such coverage were terminated by the
                                sponsor (reasons that are not acceptable are
                                failure to pay on a timely basis or termination
                                of other coverage for cause (such as making a
                                fraudulent claim or an intentional
                                misrepresentation of a material fact in
                                connection with said plan)).

                        (2) SPECIAL ENROLLMENT EVENT: NEW DEPENDENTS. If an
                individual becomes a Dependent of an Eligible



                                       8
<PAGE>

                Employee through marriage, birth, adoption, or placement for
                adoption, the Dependent (or, if the Eligible Employee is not
                otherwise enrolled, the Eligible Employee) may be enrolled in
                the Health Plan as a Dependent and/or Eligible Employee. In the
                case of the birth or adoption of a child, the spouse of the
                Eligible Employee may be enrolled as a Dependent of the Eligible
                Employee if the spouse is otherwise eligible for coverage.

                        (3) EFFECTIVE DATE OF COVERAGE. Enrollment forms
                submitted during a special enrollment period shall be effective
                as of the first day of the calendar month coinciding with or
                immediately following the date the special enrollment form is
                submitted except that:

                                (I) In the case of marriage, coverage will be
                        effective as of the date the completed request is
                        received;

                                (II) In the case of a Dependent's birth,
                        coverage will be effective as of the date of the birth;
                        and

                                (III) In the case of a Dependent's adoption or
                        placement for adoption, coverage will be effective as of
                        the date of such adoption or placement for adoption.

                (F) CHANGE IN STATUS ENROLLMENT PERIOD. If a Participant incurs
        a Change in Status, and the consistency rules in Section 3.4(g) have
        been met, such Participant shall have a Change in Status enrollment
        period that begins on the date of such event and terminates 30 days
        following such event. If the Change in Status event results in the
        individual gaining or losing coverage under a spouse's or a Dependent's
        employer's plan, then the 30-day Change in Status enrollment period will
        not begin until the date the individual gains or loses such other
        coverage. Enrollment forms submitted during a Change in Status
        enrollment period shall be effective as of the first day of the calendar
        month coinciding with or immediately following the date the Change in
        Status enrollment form is submitted.

                (G) CONSISTENCY RULES FOR CHANGE IN STATUS. The enrollment
        change under Section 3.4(f) must be on account of and correspond with
        the Change in Status that affects eligibility for coverage. A Change in




                                       9
<PAGE>
        Status that affects eligibility for coverage also includes a Change in
        Status that results in an increase or decrease in the number of an
        Eligible Employee's family members or Dependents who may benefit from
        coverage.

                        (1) CONSISTENCY RULE - ACCIDENT OR HEALTH INSURANCE
                COVERAGE - ENROLLMENT CHANGE ONLY FOR AFFECTED DEPENDENT. If the
                Change in Status is the Eligible Employee's divorce, annulment,
                or legal separation from a spouse, death of a spouse or
                Dependent, or a Dependent ceasing to satisfy the eligibility
                requirements for coverage, an Eligible Employee's election under
                the Plan to cancel accident or health insurance coverage (as
                that term is used in Treas. Reg. ss. 125-4(c)(3)(iii)) for any
                individual other than the spouse involved in the divorce,
                annulment, or separation; the deceased spouse or Dependent; or
                the Dependent that ceased to satisfy the eligibility requirement
                for coverage shall not satisfy the consistency rules.

                        (2) GAINING ELIGIBILITY UNDER FAMILY MEMBER'S PLAN. If
                an Eligible Employee, spouse, or Dependent gains eligibility for
                coverage under a family member's plan as a result of a change in
                marital status or a change in employment status, an Eligible
                Employee's election under the Plan to cease or decrease coverage
                for that individual under the Plan shall not satisfy the
                consistency rules unless the coverage for that individual
                becomes applicable or is increased under the family member's
                plan.

                        (3) COBRA CONTINUATION COVERAGE. If the Eligible
                Employee, spouse, or Dependent becomes eligible for continuation
                coverage under the Health Plan as provided in Code Section 4980B
                or any similar state law, the Participant may choose to increase
                payments under the Plan to pay for the continuation coverage.

                (H) CHANGE IN ENROLLMENT - JUDGMENT, DECREE, OR ORDER. This
        Section 3.4(h) applies in the case of a judgment, decree, or order
        resulting from a divorce, legal separation, annulment, or change in
        legal custody that meets the requirements of a qualified medical child
        support order ("QMCSO") as defined in ERISA Section 609 that requires
        health coverage for an Eligible Employee's child or for a foster child
        who is a Dependent of the Eligible Employee. The Eligible Employee may:


                                       10
<PAGE>


                        (1) Change his enrollment to provide coverage for the
                child if the QMCSO required coverage for the child under the
                Health Plan; or

                        (2) Make a change to cancel coverage for the child if
                the QMCSO required the spouse, former spouse, or other
                individual to provide coverage for the child, and such coverage
                is provided for the child pursuant to the QMCSO.

        An Eligible Employee must make any enrollment change pursuant to this
        Section 3.4(h) within 31 days after the order is approved by the plan to
        which the order applies.

                (I) MEDICARE, MEDICAID, OR OTHER COVERAGE SPONSORED BY A
        GOVERNMENTAL OR EDUCATIONAL INSTITUTION.

                        (1) GAINING COVERAGE UNDER MEDICARE OR MEDICAID. If an
                Eligible Employee, spouse, or Dependent is enrolled in the
                Health Plan and becomes enrolled under Part A or Part B of Title
                XVIII of the Social Security Act (Medicare) or Title XIX of the
                Social Security Act (Medicaid), other than coverage consisting
                solely of benefits under Section 1928 of the Social Security Act
                (the program for distribution of pediatric vaccines), the
                Eligible Employee may make a prospective enrollment change to
                cancel or reduce coverage under the Health Plan for that
                Eligible Employee, spouse, or Dependent.

                        (2) LOSING MEDICARE, MEDICAID, OR OTHER COVERAGE
                SPONSORED BY A GOVERNMENTAL OR EDUCATIONAL INSTITUTION. In
                addition, if an Eligible Employee, spouse, or Dependent who has
                been entitled to such coverage under Medicare, Medicaid, or
                other coverage sponsored by a governmental or educational
                institution (such as a state children's health insurance
                program) loses eligibility for such coverage, the Eligible
                Employee may make a prospective enrollment change to commence or
                increase coverage of that Eligible Employee, spouse, or
                Dependent under the Health Plan.

                        (3) ENROLLMENT CHANGES. An Eligible Employee must make
                any enrollment changes pursuant to this Section 3.4(i) within 31
                days after the Eligible Employee, spouse, or Dependent gains or
                loses coverage (as applicable) as described in paragraphs (1)
                and (2) above.



                                       11
<PAGE>

                (J) CHANGE IN ENROLLMENT - FMLA LEAVE. If the Participant takes
        FMLA Leave, the Participant may revoke his Pre-Tax Benefit enrollments
        within 14 days of taking leave or before the end of the leave, whichever
        is earlier. The Participant also may choose to be reinstated in his
        enrollments under the Plan when the Participant returns from FMLA Leave.
        Before beginning unpaid FMLA Leave, the Participant may prepay on a
        pre-tax or after-tax basis the Premiums for a Pre-Tax Benefit that would
        be due during the FMLA Leave for coverage under the Health Benefits.
        However, the Participant may not prepay Premiums that would be due for a
        future Participation Year. Alternatively, the Participant may choose to
        have these Premiums deducted from any sick pay or vacation pay the
        Participant receives during the FMLA Leave or the Participant may make
        payments during unpaid FMLA Leave on an after-tax basis.

        3.5 LIMITATION ON ENROLLMENT CHANGES. A Participant's right to enroll in
certain benefit coverage shall be additionally limited to the extent such rights
are limited in the applicable benefit or in rules adopted by the Administrator
pursuant to a written procedure. Furthermore, a Participant shall not be
entitled to revoke an enrollment choice after a Participation Year has commenced
and to make a new enrollment choice with respect to the remainder of the
Participation Year except as provided in Section 3.4.

        3.6 COBRA COORDINATION. Any Participant or Dependent who is a qualified
beneficiary (as defined in Code Section 4980B(g)(1) or ERISA Section 607(3)) and
is actually participating in the Health Benefits on the date of qualifying event
(as defined in Code Section 4980B(f)(3) or ERISA Section 603) shall have the
right to choose the continuation group health coverage that is required under
Code Section 4980B or ERISA Sections 601 et seq. Such continuation coverage
shall be provided by the Health Benefits in the manner provided in the
applicable Benefit Description. Any such qualified beneficiary actually choosing
such continuation coverage will, during the period of such coverage, have the
same right as Participants to change his enrollments under the Health Benefits.



                                   ARTICLE IV

                                  CONTRIBUTIONS

        4.1 CONTRIBUTIONS WITHHELD. Each Participant shall be deemed to have
authorized the Administrator to withhold from his compensation for the
Participation Year an amount of Flexible Pay or other compensation equal to his
Premiums for the benefits elected for such Participation Year.



                                       12
<PAGE>

                (A) EQUAL INSTALLMENTS. Any amounts that are withheld from a
        Participant's compensation pursuant to this Section shall be withheld in
        approximately equal installments during the Participation Year as the
        Administrator designates.

                (B) COMPENSATION PAYABLE OVER LESS THAN ONE YEAR. For an
        Eligible Employee whose compensation during the year is payable to him
        over a period of time less than a year, Flexible Pay amounts will be
        withheld in approximately equal installments over such period.

                (C) PARTICIPATION DURING PARTICIPATION YEAR. If an Eligible
        Employee becomes a Participant after the beginning of the first pay
        period of the Participation Year, the amount withheld from his
        compensation during such year shall be a pro rata share of the amount
        that would have been withheld had he been a Participant in the Plan as
        of the beginning of the Participation Year.

        4.2 CARRYOVER PROHIBITED. In no event may an Eligible Employee carry
over unused Flexible Pay from one Participation Year to the next. An Eligible
Employee may not use contributions for one Participation Year to purchase
Pre-Tax Benefits that will be provided in a subsequent Participation Year.

        4.3 ENROLLMENT. An Eligible Employee's enrollment under Section 4.1 to
authorize withholding of Flexible Pay shall be made on an enrollment form
submitted in accordance with Section 3.2.

        4.4 PREMIUM REBATES AND POLICY DIVIDENDS. The Administrator, in its sole
discretion, may pay to Participants reasonable premium rebates and policy
dividends with respect to benefits provided under the Plan. Any such rebates or
dividends must be paid before the close of the 12-month period immediately
following the year to which such rebate and dividend relates.

        4.5 EFFECT OF CHANGE IN DEPENDENT STATUS. If a Participant makes an
enrollment change during the Participation Year pursuant to Section 3.4, then in
accordance with written rules adopted by the Administrator, appropriate
adjustments shall be made in the amount withheld from or added to the
Participant's pay for the balance of the Participation Year to reflect any
changes in the Participant's enrollments under the Plan.

        4.6 CASH BENEFIT. Any Flexible Pay not expended to purchase Pre-Tax
Benefits shall be considered a cash benefit under the Plan payable to the
Participant.



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<PAGE>



        4.7 COST CHANGES.

                (A) AUTOMATIC CHANGES. If the cost of a benefit under the Plan
        increases or decreases during the Participation Year, a corresponding
        change will automatically be made in the Participants' Premiums under
        the Plan.

                (B) SIGNIFICANT COST INCREASES/DECREASES. If the Administrator
        determines that the cost of a Pre-Tax Benefit or of a benefit package
        option significantly increases or decreases during a Participation Year,
        the Administrator may permit Participants either to make a corresponding
        prospective increase in their Premiums or to revoke their enrollment
        choice and, in lieu thereof, to receive on a prospective basis coverage
        under another Pre-Tax Benefit or benefit package option providing
        similar coverage. If another Pre-Tax Benefit or benefit package option
        does not provide similar coverage, the Administrator may permit
        Participants to cancel coverage. If there is a significant decrease in
        the cost of a Pre-Tax Benefit or benefit package option, all Eligible
        Employees shall be given the right to enroll in the Plan at that time,
        regardless of whether they have declined enrollment in the past.

        4.8 COVERAGE CHANGES.

                (A) SIGNIFICANT IMPROVEMENT/CURTAILMENT. If the coverage under a
        Pre-Tax Benefit or benefit package option is significantly improved or
        curtailed or if a new benefit package option is offered during a
        Participation Year, the Administrator may permit affected Participants
        to revoke such Pre-Tax Benefit enrollment choice under the Plan. In that
        case, each affected Participant must make a new enrollment on a
        prospective basis for coverage under another Pre-Tax Benefit or benefit
        package option providing similar coverage. Coverage under the Health
        Plan is significantly curtailed only if there is an overall reduction in
        coverage provided to Participants under the Health Plan so as to
        constitute reduced coverage to Participants generally. If the coverage
        under a Pre-Tax Benefit or benefit package option is significantly
        curtailed resulting in a loss of coverage, the Administrator may permit
        Participants to cancel coverage. A loss of coverage shall mean a
        complete loss of coverage under the Pre-Tax Benefit or benefit package
        option, such as a health maintenance organization ceasing to be
        available in the area where the Participant, his spouse, or Dependent
        reside; losing all coverage by reason of an overall lifetime or annual
        limitation; a substantial decrease in medical care providers; a
        reduction in the benefits for a specific type of medical condition or
        treatment with respect to which the Participant, the Participant's
        spouse, or Dependent



                                       14
<PAGE>

        is currently in a course of treatment; or any other similar fundamental
        loss of coverage as determined by the Administrator.

                (B) ADDITION OR ELIMINATION OF BENEFIT PACKAGE OPTION PROVIDING
        SIMILAR COVERAGE. If during a Participation Year, the Plan adds a new
        Pre-Tax Benefit or if a benefit package option or other coverage option
        is added to an existing Pre- Tax Benefit (or if an existing benefit
        package option or other coverage option is eliminated from an existing
        Pre-Tax Benefit or a Pre-Tax Benefit is eliminated from the Plan), the
        Administrator may permit affected Participants to choose the newly added
        option or Pre-Tax Benefit (or choose another option or Pre-Tax Benefit
        if an option or Pre-Tax Benefit has been eliminated) prospectively on a
        pre-tax basis and make corresponding enrollment changes with respect to
        the other benefit package options providing similar coverage.

                (C) CHANGE IN COVERAGE UNDER OTHER EMPLOYER'S PLAN. A
        Participant may make a prospective enrollment change that is on account
        of and corresponds with a change made under another employer's plan if:

                        (1) ELECTIVE CHANGE UNDER OTHER PLAN. A cafeteria plan
                or qualified benefits plan permits an election change that would
                be permitted under the cafeteria plan regulations; or

                        (2) DIFFERENT PERIODS OF COVERAGE. The Participation
                Year under the Plan is different from the period of coverage
                under the cafeteria plan or qualified benefits plan.


                                    ARTICLE V

                                 ADMINISTRATION

        5.1 ALLOCATION OF RESPONSIBILITY. The following persons shall have only
those powers, duties, responsibilities, and obligations specifically given or
delegated to them under the Plan.

                (A) Landair shall have the sole authority to appoint and remove
        the Administrator, and to amend or terminate the Plan in whole or in
        part.



                                       15
<PAGE>

                (B) The Administrator shall have the sole responsibility for
        administering the Plan, which responsibility is specifically described
        herein.

        5.2 ADMINISTRATION. The Plan shall be administered by the Administrator
which may appoint or employ persons to assist in administering the Plan and may
appoint or employ any other agents it deems advisable, including legal counsel,
actuaries, auditors, bookkeepers, and recordkeepers to serve at the
Administrator's direction.

        5.3 EXPENSES. All usual and reasonable expenses of the Plan and the
Administrator may be paid by the Employer, but the Employer shall not be
obligated to do so.

        5.4 DENIAL OF CLAIMS. The Administrator, or a party designated by the
Administrator, shall make all determinations as to the right of any person to
payment or reimbursement under the Plan. If an assertion of any such right by a
Participant or Dependent is wholly or partially denied, the Administrator, or
the designated party, will provide such claimant written notice within 90 days
after receipt of the claim, unless circumstances warrant an extension of time
not to exceed an additional 90 days, setting forth:

                (A) The specific reason or reasons for such denial;

                (B) Specific reference to pertinent Plan provisions on which the
        denial is based;

                (C) A description of any additional material or information the
        claimant must submit to perfect the claim and an explanation of why such
        material or information is necessary; and

                (D) A description of the Plan's claims review procedure. The
        review procedure is available on written request by the claimant to the
        Administrator, or the designated party, within 60 days after receipt by
        the claimant of written notice of the denial of the claim.

        5.5 CLAIMS REVIEW PROCEDURE.

                (A) REQUEST FOR RECONSIDERATION. Any Participant, former
        Participant, or beneficiary of either, who has been denied a benefit by
        a decision of the Administrator pursuant to Section 5.4 is entitled to
        request that the Administrator give further consideration to his claim
        by filing with the Administrator a written request for a review of the
        denial of his claims. The claimant shall file with the Administrator
        such


                                       16
<PAGE>

        request, together with a written statement of the reasons why the
        claimant believes his claim should be allowed, no later than 60 days
        after the claimant receives the written notification provided for in
        Section 5.4. As a condition of coverage and of receiving benefits under
        the Plan, each Participant or beneficiary agrees that requests for
        review received by the Administrator more than 60 calendar days after
        the date of receipt of the claim denial will not be considered. No legal
        recourse will be available after this period. The claimant should
        include in his written appeal the following information to support his
        claim for benefits:

                        (1) A list of which issues, if any, in the claim denial
                that he chooses to contest and that he wishes the Administrator
                to review on appeal;

                        (2) His position on each issue;

                        (3) Any additional facts that he believes support his
                position on each issue; and

                        (4) Any legal or other arguments he believes support his
                position on each issue.

        He may, if he chooses, obtain legal counsel, and he may examine any
        related Plan documents.

                (B) FINAL DECISION. The Administrator shall make a final
        decision as to the allowance of the claim within sixty (60) days of
        receipt of the request for review (unless there has been an extension of
        sixty (60) days due to special circumstances, provided the Administrator
        communicates to the claimant the delay and the special circumstances
        occasioning it within the sixty (60) day period). Such communication
        shall be written in a manner calculated to be understood by the claimant
        and shall include specific reasons for the decision and specific
        references to the pertinent Plan provisions on which the decision is
        based. If the decision on review is not furnished within the time
        period(s) set out above, the claim will be deemed denied on review.

                (C) FURTHER ACTIONS. No legal action related to the Plan to
        recover benefits or with respect to any other matter related to the Plan
        may be commenced before the claimant has timely exhausted the claim and
        claim review procedures described above. In no event may any such action
        be brought more than two (2) years after the claim was first



                                       17
<PAGE>

        incurred or after the occurrence of the event on which the claim is
        based, whichever is earlier.

        5.6 OTHER ADMINISTRATIVE POWERS AND DUTIES. The Administrator shall have
such powers and duties necessary to discharge its functions hereunder, including
the discretionary power to:

                (A) construe and interpret the Plan, decide all questions of
        eligibility for participation or benefits and determine the amount,
        manner, and time of payment of any benefit or reimbursement hereunder;

                (B) prescribe procedures to be followed by Participants choosing
        benefit coverages or filing applications for reimbursements;

                (C) prepare and distribute, in such manner as the Administrator
        determines to be appropriate, information explaining the Plan;

                (D) receive from Employees, agents, and Participants such
        information as is necessary to properly administer the Plan;

                (E) receive, review, and keep on file (as it deems convenient or
        proper) reports of the receipts and disbursements of the Plan;

                (F) appoint or employ individuals or other parties to assist in
        administering the Plan and any other agents it deems advisable,
        including accountants, legal counsel, bookkeepers, and recordkeepers;
        and

                (G) designate or employ persons to carry out any of the
        Administrator's fiduciary duties or responsibilities under the Plan.

The foregoing list is not intended to be complete or all-inclusive. The
Administrator shall have all powers, whether or not expressly authorized, that
it may deem necessary, desirable, or proper for the supervision and
administration of the Plan.

        5.7 RULES AND DECISIONS. The Administrator may adopt such written rules
and procedures as it deems necessary, desirable, or appropriate to administer
the Plan. When making a determination or calculation, the Administrator shall be
entitled to rely on information furnished by a Participant, a Dependent, the
duly authorized representative of a Participant or Dependent, or the legal
counsel of the Administrator.

        5.8 FORMS AND REQUESTS FOR INFORMATION. The Administrator may require a
Participant to complete and file such forms as are provided for herein and all
other


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