EXHIBIT 10.1













                                              USFREIGHTWAYS CORPORATION
                                              LONG-TERM INCENTIVE PLAN

                          RESTATED AS OF MARCH 8, 2001






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                                              USFREIGHTWAYS CORPORATION
                                              LONG-TERM INCENTIVE PLAN


1.       PURPOSE

The USFreightways  Corporation  Long-Term  Incentive Plan is adopted January 24,
1997.  The Plan is  designed  to attract and retain  selected  employees  of the
Company and its Affiliates,  and reward them for making major  contributions  to
the success of the Company and its Affiliates. These objectives are accomplished
by making long-term incentive awards under the Plan that will offer Participants
an opportunity to have a greater  proprietary  interest in, and closer  identity
with, the Company and its Affiliates and their financial success.

         The Awards may consist of:
                  (a)      Incentive Options;
                  (b)      Nonstatutory Options;
                  (c)      Restricted Stock;
                  (d)      Rights;
                  (e)      Performance Awards; or
                  (f)      Cash Awards

or any combination of the foregoing, as the Committee may determine.

The Plan is intended to qualify certain  compensation awarded under the Plan for
tax  deductibility  under  Section  162(m)  of the  Code  to the  extent  deemed
appropriate  by the  Committee.  The Plan and the grant of Awards  hereunder are
expressly  conditioned  upon the  Plan's  approval  by the  stockholders  of the
Company.  If such  approval  is not  obtained,  then  this  Plan and all  Awards
hereunder shall be null and void ab initio.

2.       DEFINITIONS

(a)  Affiliate  means any  individual,  corporation,  partnership,  association,
joint-stock company,  trust,  unincorporated  association or other entity (other
than the Company) that, for purposes of Section 422 of the Code, is a subsidiary
of the Company, direct or indirect.

(b) Award  means the grant to any  employee  of any form of  Option,  Restricted
Stock,  Right,  Performance  Award, or Cash Award,  whether  granted singly,  in
combination,  or  in  tandem,  and  pursuant  to  such  terms,  conditions,  and
limitations as the Committee may establish in order to fulfill the objectives of
the Plan.

(c) Award  Agreement  means an agreement  entered into between the Company and a
Participant  under  which an Award is  granted  and which  sets forth the terms,
conditions, and limitations applicable to the Award.

(d)      Board means the Board of Directors of the Company.

(e) Cash Award means an Award of cash, subject to the requirements of Section 11
and such other restrictions as the Committee deems appropriate or desirable.

(f) Code means the Internal  Revenue Code of 1986, as amended from time to time,
or any successor statute thereto.

(g) Committee  means the committee to which the Board delegates the power to act
under or pursuant to the provisions of the Plan, or the Board if no committee is
selected. If the Board delegates powers to a committee, and if the Company is or
becomes  subject to Section 16 of the  Exchange  Act,  then,  if  necessary  for
compliance  therewith,  such committee shall consist  initially of not less than
two (2)  members of the  Board,  each  member of which  must be a  "non-employee
director,"  within the meaning of the applicable rules  promulgated  pursuant to
the  Exchange  Act.  If the  Company is or becomes  subject to Section 16 of the
Exchange Act, no member of the Committee shall receive any Award pursuant to the
Plan or any similar plan of the Company or any  Affiliate  while  serving on the
Committee, unless the Board determines that the grant of such an Award satisfies
the then current Rule 16b-3 requirements under the Exchange Act. Notwithstanding
anything  herein to the  contrary,  and insofar as it is  necessary in order for
compensation  recognized  by  Participants  pursuant  to the  Plan  to be  fully
deductible to the Company for federal  income tax  purposes,  each member of the
Committee  also shall be an "outside  director"  (as defined in  regulations  or
other  guidance  issued by the  Internal  Revenue  Service  under  Code  Section
162(m)).
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(h)      Common Stock means the common stock of the Company.

(i) Company means USFreightways  Corporation,  a Delaware  corporation,  and any
successor or assignee  corporation or corporations into which the Company may be
merged,  changed,  or  consolidated;  any corporation  for whose  securities the
securities of the Company  shall be exchanged;  and any assignee of or successor
to substantially all of the assets of the Company.

(j) Disability or Disabled means a permanent and total disability as defined in
Section 22(e)(3) of the Code.

(k) Exchange Act means the Securities Exchange Act of 1934, as amended from time
to time, or any successor statute thereto.

(l) Fair Market Value means, if the Shares are listed on any national securities
exchange,  the closing sales price,  if any, on the largest such exchange on the
valuation date, or, if none, on the most recent trade date immediately  prior to
the  valuation  date  provided  such trade date is no more than thirty (30) days
prior to the  valuation  date.  If the  Shares  are not then  listed on any such
exchange,  the fair market value of such Shares shall be the closing sales price
if such is  reported,  or otherwise  the mean between the closing  "Bid" and the
closing  "Ask"  prices,  if any,  as  reported in the  National  Association  of
Securities Dealers Automated Quotation System ("NASDAQ") for the valuation date,
or if none,  on the most recent trade date  immediately  prior to the  valuation
date  provided  such  trade date is no more than  thirty  (30) days prior to the
valuation date. If the Shares are not then either listed on any such exchange or
quoted in NASDAQ,  or there has been no trade date  within  such thirty (30) day
period, the fair market value shall be the mean between the average of the "Bid"
and the average of the "Ask" prices,  if any, as reported in the National  Daily
Quotation  System for the valuation date, or, if none, for the most recent trade
date immediately prior to the valuation date provided such trade date is no more
than  thirty (30) days prior to the  valuation  date.  If the fair market  value
cannot be determined under the preceding three sentences, it shall be determined
in good faith by the Committee.

(m) Incentive  Option means an Option that,  when granted,  is intended to be an
"incentive stock option," as defined in Section 422 of the Code.

(n) Nonstatutory  Option means an Option that, when granted,  is not intended to
be an "incentive stock option," as defined in Section 422 of the Code.

(o) Normal Retirement means  termination of a Participant's  employment with the
Company or one of its Affiliates after the Participant reaches the age of 65.

(p)Option means a right or option to purchase Common Stock, including Restricted
Stock if the Committee so determines.

(q)Participant means an employee to whom one or more Awards are granted under
the Plan.

(r) Performance  Award means an Award subject to the requirements of Section 10,
and such performance conditions as the Committee deems appropriate or desirable.

(s)Plan means the USFreightways Corporation Long-Term Incentive Plan, as amended
from time to time.

(t) Restricted Stock means an Award made in Common Stock or denominated in units
of Common Stock and delivered  under the Plan,  subject to the  requirements  of
Section  8, such  other  restrictions  as the  Committee  deems  appropriate  or
desirable, and as awarded in accordance with the terms of the Plan.

(u) Right means a stock  appreciation right delivered under the Plan, subject to
the requirements of Section 9 and as awarded in accordance with the terms of the
Plan.

(v) Shares means the following  shares of the capital stock of the Company as to
which Options or Restricted Stock have been or may be granted under the Plan and
upon  which  Rights  or units of  Restricted  Stock may be  based:  treasury  or
authorized but unissued  Common Stock,  $.01 par value,  of the Company,  or any
shares of capital  stock into which the Shares are changed or for which they are
exchanged within the provisions of Section 17 of the Plan.

<PAGE>

3.       SHARES SUBJECT TO THE PLAN

The  aggregate  number of Shares as to which  Awards may be granted from time to
time shall be  3,350,000  Shares of which no more than  130,000  Shares shall be
available  for  Awards of  Restricted  Stock  and  Performance  Awards  combined
(subject in each case to  adjustments  for stock splits,  stock  dividends,  and
other adjustments described in Section 17 hereof). Subject to the limitation set
forth in the preceding sentence,  the 400,000 Shares that became available under
the Plan by Plan amendment  effective  March 8, 2001 shall only be available for
the grant of Awards in the form of Options or Restricted Stock.

In accordance with Code Section 162(m),  if applicable,  the aggregate number of
Shares as to which  Awards may be granted  in any one  calendar  year to any one
employee shall not exceed five hundred  thousand  (500,000)  Shares  (subject to
adjustment for stock splits, stock dividends, and other adjustments described in
Section 17 hereof).

From time to time, the Committee and  appropriate  officers of the Company shall
take whatever actions are necessary to file required documents with governmental
authorities  and stock  exchanges  so as to make Shares  available  for issuance
pursuant  to the  Plan.  Shares  subject  to  Awards  that  expire  or that  are
forfeited, terminated, unexercised, canceled by agreement of the Company and the
Participant,  settled in cash in lieu of Common Stock or in such manner that all
or some of the Shares covered by such Awards are not issued to a Participant, or
are exchanged for Awards that do not involve  Common  Stock,  shall  immediately
become available for Awards.  Awards payable in cash shall not reduce the number
of Shares available for Awards under the Plan.

Except as otherwise set forth herein, the aggregate number of Shares as to which
Awards may be granted  shall be subject to change only by means of an  amendment
of the Plan duly adopted by the Company and approved by the  stockholders of the
Company  within  one year  before  or  after  the  date of the  adoption  of the
amendment.

4.       ADMINISTRATION OF THE PLAN

The Plan shall be  administered  by the  Committee.  A majority of the Committee
shall  constitute  a quorum  at any  meeting  thereof  (including  by  telephone
conference) and the acts of a majority of the members present,  or acts approved
in writing by a majority of the entire Committee without a meeting, shall be the
acts of the Committee for purposes of this Plan. The Committee may authorize one
or more of its  members  or an officer of the  Company  to execute  and  deliver
documents  on  behalf of the  Committee.  A member  of the  Committee  shall not
exercise any discretion  respecting himself or herself under the Plan. The Board
shall have the authority to remove, replace or fill any vacancy of any member of
the Committee upon notice to the Committee and the affected  member.  Any member
of the Committee may resign upon notice to the Board. The Committee may allocate
among one or more of its members,  or may delegate to one or more of its agents,
such duties and responsibilities as it determines.  Subject to the provisions of
the Plan, the Committee is authorized to:

(a)      Interpret the provisions of the Plan and any Award or Award  Agreement,
and make all rules and  determinations  that it deems necessary or advisable to
the administration of the Plan;

(b)      Determine  which  employees of the Company or an Affiliate  shall be
designated  as  Participants and which of the employees shall be granted Awards;

(c)      Determine whether an Option to be granted shall be an Incentive Option
or Nonstatutory Option;

(d)      Determine the number of Shares for which an Option or Restricted Stock
shall be granted;

(e)      Determine the number of Rights, the Cash Award or the Performance Award
to be granted;

(f)      Provide for the acceleration of the right to exercise any Award; and
<PAGE>


(g)      Specify the terms, conditions, and limitations upon which Awards may be
granted;
provided,   however,   that  with  respect  to  Incentive   Options,   all  such
interpretations,  rules, determinations, terms, and conditions shall be made and
prescribed in the context of preserving the tax status of the Incentive  Options
as incentive stock options within the meaning of Section 422 of the Code.

The  Committee may delegate to the chief  executive  officer and to other senior
officers of the Company or its  Affiliates its duties under the Plan pursuant to
such conditions or limitations as the Committee may establish,  except that only
the Committee may select,  and grant Awards to,  Participants who are subject to
Section 16 of the Exchange Act. All  determinations  of the  Committee  shall be
made by a majority of its members.  No member of the  Committee  shall be liable
for any action or  determination  made in good faith with respect to the Plan or
any Award.

The  Committee  shall  have the  authority  at any  time to  cancel  Awards  for
reasonable cause and to provide for the conditions and circumstances under which
Awards shall be forfeited.

Any determination  made by the Committee  pursuant to the provisions of the Plan
shall  be made in its  sole  discretion,  and in the  case of any  determination
relating  to an  Award,  may be made at the time of the  grant of the  Award or,
unless in contravention of any express term of the Plan or an Agreement,  at any
time thereafter.  All decisions made by the Committee pursuant to the provisions
of the Plan shall be final and binding on all persons, including the Company and
the  Participants.  No  determination  shall be  subject  to de novo  review  if
challenged in court.

5.       ELIGIBILITY FOR PARTICIPATION

Awards may be granted  under this Plan only to  employees  of the Company or its
Affiliates.  The  foregoing  notwithstanding,   each  Participant  receiving  an
Incentive  Option must be an employee of the Company or of an  Affiliate  at the
time the Incentive Option is granted.

The  Committee may at any time and from time to time grant one or more Awards to
one or more employees and may designate the number of Shares, if applicable,  to
be subject to each Award so granted,  provided, however that no Incentive Option
shall be granted after the  expiration of ten (10) years from the earlier of the
date of the  adoption of the Plan by the Company or the  approval of the Plan by
the  stockholders  of the Company,  and provided  further,  that the Fair Market
Value of the Shares  (determined  at the time the Option is granted) as to which
Incentive  Options are exercisable for the first time by any employee during any
single  calendar year (under the Plan and under any other incentive stock option
plan of the  Company  or an  Affiliate)  shall not exceed  Two  Million  Dollars
($2,000,000).  To the extent that the Fair Market  Value of such Shares  exceeds
Two Million Dollars ($2,000,000),  the Shares subject to Option in excess of Two
Million  Dollars  ($2,000,000)  shall,  without further action by the Committee,
automatically be converted to Nonstatutory Options.

Notwithstanding any of the foregoing provisions, the Committee may authorize the
grant of an Award to a person  not then in the  employ  of, or  engaged  by, the
Company or of an Affiliate, conditioned upon such person becoming eligible to be
granted an Award at or prior to the execution of the Award Agreement  evidencing
the actual grant of such Award.

6.       AWARDS UNDER THIS PLAN

As the Committee  may  determine,  the following  types of Awards may be granted
under the Plan on a stand alone, combination, or tandem basis:

(a)      Incentive Option

An Award in the form of an Option  that shall  comply with the  requirements  of
Section  422  of the  Code.  Subject  to  adjustments  in  accordance  with  the
provisions of Section 17, the aggregate  number of Shares that may be subject to
Incentive Options under the Plan shall not exceed Two Million (2,000,000).

(b)      Nonstatutory Option

An Award in the form of an Option  that shall not be intended to comply with the
requirements of Section 422 of the Code.


<PAGE>




(c)      Restricted Stock

An Award made to a Participant in Common Stock or denominated in units of Common
Stock,  subject to future service and such other  restrictions and conditions as
may be established by the  Committee,  and as set forth in the Award  Agreement,
including  but not  limited  to  continuous  service  with  the  Company  or its
Affiliates,  achievement of specific business objectives, increases in specified
indices,  attaining growth rates, and other measurements of Company or Affiliate
performance.

(d)      Stock Appreciation Right

An Award in the form of a Right to receive the excess of the Fair  Market  Value
of a Share on the date the Right is  exercised  over the Fair Market  Value of a
Share on the date the Right was granted.

(e)      Performance Awards

An  Award  made to a  Participant  that is  subject  to  performance  conditions
specified by the Committee, including but not limited to continuous service with
the Company or its  Affiliates,  achievement  of specific  business  objectives,
increases in specified  indices,  attaining growth rates, and other measurements
of Company or Affiliate performance.

(f)      Cash Awards

An Award  made to a  Participant  and  denominated  in cash,  with the  eventual
payment subject to future service and such other  restrictions and conditions as
may be established by the Committee, and as set forth in the Award Agreement.

Each Award under the Plan shall be evidenced by an Award Agreement.  Delivery of
an Award Agreement to each Participant shall constitute an agreement between the
Company and the Participant as to the terms and conditions of the Award.

7.       TERMS AND CONDITIONS OF INCENTIVE OPTIONS AND NONSTATUTORY OPTIONS

Each Option shall be set forth in an Award Agreement, duly executed on behalf of
the Company and by the  Participant  to whom such Option is granted.  Except for
the setting of the Option price under  Section  7(a), no Option shall be granted
and no  purported  grant of any  Option  shall be  effective  until  such  Award
Agreement  shall have been duly  executed  on behalf of the  Company  and by the
Participant.  Each  such  Award  Agreement  shall be  subject  to at  least  the
following terms and conditions:


(a)      Option Price

The purchase  price of the Shares  covered by each Option granted under the Plan
shall be  determined  by the  Committee.  In the case of a grant of an Incentive
Option  (provided the  Participant  owns directly or by reason of the applicable
attribution  rules ten percent (10%) or less of the total combined  voting power
of all classes of share capital of the Company), and in the case of any grant of
a Nonstatutory  Option, the Option price per share of the Shares covered by each
such Option  shall be not less than the Fair  Market  Value of the Shares on the
date of the grant of the Option.  In all cases of Incentive  Options not covered
by the preceding  sentence,  the Option price shall be not less than one hundred
ten percent (110%) of the Fair Market Value on the date of grant.

(b)      Number of Shares

Each Option shall state the number of Shares to which it pertains.

(c)      Term of Option

Each Incentive Option shall terminate not more than ten (10) years from the date
of the grant thereof,  or such earlier time as the Award  Agreement may provide,
and shall be subject to earlier  termination as herein provided,  except that if
the Option price is required  under  Section 7(a) to be at least one hundred ten
percent (110%) of Fair Market Value,  each such Incentive Option shall terminate
not more than five (5) years  from the date of the grant  thereof,  and shall be
subject to earlier termination as herein provided. The Committee shall determine
the time at which a Nonstatutory Option shall terminate; provided, however, that
such termination date shall not be more than ten (10) years from the date of the
grant thereof.
<PAGE>


(d)      Date of Exercise

Upon the authorization of the grant of an Option, or at any time thereafter, the
Committee may, subject to the provisions of Section 7(c),  prescribe the date or
dates on which the Option becomes  exercisable,  and may provide that the Option
become  exercisable  in  installments  over a  period  of  years,  or  upon  the
attainment of stated goals.

(e)      Medium of Payment

The Option price shall be payable upon the exercise of the Option,  as set forth
in Section 7(j).  It shall be payable in such form  (permitted by Section 422 of
the Code in the case of Incentive  Options) as the  Committee  shall,  either by
rules promulgated pursuant to the provisions of Section 4 of the Plan, or in the
particular Award Agreement, provide.

(f)      Termination of Employment

         (1)      A  Participant  who ceases to be an employee of the Company or
                  of an Affiliate  for any reason other than death,  Disability,
                  Normal  Retirement or  termination  "for cause," as defined in
                  Section  7(f)(2),  may  exercise  any  Option  granted to such
                  Participant,  to the extent that the right to purchase  Shares
                  thereunder  has  become   exercisable  on  the  date  of  such
                  termination,  but only within three (3) months after such date
                  of  termination,   or,  if  earlier,   within  the  originally
                  prescribed  term of the  Option.  A  Participant's  employment
                  shall not be deemed  terminated  by  reason of a  transfer  to
                  another employer that is the Company or an Affiliate.

         (2)      A  Participant  who ceases to be an employee of the Company or
                  of an  Affiliate  "for cause"  shall,  upon such  termination,
                  cease to have any right to exercise  any Option.  For purposes
                  of this Plan,  cause shall mean (A) a  Participant's  theft or
                  embezzlement,  or attempted theft or embezzlement, of money or
                  property of the Company or of an  Affiliate,  a  Participant's
                  perpetration   or  attempted   perpetration  of  fraud,  or  a
                  Participant's  participation in a fraud or attempted fraud, on
                  the Company or of an Affiliate or a Participant's unauthorized
                  appropriation    of,   or   a    Participant's    attempt   to
                  misappropriate,  any tangible or intangible assets or property
                  of the  Company  or of an  Affiliate;  (B)  any act or acts of
                  disloyalty,  dishonesty,  misconduct,  moral turpitude, or any
                  other act or acts by a Participant  injurious to the interest,
                  property, operations, business or reputation of the Company or
                  of an Affiliate; (C) a Participant's commission of a felony or
                  any other crime the  commission  of which results in injury to
                  the Company or of an  Affiliate;  or (D) any  violation of any
                  restriction   on  the   disclosure  or  use  of   confidential
                  information   of  the  Company  or  of  an   Affiliate  or  on
                  competition  with the Company or of an Affiliate or any of its
                  businesses  as  then  conducted.   The  determination  of  the
                  Committee as to the existence of cause shall be conclusive and
                  binding upon the Participant and the Company or the Affiliate.

         (3)      A  Participant  who is absent from work with the Company or an
                  Affiliate  because of  temporary  disability  (any  disability
                  other than a  Disability),  or who is on leave of absence  for
                  any  purpose  permitted  by any  authoritative  interpretation
                  (i.e.,  regulation,  ruling, case law, etc.) of Section 422 of
                  the Code, shall not, during the period of any such absence, be
                  deemed,  by virtue of such absence alone,  to have  terminated
                  his or her employment or relationship with the Company or with
                  an Affiliate,  except as the Committee may otherwise expressly
                  provide or determine.

         (4)      Section  7(f)(1)  shall  control  and  fix  the  rights  of  a
                  Participant  who ceases to be an employee of the Company or of
                  an  Affiliate  for any reason  other than  Disability,  death,
                  Normal   Retirement  or  termination   "for  cause,"  and  who
                  subsequently becomes Disabled or dies. Nothing in Section 7(g)
                  and (h) shall be applicable in any such case.
<PAGE>


(g)      Total and Permanent Disability

A Participant, who ceases to be an employee of the Company or of an Affiliate by
reason of  Disability,  may  exercise  any Option  granted  to such  Participant
(notwithstanding  that the Participant  might not have been able to exercise the
Option  as to some  or all of the  Shares  if the  Participant  had  not  become
Disabled)  within a period of not more than twelve  (12)  months  after the date
that the  Participant  became  Disabled as determined by the  Committee,  or, if
earlier, within the originally prescribed term of the Option.

(h)      Death

In the event that a Participant  to whom an Option has been granted ceases to be
an employee of the Company or of an  Affiliate  by reason of such  Participant's
death,  any  Option  granted  to  such  Participant  (notwithstanding  that  the
Participant might not have been able to exercise the Option as to some or all of
the  Shares  if  the   Participant  had  not  died)  may  be  exercised  by  the
Participant's estate or personal representative within a period of not more than
twelve (12) months after the date of death of such  Participant  or, if earlier,
within the originally prescribed term of the Option.

(i)      Normal Retirement

Except as otherwise  mandated by Code Section 422, a Participant,  who ceases to
be an employee of the Company or of an Affiliate by reason of such Participant's
Normal Retirement, may exercise any Option (notwithstanding that the Participant
might not have been able to exercise  the Option as to some or all of the Shares
if the  Participant  had not terminated his or her employment  because of Normal
Retirement)  within a period of not more than twelve (12) months  after the date
of Normal Retirement,  or, if earlier,  within the originally prescribed term of
the Option.

(j)      Exercise of Option and Issuance of Stock

Options shall be exercised by giving written notice to the Company. Such written
notice shall: (1) be signed by the person  exercising the Option,  (2) state the
number of  Shares  with  respect  to which the  Option is being  exercised,  (3)
contain the warranty required by Section 7(n), if applicable,  and (4) specify a
date (other than a Saturday, Sunday or legal holiday) not less than five (5) nor
more than ten (10) days after the date of such  written  notice,  as the date on
which the Shares will be purchased.  Such tender and conveyance shall take place
at the principal  office of the Company during  ordinary  business  hours, or at
such other hour and place  agreed  upon by the Company and the person or persons
exercising the Option.  On the date specified in such written notice (which date
may be extended  by the  Company in order to comply  with any law or  regulation
that  requires the Company to take any action with respect to the Option  Shares
prior to the issuance thereof),  the Company shall accept payment for the Option
Shares in cash, by bank or certified  check, by wire transfer,  or by such other
means as may be approved  by the  Committee  and shall  deliver to the person or
persons exercising the Option in exchange therefor an appropriate certificate or
certificates  for fully  paid  nonassessable  Shares  or  undertake  to  deliver
certificates  within a reasonable period of time. In the event of any failure to
take up and pay for the number of Shares specified in such written notice on the
date set forth therein (or on the extended date as above provided), the right to
exercise the Option shall  terminate with respect to such number of Shares,  but
shall  continue with respect to the remaining  Shares  covered by the Option and
not yet acquired pursuant thereto.

If approved in advance by the Committee,  payment in full or in part also may be
made (1) by delivering  Shares already owned by the  Participant  having a total
Fair Market Value on the date of such delivery equal to the Option price; (2) by
the execution and delivery of a note or other evidence of indebtedness  (and any
security agreement thereunder) satisfactory to the Committee; (3) by authorizing
the Company to retain Shares that  otherwise  would be issuable upon exercise of
the Option having a total Fair Market Value on the date of delivery equal to the
Option  price;  (4) by the  delivery  of cash or the  extension  of  credit by a
broker-dealer  to whom the  Participant  has  submitted  a notice of exercise or
otherwise  indicated  an intent to exercise an Option (in  accordance  with part
220,  Chapter  II,  Title 12 of the Code of  Federal  Regulations,  a  so-called
"cashless" exercise); or (5) by any combination of the foregoing.

(k)      Rights as a Stockholder

No  Participant  to whom an  Option  has been  granted  shall  have  rights as a
stockholder  with respect to any Shares covered by such Option except as to such
Shares as have been  registered in the Company's  share  register in the name of
such  Participant  upon the due  exercise  of the  Option and tender of the full
Option price.
<PAGE>


(l)      Assignability and Transferability of Option

Unless otherwise permitted by the Code and by Rule 16b-3 of the Exchange Act, if
applicable,  and approved in advance by the  Committee,  an Option  granted to a
Participant   shall  not  be  transferable  by  the  Participant  and  shall  be
exercisable,  during the Participant's lifetime, only by such Participant or, in
the event of the Participant's incapacity, his guardian or legal representative.
Except as  otherwise  permitted  herein,  such  Option  shall  not be  assigned,
pledged,  or  hypothecated in any way (whether by operation of law or otherwise)
and shall not be subject to execution,  attachment,  or similar  process and any
attempted transfer,  assignment,  pledge,  hypothecation or other disposition of
any Option or of any rights  granted  thereunder  contrary to the  provisions of
this Section  7(l),  or the levy of any  attachment  or similar  process upon an
Option or such rights, shall be null and void.

(m)      Other Provisions

The Award Agreement for an Incentive  Option shall contain such  limitations and
restrictions upon the exercise of the Option as shall be necessary in order that
such Option can be an "incentive stock option" within the meaning of Section 422
of the Code.  Further,  the Award Agreements  authorized under the Plan shall be
subject  to such  other  terms and  conditions  including,  without  limitation,
restrictions  upon the  exercise  of the  Option,  as the  Committee  shall deem
advisable and which, in the case of Incentive Options, are not inconsistent with
the requirements of Section 422 of the Code.

(n)      Purchase for Investment

If Shares to be issued upon the particular  exercise of an Option shall not have
been effectively registered under the Securities Act of 1933, as now in force or
hereafter amended,  the Company shall be under no obligation to issue the Shares
covered by such  exercise  unless and until the following  conditions  have been
fulfilled.  The person who  exercises  such Option shall  warrant to the Company
that, at the time of such  exercise,  such person is acquiring his or her Option
Shares for  investment  and not with a view to, or for sale in connection  with,
the distribution of any such Shares, and shall make such other  representations,
warranties,  acknowledgments,  and  affirmations,  if any, as the  Committee may
require.  In such event,  the person acquiring such Shares shall be bound by the
provisions of the following  legend (or similar  legend) which shall be endorsed
upon the  certificate(s)  evidencing his or her Option Shares issued pursuant to
such exercise.

                  "The shares represented by this certificate have been acquired
                  for   investment  and  they  may  not  be  sold  or  otherwise
                  transferred by any person, including a pledgee, in the absence
                  of an effective  registration  statement  for the shares under
                  the   Securities   Act  of  1933  or  an  opinion  of  counsel
                  satisfactory   to  the   Company   that  an   exemption   from
                  registration is then available."

                  "The  shares  of stock  represented  by this  certificate  are
                  subject  to all of  the  terms  and  conditions  of a  certain
                  Agreement  dated as of  _________________,  _____,  among  the
                  Company  and  certain  of  its  stockholders.  A  copy  of the
                  Agreement  is on file in the  office of the  Secretary  of the
                  Company.  The  Agreement  provides,  among other  things,  for
                  restrictions  upon the  holder's  right to transfer the shares
                  represented  hereby,  and for certain prior rights to purchase
                  and  certain  obligations  to sell the shares of common  stock
                  evidenced by this  certificate at a designated  purchase price
                  determined  in  accordance   with  certain   procedures.   Any
                  attempted  transfer of these shares  other than in  compliance
                  with  the  Agreement  shall  be  void  and  of no  effect.  By
                  accepting the shares of stock  evidenced by this  certificate,
                  any  permitted  transferee  agrees  to be  bound by all of the
                  terms and conditions of said Agreement."

Without limiting the generality of the foregoing, the Company may delay issuance
of the Shares until  completion  of any action or obtaining any consent that the
Company deems necessary under any applicable law (including  without  limitation
state securities or "blue sky" laws).



<PAGE>




(o)      Repricing

The  Committee  may not at any time  reduce  the  exercise  price  of an  Option
previously awarded to any Participant,  whether through amendment,  cancellation
or replacement  grants,  or any other means  (subject to  adjustments  for stock
splits, stock dividends, and other adjustments described in Section 17 hereof).


8.       REQUIRED TERMS AND CONDITIONS OF RESTRICTED STOCK

(a) The Committee may from time to time grant an Award in Shares of Common Stock
or grant an Award denominated in units of Common Stock, for such  consideration,
if any, as the Committee  deems  appropriate  (which amount may be less than the
Fair Market Value of the Common Stock on the date of the Award),  and subject to
such  restrictions and conditions and other terms as the Committee may determine
at the time of the Award (including, but not limited to, continuous service with
the Company or its  Affiliates,  achievement  of specific  business  objectives,
increases in specified  indices,  attaining growth rates, and other measurements
of  Company or  Affiliate  performance),  and  subject  further  to the  general
provisions  of the Plan,  the  applicable  Award  Agreement,  and the  following
specific rules.

(b) If Shares of Restricted  Stock are awarded,  such Shares cannot be assigned,
sold,  transferred,   pledged,  or  hypothecated  prior  to  the  lapse  of  the
restrictions  applicable thereto, and, in no event, prior to six (6) months from
the date of the Award.  The Company shall issue, in the name of the Participant,
stock  certificates  representing the total number of Shares of Restricted Stock
awarded to the Participant,  as soon as may be reasonably  practicable after the
grant of the Award.

(c) Restricted Stock issued to a Participant under the Plan shall be governed by
an Award Agreement that shall specify whether Shares of Common Stock are awarded
to the  Participant,  or whether  the Award shall be one not of Shares of Common
Stock but one denominated in units of Common Stock, any  consideration  required
thereto, and such other provisions as the Committee shall determine.

(d)  Subject  to  the  provisions  of  Section  8(b)  and  (e)  hereof  and  the
restrictions set forth in the related Award Agreement, the Participant receiving
an Award of Shares of Restricted  Stock shall  thereupon be a  stockholder  with
respect to all of the Shares represented by such certificate or certificates and
shall have the rights of a  stockholder  with respect to such Shares,  including
the right to vote such Shares and to receive  dividends and other  distributions
made with respect to such Shares.  All Common Stock received by a Participant as
the result of any dividend on the Shares of Restricted  Stock,  or as the result
of any stock split, stock  distribution,  or combination of the Shares affecting
Restricted Stock,  shall be subject to the restrictions set forth in the related
Award Agreement.

(e)  Restricted  Stock or units of  Restricted  Stock  awarded to a  Participant
pursuant to the Plan will be forfeited,  and any Shares of  Restricted  Stock or
units of Restricted Stock sold to a Participant pursuant to the Plan may, at the
Company's option, be resold to the Company for an amount equal to the price paid
therefor, and in either case, such Restricted Stock or units of Restricted Stock
shall revert to the Company,  if the Company so determines  in  accordance  with
Section  13 or any  other  condition  set  forth  in the  Award  Agreement,  or,
alternatively,   if  the  Participant's  employment  with  the  Company  or  its
Affiliates terminates,  other than for reasons set forth in Section 12, prior to
the  expiration of the  forfeiture or  restriction  provisions  set forth in the
Award Agreement.

(f) The  Committee,  in its  discretion,  shall have the power to accelerate the
date on which the restrictions contained in the Award Agreement shall lapse with
respect to any or all Restricted Stock awarded under the Plan.

(g) The Committee may prescribe such other restrictions,  conditions,  and terms
applicable to Restricted  Stock issued to a Participant  under the Plan that are
neither  inconsistent  with nor  prohibited by the Plan or the Award  Agreement,
including,  without limitation,  terms providing for a lapse of the restrictions
of this Section or any Award Agreement in installments.

(h) Notwithstanding  anything in this Article 8 to the contrary, any restriction
period imposed hereunder shall be for a period of not less than three (3) years,
if such  restriction  is based upon  continuous  service with the Company or its
Affiliates.
<PAGE>


9.       REQUIRED TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS

If  deemed  by the  Committee  to be in the best  interests  of the  Company,  a
Participant may be granted a Right.  Each Right shall be granted subject to such
restrictions  and conditions and other terms as the Committee may specify in the
Award  Agreement  at the  time the  Right is  granted,  subject  to the  general
provisions of the Plan, and the following specific rules.

(a) Rights may be granted, if at all, either singly, in combination with another
Award,  or in tandem with another  Award.  At the time of grant of a Right,  the
Committee  shall specify the base price of Common Stock to be used in connection
with the  calculation  described in Section  9(b),  provided that the base price
shall not be less than one hundred  percent (100%) of the Fair Market Value of a
Share of Common Stock on the date of grant, unless approved by the Board.

(b) Upon  exercise of a Right,  which shall be not less than six (6) months from
the  date of the  grant,  the  Participant  shall  be  entitled  to  receive  in
accordance with Section 14, and as soon as  practicable,  the excess of the Fair
Market Value of one Share of Common Stock on the date of exercise  over the base
price  specified  in such  Right,  multiplied  by the number of Shares of Common
Stock then subject to the Right, or the portion thereof being exercised.

(c) Notwithstanding  anything herein to the contrary,  if the Award granted to a
Participant  allows  him or her to  elect to  cancel  all or any  portion  of an
unexercised  Option by exercising an additional or tandem Right, then the Option
price per Share of Common  Stock  shall be used as the base price  specified  in
Section 9(a) to determine  the value of the Right upon such exercise and, in the
event of the exercise of such Right,  the Company's  obligation  with respect to
such Option or portion  thereof  shall be  discharged by payment of the Right so
exercised. In the event of such a cancellation, the number of Shares as to which
such Option was canceled shall become available for use under the Plan, less the
number of Shares,  if any, received by the Participant upon such cancellation in
accordance with Section 14.

(d) A Right may be exercised only by the  Participant  (or, if applicable  under
Section  12, by a legatee or legatees  of such  Right,  or by the  Participant's
executors, personal representatives, or distributees).

10.      PERFORMANCE AWARDS

(a) A  Participant  may be  granted  an Award  that is  subject  to  performance
conditions  specified by the Committee.  The Committee may use business criteria
and other  measures of  performance it deems  appropriate  in  establishing  any
performance conditions  (including,  but not limited to, continuous service with
the Company or its  Affiliates,  achievement  of specific  business  objectives,
increases in specified  indices,  attaining growth rates, and other measurements
of Company or Affiliate performance),  and may exercise its discretion to reduce
or  increase  the  amounts  payable  under  any  Award  subject  to  performance
conditions,  except as otherwise  limited under Section 10(c) and (d), below, in
the case of a Performance Award intended to qualify under Code Section 162(m).

(b) Any  Performance  Award will be  forfeited if the Company so  determines  in
accordance  with  Section  13 or any  other  condition  set  forth in the  Award
Agreement,  or, alternatively,  if the Participant's employment with the Company
or its  Affiliates  terminates,  other than for reasons set forth in Section 12,
prior to the expiration of the time period over which the performance conditions
are to be measured.

(c) If the Committee  determines  that a  Performance  Award to be granted to an
employee should qualify as "performance-based compensation" for purposes of Code
Section 162(m),  the grant and/or  settlement of such Performance Award shall be
contingent upon achievement of preestablished  performance goals and other terms
set forth in Section 10(c).

         (1)      Performance  Goals Generally.  The performance  goals for such
                  Performance  Awards  shall  consist  of one or  more  business
                  criteria and a targeted  level or levels of  performance  with
                  respect  to  such  criteria,  as  specified  by the  Committee
                  consistent with this Section 10(c). Performance goals shall be
                  objective and shall  otherwise meet the  requirements  of Code
                  Section 162(m),  including the  requirement  that the level or
                  levels of performance  targeted by the Committee result in the
                  performance   goals  being   "substantially   uncertain."  The
                  Committee may determine  that more than one  performance  goal
                  must  be  achieved  as  a  condition  to  settlement  of  such
                  Performance   Awards.   Performance   goals  may   differ  for
                  Performance  Awards  granted  to  any  one  Participant  or to
                  different Participants.
<PAGE>


         (2)      Business  Criteria.  One or  more  of the  following  business
                  criteria for the Company,  on a consolidated basis, and/or for
                  specified  Affiliates or business units of the Company (except
                  with respect to the total stockholder  return and earnings per
                  share criteria), shall be used exclusively by the Committee in
                  establishing  performance  goals for such Performance  Awards:
                  (A)  total  stockholder  return;  (B) such  total  stockholder
                  return as compared to the total return (on a comparable basis)
                  of a publicly available index such as, but not limited to, the
                  Standard  &  Poor's  500 or the  Nasdaq-U.S.  Index;  (C)  net
                  income;   (D)  pre-tax  earnings;   (E)  EBITDA;  (F)  pre-tax
                  operating  earnings after interest expense and before bonuses,
                  service  fees,  and   extraordinary   or  special  items;  (G)
                  operating  margin;  (H)  earnings  per  share;  (I)  return on
                  equity; (J) return on capital;  (K) return on investment;  (L)
                  operating income, excluding the effect of charges for acquired
                  in-process technology and before payment of executive bonuses;
                  (M)  earnings per share,  excluding  the effect of charges for
                  acquired in-process technology and before payment of executive
                  bonuses;  (N) working  capital;  and (O) total  revenues.  The
                  foregoing  business  criteria also may be used in establishing
                  performance  goals for Cash Awards  granted  under  Section 11
                  hereof.

         (3)      Compensation  Limitation.  No employee may receive a
                  Performance Award in excess of $1 million for any three (3)
                  year period.

(d) Achievement of performance goals in respect of such Performance Awards shall
be measured over such periods as may be specified by the Committee.  Performance
goals shall be established on or before the dates that are required or permitted
for "performance-based compensation" under Code Section 162(m).

(e)  Settlement  of  Performance  Awards  may be in cash  or  Shares,  or  other
property,  in the  discretion  of  the  Committee.  The  Committee  may,  in its
discretion, reduce the amount of a settlement otherwise to be made in connection
with such Performance  Awards,  but may not exercise  discretion to increase any
such amount  payable in respect of a  Performance  Award subject to Code Section
162(m).

11.      REQUIRED TERMS AND CONDITIONS OF CASH AWARDS

(a) The  Committee  may from time to time  authorize  the award of cash payments
under the Plan to Participants,  subject to such restrictions and conditions and
other  terms  as the  Committee  may  determine  at the  time  of  authorization
(including,  but not  limited  to,  continuous  service  with the Company or its
Affiliates,  achievement of specific business objectives, increases in specified
indices,  attaining growth rates, and other measurements of Company or Affiliate
performance),  and subject to the general provisions of the Plan, the applicable
Award Agreement, and the following specific rules.

(b) Any Cash Award will be forfeited if Company so determines in accordance with
Section  13 or any  other  condition  set  forth  in the  Award  Agreement,  or,
alternatively,   if  the  Participant's  employment  with  the  Company  or  its
Affiliates terminates,  other than for reasons set forth in Section 12, prior to
the  attainment  of any goals set forth in the Award  Agreement  or prior to the
expiration of the  forfeiture or  restriction  provisions set forth in the Award
Agreement, whichever is applicable.

(c) The Committee, in its discretion, shall have the power to change the date on
which the restrictions contained in the Award Agreement shall lapse, or the date
on which goals are to be measured, with respect to any Cash Award.

(d) Any Cash Award, if not previously forfeited,  shall be payable in accordance
with Section 14 as soon as practicable after the restrictions lapse or the goals
are attained.

(e) The Committee may prescribe such other restrictions,  conditions,  and terms
applicable to the Cash Awards  issued to a  Participant  under the Plan that are
neither  inconsistent  with nor  prohibited by the Plan or the Award  Agreement,
including,  without limitation, terms providing for a lapse of the restrictions,
or a measurement of the goals, in installments.
<PAGE>


12.      TERMINATION OF EMPLOYMENT

Except as may  otherwise be (A) provided in Section 7 for Options,  (B) provided
for under the Award Agreement,  or (C) permitted  pursuant to Sections 12(a) and
(c) (subject to the limitations  under the Code for Incentive  Options),  if the
employment of a Participant terminates, all unexpired,  unpaid,  unexercised, or
deferred Awards shall be canceled immediately.

(a)  Retirement   under  a  Company  or  Affiliate   Retirement   Plan.  When  a
Participant's employment terminates as a result of retirement as defined under a
Company  or  Affiliate  retirement  plan  but  such  retirement  is not a Normal
Retirement  as defined  under the Section 2(o) of the Plan,  the  Committee  may
permit  Awards to continue in effect beyond the date of retirement in accordance
with the applicable Award Agreement,  and/or the  exercisability  and vesting of
any Award may be accelerated.

(b)  Resignation  in the Best  Interests of the Company or an Affiliate.  When a
Participant resigns from the Company or an Affiliate and, in the judgment of the
chief executive officer or other senior officer designated by the Committee, the
acceleration  and/or  continuation  of  outstanding  Awards would be in the best
interests of the Company,  the Committee may (i) authorize,  where  appropriate,
the acceleration  and/or continuation of all or any part of Awards granted prior
to such termination and (ii) permit the exercise,  vesting,  and payment of such
Awards for such period as may be set forth in the  applicable  Award  Agreement,
subject to earlier  cancellation  pursuant  to Section 13 or at such time as the
Committee shall deem the  continuation  of all or any part of the  Participant's
Awards are not in the Company's or its Affiliate's best interests.

(c)      Death or Disability of a Participant

         (1)      In the  event  of a  Participant's  death,  the  Participant's
                  estate or beneficiaries  shall have a period up to the earlier
                  of (A) the expiration  date specified in the Award  Agreement,
                  or (B) the  expiration  date  specified  Section 7(h),  within
                  which to receive or exercise  any  outstanding  Awards held by
                  the  Participant  under such terms as may be  specified in the
                  applicable  Award  Agreement.  Rights to any such  outstanding
                  Awards  shall  pass  by  will  or  the  laws  of  descent  and
                  distribution in the following  order:  (i) to beneficiaries so
                  designated by the Participant;  (ii) to a legal representative
                  of the  Participant;  or (iii) to the persons entitled thereto
                  as determined by a court of competent jurisdiction.  Awards so
                  passing  shall be made at such times and in such  manner as if
                  the Participant were living.

         (2)      In the event a Participant  is determined by the Company to be
                  Disabled,  and  subject to the  limitations  of Section  7(g),
                  Awards may be paid to, or exercised  by, the  Participant,  if
                  legally  competent,  or by a legally  designated  guardian  or
                  other representative if the Participant is legally incompetent
                  by virtue of such Disability.

         (3)      After the death or Disability of a Participant,  the Committee
                  may  in  its  sole   discretion  at  any  time  (A)  terminate
                  restrictions  in Award  Agreements;  (B) accelerate any or all
                  installments  and rights;  and/or (C)  instruct the Company to
                  pay the total of any accelerated payments in a lump sum to the
                  Participant,   the  Participant's  estate,   beneficiaries  or
                  representative,  notwithstanding  that, in the absence of such
                  termination of restrictions  or acceleration of payments,  any
                  or all of the payments due under the Awards  ultimately  might
                  have become payable to other beneficiaries.

13.      CANCELLATION AND RESCISSION OF AWARDS

Unless the Award  Agreement  specifies  otherwise,  the Committee may cancel any
unexpired,   unpaid,  unexercised,  or  deferred  Awards  at  any  time  if  the
Participant  is not in compliance  with the  applicable  provisions of the Award
Agreement, the Plan, or with the following conditions:
<PAGE>
(a) A Participant shall not breach any protective agreement entered into between
him or her and  the  Company  or any  Affiliates,  or  render  services  for any
organization  or engage  directly or  indirectly in any business  which,  in the
judgment of the chief  executive  officer of the Company or other senior officer
designated by the  Committee,  is or becomes  competitive  with the Company,  or
which   organization  or  business,   or  the  rendering  of  services  to  such
organization or business,  is or becomes otherwise prejudicial to or in conflict
with the  interests of the  Company.  For a  Participant  whose  employment  has
terminated,  the judgment of the chief executive officer shall be based on terms
of the protective agreement, if applicable, or on the Participant's position and
responsibilities   while  employed  by  the  Company  or  its  Affiliates,   the
Participant's  post-employment  responsibilities  and  position  with the  other
organization or business, the extent of past, current, and potential competition
or conflict between the Company and other  organization or business,  the effect
of the Participant's  assuming the post-employment  position on the Company's or
its Affiliate's customers, suppliers, investors, and competitors, and such other
considerations   as  are  deemed   relevant  given  the  applicable   facts  and
circumstances.  A  Participant  may,  however,  purchase  as  an  investment  or
otherwise,  stock or other securities of any organization or business so long as
they   are   listed   upon  a   recognized   securities   exchange   or   traded
over-the-counter,   and  such   investment  does  not  represent  a  substantial
investment to the Participant or a greater than one percent (1%) equity interest
in the organization or business.

(b) A  Participant  shall not,  without  prior  written  authorization  from the
Company,  disclose to anyone  outside the Company or its  Affiliates,  or use in
other than the Company's or Affiliate's business,  any confidential  information
or materials relating to the business of the Company or its Affiliates, acquired
by the  Participant  either during or after  employment  with the Company or its
Affiliates.


(c) A Participant  shall disclose  promptly and assign to the Company all right,
title,  and  interest  in any  invention  or idea,  patentable  or not,  made or
conceived by the Participant during employment with the Company or an Affiliate,
relating  in any  manner to the actual or  anticipated  business,  research,  or
development  work of the  Company  or its  Affiliates,  and  shall  do  anything
reasonably necessary to enable the Company or its Affiliates to secure a patent,
trademark,  copyright,  or other  protectable  interest where appropriate in the
United States and in foreign countries.

Upon exercise,  payment, or delivery pursuant to an Award, the Participant shall
certify on a form  acceptable to the  Committee  that he or she is in compliance
with the terms and  conditions  of the Plan,  including  the  provisions of this
Sections  13(a),  (b) or (c).  Failure  to comply  with the  provisions  of this
Sections  13(a),  (b) or (c) prior to, or during the one (1) year period  after,
any  exercise,  payment,  or  delivery  pursuant  to an Award  shall  cause such
exercise,  payment,  or delivery to be  rescinded.  The Company shall notify the
Participant  in writing of any such  rescission  within two (2) years after such
exercise,  payment,  or delivery.  Within ten (10) days after  receiving  such a
notice from the Company,  the Participant shall pay to the Company the amount of
any gain  realized or payment  received as a result of the  rescinded  exercise,
payment, or delivery pursuant to the Award. Such payment shall be made either in
cash or by  returning  to the Company the number of Shares of Common  Stock that
the Participant received in connection with the rescinded exercise,  payment, or
delivery.

14.      PAYMENT OF RESTRICTED STOCK, RIGHTS, PERFORMANCE AWARDS AND CASH AWARDS

Payment of Restricted Stock,  Rights,  Performance Awards and Cash Awards may be
made,  as the Committee  shall  specify,  in the form of cash,  Shares of Common
Stock, or combinations  thereof;  provided,  however, that a fractional Share of
Common  Stock  shall  be paid in cash  equal  to the  Fair  Market  Value of the
fractional Share of Common Stock at the time of payment.

15.      WITHHOLDING

Except as otherwise provided by the Committee,

(a) The Company shall have the power and right to deduct or withhold, or require
a Participant to remit to the Company,  an amount sufficient to satisfy federal,
state, and local taxes required by law to be withheld with respect to any grant,
exercise, or payment made under or as a result of this Plan; and

(b) In the  case  of  payments  of  Awards,  or upon  any  other  taxable  event
hereunder,  a Participant  may elect,  subject to the approval in advance by the
Committee, to satisfy the withholding requirement,  if any, in whole or in part,
by having the Company  withhold  Shares of Common Stock that would  otherwise be
transferred to the  Participant  having a Fair Market Value, on the date the tax
is to be determined,  equal to the minimum marginal tax that could be imposed on
the  transaction.  All  elections  shall be made in  writing  and  signed by the
Participant.
<PAGE>
16.      SAVINGS CLAUSE

This  Plan is  intended  to  comply  in all  respects  with  applicable  law and
regulations,  including, (A) with respect to those Participants who are officers
or directors  for purposes of Section 16 of the Exchange  Act, Rule 16b-3 of the
Securities  and  Exchange  Commission,  if  applicable,  and (B) with respect to
executive  officers,  Code Section 162(m). In case any one or more provisions of
this Plan shall be held invalid,  illegal, or unenforceable in any respect under
applicable law and regulation  (including  Rule 16b-3 and Code Section  162(m)),
the validity, legality, and enforceability of the remaining provisions shall not
in any way be  affected  or  impaired  thereby  and  the  invalid,  illegal,  or
unenforceable  provision shall be deemed null and void;  however,  to the extent
permitted by law, any  provision  that could be deemed null and void shall first
be construed,  interpreted,  or revised  retroactively to permit this Plan to be
construed in compliance  with all applicable law (including  Rule 16b-3 and Code
Section  162(m))  so as to  foster  the  intent  of this  Plan.  Notwithstanding
anything herein to the contrary,  with respect to Participants  who are officers
and directors for purposes of Section 16 of the Exchange Act, if applicable, and
if required to comply with rules promulgated thereunder,  no grant of, or Option
to  purchase,  Shares  shall  permit  unrestricted  ownership  of  Shares by the
Participant for at least six (6) months from the date of grant or Option, unless
the Board determines that the grant of, or Option to purchase,  Shares otherwise
satisfies the then current Rule 16b-3 requirements.

17.      ADJUSTMENTS UPON CHANGES IN CAPITALIZATION; CORPORATE
         TRANSACTIONS

In the event that the  outstanding  Shares of the Company  are  changed  into or
exchanged  for a different  number or kind of shares or other  securities of the
Company  or of  another  corporation  by reason of any  reorganization,  merger,
consolidation,  recapitalization,  reclassification,  change in par value, stock
split-up,  combination of shares or dividends  payable in capital stock,  or the
like,  appropriate  adjustments to prevent dilution or enlargement of the Awards
granted to, or available for,  Participants shall be made in the manner and kind
of Shares for the purchase of which Awards may be granted  under the Plan,  and,
in  addition,  appropriate  adjustment  shall be made in the  number and kind of
Shares and in the Option price per share  subject to  outstanding  Options.  The
foregoing  notwithstanding,  no such  adjustment  shall be made in an  Incentive
Option  which shall,  within the meaning of Section 424 of the Code,  constitute
such a  modification,  extension,  or  renewal of an Option as to cause it to be
considered as the grant of a new Option.
<PAGE>


Notwithstanding  anything  herein to the contrary,  the Company may, in its sole
discretion, accelerate the timing of the exercise provisions of any Award in the
event of a tender  offer for the  Company's  Shares,  the  adoption of a plan of
merger or  consolidation  under  which a majority  of the Shares of the  Company
would be eliminated,  or a sale of all or any portion of the Company's assets or
capital stock.  Alternatively,  the Company may, in its sole discretion,  cancel
any or all Awards upon any of the  foregoing  events and provide for the payment
to  Participants  in cash of an amount equal to the value or appreciated  value,
whichever  is  applicable,  of the  Award,  as  determined  in good faith by the
Committee, at the close of business on the date of such event. The preceding two
sentences of this Section 17  notwithstanding,  the Company shall be required to
accelerate  the timing of the exercise  provisions  of any Award if (i) any such
business combination is to be accounted for as a pooling-of-interests  under APB
Opinion  16 and (ii) the  timing  of such  acceleration  does not  prevent  such
pooling-of-interests treatment.

Upon a business  combination  by the Company or any of its  Affiliates  with any
corporation  or  other  entity  through  the  adoption  of a plan of  merger  or
consolidation   or  a  share   exchange  or  through  the  purchase  of  all  or
substantially  all of the capital stock or assets of such other  corporation  or
entity,  the Board or the Committee may, in its sole  discretion,  grant Options
pursuant  hereto  to all or any  persons  who,  on the  effective  date  of such
transaction,  hold  outstanding  options to  purchase  securities  of such other
corporation  or  entity  and  who,  on and  after  the  effective  date  of such
transaction,  will become  employees or directors of, or consultants or advisors
to,  the  Company  or its  Affiliates.  The  number  of Shares  subject  to such
substitute  Options  shall be  determined  in  accordance  with the terms of the
transaction by which the business  combination is effected.  Notwithstanding the
other provisions of this Plan, the other terms of such substitute  Options shall
be  substantially  the same as or  economically  equivalent  to the terms of the
options for which such Options are  substituted,  all as determined by the Board
or by the  Committee,  as the case may be. Upon the grant of substitute  Options
pursuant hereto, the options to purchase securities of such other corporation or
entity for which such Options are substituted shall be cancelled immediately.

18.      DISSOLUTION OR LIQUIDATION OF THE COMPANY

Upon the dissolution or liquidation of the Company other than in connection with
a transaction  to which Section 17 is applicable,  all Awards granted  hereunder
shall terminate and become null and void; provided,  however, that if the rights
of a Participant  under the applicable  Award have not otherwise  terminated and
expired,  the  Participant  may, if the Committee,  in its sole  discretion,  so
permits,  have the right immediately prior to such dissolution or liquidation to
exercise any Award granted hereunder to the extent that the right thereunder has
become  exercisable  as of the date  immediately  prior to such  dissolution  or
liquidation.

19.      TERMINATION OF THE PLAN

The Plan shall terminate (10) years from the earlier of the date of its adoption
by the Board or the date of its  approval by the  stockholders.  The Plan may be
terminated  at an  earlier  date  by  vote  of the  stockholders  or the  Board;
provided,  however, that any such earlier termination shall not affect any Award
Agreements   executed  prior  to  the  effective   date  of  such   termination.
Notwithstanding anything in this Plan to the contrary, any Options granted prior
to the  effective  date of the Plan's  termination  may be  exercised  until the
earlier of (A) the date set forth in the Award Agreement,  or (B) in the case of
an Incentive Option, ten (10) years from the date the Option is granted; and the
provisions  of the Plan  with  respect  to the full and final  authority  of the
Committee under the Plan shall continue to control.

20.      AMENDMENT OF THE PLAN

The Plan may be amended by the Board and such amendment  shall become  effective
upon  adoption by the Board;  provided,  however,  that any  amendment  that (A)
increases the numbers of Shares that may be granted under this Plan,  other than
as  provided by Section  17, (B)  materially  modifies  the  requirements  as to
eligibility to participate in the Plan, (C) materially increases the benefits to
Participants,  (D)  extends the period  during  which  Incentive  Options may be
granted or exercised,  or (E) changes the  designation of the class of employees
eligible to receive Incentive Options, or otherwise causes the Incentive Options
to no longer  qualify as "incentive  stock options" as defined in Section 422 of
the Code,  also shall be  subject to the  approval  of the  stockholders  of the
Company  within one (1) year either  before or after such adoption by the Board,
subject to the requirements of Section 16 of the Plan.

21.      EMPLOYMENT RELATIONSHIP

Nothing herein  contained shall be deemed to prevent the Company or an Affiliate
from  terminating the employment of a Participant,  nor to prevent a Participant
from terminating the Participant's employment with the Company or an Affiliate.
<PAGE>


22.      INDEMNIFICATION OF COMMITTEE

In  addition  to such  other  rights  of  indemnification  as they  may  have as
directors or as members of the Committee,  the members of the Committee shall be
indemnified by the Company against all reasonable expenses, including attorneys'
fees,  actually and  reasonably  incurred in connection  with the defense of any
action,  suit or proceeding,  or in connection with any appeal therein, to which
they or any of them  may be a party by  reason  of any  action  taken by them as
directors  or members of the  Committee  and against all amounts paid by them in
settlement  thereof  (provided such settlement is approved by the Board) or paid
by them in  satisfaction  of a judgment in any such action,  suit or proceeding,
except in relation  to matters as to which it shall be adjudged in such  action,
suit or  proceeding  that the director or  Committee  member is liable for gross
negligence or willful  misconduct in the  performance  of his or her duties.  To
receive such indemnification, a director or Committee member must first offer in
writing to the Company the opportunity,  at its own expense,  to defend any such
action, suit or proceeding.

23.      UNFUNDED PLAN

Insofar as it provides  for payments in cash in  accordance  with Section 14, or
otherwise,  the Plan shall be  unfunded.  Although  bookkeeping  accounts may be
established with respect to Participants who are entitled to cash, Common Stock,
or rights  thereto under the Plan,  any such accounts  shall be used merely as a
bookkeeping  convenience.  The Company  shall not be required to  segregate  any
assets that may at any time be  represented  by cash,  Common  Stock,  or rights
thereto, nor shall the Plan be construed as providing for such segregation,  nor
shall the Company,  the Board, or the Committee be deemed to be a trustee of any
cash,  Common  Stock,  or rights  thereto  to be  granted  under  the Plan.  Any
liability  of the Company to any  Participant  with  respect to a grant of cash,
Common  Stock,  or rights  thereto under the Plan shall be based solely upon any
contractual obligations that may be created by the Plan and any Award Agreement;
no such obligation of the Company shall be deemed to be secured by any pledge or
other  encumbrance  on any property of the Company.  Neither the Company nor the
Board nor the  Committee  shall be required to give any security or bond for the
performance of any obligation that may be created by the Plan.

24.      MITIGATION OF EXCISE TAX

If any payment or right  accruing to a Participant  under this Plan (without the
application of this Section 24), either alone or together with other payments or
rights  accruing  to the  Participant  from the Company or an  Affiliate,  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 the 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.
The  determination of whether any reduction in the rights or payments under this
Plan is to apply shall be made by the Company.  The Participant  shall cooperate
in good faith with the Company in making such  determination  and  providing any
necessary information for this purpose.

25.      EFFECTIVE DATE

This Plan shall become  effective upon adoption by the Board,  provided that the
Plan is approved by the  stockholders  of the Company before or at the Company's
next annual meeting,  but in no event shall stockholder  approval be sought more
than one (1) year after such adoption by the Board.

26.      GOVERNING LAW

This Plan shall be governed by the laws of the State of Illinois  and  construed
in accordance therewith.

Amended and restated this 8th day of March, 2001.



<PAGE>




EXHIBIT 10.2


                            USFREIGHTWAYS CORPORATION
                                STOCK OPTION PLAN
                           FOR NON-EMPLOYEE DIRECTORS

                    AMENDED AND RESTATED AS OF MARCH 8, 2001

I.       DEFINITIONS AND PURPOSE

         A.       Definitions:

                  Unless  otherwise  specified  or unless the context  otherwise
                  requires,  the following terms, as used in this Plan, have the
                  following meanings:

                  1.       Affiliate means a corporation  which, for purposes of
                           Section 422 of the Code, is a parent or subsidiary of
                           the Company, direct or indirect.

                  2.       Board means the Board of Directors of the Company.

                  3.       Code means the Internal Revenue Code of 1986, as
                           amended.

                  4.       Committee  means the  committee  to which  the Board
                           delegates  the power to act under or  pursuant to the
                           provisions of the Plan, or the Board if no committee
                           is selected.

                  5.       Company means USFreightways  Corporation,  a Delaware
                           corporation,  and includes any  successor or assignee
                           corporation  or  corporations  into which the Company
                           may  be  merged,   changed,   or  consolidated;   any
                           corporation  for whose  securities  the securities of
                           the Company shall be  exchanged;  and any assignee of
                           or successor to substantially all other assets of the
                           Company.

                  6.       Disability means a permanent and total disability as
                           defined in Section 22(e)(3) of the Code.

7.                         Eligible Director means each person who is a director
                           of the  Company,  and who is not an  employee  of the
                           Company or any  Affiliate  of the Company and who has
                           not been an employee of the Company or any  Affiliate
                           of the Company  for all or any part of the  preceding
                           fiscal year.

                  8.       Option  means a right or  option  granted  under  the
                           Plan,  which right or option shall not be intended to
                           qualify as an  incentive  stock  option as defined in
                           Section 422 of the Code.

                  9.       Option Agreement means an agreement between the
                           Company and a Participant  executed and delivered
                           pursuant to the Plan.

                  10.      Participant means an Eligible Director to whom an
                           Option is granted under the Plan.

                  11.      Plan means this Stock Option Plan for Non-Employee
                           Directors, as amended from time to time.

                  12.      Shares  means the  following  shares  of the  capital
                           stock of the Company as to which Options have been or
                           may  be  granted  under  the  Plan:   authorized  and
                           unissued  common  stock,  $0.01 par  value,  treasury
                           shares  held by the  Company or any shares of capital
                           stock into which the Shares are  changed or for which
                           they are exchanged  within the  provisions of Article
                           VI of the Plan.


<PAGE>



         B.       Purpose of the Plan:

                  The Plan  intended to promote the interests of the Company and
                  its  stockholders by attracting and retaining highly qualified
                  independent  directors  through an investment  interest in the
                  Company's future success.

II.      SHARES SUBJECT TO THE PLAN

         The aggregate  number of Shares as to which Options may be granted from
         time to time shall be Six Hundred Thousand (600,000) Shares.

         If an  Option  ceases  to be  "outstanding",  in whole or in part,  the
         Shares  which  were  subject  to such  Option,  if the  Option  was not
         exercised,  shall be available for the granting of other  Options.  Any
         Option,  if the Option was not  exercised,  shall be available  for the
         granting of other Options. Any Option shall be treated as "outstanding"
         until such Option is exercised in full,  or terminates or expires under
         the provisions of the Plan or Option Agreement.

         Subject to the provisions of Article VI, the aggregate number of Shares
         as to which  Options may be granted  shall be subject to change only by
         means of an  amendment  of the Plan duly  adopted  by the  Company  and
         approved by the  stockholders of the Company within such time period as
         may be required by the Securities Exchange Act of 1934, as amended from
         time to time.

III.     ADMINISTRATION OF THE PLAN

         The  Plan  shall  be  administered  by the  Committee.  Subject  to the
provisions of the Plan, the Committee is authorized to:

         A.       Interpret  the  provisions of the Plan or any Option or Option
                  Agreement  and to make all rules and  determinations which it
                  deems necessary or advisable for the administration of
                  the Plan;

         B.       Determine the Eligible Directors to whom Options shall be
                  granted;

         C.       Determine the number of Shares for which an Option or Options
                  shall be granted;

         D.       Provide for the acceleration of the righ to exercise an Option
                  (or any portion thereof); and

         E.       Specify the terms and conditions upon which Options may be
                  granted.

         The  interpretation and construction by the Committee of any provisions
         of the Plan or of any Option granted under it shall be final.

IV.      ELIGIBILITY FOR PARTICIPATION

         Each  Participant  must be an  Eligible  Director of the Company at the
         time an Option is granted.  Each Eligible Director shall be granted, at
         the later of the  effective  date of the Plan or the date such director
         becomes  an  Eligible  Director,  and at such  other  time or  times as
         described in Article V, an Option to purchase Shares under the Plan. In
         addition  to the  formula-based  Shares  set  forth in  Article  V, the
         Committee  may at any  time  and from  time to time  grant  one or more
         additional  Options to one or more Eligible  Directors  ("Discretionary
         Options")  and may designate the number of Shares to be subject to each
         Discretionary  Option so granted,  provided  however that no grant of a
         Discretionary  Option to  purchase  Shares  shall  permit  unrestricted
         ownership  of  Shares  by the  Eligible  Director  for at least six (6)
         months from the date of grant of the Discretionary  Option,  unless the
         Committee  determines  that the grant of such  Discretionary  Option to
         purchase  Shares  otherwise  satisfies  the  then  current  Rule  16b-3
         requirements under the Securities Exchange Act of 1934.
<PAGE>


V.       TERMS AND CONDITIONS OF OPTIONS

         Each Option shall be set forth in an Option Agreement, duly executed on
         behalf of the  Company  and by the  participant  to whom such Option is
         granted.  Except for the setting of the Option price under  Paragraph A
         of this Article V, no Option shall be granted and no purported grant of
         any Option shall be effective  until such Option  Agreement  shall have
         been duly  executed on behalf of the  Company  and by the  Participant.
         Each such Option  Agreement  shall be subject to at least the following
         terms and conditions:

         A.       OPTION PRICE:

                  The  exercise  price  of the  Shares  covered  by each  Option
                  granted  under  the Plan  shall be equal to 100% of the  "fair
                  market value" of the Shares on the date of the granted Option.
                  If the Shares are listed on any national securities  exchange,
                  the fair market  value  shall be the mean  average of the high
                  and low sales prices,  if any, on the largest such exchange on
                  the date of the grant of the Option,  or, if none, on the most
                  recent  trade date  thirty (30) days or less prior to the date
                  of the grant of the Option.  If the Shares are not then listed
                  on any such  exchange,  the fair  market  value of such Shares
                  shall be the closing "Ask" prices,  if any, as reported on the
                  National Association of Securities Dealers automated Quotation
                  System  ("NASDAQ") for the date of the grant of the Option, or
                  if none,  on the most  recent  trade date  thirty (30) days or
                  less  prior to the date of the grant of the  Option  for which
                  such  quotations  are  reported.  If the  Shares  are not then
                  either  listed on any such  exchange or quoted on NASDAQ,  the
                  fair market value shall be the mean between the average of the
                  "Bid" and the average of the "Ask" prices, if any, as reported
                  in the National  daily  Quotation  Service for the date of the
                  grant of the Option,  or, if none,  for the most recent  trade
                  date  thirty  (30) days or less prior to the date of the grant
                  of the Option for which such quotations are reported.

         B.       NUMBER OF SHARES:

                  Each Eligible  Director shall  automatically,  at the later of
                  the  effective  date of the  Plan or the  date  such  director
                  becomes an Eligible Director,  be granted an Option under this
                  Plan to  acquire  10,000  Shares.  Upon the  fifth  and  tenth
                  anniversaries of such initial grant,  each  Participant  shall
                  automatically be granted Options under this Plan to acquire an
                  additional  10,000 Shares at each such  anniversary,  provided
                  the Participant is an Eligible  Director at such  anniversary.
                  In addition to the foregoing,  each Eligible Director may from
                  time to time be granted by the Committee, in its discretion, a
                  Discretionary Option.

         C.       TERM OF OPTION:

                  No Option  granted under the Plan shall be  exercisable  after
                  the expiration of ten (10) years from the date of the grant.

         D.       DATE OF EXERCISE:

                  1.       Options  granted to an  Eligible  Director  under the
                           Plan  on  the  Plan's  effective  date  shall  become
                           exercisable   cumulatively  in  accordance  with  the
                           following schedule:

                           Years Elapsed Since       Cumulative Number of Shares
                           Date of Grant       For Which Option May Be Exercised
                           _________________                    ________________
                           Less than       1                               2,000
                                           1                               3,600
                                           2                               5,200
                                           3                               6,800
                                           4                               8,400
                                           5 or more                      10,000
<PAGE>


                  2.       Options  granted to an  Eligible  Director  under the
                           Plan after the  Plan's  effective  date shall  become
                           exercisable   cumulatively  in  accordance  with  the
                           following schedule:


                           Years Elapsed Since       Cumulative Number of Shares
                           Date of Grant       For Which Option May Be Exercised
                           _________________                    ________________
                           Less than       1                                   0
                                           1                               2,000
                                           2                               4,000
                                           3                               6,000
                                           4                               8,000
                                           5 or more                      10,000

                  The  foregoing  schedules  notwithstanding,  if a  Participant
                  shall cease to be a director  of the Company  because of death
                  or Disability, all Shares for which an Option has been granted
                  shall become immediately  exercisable and shall be exercisable
                  in accordance with Paragraph F.

                  Not  withstanding  anything  herein to the contrary,  upon the
                  authorization  of the grant of a Discretionary  Option,  or at
                  anytime  thereafter,  the  Committee may prescribe the date or
                  dates on which the Discretionary  Option becomes  exercisable,
                  and  may  provide  that  the   Discretionary   Option   become
                  exercisable in  installments  over a period of years,  or upon
                  the attainment of stated goals.

         E.       MEDIUM OF PAYMENT:

                  The  Option  price  shall  be  paid on the  date  of  purchase
                  specified in the notice of exercise, as set forth in Paragraph
                  G. It shall be paid in the legal tender of the United  States,
                  or, at the  election of the  Participant,  by surrender to the
                  Company of  previously  owned  shares with an  aggregate  fair
                  market value (on the date of the exercise) equal to the Option
                  price to be paid; provided,  however, that if such shares were
                  acquired  pursuant  to an  incentive  stock  option  plan  (as
                  defined in Code Section 422) of the Company or Affiliate, then
                  the applicable holding period requirements of said Section 422
                  have  been met with  respect  to such  shares,  and,  provided
                  further,  that if (i) such shares were granted  pursuant to an
                  option,  then such option must have been  granted at least six
                  (6) months prior to the exercise of the Option hereunder;  and
                  (ii),  such shares were purchased other than through the grant
                  and  exercise  of an  option,  such  shares  were owned by the
                  Participant for more than six (6) months prior to the exercise
                  of the Option hereunder.

         F.       TERMINATION OF STATUS:

         1.       In the event that a  Participant  shall cease to be a director
                  of the Company for any reason other than death, Disability, or
                  voluntary termination as a director of the Company on or after
                  the attainment of his or her 65th birthday,  his or her Option
                  shall  be  exercisable,   only  to  the  extent  that  it  was
                  exercisable  at the date he or she ceased to be a director and
                  only  until the first to occur of one (1) year after such date
                  or until  the  date on  which  the  Option  otherwise  expires
                  according to its terms.

         2.       In the event that a  Participant  shall cease to be a director
                  of the  Company  because  of death or  Disability,  his or her
                  Option may be exercised in its entirety  (notwithstanding  the
                  vesting schedule set forth in Paragraph D of this Article V or
                  in any Option Agreement) within the originally prescribed term
                  of the Option by the  Participant  or by any person or persons
                  designated   by   the   Participant   as  the   executors   or
                  administrators of the  Participant's  estate, or by any person
                  or persons who shall have  acquired the Option  directly  from
                  the  Participant  by his or her will or the  applicable law of
                  descent and distribution.

         3.       In the event that a  Participant  shall cease to be a director
                  of the Company because of voluntary  termination as a director
                  of the Company on or after the  attainment  of his or her 65th
                  birthday and that  Participant has served as a director of the
                  Company  for five (5) years or more,  his or her Option may be
                  exercised  in  its  entirety   (notwithstanding   the  vesting
                  schedule  set forth in Paragraph D of this Article V or in any
                  Option Agreement) within the originally prescribed term of the
                  Option by the Participant; provided that the Committee, in its
                  sole  discretion,  approves  the exercise of the Option in its
                  entirety.
<PAGE>


         4.       In the  event  that a  Participant  shall  cease  to be a
                  director  of the  Company  because  of  voluntarytermination
                  as a director of the Company on or after the attainment of his
                  or her 72nd  birthday and that Participant  has not served as
                  a director  of the  Company  for five (5) years,  his or her
                  Option  shall be exercisable  (notwithstanding  the vesting
                  schedule  set forth in Paragraph D of this Article V or in any
                  Option  Agreement)  within the originally  prescribed term of
                  the Option by the  Participant, to the extent that  (a) it was
                  exercisable  at the date he or she  ceased  to be a  director
                  and (b) if the  Option  was exercisable  periodically, to the
                  extent of any additional  rights that would have become
                  exercisable (had the Participant not voluntarily terminated as
                  a director of the Company) during successive one year periods
                  from the Participant's  date of termination  for each year the
                  Participant  served as a  director  of theCompany.


         G.       EXERCISE OF OPTION AND ISSUE OF STOCK:

                  Option  shall be  exercised  by giving  written  notice to the
                  Company.  Such  written  notice  shall:  (1) be  signed by the
                  person  exercising the Option,  (2) state the number of Shares
                  with respect to which the Option is being  exercised,  and (3)
                  specify  a  date  (other  than a  Saturday,  Sunday  or  legal
                  holiday)  not less  than  five (5) nor more than ten (10) days
                  after the date of such  written  notice,  as the date on which
                  the Shares will be purchased. Such tender and conveyance shall
                  take  place at the  principal  office  of the  Company  during
                  ordinary  business  hours,  or at such  other  hour and  place
                  agreed   upon  by  the  Company  and  the  person  or  persons
                  exercising  the Option.  On the date specified in such written
                  notice  (which date may be extended by the Company in order to
                  comply with any law or regulation  which  requires the Company
                  to take any action with respect to the Option  Shares prior to
                  the issuance  thereof,  whether  pursuant to the provisions of
                  Article VI or otherwise), the Company shall accept payment for
                  the Option  Shares and shall  deliver to the person or persons
                  exercising  the Option in  exchange  therefor  an  appropriate
                  certificate or certificates for paid non-assessable Shares. In
                  the event of any  failure to take up and pay for the number of
                  Shares  specified in such written notice on the date set forth
                  therein (or on the extended date as above provided), the right
                  to exercise  the Option shall  terminate  with respect to such
                  number of  Shares,  but shall  continue  with  respect  to the
                  remaining  Shares  covered by the Option and not yet  acquired
                  pursuant thereto.

         H.       RIGHTS AS A STOCKHOLDER:

                  No  Participant  to whom an Option has been granted shall have
                  rights as a stockholder  with respect to any Shares covered by
                  such Option except as to such Shares as have been issued to or
                  registered in the Company's share register in the name of such
                  Participant  upon the due exercise of the Option and tender of
                  the full Option price.

         I.       ASSIGNABILITY AND TRANSFERABILITY OF OPTION:

                  By its terms, an Option granted to a participant  shall not be
                  transferable  by the  Participant  and  shall be  exercisable,
                  during the Participant's  lifetime,  only by such Participant.
                  Such Option shall not be assigned,  pledged or hypothecated in
                  any way (whether by operation of law or  otherwise)  and shall
                  not be subject to execution,  attachment,  or similar process.
                  Any attempted transfer,  assignment,  pledge, hypothecation or
                  other  disposition  of any  Option  or of any  rights  granted
                  thereunder  contrary to the provisions of this Paragraph I, or
                  the levy of any  attachment or similar  process upon an Option
                  or such rights, shall be null and void.
<PAGE>

VI.      ADJUSTMENTS UPON CHANGES IN CAPITALIZATION

         In the event that the  outstanding  shares of the  Company  are changed
         into or  exchanged  for a  different  number or kind of shares or other
         securities  of the Company or of another  corporation  by reason of any
         reorganization    ,    merger,     consolidation,     recapitalization,
         reclassification,  change in par value, stock split-up,  combination of
         shares or dividend payable in capital stock , or the like,  appropriate
         adjustments  to prevent  dilution or  enlargement of the rights granted
         to, or available for, Participants shall be made in the number and kind
         of shares for the  purchase of which  Options may be granted  under the
         Plan,  and, in addition,  appropriate  adjustment  shall be made in the
         number and kind of Shares and in the Option price per share  subject to
         outstanding options.  Notwithstanding  anything herein to the contrary,
         in the event of an offer for the  Company's  shares,  the adoption of a
         plan of merger or  consolidation  under  which all of the shares of the
         Company  would be  eliminated,  or a sale of  substantially  all of the
         Company's   assets,  a  Participant   shall  be  entitled  to  exercise
         immediately  all or  any  portion  of the  Shares  to  which  he or she
         received an Option, regardless of the number of years elapsed since the
         date of the grant .



VII.     DISSOLUTION OR LIQUIDATION OF THE COMPANY

         Upon the  dissolution  or  liquidation  of the  Company  other  than in
         connection  with a  transaction  to which the  preceding  Article VI is
         applicable,  all Options  granted  hereunder shall terminate and become
         null and void; provided,  however,  that if the rights of a Participant
         under the applicable Options have not otherwise terminated and expired,
         the  Participant  shall  have  the  right  immediately  prior  to  such
         dissolution or liquidation to exercise any Option granted  hereunder to
         the extent  that the right to  purchase  Shares  thereunder  has become
         exercisable  as of the date  immediately  prior to such  dissolution or
         liquidation.

VIII.    TERMINATION OF THE PLAN

         The  Plan  shall  terminate  fifteen  (15)  years  from the date of its
         adoption.  The Plan may be terminated at an earlier date by vote of the
         Board;  provided,  however, that any such earlier termination shall not
         affect any Options granted or Option  Agreements  executed prior to the
         effective date of such termination. Except as may otherwise by provided
         for under  Articles VI and VII,  and  notwithstanding  anything in this
         Plan to the contrary,  any Options  granted prior to the effective date
         of the Plan's  termination may be exercised,  if otherwise  exercisable
         until ten (10) years have  elapsed from the date the Option is granted,
         and the  provisions  of the Plan  with  respect  to the full and  final
         authority of the Committee under the Plan shall continue to control.

IX.      AMENDMENT OF THE PLAN

         The Plan may be amended by the Board and such  amendment  shall  become
         effective  upon  adoption  by the Board;  provided,  however,  that any
         amendment to Article II above or that  otherwise  requires the approval
         of the  stockholders  of the Company in accordance  with the Rule 16b-3
         requirements  of the  Securities  Exchange Act of 1934, as amended from
         time to time, shall be subject to approval of the  stockholders  within
         the requisite time period of such Act, and provided,  further, that the
         Plan may not be amended more frequently than once every six (6) months,
         unless  an  amendment  is  necessary  to  comply  with  the Code or the
         Employee  Retirement  Income  Security Act of 1974, as amended,  and is
         otherwise permitted by Rule 16b-3.

X.       INDEMNIFICATION OF COMMITTEE

         In addition to such other rights of indemnification as they may have as
         directors  or members of the  Committee,  the members of the  Committee
         shall be  indemnified by the Company  against all reasonable  expenses,
         including   attorneys'  fees,  actually  and  necessarily  incurred  in
         connection  with the defense of any action,  suit or proceeding,  or in
         connection with any appeal therein, to which they or any of them may be
         a party  by  reason  of any  action  taken  by them as  members  of the
         Committee  and against all amounts paid by them in  settlement  thereof
         (provided  such  settlement  is approved by  independent  legal counsel
         selected by the Company) or paid by them in  satisfaction of a judgment
         in any such action,  suit or proceeding,  except in relation to matters
         as to which it shall be adjudged  in such  action,  suit or  proceeding
         that the  Committee  member is liable for gross  negligence  or willful
         misconduct  in the  performance  of his or her duties.  To receive such
         indemnification,  a Committee member must first offer in writing to the
         Company the opportunity, at his own expense, to defend any such action,
         suit or proceeding.
<PAGE>
XI.      RESTRICTIONS

         If the Company  shall  determine,  in its  discretion,  that the Shares
         under the Plan must be  registered  or qualified  under any  applicable
         state or federal  securities  law before they may be offered or sold to
         the  Participant,  or that the consent or approval of any  governmental
         regulatory  body is  necessary  or  desirable  in  connection  with the
         issuance  of such  Shares,  such  Option  may not be  exercised  by the
         Participant  unless the Shares have been so registered,  qualified,  or
         listed,  or until such  consent or approval  shall have been  obtained,
         free of any conditions not acceptable to the Company. The Company shall
         use reasonable efforts to qualify the Shares, obtain the benefit of any
         applicable  exemption  from  such  qualification,  or  obtain  any such
         consent or approval,  provided that no Participant shall have any right
         to require the company to undertake  any  registration  or other action
         which the  Company  determines,  in its sole  discretion,  to be unduly
         burdensome.



XII.     SAVINGS CLAUSE

         This Plan  intended to comply in all respects with  applicable  law and
         regulations,  including  Rule  16b-3  of the  Securities  and  Exchange
         Commission.  In case any one or more  provisions  of this Plan shall be
         held invalid, illegal, or unenforceable in any respect under applicable
         law and regulation (including Rule 16b-3), the validity,  legality, and
         enforceability  of the  remaining  provisions  shall  not in any way be
         affected or impaired thereby and the invalid, illegal, or unenforceable
         provisions  shall be  deemed  null and  void;  however,  to the  extent
         permitted  by law,  any  provision  that could be deemed  null and void
         shall first be  construed,  interpreted,  or revised  retroactively  to
         permit this Plan to be construed in compliance  with all applicable law
         (including  Rule  16b-3)  so as to  foster  the  intent  of this  Plan.
         Notwithstanding anything herein to the contrary, no grant of, or Option
         to purchase,  Shares shall permit  unrestricted  ownership of Shares by
         the  Participant  for at least six (6) months from the date of grant or
         Option to purchase.

XIII.    EFFECTIVE DATE

         This Plan shall  become  effective  upon  adoption  by the  Board.  The
         adoption  of the Plan shall be subject to  subsequent  approval  by the
         stockholders of the Company at the next annual meeting of the company's
         stockholders  unless  such  approval  is not  required  by any rules or
         regulations promulgated by the Securities and Exchange Commission under
         Section 16(b) of the  Securities  Exchange Act of 1934, as amended from
         time to time.  Notwithstanding  the  foregoing,  if the Plan shall have
         been approved by the Board prior to such annual meeting,  Options shall
         be  granted  to  Eligible  Directors  prior to the date of such  annual
         meeting  in  accordance  with  Article V,  subject  to such  subsequent
         stockholder  approval  but such  Options  shall not become  exercisable
         until such approval is obtained or its is determined that such approval
         is not required.

XIV.     GOVERNING LAW

         This Plan shall be governed  by the laws of the State of  Delaware  and
construed in accordance therewith.


Originally  adopted and effective on the 29th day of October,  1993 by the Board
of  Directors.  Amended and restated  this 8th day of March 2001 by the Board of
Directors.





<PAGE>




EXHIBIT 10.3

                            USFREIGHTWAYS CORPORATION
                         SEVERANCE PROTECTION AGREEMENT



         THIS AGREEMENT (the  "Agreement") is made as of  ___________,  20__, by
and between USFreightways  Corporation,  a Delaware corporation (the "Company"),
and _________________ (the "Executive").

                                    RECITALS

         A. The Board  recognizes  that the  possibility  of a Change in Control
exists and that the threat or the occurrence of a Change in Control can distract
its key management  personnel  because of the  uncertainties  inherent in such a
situation.

         B The  Board  has  determined  that  it is  essential  and in the  best
interest  of the  Company  and its  stockholders  to retain the  services of the
Executive in the event of a threat or  occurrence  of a Change in Control and to
ensure his continued dedication and efforts in such event.

         C. In order to induce  the  Executive  to  remain in the  employ of the
Company,  the Company desires to enter into this Agreement with the Executive to
provide the  Executive  with  certain  benefits in the event his  employment  is
terminated as a result of, or in connection with, a Change in Control.

         NOW,  THEREFORE,  in consideration of the respective  agreements of the
parties contained herein, the parties agree as follows:

1. Term of Agreement. This Agreement shall commence as of ___________,  20__ and
shall  continue in effect  until  December  31, 2002;  provided,  however,  that
commencing on January 1, 2003 and on each January 1 thereafter, the term of this
Agreement  shall  automatically  be extended for one (1) year unless  either the
Company or the Executive  shall have given written  notice to the other at least
ninety (90) days prior thereto that the term of this  Agreement  shall not be so
extended;  and provided,  further,  that  notwithstanding any such notice by the
Company  not to  extend,  if a Change in  Control  shall  occur  during the term
hereof,  the term of this Agreement  shall not expire prior to the expiration of
twenty-four   (24)  months  after  the   occurrence  of  a  Change  in  Control.
Notwithstanding  anything in this  Paragraph 1 to the contrary,  this  Agreement
shall terminate prior to any date set forth above,  and shall be considered null
and void, if termination is necessary for a business  combination  involving the
Company to be accounted for as a pooling-of-interests under APB Opinion No. 16.

2.       Definitions.
--------------------

2.1. "Accrued Compensation" shall mean all amounts earned or accrued through the
Termination  Date, but not paid as of the Termination  Date,  including (a) base
salary,  (b) reimbursement for reasonable and necessary expenses incurred by the
Executive on behalf of the Company  during the period ending on the  Termination
Date, (c) vacation pay, and (d) bonuses and other incentive  compensation (other
than the Pro Rata Bonus).

2.2.     "Act" shall mean the Securities Exchange Act of 1934, as amended.

2.3. "Base Amount" shall mean the greater of the Executive's  annual base salary
(a) at the rate in effect on the Termination  Date or (b) at the highest rate in
effect at any time  during  the ninety  (90) day  period  prior to the Change in
Control,  and shall  include all  amounts of his base  salary that are  deferred
under any qualified or non-qualified employee benefit plan of the Company or any
other agreement or arrangement.

2.4.     "Board" shall mean the Board of Directors of the Company.

2.5.  "Bonus Amount" shall mean the  Executive's  target bonus as established by
the  Company  for the fiscal  year in which the Change of Control  occurs  which
shall be no less than fifty percent (50%) of the  Executive's  maximum payout as
established  by the  Company  for the fiscal year in which the Change in Control
occurs.
<PAGE>


2.6.  Termination  of  employment  is for  "Cause"  if the  Executive  has  been
convicted of a felony or the termination is evidenced by a resolution adopted in
good faith by  two-thirds  of the Board that the Executive (a) failed to perform
his reasonably  assigned duties with the Company (other than a failure resulting
from the  Executive's  incapacity  due to physical or mental illness or from the
Executive's  assignment  of duties that would  constitute  Good  Reason),  which
failure  continued  for a period of at least  thirty  (30) days  after a written
notice of demand for performance had been delivered to the Executive  specifying
the manner in which the  Executive had failed to perform,  or (b)  intentionally
engaged in conduct that is demonstrably and materially injurious to the Company;
provided,  however,  that no termination of the Executive's  employment shall be
for Cause as set  forth in clause  (b)  above  until (i) there  shall  have been
delivered to the  Executive a written  notice  setting  forth that the Executive
committed  the conduct set forth in clause (b) and  specifying  the  particulars
thereof  in  detail,  and  (ii)  the  Executive  shall  have  been  provided  an
opportunity  to be heard in  person by the Board  (with  the  assistance  of the
Executive's counsel if the Executive so desires).

2.7.     "Change in Control" shall mean the occurrence of any of the following
         events:

(a)      any person (as such term is defined in Section 3 of the Act and used in
         Rule  13d-5 of the SEC under the Act) or group (as such term is defined
         in Section  13(d) of the Act),  other than a Subsidiary or any employee
         benefit  plan (or any related  trust) of the  Company or a  Subsidiary,
         becomes the beneficial  owner of  twenty-five  percent (25%) or more of
         the common  stock of the Company or of Voting  Securities  representing
         twenty-five  percent (25%) or more of the combined  voting power of all
         Voting Securities of the Company;

(b)      individuals  who, as of the Effective  Date,  constitute the Board (the
         "Incumbent  Directors")  cease for any reason to  constitute at least a
         majority  of the Board;  provided  that any  individual  who  becomes a
         director  after the Effective  Date whose  election,  or nomination for
         election  by the  Company's  stockholders,  was  approved  by a vote or
         written consent of at least two-thirds of the directors then comprising
         the Incumbent Directors shall be considered an Incumbent Director,  but
         excluding,   for  this  purpose,  any  such  individual  whose  initial
         assumption  of office  is in  connection  with an actual or  threatened
         election  contest  relating  to the  election of the  directors  of the
         Company  (as such  terms  are used in Rule  14a-11 of the SEC under the
         Act); or

(c)      approval by the stockholders of the Company of any of the following:

(i)               a merger,  reorganization  or  consolidation  ("Merger")  with
                  respect to which the  individuals  and  entities  who were the
                  respective  beneficial  owners of the Voting Securities of the
                  Company  immediately  before  such  Merger do not,  after such
                  Merger,  beneficially own,  directly or indirectly,  more than
                  seventy-five  percent  (75%) of the Voting  Securities  of the
                  corporation resulting from such Merger, or

(ii)     the sale or other disposition of all or substantially all of the assets
        of the Company.

Clauses (a), (b) and (c) of this definition notwithstanding, a Change in Control
shall not occur if the Executive is, by written  agreement  executed before such
Change in Control, a participant on such Executive's own behalf in a transaction
in  which,  pursuant  to the  written  agreement,  the  Executive  has an equity
interest in the resulting entity or a right to acquire such an equity interest.

2.8.  "Disability"  shall mean a physical or mental  condition  that impairs the
Executive's  ability to substantially  perform his duties with the Company for a
period of one hundred eighty (180)  consecutive  days and, as a result of which,
the Executive has not returned to employment  prior to the  Termination  Date as
stated in the Notice of Termination.

2.9.   "Effective Date" shall mean the date on which this Agreement is executed.
<PAGE>


2.10.  "Good Reason" shall mean the occurrence  after a Change in Control of any
of the events or conditions described in paragraphs (a) through (h) hereof:

(a)      a change in the Executive's status, title, position or responsibilities
         (including reporting  responsibilities) which, in the Executive's
         reasonable  judgment,  represents an adverse change from his status,
         title,  position or  responsibilities as in effect at any time  within
         ninety  (90)  days  preceding  the date of a Change  in  Control  or at
         any time  thereafter;  the assignment  to  the  Executive  of any
         duties  or  responsibilities  which,  in  the  Executive's  reasonable
         judgment,  are inconsistent with his status,  title,  position or
         responsibilities as in effect at any time within ninety (90) days
         preceding the date of a Change in Control or at any time  thereafter;
         or any removal of the  Executive  from or failure to reappoint or
         reelect him to any of such positions,  except in connection  with the
         termination of his employment for Disability,  Cause, as
         a result of his death, or by the Executive other than for Good Reason;

(b)      a reduction in the  Executive's  base salary or any failure to pay the
         Executive any  compensation  or benefits to which he is entitled within
         five (5) days of the date due;

(c)      the Company's  requiring the Executive to be based at any place outside
         a  40-mile   radius  of  the  location  of  the   Company's   corporate
         headquarters  immediately  prior to the Change of  Control,  except for
         reasonably  required  travel that is not  materially  greater than such
         travel requirements prior to the Change in Control;

(d)      the failure by the Company to (1) continue in effect (without reduction
         in  benefit   levels   and/or   reward   opportunities)   any  material
         compensation  or  employee  benefit  plan in which  the  Executive  was
         participating at any time within ninety (90) days preceding the date of
         a Change in  Control  or at any time  thereafter,  unless  such plan is
         replaced   with  a  plan   that   provides   substantially   equivalent
         compensation  or benefits to the Executive or (2) provide the Executive
         with  compensation and benefits,  in the aggregate,  at least equal (in
         terms of benefit levels and/or reward  opportunities) to those provided
         for under each other  employee  benefit  plan,  program and practice in
         which the  Executive was  participating  at any time within ninety (90)
         days  preceding  the  date  of a  Change  in  Control  or at  any  time
         thereafter;

(e)      the  insolvency  or the filing (by any party,  including  the Company)
         of a petition  for  bankruptcy  of the  Company,  which petition is not
         dismissed within sixty (60) days;

(f)      any material breach by the Company of any provision of this Agreement;

(g)      any  purported  termination  of the  Executive's  employment  for Cause
         by the Company which does not comply with the terms of Section 2.6; or

(h)      the failure of the Company to obtain an agreement,  satisfactory to the
         Executive,  from any  Successors  and  Assigns  to assume  and agree to
         perform this Agreement.

Any event or condition described in this Section 2.10(a) through (h) that occurs
prior to a Change in Control,  but which the Executive  reasonably  demonstrates
(1) was at the request of a third party,  or (2)  otherwise  arose in connection
with, or in  anticipation  of, a Change in Control that actually  occurs,  shall
constitute  Good Reason for purposes of this Agreement  notwithstanding  that it
occurred prior to the Change in Control.

2.11.  "Notice of  Termination"  shall mean,  following  a Change in Control,  a
written  notice of termination of the  Executive's  employment  from the Company
that  indicates,  if  applicable,  the  specific  termination  provision in this
Agreement  relied  upon and that sets forth in  reasonable  detail the facts and
circumstances  claimed to  provide a basis for  termination  of the  Executive's
employment under the provisions so indicated.

2.12. "Pro Rata Bonus" shall mean an amount equal to the Bonus Amount multiplied
by a fraction  the  numerator  of which is the number of days in the fiscal year
through  the  Termination  Date and the  denominator  of which is three  hundred
sixty-five (365).

2.13.    "SEC" shall mean the Securities and Exchange Commission.
<PAGE>
2.14.  "Subsidiary" shall mean a corporation in which greater than fifty percent
(50%) of the shares are  owned,  directly  or  indirectly,  by the  Company or a
subsidiary of the Company.

2.15.  "Successors  and  Assigns"  shall  mean a  corporation  or  other  entity
acquiring all or  substantially  all the stock,  assets  and/or  business of the
Company whether by operation of law or otherwise.

2.16.  "Termination  Date" shall mean in the case of the Executive's  death, his
date of death; in the case of Good Reason,  the last day of his employment;  and
in all other cases,  the date specified in the Notice of Termination,  provided,
however,  that if the  Executive's  employment  is terminated by the Company for
Cause or due to  Disability,  the date  specified  in the Notice of  Termination
shall be at least  thirty (30) days from the date the Notice of  Termination  is
given to the Executive,  and provided  further,  that in the case of Disability,
the Executive shall not have returned to the full-time performance of his duties
during such period of at least thirty (30) days.



2.17. "Voting  Securities" shall mean those securities of a corporation that are
entitled to vote generally in the election of directors of such corporation.

3.       Termination of Employment.
----------------------------------

3.1. If, during the term of this Agreement,  the Executive's employment with the
Company shall be terminated within twenty-four (24) months following a Change in
Control,  the  Executive  shall be entitled to the  following  compensation  and
benefits:

(a)      If the Executive's  employment with the Company shall be terminated (1)
         by  the  Company  for  Cause  or  Disability,  (2)  by  reason  of  the
         Executive's  death, or (3) by the Executive other than for Good Reason,
         the Company shall pay to the Executive the Accrued Compensation and, if
         such  termination is other than by the Company for Cause,  the Pro Rata
         Bonus.

(b)      If the Executive's  employment with the Company shall be terminated for
         any reason  other than as specified in Section  3.1(a),  the  Executive
         shall be entitled to the following:

(i)      The Company shall pay the Executive his Accrued Compensation and the
         Pro Rata Bonus;

(ii)              The Company  shall pay the  Executive as severance pay and, in
                  lieu of any further compensation for periods subsequent to the
                  Termination  Date, a payment equal to two (2) times the sum of
                  (A) the Base Amount and (B) the Bonus Amount.
<PAGE>
(iii)    For eighteen (18) months (the  "Continuation  Period") following such
                  termination,  the Company shall continue to provide,  at
                  its expense,  life insurance  coverage to the Executive on the
                  same terms as provided to the Executive by the Company
                  under any life  insurance plan or program as in existence at
                  any time during the 90-day period prior to the Change in
                  Control or at any time  thereafter  or, if such  coverage,  in
                  whole or in part,  is no longer  provided to similarly
                  situated  executives who continue in the employ of the Company
                  during the  Continuation  Period,  such life insurance
                  coverage as is provided to those similarly situated executives
                  during the Continuation  Period, in either case to the
                  extent such  insurance  coverage is permissible  under the
                  terms of the Company's  life insurance  plans or programs.
                  The Company agrees that it shall, if necessary for the
                  continuation of such insurance  coverage,  take any steps that
                  are reasonably  necessary to amend its life insurance plans or
                  programs in order to permit the Executive to continue
                  to receive  coverage  under such plans,  provided the cost to
                  the Company of taking such actions is not  commercially
                  unreasonable.  The Company's  obligation  hereunder with
                  respect to the foregoing  life  insurance  benefits shall be
                  limited to the extent that the  Executive  obtains any such
                  benefits  pursuant to a subsequent  employer's  employee
                  benefit  plans,  in which case the Company may reduce the
                  coverage of any life  insurance  benefits it is required to
                  provide  the  Executive  hereunder  as long as the  aggregate
                  insurance  coverage of the  combined  plans is no less
                  favorable to the Executive than the life insurance  coverage
                  required to be provided  hereunder.  In addition to the
                  foregoing,  if the Executive elects any benefits mandated
                  under the Consolidated Omnibus Budget Reconciliation Act of
                  1985 (COBRA),  the Company agrees that it shall pay the full
                  cost of such coverage during the Continuation Period, or
                  if shorter,  until the Executive is no longer eligible for
                  COBRA continuation  coverage.  This subsection (iii) shall
                  not be interpreted so as to limit  benefits to which the
                  Executive or his dependents or  beneficiaries  may otherwise
                  be entitled  under any of the Company's  employee  benefit
                  plans,  programs or practices  following the  Executive's
                  termination of employment,  including  without  limitation,
                  their  entitlement to retiree medical and life insurance
                  benefits.
<PAGE>
(iv)     (A) The  restrictions  on any  outstanding  incentive  awards  granted
                  to the Executive  under the  USFreightways  Corporation
                  Long-Tem  Incentive  Plan (the  "Stock  Plan")  or under  any
                  other  incentive  plan or  arrangement  (including  any
                  restricted  stock plan) shall lapse and such incentive  awards
                  shall become one hundred  percent  (100%) vested,  all
                  stock options and stock appreciation  rights granted to the
                  Executive shall become immediately  exercisable and shall
                  become one hundred  percent  (100%)  vested,  and all
                  performance  units granted to the  Executive  shall become one
                  hundred  percent  (100%) vested and (B) the  Executive  shall
                  have the right to require the Company to purchase,  for
                  cash, any shares of  unrestricted  stock or shares  purchased
                  upon exercise of any options,  at a price equal to the
                  fair market  value of such shares on the date of purchase by
                  the  Company.  For  purposes of this  Agreement,  if the
                  shares are listed on any national  securities  exchange,  the
                  fair market value shall be the mean average of the high
                  and low sales  prices,  if any, on the largest such  exchange
                  on the date of purchase by the Company or, if there are
                  no sales on such date,  on the most  recent  trade date thirty
                  (30) days or less prior to the date of purchase by the
                  Company.  If the shares are not listed on any  national
                  securities  exchange,  the fair market  value of such shares
                  shall be determined by a nationally  recognized  investment
                  banking firm mutually agreed upon by the Company and the
                  Executive.  If the parties  shall be unable to  mutually agree
                  upon an  investment  banking  firm,  then each of the
                  Company and the Executive shall designate an investment
                  banking firm within ten (10) days of the date on which it is
                  determined  that the parties are unable to mutually agree upon
                  an investment  banking firm.  The two (2)  independent
                  firms shall,  within ten (10) days,  jointly select a third
                  nationally  recognized  investment  banking firm,  whose
                  determination of the fair market value shall be final,binding
                  and conclusive on the Company and the Executive.  All
                  costs  associated  with the  determination  of fair  market
                  value  shall be  borne by the  Company.  Notwithstanding
                  anything in this  paragraph (iv)  to the contrary,  if there
                  exists an  inconsistency  between the terms of the Stock
                  Plan and this  paragraph  (iv),  such that the terms of this
                  paragraph (iv)  cannot be applied  in a manner  that is
                  consistent with the Stock Plan, then the terms of the Stock
                  Plan shall govern,  provided,  however,  that the Company
                  shall pay the Executive in one single sum the difference
                  between  (1) the amount that the Executive would receive by
                  applying this paragraph  most  favorably to the Executive,
                  without regard to the Stock Plan, and (2) the amount that
                  the Executive would receive under this paragraph after
                  applying any limitations imposed by the Stock Plan.

(v)               The Company shall pay the full cost of  outplacement  services
                  for the  Executive  for a period of six (6)  months  following
                  such termination or, if earlier,  until the Executive  obtains
                  full-time  employment,  to  be  provided  by  an  outplacement
                  services firm selected by the Executive.

(c)      The amounts  provided  for in Sections  3.1(a) and  3.1(b)(i)  and (ii)
         shall be paid in a single lump sum cash payment within thirty (30) days
         after the  Executive's  Termination  Date (or  earlier if  required  by
         applicable law).

(d)      The  Executive  shall not be  required  to  mitigate  the amount of any
         payment  provided for in this Agreement by seeking other employment and
         no such  payment  shall be  offset  or  reduced  by the  amount  of any
         compensation  or benefits  provided to the Executive in any  subsequent
         employment, except as provided in Section 3.1(b)(iii).

3.2. The severance pay and benefits provided for in this Section 3 shall also be
in lieu of any other  severance or termination pay to which the Executive may be
entitled under any Company severance or termination plan,  program,  practice or
arrangement.
<PAGE>
3.3. Other than as set forth in Section 3.2, the Executive's  entitlement to any
other  compensation  or benefits  shall be  determined  in  accordance  with the
Company's  employee  benefit plans and other applicable  programs,  policies and
practices then in effect.

4.       Notice of  Termination.  Following a Change in  Control,  any purported
         termination  of the  Executive's  employment  by the
-------------------------------
Company shall be communicated by Notice of Termination to the Executive.

5.       Excise Tax Payments.
----------------------------

5.1. If any payment  (within the meaning of Section  280G(b)(2)  of the Internal
Revenue Code of 1986, as amended (the "Code")) to the Executive  pursuant to the
terms of this Agreement or otherwise in connection  with, or arising out of, his
employment with the Company or a change in ownership or effective control of the
Company (a "Payment" or "Payments") would be subject to an excise tax imposed by
Section  4999 of the Code or any  interest  or  penalties  are  incurred  by the
Executive  with respect to such excise tax (such excise tax,  together  with any
such interest and penalties,  are  hereinafter  collectively  referred to as the
"Excise  Tax"),  then the  Executive  will be entitled to receive an  additional
payment (a  "Gross-Up  Payment")  in an amount such that,  after  payment by the
Executive of all taxes (including any interest or penalties, other than interest
and penalties imposed by reason of the Executive's  failure to file timely a tax
return or pay taxes shown due on his return,  imposed with respect to such taxes
and the Excise Tax), including any Excise Tax imposed upon the Gross-Up Payment,
the Executive  will receive an amount as a Gross-Up  Payment equal to the Excise
Tax imposed upon the Payments.
<PAGE>
5.2.  An initial  determination  as to whether a  Gross-Up  Payment is  required
pursuant to this Agreement and the amount of such Gross-Up Payment shall be made
at the  Company's  expense by an  accounting  firm  selected  by the Company and
reasonably  acceptable to the Executive (the "Accounting  Firm"). If the Company
and the Executive  shall be unable to mutually  agree upon an  accounting  firm,
then each of the  Company  and the  Executive  shall  designate  an  independent
accounting  firm within ten (10) days of the date on which it is determined that
the parties are unable to mutually  agree upon an accounting  firm.  The two (2)
independent accounting firms shall, within ten (10) days, jointly select a third
independent  accounting  firm, which third firm shall be the Accounting Firm for
purposes  of  this  Section  5.2.  The   Accounting   Firm  shall   provide  its
determination   (the   "Determination"),   together  with  detailed   supporting
calculations and  documentation to the Company and the Executive within five (5)
days of the Termination  Date, or such other time as requested by the Company or
by the Executive  (provided the  Executive  reasonably  believes that any of the
Payments  may be  subject  to the  Excise  Tax),  and  if  the  Accounting  Firm
determines  that no Excise  Tax is payable by the  Executive  with  respect to a
Payment or Payments,  it shall furnish the Executive with an opinion  reasonably
acceptable to the  Executive  that no Excise Tax will be imposed with respect to
any such  Payment  or  Payments.  Within  ten (10) days of the  delivery  of the
Determination  to the Executive,  the Executive  shall have the right to dispute
the Determination (the "Dispute").  The Gross-Up Payment,  if any, as determined
pursuant  to this  Section  5.2 shall be paid by the  Company  to the  Executive
within fifteen (15) days of the receipt of the  Determination.  The existence of
the  Dispute  shall not in any way affect the  Executive's  right to receive the
Gross-Up Payment in accordance with the  Determination.  If there is no Dispute,
the  Determination  shall be binding,  final and conclusive upon the Company and
the Executive subject to the application of Section 5.3 below.

5.3. As a result of the uncertainty in the application of Sections 4999 and 280G
of the Code, it is possible that a Gross-Up  Payment (or a portion thereof) will
be paid which  should  not have been paid (an  "Excess  Payment")  or a Gross-Up
Payment (or a portion  thereof)  which  should have been paid will not have been
paid (an  "Underpayment").  An Underpayment shall be deemed to have occurred (a)
upon notice (formal or informal) to the Executive from any  governmental  taxing
authority  that  the  Executive's  tax  liability  (whether  in  respect  of the
Executive's current taxable year or in respect of any prior taxable year) may be
increased by reason of the imposition of the Excise Tax on a Payment or Payments
with  respect  to which the  Company  has failed to make a  sufficient  Gross-Up
Payment,  (b) upon a determination  by a court, (c) by reason of a determination
by the Company,  or (d) upon the  resolution  of the Dispute to the  Executive's
satisfaction. If an Underpayment occurs, the Executive shall promptly notify the
Company and the Company shall promptly, but in any event, at least five (5) days
prior  to the date on which  the  applicable  government  taxing  authority  has
requested payment,  pay to the Executive an additional Gross-Up Payment equal to
the amount of the  Underpayment  plus any  interest  and  penalties  (other than
interest  and  penalties  imposed by reason of the  Executive's  failure to file
timely a tax return or pay taxes shown due on the Executive's return) imposed on
the  Underpayment.  An Excess  Payment  shall be deemed to have  occurred upon a
"Final  Determination" (as hereinafter defined) that the Excise Tax shall not be
imposed  upon a Payment or Payments (or portion  thereof)  with respect to which
the   Executive  had   previously   received  a  Gross-Up   Payment.   A  "Final
Determination"  shall be deemed to have occurred when the Executive has received
from the  applicable  government  taxing  authority  a refund  of taxes or other
reduction  in the  Executive's  tax  liability  and upon  either  (a) the date a
determination  is made by, or an agreement is entered into with,  the applicable
governmental taxing authority which finally and conclusively binds the Executive
and such  taxing  authority,  or in the event that a claim is  brought  before a
court of competent  jurisdiction,  the date upon which a final determination has
been made by such  court and  either all  appeals  have been  taken and  finally
resolved  or the  time  for  all  appeals  has  expired  or (b) the  statute  of
limitations  with respect to the Executive's  applicable tax return has expired.
If an Excess  Payment is determined to have been made,  the amount of the Excess
Payment  shall be treated  as a loan by the  Company  to the  Executive  and the
Executive  shall pay to the  Company on demand  (but not less than ten (10) days
after the  determination  of such Excess  Payment  and  written  notice has been
delivered to the Executive) the amount of the Excess Payment plus interest at an
annual rate equal to the Applicable Federal Rate provided for in Section 1274(d)
of the Code from the date the  Gross-Up  Payment  (to which the  Excess  Payment
relates) was paid to the Executive until the rate of repayment to the Company.
<PAGE>
6.       Successors; Binding Agreement.
--------------------------------------

6.1. This Agreement  shall be binding upon and shall inure to the benefit of the
Company  and its  Successors  and  Assigns,  and the Company  shall  require any
Successors  and Assigns to expressly  assume and agree to perform this Agreement
in the same manner and to the same extent that the Company  would be required to
perform it if no such succession or assignment had taken place.

6.2.  Neither  this  Agreement  nor any  right or  interest  hereunder  shall be
assignable  or  transferable  by the  Executive  or his  beneficiaries  or legal
representatives,  except by will or by the laws of descent and distribution, and
this  Agreement  shall  inure  to  the  benefit  of and  be  enforceable  by the
Executive's legal representatives.

7. Fees and Expenses.  The Company shall pay all legal fees and related expenses
(including the costs of experts, evidence and counsel) incurred by the Executive
as they become due as a result of (a) the Executive seeking to obtain or enforce
any right or benefit provided by this Agreement (including,  but not limited to,
any such fees and expenses incurred in connection with (i) the Dispute, and (ii)
the Gross-Up  Payment  whether as a result of any applicable  government  taxing
authority  proceeding,  audit or otherwise) or by any other plan or  arrangement
maintained  by the Company  under which the Executive may be entitled to receive
benefits,  and (b) the  Executive's  hearing before the Board as contemplated in
Section 2.6 of this Agreement.

8.  Notice.  For  the  purposes  of  this  Agreement,   notices  and  all  other
communications   provided  for  in  the  Agreement   (including  the  Notice  of
Termination)  shall be in  writing  and shall be deemed to have been duly  given
when personally  delivered or sent by certified mail, return receipt  requested,
postage prepaid,  addressed to the respective addresses last given by each party
to the other,  provided that all notices to the Company shall be directed to the
attention of the Board with a copy to the Secretary of the Company.  All notices
and communications shall be deemed to have been received on the date of delivery
thereof or on the third  business  day after the  mailing  thereof,  except that
notice of a change of address shall be effective only upon receipt.

9.  Non-exclusivity of Rights.  Nothing in this Agreement shall prevent or limit
the  Executive's  continuing  or future  participation  in any  benefit,  bonus,
incentive or other plan or program  provided by the Company (except as otherwise
expressly  provided  herein) and for which the Executive may qualify,  nor shall
anything  herein limit or reduce such rights as the Executive may have under any
other  agreements  with the  Company  (except as  otherwise  expressly  provided
herein).  Amounts  that are vested  benefits or that the  Executive is otherwise
entitled to receive under any plan or program of the Company shall be payable in
accordance  with such plan or  program,  except as  expressly  modified  by this
Agreement.

10. Settlement of Claims. The Company's obligation to make the payments provided
for in this Agreement and otherwise to perform its  obligations  hereunder shall
not be  affected  by  any  circumstances,  including,  without  limitation,  any
set-off, counterclaim,  recoupment, defense or other right which the Company may
have against the Executive or others.

11.  Miscellaneous.  No provision of this  Agreement may be modified,  waived or
discharged  unless  such  modification,  waiver,  or  discharge  is agreed to in
writing and signed by the Executive  and the Company.  No waiver by either party
hereto at any time of any breach by the other party  hereto of any  condition or
provision of this  Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time.

12. Payments to Beneficiary.  If the Executive dies before receiving  amounts to
which the Executive is entitled under this Agreement, such amounts shall be paid
in a lump sum to the beneficiary  designated in writing by the Executive,  or if
none is so designated, to the Executive's estate.

13. Non-alienation of Benefits.  Benefits payable under this Agreement shall not
be  subject  in  any  manner  to  anticipation,   alienation,   sale,  transfer,
assignment, pledge, encumbrance,  charge, garnishment,  execution or levy of any
kind,  either  voluntary or  involuntary,  before actually being received by the
Executive,  and any such  attempt to dispose  of any right to  benefits  payable
under this Agreement shall be void.
<PAGE>
14.  Severability.  If any one or more  articles,  sections or other portions of
this  Agreement  are  declared  by any  court or  governmental  authority  to be
unlawful  or  invalid,  such  unlawfulness  or  invalidity  shall  not  serve to
invalidate any article,  section or other portion not so declared to be unlawful
or invalid. Any article,  section or other portion so declared to be unlawful or
invalid  shall be  construed  so as to  effectuate  the  terms of such  article,
section or other portion to the fullest extent possible while  remaining  lawful
and valid.

15.      Counterparts.  This  Agreement  may be executed in one or more
         counterparts,  each of which shall be deemed an original,  but
---------------------
all of which together constitute one and the same instrument.

16.      Tax  Withholding.  The Company may withhold from any amounts  payable
under this  Agreement any federal,  state or local taxes that are required to be
withheld pursuant to any applicable law or regulation.

17.      Obligations  Unfunded.  The  obligations of the Company under this
Agreement  shall be unfunded and unsecured.  The Company is not required to
segregate any assets that may at any time be required to provide  benefits under
this Agreement.

18.      Governing  Law. This  Agreement shall be governed by and  construed and
enforced in accordance  with the laws of the State  Illinois, to the extent that
such laws are not preempted by the Employee Retirement Income Security Act of
1974, as amended ("ERISA").

19.      Entire  Agreement.  This  Agreement  constitutes  the entire  agreement
between the parties  hereto and  supersedes all prior agreements, understandings
and arrangements, oral or written, between the parties hereto with respect to
the subject matter hereof.

20. Application of ERISA. This Agreement  constitutes part of a welfare plan for
certain selected  employees,  as set forth in Department of Labor Regulation ss.
2520.104-24.  Accordingly,  nothing  herein shall be deemed to limit or restrict
any rights or entitlements  to which the Executive is entitled under ERISA,  and
any such rights or entitlements are expressly incorporated herein by reference.

         IN WITNESS  WHEREOF,  the  Company  has  caused  this  Agreement  to be
executed by its duly  authorized  officer and the  Executive  has executed  this
Agreement as of the day and year first above written.

USFREIGHTWAYS CORPORATION




By:                                            By:
   -----------------------------------------      -----------------------------
Name:                                             Executive
     ---------------------------------------
Title:
      --------------------------------------