Document:

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                                                                     EXHIBIT 4.3

                              ALLIED HOLDINGS, INC.

                  AMENDED AND RESTATED LONG-TERM INCENTIVE PLAN

                                    EFFECTIVE

                                 JANUARY 1, 2001
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                              ALLIED HOLDINGS, INC.

                  AMENDED AND RESTATED LONG-TERM INCENTIVE PLAN

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                           <C>
ARTICLE I PURPOSE........................................................      1
ARTICLE II DEFINITIONS...................................................      1
   2.1 "Adjusted Fair Market Value"......................................      1
   2.2 "Agreement".......................................................      1
   2.3 "Award"...........................................................      1
   2.4 "Bank Balance"....................................................      2
   2.5 "Board"...........................................................      2
   2.6 "Cash Awards".....................................................      2
   2.7 "Cause"...........................................................      2
   2.8 "Change in Capitalization"........................................      2
   2.9 "Change in Control"...............................................      2
   2.10 "Code"...........................................................      3
   2.11 "Committee"......................................................      3
   2.12 "Company"........................................................      3
   2.13 "Deferral Plan"..................................................      3
   2.14 "Disability".....................................................      3
   2.15 "Division".......................................................      4
   2.16 "Eligible Employee"..............................................      4
   2.17 "Eligible Director"..............................................      4
   2.18 "Employee".......................................................      4
   2.19 "Exchange Act"...................................................      4
   2.20 "Fair Market Value"..............................................      4
   2.21 "Grantee"........................................................      4
   2.22 "Incentive Stock-Option".........................................      4
   2.23 "Maximum Goal"...................................................      5
   2.24 "Minimum Goal"...................................................      5
   2.25 "Nonqualified Stock Option"......................................      5
   2.26 "Option".........................................................      5
   2.27 "Optionee".......................................................      5
   2.28 "Performance Awards".............................................      5
   2.29 "Performance Goal"...............................................      5
   2.30 "Performance Period".............................................      5
   2.31 "Performance Shares".............................................      5
   2.32 "Performance Sharing Bank".......................................      5
   2.33 "Performance Unit"...............................................      5
   2.34 "Primary Goal"...................................................      5
   2.35 "Restricted Stock"...............................................      5
   2.36 "Retirement".....................................................      6
   2.37 "Shares".........................................................      6
   2.38 "Stock Appreciation Right".......................................      6
</TABLE>

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<TABLE>
<S>                                                                           <C>
   2.39 "Subsidiary".....................................................      6
   2.40 "Successor Corporation"..........................................      6
   2.41 "Ten-Percent Stockholder"........................................      6
ARTICLE III ADMINISTRATION...............................................      6
   3.1 Powers of the Committee...........................................      6
   3.2 The Committee.....................................................      7
   3.3 Awards Issuable by the Board......................................      8
ARTICLE IV STOCK SUBJECT TO PLAN.........................................      8
   4.1 Number of Shares..................................................      8
   4.2 Shares Eligible After Expiration..................................      8
ARTICLE V ELIGIBILITY....................................................      8
ARTICLE VI OPTIONS.......................................................      9
   6.1 Purchase Price....................................................      9
   6.2 Duration..........................................................      9
   6.3 Non-transferability...............................................      9
   6.4 Vesting...........................................................      9
   6.5 Method of Exercise................................................      9
   6.6 Rights of Optionees...............................................     10
   6.7 Termination of Employment.........................................     10
   6.8 Modification or Substitution......................................     10
   6.9 Effect of Change in Control.......................................     10
ARTICLE VII STOCK APPRECIATION RIGHTS....................................     11
   7.1 Time of Grant.....................................................     11
   7.2 Stock Appreciation Right Related to an Option.....................     11
   7.3 Stock Appreciation Right Unrelated to an Option...................     12
   7.4 Method of Exercise................................................     12
   7.5 Form of Payment...................................................     13
   7.6 Restrictions......................................................     13
   7.7 Termination of Employment.........................................     13
   7.8 Modification or Substitution......................................     13
   7.9 Effect of Change in Control.......................................     13
ARTICLE VIII RESTRICTED STOCK............................................     14
   8.1 Rights of Grantee.................................................     14
   8.2 Non-transferability...............................................     14
   8.3 Lapse of Restrictions.............................................     14
   8.4 Termination of Employment.........................................     15
   8.5 Modification or Substitution......................................     15
   8.6 Treatment of Dividends............................................     15
   8.7 Delivery of Shares................................................     15
   8.8 Vesting...........................................................     15
ARTICLE IX PERFORMANCE AWARDS............................................     15
   9.1 Performance Goals.................................................     15
   9.2  Performance Shares...............................................     16
   9.3 Cash Awards.......................................................     16
   9.4 Effect of Change in Control.......................................     17
   9.5 Non-transferability...............................................     18
   9.6 Modification or Substitution......................................     18
ARTICLE X LOANS..........................................................     18
   10.1 Loans............................................................     18
   10.2 Maximum Amount of Loan...........................................     18
</TABLE>

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<TABLE>
<S>                                                                           <C>
   10.3 Term.............................................................     18
   10.4 Repayment........................................................     18
   10.5 Security.........................................................     18
ARTICLE XI ADJUSTMENT UPON CHANGES IN CAPITALIZATION.....................     19
   11.1 Adjustments......................................................     19
   11.2 Limitations Regarding Incentive Stock Options....................     19
   11.3 Continuation of Conditions, Restrictions, Etc....................     19
ARTICLE XII EFFECT OF CERTAIN TRANSACTIONS...............................     19
ARTICLE XIII RELEASE OF FINANCIAL INFORMATION............................     20
ARTICLE XIV TERMINATION AND AMENDMENT OF THIS PLAN.......................     20
   14.1 Termination......................................................     20
   14.2 Amendment........................................................     20
ARTICLE XV NON-EXCLUSIVITY OF THIS PLAN..................................     20
ARTICLE XVI LIMITATION OF LIABILITY......................................     21
ARTICLE XVII REGULATIONS AND OTHER APPROVALS, GOVERNING LAW..............     21
   17.1 Governing Law....................................................     21
   17.2 Conditions.......................................................     21
   17.3 Rule 16b-3.......................................................     21
   17.4 Authority of the Board...........................................     21
   17.5 Effect of Securities Laws........................................     22
   17.6 Registration.....................................................     22
ARTICLE XVIII MISCELLANEOUS..............................................     22
   18.1 Multiple Agreements..............................................     22
   18.2 Withholding of Taxes.............................................     23
   18.3 Designation of Beneficiary.......................................     23
   18.4 Notices..........................................................     24
ARTICLE XIX EFFECTIVE DATE...............................................     24
</TABLE>

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                              ALLIED HOLDINGS, INC.

                  AMENDED AND RESTATED LONG-TERM INCENTIVE PLAN

                                    ARTICLE I

                                     PURPOSE

         The Allied Holdings, Inc. Long-Term Incentive Plan (the "Plan") is
restated as of January 1, 2001 to provide additional incentives to the officers,
directors and certain other Employees of Allied Holdings, Inc. (the "Company")
and its Subsidiaries (as hereinafter defined) whose contributions are
substantial and essential to the continued growth and success of the Company's
business; to strengthen their commitment to the Company and its Subsidiaries; to
motivate such officers and Employees to perform their responsibilities
faithfully, diligently, to the best of their ability and in the best interests
of the Company; and, to attract and retain competent, qualified and dedicated
individuals whose efforts will result in the long-term growth and profitability
of the Company. To accomplish these purposes, this Plan authorizes the Company
to grant Incentive Stock Options, Nonqualified Stock Options, Stock Appreciation
Rights, Restricted Stock, Performance Units, Performance Shares, and Cash Awards
to Eligible Employees (as each term is hereinafter defined) on the terms and
conditions hereinafter set forth.

                                   ARTICLE II

                                   DEFINITIONS

         As used in this Plan, the following terms shall have the meaning set
forth:

         2.1 "ADJUSTED FAIR MARKET VALUE" means, in the event of a Change in
Control, the greater of (a) the highest price per Share paid to holders of the
Shares in any transaction (or series of transactions) constituting or resulting
in such Change in Control, or (b) the highest Fair Market Value of a Share
during the ninety (90) day period ending on the date of such Change in Control.

         2.2 "AGREEMENT" means the written agreement between the Company and an
Optionee or Grantee which evidences the grant of an Option or Award and sets
forth the terms and conditions thereof.

         2.3 "AWARD" means a grant of Restricted Stock, Stock Appreciation
Rights, Performance Shares, Performance Awards or any combination thereof.
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         2.4 "BANK BALANCE" means the total of undistributed Cash Awards held in
the Performance Sharing Bank.

         2.5 "BOARD" means the Board of Directors of the Company.

         2.6 "CASH AWARDS" means cash to be paid pursuant to the Award and
Performance Sharing Bank System described in Section 9.3.

         2.7 "CAUSE" with respect to termination of the Participant's employment
with the Company or any Subsidiary, means (i) the commission by Employee of an
act constituting a felony and Employee's conviction thereof; (ii) Employee's
prolonged absence, without the consent of Employer, other than as a result of
Employee's Disability or permitted absence or vacation; (iii) conduct of
Employee which amounts to fraud, dishonesty, gross or willful neglect of duties;
or (iv) Employee's engaging in any activity which would constitute grounds for
termination for cause by Employer or an of its subsidiaries or affiliates.

         2.8 "CHANGE IN CAPITALIZATION" means any increase or reduction in the
number of Shares, or any change (including, but not limited to, a change in
value) or exchange of Shares for a different number or kind of shares or other
securities of the Company, by reason of a reclassification, recapitalization,
merger, consolidation, reorganization, spin-off, split-up, issuance of warrants
or rights or debentures, stock dividend, stock split or reverse stock split,
cash dividend, property dividend, combination or exchange of shares, repurchase
of shares, public offering, private placement, change in corporate structure or
otherwise which, in the judgment and sole discretion of the Board, is material
or significant.

         2.9 "CHANGE IN CONTROL" means any of the following events:

         (a)      The acquisition (other than from the Company) by any "Person"
                  (as used for purposes of Section 13(d) or 14(d) of the
                  Exchange Act) of beneficial ownership (within the meaning of
                  Rule 13d-3 promulgated under the Exchange Act) of twenty
                  percent (20%) or more of the combined voting power of the
                  Company's then outstanding voting securities; or

         (b)      The individuals who, as of the date of adoption of this Plan
                  by the Board, are members of the Board (the "Incumbent
                  Board"), cease for any reason to constitute at least
                  two-thirds (2/3) of the Board; provided, however, that if the
                  election, or nomination for election by the Company's
                  stockholders, of any new director was approved by a vote of at
                  least two-thirds (2/3) of the Incumbent Board, such new
                  director shall, for purposes of this Agreement, be considered
                  as a member of the Incumbent Board; or

         (c)      Approval by stockholders of the Company of (i) a merger or
                  consolidation involving the Company if the stockholders of the
                  Company, immediately before such merger or consolidation do
                  not, as a result of such merger or consolidation,

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                  own, directly or indirectly, more than seventy percent (70%)
                  of the combined voting power of the then outstanding voting
                  securities of the corporation resulting from such merger or
                  consolidation in substantially the same proportion as their
                  ownership of the combined voting power of the voting
                  securities of the Company outstanding immediately before such
                  merger or consolidation, or (ii) a complete liquidation or
                  dissolution of the Company or an agreement for the sale or
                  other disposition of all or substantially all of the assets of
                  the Company.

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
pursuant to subsection (a) above, solely because twenty percent (20%) or more of
the combined voting power of the Company's then outstanding securities is
acquired by (i) a trustee or other fiduciary holding securities under one or
more Employee benefit plans maintained by the Company or any of its
subsidiaries, or (ii) any corporation which, immediately prior to such
acquisition, is owned directly or indirectly by the stockholders of the Company
in the same proportion as their ownership of stock in the Company immediately
prior to such acquisition.

         2.10 "CODE" means the Internal Revenue Code of 1986, as from time to
time amended.

         2.11 "COMMITTEE" means the compensation committee (a) as may be
appointed by the Board at any time who qualify as "outside directors" within the
meaning of Treasury Regulation Section 1.162-27(e)(3) and (b) to which the Board
may delegate any or all of its duties under this Plan, and which may be
disbanded at any time by the Board, all in accordance with Section 3.2 hereof.

         2.12 "COMPANY" means Allied Holdings, Inc., a Georgia corporation.

         2.13 "DEFERRAL PLAN" means the Allied Holdings, Inc. Deferred
Compensation Plan.

         2.14 "DISABILITY" with respect to an Optionee or Grantee, shall
conclusively be deemed to have occurred (a) if such Optionee or Grantee shall be
receiving payments pursuant to a policy of long-term disability income
insurance; or (b) if such Optionee or Grantee shall have no disability income
insurance then in force, then if any insurance company insuring such Optionee's
or Grantee's life shall agree to waive the premiums due on such policy pursuant
to a disability waiver of premium provision in the contract of life insurance;
or (c) if such Optionee or Grantee shall have no disability waiver of premium
provision in any contract of life insurance, then if such Optionee or Grantee
shall be receiving disability benefits from or through the Social Security
Administration; provided, however, that in the event such Optionee's or
Grantee's disability shall, otherwise and in good faith, come into question
(and, for purposes of this proviso, "disability" shall mean the permanent and
continuous inability of such Optionee or Grantee to perform substantially all of
the duties being performed immediately prior to his disability coming into
question), and a dispute shall arise with respect thereto, then such Optionee or
Grantee (or his personal representatives) shall appoint a medical doctor, the
Company shall appoint a medical doctor, and said two doctors shall, in turn,
appoint a third party medical doctor who shall examine such Optionee or Grantee
to determine the question of disability and whose determination shall be binding
upon such Optionee or Grantee, the Company, and their respective successors and
assigns.

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         2.15 "DIVISION" means such operating units or divisions of the Company
designated as a Division by the Board, if any.

         2.16 "ELIGIBLE EMPLOYEE" means any officer or certain other Employee of
the Company or a Subsidiary designated by the Committee as eligible to receive
Options or Awards subject to the terms and conditions of this Plan. Only
Employees in grade category 9 or above shall be eligible to participate in
awards issued under Section 9.3, and only Employees in grade category 6 or above
shall be eligible to participate in awards issuable under Section 9.2.

         2.17 "ELIGIBLE DIRECTOR" means any non-Employee member of the Board or
any non-Employee member of the board of directors (or similar governing body, if
any) of a Subsidiary.

         2.18 "EMPLOYEE" means any Employee of the Company or a Subsidiary.

         2.19 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as from
time to time amended.

         2.20 "FAIR MARKET VALUE" means the value determined as follows:

         (a)      If the Shares are admitted to trading on a national securities
                  exchange, Fair Market Value on any date shall be the last sale
                  price reported for the Shares on such exchange on such date
                  or, if no sale was reported on such date, on the last date
                  preceding such date on which a sale was reported; or

         (b)      If the Shares are admitted to quotation on the National
                  Association of Securities Dealers Automated Quotation System
                  ("NASDAQ") or other comparable quotation system and have been
                  designated as a National Market System ("NMS") security, Fair
                  Market Value on any date shall be the last sale price reported
                  for the Shares on such system on such date or on the last day
                  preceding such date on which a sale was reported; or

         (c)      If the Shares are admitted to quotation on NASDAQ and have not
                  been designated a NMS security, Fair Market Value on any date
                  shall be the average of the highest bid and lowest asked
                  prices of the Shares on such system on such date;

provided, however, that if none of the foregoing shall be applicable, Fair
Market Value shall mean the fair market value of the Shares as determined in
good faith by the Board.

         2.21 "GRANTEE" means an Eligible Employee to whom an Award has been
granted under this Plan.

         2.22 "INCENTIVE STOCK OPTION" means an Option within the meaning of
Section 422(b) of the Code.

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         2.23 "MAXIMUM GOAL" means an outstanding level of performance of the
Company, a Subsidiary or a Division during a Performance Period for which a
Performance Award is granted, as determined by the Committee at the time such
Performance Award is granted.

         2.24 "MINIMUM GOAL" means a minimum level of performance of the
Company, a Subsidiary or a Division during a Performance Period for which a
Performance Award is granted, as determined by the Committee at the time such
Performance Award is granted.

         2.25 "NONQUALIFIED STOCK OPTION" means an Option which is not an
Incentive Stock Option.

         2.26 "OPTION" means an Incentive Stock Option, a Nonqualified Stock
Option, or either or both of them.

         2.27 "OPTIONEE" means an Eligible Employee to whom an Option has been
granted under this Plan.

         2.28 "PERFORMANCE AWARDS" means Performance Units, Performance Shares,
Cash Awards, or any combination of them.

         2.29 "PERFORMANCE GOAL" means a goal set by the Committee which, if
achieved, shall result in the payment of an Award. If so provided pursuant to an
Agreement, an Award may be partially paid if a Performance Goal is not fully
attained.

         2.30 "PERFORMANCE PERIOD" means the time period specified by the
Committee at the time a Performance Award is granted during which the
performance of the Company, a Subsidiary or a Division shall be measured, which
period shall be not less than one fiscal year.

         2.31 "PERFORMANCE SHARES" means potential rights to receive Restricted
Stock which are granted under Article IX of this Plan.

         2.32 "PERFORMANCE SHARING BANK" means the record of account maintained
by the Company to which Cash Awards shall be credited. No actual fund or trust
shall exist.

         2.33 "PERFORMANCE UNIT" means an Award granted under Article IX of this
Plan.

         2.34 "PRIMARY GOAL" means a challenging and above average level of
performance of the Company, a Subsidiary or a Division during a Performance
Period for which a Performance Award is granted, as determined by the Committee
at the time such Performance Award is granted.

         2.35 "RESTRICTED STOCK" means Shares issued or transferred to an
Eligible Employee which are subject to restrictions established by the Committee
at the time the Restrictive Stock is awarded to such Eligible Employee.
Restricted Stock may be subject to restrictions which lapse over time without
regard to the performance of the Company, a Subsidiary or a Division pursuant to
Article VIII hereof or may be awarded as Performance Shares pursuant to Article
IX hereof.

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         2.36 "RETIREMENT" means the voluntary termination of employment by a
Grantee or Optionee at any time after such Grantee or Optionee attains age
sixty-five (65).

         2.37 "SHARES" means the no par value common stock of the Company
(including any new, additional or different stock or securities resulting from a
Change in Capitalization).

         2.38 "STOCK APPRECIATION RIGHT" means a right to receive all or some
portion of the increase in the value of the Shares pursuant to Article VII
hereof.

         2.39 "SUBSIDIARY" means (a) Allied Systems, Ltd., a Georgia limited
partnership, and (b) any corporation in an unbroken chain of corporations,
beginning with the Company, if each of the corporations other than the last
corporation in the unbroken chain owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.

         2.40 "SUCCESSOR CORPORATION" means a corporation, or a parent or
subsidiary thereof within the meaning of Section 425(a) of the Code, which
issues or assumes a stock option in a transaction to which Section 425(a) of the
Code applies.

         2.41 "TEN-PERCENT STOCKHOLDER" means an Eligible Employee who, at the
time an Incentive Stock Option is to be granted to him, owns (within the meaning
of Section 422(b)(6) of the Code) stock possessing more than ten percent (10%)
of the total combined voting power of all classes of stock of the Company, or of
a parent or a subsidiary of the Company.

                                   ARTICLE III

                                 ADMINISTRATION

         3.1 POWERS OF THE COMMITTEE. This Plan shall be administered by the
Committee and, subject to the express terms and conditions set forth herein, the
Committee shall have the power, from time to time:

         (a)      To determine those Eligible Employees to whom Options shall be
                  granted under this Plan and the number of Incentive Stock
                  Options, Nonqualified Stock Options, or both, to be granted to
                  each Eligible Employee; to prescribe the terms and conditions
                  (which need not be identical) of each Option, including
                  without limitation the purchase price per Share subject to
                  each Option; and, to make any amendment or modification to any
                  Agreement consistent with the terms of this Plan;

         (b)      To determine those Eligible Directors to whom Nonqualified
                  Stock Options shall be granted under this Plan and the number
                  of Nonqualified Stock Options to be granted to each Eligible
                  Director; to prescribe the terms and conditions (which need
                  not be identical) of each Option, including without limitation
                  the purchase

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                  price per Share subject to each Option; and, to make any
                  amendment or modification to any Agreement consistent with the
                  terms of this Plan;

         (c)      To select those Eligible Employees to whom Awards shall be
                  granted under this Plan and to determine the number of
                  Performance Units, Performance Shares, Shares of Restricted
                  Stock, Stock Appreciation Rights, or all or any of them, to be
                  granted pursuant to each Award; to prescribe the terms and
                  conditions of each Award, including without limitation the
                  restrictions or performance criteria relating to such Units,
                  Shares or Rights, the maximum value of each Performance Unit
                  and Performance Share and whether Stock Appreciation Rights
                  will be granted along with, in conjunction with, or related
                  to, an Option; and, to make any amendment or modification to
                  any Agreement consistent with the terms of this Plan;

         (d)      To select those Eligible Directors to whom Awards shall be
                  granted under this Plan and to determine the number of
                  Performance Units, Performance Shares, Shares of Restricted
                  Stock, Stock Appreciation Rights, or all or any of them, to be
                  granted pursuant to each Award; to set annual incentives and
                  performance based measures; to prescribe the terms and
                  conditions of each Award, including without limitation the
                  restrictions or performance criteria relating to such Units,
                  Shares or Rights, the maximum value of each Performance Unit
                  and Performance Share and whether Stock Appreciation Rights
                  will be granted along with, in conjunction with, or related
                  to, Nonqualified Stock Options; and, to make any amendment or
                  modification to any Agreement consistent with the terms of
                  this Plan;

         (e)      To construe and interpret this Plan and the Options and Awards
                  granted hereunder and to establish, amend and revoke rules and
                  regulations for the administration of this Plan, including
                  without limitation correcting any defect or supplying any
                  omission in, or reconciling any inconsistency in, this Plan or
                  in any Agreement, in such manner and to such extent it shall
                  deem necessary or advisable to make this Plan fully effective,
                  and all decisions and determinations by the Committee in the
                  exercise of this power shall be final, binding and conclusive
                  upon the Company, each Subsidiary, Optionees and Grantees, as
                  the case may be;

         (f)      To determine the duration and purposes for leaves of absence
                  which may be granted to an Optionee or Grantee on an
                  individual basis without constituting a termination of
                  employment or service for purposes of this Plan;

         (g)      To exercise its discretion with respect to the powers and
                  rights granted to it as set forth in this Plan; and

         (h)      To exercise, generally, such powers and to perform such acts
                  as it shall deem necessary or advisable to promote the best
                  interests of the Company with respect to this Plan.

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         3.2 THE COMMITTEE. In addition to the powers described in Section 3.1,
the Committee shall have such powers and duties as shall be expressly delegated
in writing by the Board. The Board may, at the time of delegating such duties,
specify the minimum number of meetings to be held each calendar year; the number
of members of the Committee that shall constitute a quorum; and the requisite
vote of the Committee needed to adopt or defeat any proposal. In the event of a
failure of the Board to specify the matters described in the preceding sentence,
the Committee may establish its own rules of governance. Anything in this Plan
to the contrary notwithstanding, the Board may, at any time after the appointing
of a Committee and for any reason, disband the Committee, at which time any and
all powers and duties previously delegated to the Committee shall revert to the
Board. No member of the Committee shall be personally liable for any action,
determination or interpretation made in good faith with respect to this Plan,
Agreements, Options or Awards, and all members of the Committee shall be fully
indemnified by the Company with respect to any such action, determination or
interpretation.

         3.3 AWARDS ISSUABLE BY THE BOARD. The Board may grant any awards
available under the Plan except Incentive Stock Options and awards described in
Article IX to Eligible Directors. When the Board does so, it shall have all
those powers described in Sections 3.1 and 3.2 which are vested in the Committee
with respect to such awards.

                                   ARTICLE IV

                              STOCK SUBJECT TO PLAN

         4.1 NUMBER OF SHARES. The maximum number of Shares that may be issued
or transferred pursuant to Options and Awards under this Plan shall be One
Million Five Hundred Thousand (1,500,000) Shares (or such number and kind of
shares of stock or other securities to which such Shares are adjusted upon a
Change in Capitalization pursuant to Article XI hereof provided that the number
of shares available under the Plan may be increased pursuant to action by the
shareholders of the Company) and the Company shall reserve for the purposes of
this Plan, out of its authorized but unissued Shares or out of Shares held in
the Company's treasury, or partly out of each, such number of Shares as shall be
determined, from time to time, by the Board so long as the aggregate number of
shares so reserved shall not exceed the maximum set forth above.

         4.2 SHARES ELIGIBLE AFTER EXPIRATION. Whenever any outstanding Option
or Award or portion thereof expires, is canceled, is forfeited or is otherwise
terminated for any reason (other than by exercise of the Option or any Stock
Appreciation Right), the Shares allocable to the expired, canceled, forfeited or
otherwise terminated portion of such Option or Award may again be the subject of
Options and Awards hereunder.

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                                    ARTICLE V

                                   ELIGIBILITY

         Subject to the terms and conditions of this Plan, the Committee shall
have full and final authority to select those Eligible Employees and Eligible
Directors who shall receive Options, Awards, or both; provided, however, that no
Eligible Employee shall receive any Incentive Stock Options unless such Eligible
Employee shall be an Employee of the Company, a parent or a subsidiary (within
the meaning of Section 422 of the Code) at the time the Incentive Stock Option
is granted. No Eligible Director shall receive any Incentive Stock Options.

                                   ARTICLE VI

                                     OPTIONS

         The Committee may, at any time and from time to time during the term of
this Plan, grant Options in accordance with this Plan and the terms and
conditions of the Option shall be set forth in an Agreement; each Option and
Related Agreement shall be subject to the following terms and conditions:

         6.1 PURCHASE PRICE. The purchase price or the manner in which the
purchase price is to be determined for Shares under each Option shall be set
forth in the Agreement; provided, however, that the purchase price per Share
under each Option shall not be less than one hundred percent (100%) of the Fair
Market Value of a Share at the time the Option is granted (one hundred ten
percent (110%) in the case of an Incentive Stock Option granted to a Ten-Percent
Stockholder).

         6.2 DURATION. Options granted hereunder shall be for such term as the
Committee shall determine; provided, however, that no Option shall be
exercisable after the expiration of ten (10) Years from the date it shall be
granted (five (5) years in the case of an Incentive Stock Option granted to a
Ten-Percent Stockholder). The Committee may, after the granting of any Option,
extend the term thereof, but in no event shall the term as so extended exceed
the maximum term provided for in the preceding sentence.

         6.3 NON-TRANSFERABILITY. No Option shall be transferable by the
Optionee to whom granted otherwise than by will or the laws of descent and
distribution, and an Option may be exercised during the lifetime of such
Optionee only by such Optionee or such Optionee's guardian or legal
representative. The terms of such Option shall be final, binding and conclusive
upon the beneficiaries, executors, administrators, heirs and successors of the
Optionee.

         6.4 VESTING. Subject to Section 6.9 hereof, each Option shall be
exercisable in such installments (which need not be equal) and at such times as
may be designated by the Committee

                                       9
<PAGE>   14
and set forth in the Agreement. To the extent not exercised, installments shall
accumulate and be exercisable, in whole or in part, at any time after becoming
exercisable, but not later than the date the Option expires. The Committee may
accelerate the exercisability of any Option or portion thereof, at any time and
from time to time.

         6.5 METHOD OF EXERCISE. The exercise of an Option shall be made only by
a written notice (a) delivered in accordance with Section 18.4 hereof to the
Secretary or an officer of the Company at the Company's principal executive
office, (b) specifying the number of Shares to be purchased and accompanied by
payment therefor and (c) otherwise in accordance with the Agreement pursuant to
which the Option was granted. The purchase price for any Shares purchased
pursuant to the exercise of an Option shall be paid in full upon such exercise
and, in the sole discretion of the Committee, either in cash, by check, or by
transferring Shares to the Company upon such terms and conditions as determined
by the Committee. The written notice pursuant to this Section 6.5 may also
provide instructions from the Optionee to the Company that upon receipt of the
purchase price in cash from the Optionee's broker or dealer, designated as such
in the written notice, in payment for any Shares purchased pursuant to the
exercise of an Option, the Company shall issue such Shares directly to the
designated broker or dealer. Any Shares transferred to the Company as payment of
the purchase price under an Option shall be valued at their Fair Market Value on
the day preceding the date of exercise of such Option. If requested by the
Committee, the Optionee shall deliver the Agreement evidencing the Option and
the Agreement evidencing any related Stock Appreciation Right to the Secretary
or an officer of the Company who shall endorse thereon a notation of such
exercise and return such Agreement to the Optionee. No fractional Shares shall
be issued upon exercise of an Option and the number of Shares that may be
purchased upon exercise shall be rounded to the nearest number of whole Shares.

         6.6 RIGHTS OF OPTIONEES. No Optionee shall be deemed for any purpose to
be the owner of any Shares subject to any Option unless and until (a) the Option
shall have been exercised pursuant to the terms thereof, (b) the Company shall
have issued and delivered the Shares to the Optionee, and (c) the Optionee's
name shall have been entered as a stockholder of record on the books of the
Company. Thereupon, the Optionee shall have full voting, dividend and other
ownership rights with respect to such Shares.

        6.7 TERMINATION OF EMPLOYMENT. An Agreement shall set forth the terms
and conditions of the Option upon the termination of the Optionee's employment
with the Company, Subsidiary or Division, as applicable (including a Grantee's
ceasing to be employed by a Subsidiary or Division as a result of the sale of
such Subsidiary or Division or an interest in such Subsidiary or Division), as
the Committee may, in its discretion, determine at the time the Option is
granted or thereafter; provided, however, that no Option shall be exercisable
beyond its maximum term as set forth in Section 6.2 hereof.

         6.8 MODIFICATION OR SUBSTITUTION. Subject to the terms of this Plan,
the Committee may, in its discretion, modify outstanding Options or accept the
surrender of outstanding Options (to the extent not exercised) and grant new
Options in substitution therefor. Notwithstanding the

                                       10
<PAGE>   15
foregoing, no modification of an Option shall adversely alter or impair any
rights or obligations under the Agreement without the Optionee's prior written
consent.

         6.9 EFFECT OF CHANGE IN CONTROL. Notwithstanding anything contained in
this Plan or an Agreement to the contrary, in the event of a Change in Control,
(a) all Options outstanding on the date of such Change in Control shall become
immediately and fully exercisable; (b) each Optionee shall be permitted to
surrender for cancellation, within sixty (60) days after such Change in Control,
any Option or portion of an Option to the extent not yet exercised; and (c) upon
cancellation, each Optionee shall be entitled to receive a cash payment in an
amount equal to:

                  (i)      in the case of a Non-Qualified Stock Option, the
                           excess of the greater of the Fair Market Value, on
                           the date preceding the date of surrender, of the
                           Shares subject to such Option or portion thereof
                           surrendered or the Adjusted Fair Market Value of the
                           Shares subject to such Option or portion thereof
                           surrendered over the aggregate purchase price for
                           such Shares under such Option; or

                  (ii)     in the case of an Incentive Stock Option, the excess
                           of the Fair Market Value, at the time of surrender,
                           of the Shares subject to such Option or portion
                           thereof surrendered over the aggregate purchase price
                           for such Shares under such Option;

provided, however, that in the case of an Option granted within six (6) months
prior to the Change in Control to any Optionee who may be subject to liability
under Section 16(b) of the Exchange Act, such Optionee shall be entitled to
surrender for cancellation his or her Option during the sixty (60) day period
commencing upon the expiration of six (6) months after the date of grant of any
such Option.

                                   ARTICLE VII

                            STOCK APPRECIATION RIGHTS

         The Committee may, in its discretion, either alone or in connection
with the grant of an Option grant Stock Appreciation Rights in accordance with
this Plan and such terms and conditions as shall be set forth in an Agreement.
If granted in connection with an Option, a Stock Appreciation Right shall cover
the same Shares covered by the Option (or such lesser number of Shares as the
Committee may determine) and shall, except as provided in this Article VII, be
subject to the same terms and conditions as the related Option.

         7.1 TIME OF GRANT. A Stock Appreciation Right may be granted (a) at any
time if unrelated to an Option, or (b) if related to an Option, either at the
time of grant, or at any time thereafter during the term of the Option.

                                       11
<PAGE>   16
         7.2 STOCK APPRECIATION RIGHT RELATED TO AN OPTION.

         (a)      Payment. A Stock Appreciation Right granted in connection with
                  an Option shall entitle the holder thereof to receive payment
                  of an amount computed pursuant to Section 7.2(c) below upon
                  exercise of the Stock Appreciation Right or any portion
                  thereof.

         (b)      Exercise. Subject to Section 7.6 hereof, a Stock Appreciation
                  Right granted in accordance with an Option shall be
                  exercisable at such time or times and only to the extent that
                  the related Option is exercisable, and shall not be
                  transferable except to the extent the related Option may be
                  transferable. A Stock Appreciation Right granted in connection
                  with an Incentive Stock Option shall be exercisable only if
                  the Fair Market Value of a Share on the date of exercise
                  exceeds the purchase price specified in the related Incentive
                  Stock Option Agreement.

         (c)      Amount of Payment. Except as otherwise provided in Section 7.9
                  below, upon the exercise of a Stock Appreciation Right related
                  to an Option, the Grantee shall be entitled to receive an
                  amount determined by multiplying

                  (i)      the excess of the Fair Market Value of a Share on the
                           date of exercise of such Stock Appreciation Right
                           over the per Share purchase price under the related
                           Option, by

                  (ii)     the number of Shares as to which such Stock
                           Appreciation Right is being exercised.

                  Notwithstanding the foregoing, the Committee may limit, in any
                  manner, the amount payable with respect to any Stock
                  Appreciation Right by including such limit in the Agreement
                  evidencing the Stock Appreciation Right at the time it is
                  granted.

         (d)      Treatment of Related Options and Stock Appreciation Rights
                  Upon Exercise. Upon the exercise of a Stock Appreciation Right
                  granted in connection with an Option, the Option related
                  thereto shall be deemed to be exercised and shall be canceled
                  to the extent of the number of Shares as to which the Stock
                  Appreciation Right is exercised, and upon the exercise of an
                  Option granted in connection with a Stock Appreciation Right
                  or the surrender of such Option pursuant to Section 6.9
                  hereof, the Stock Appreciation Right related thereto shall be
                  deemed to be exercised and shall be canceled to the extent of
                  the number of Shares as to which the Option is exercised or
                  surrendered.

         7.3 STOCK APPRECIATION RIGHT UNRELATED TO AN OPTION. The Committee may
grant to Eligible Employees Stock Appreciation Rights unrelated to Options.
Stock Appreciation Rights unrelated to Options shall contain such terms and
conditions as to exercisability (subject to Section 7.6 below), vesting and
duration as the Committee shall determine, but in no event shall they have a
term of greater than ten (10) years. The amount payable upon exercise of a

                                       12
<PAGE>   17
Stock Appreciation Right shall be determined in accordance with Section 7.2(c)
or Section 7.9 hereof, as the case may be, except that "Fair Market Value of a
Share on the date of the grant of the Stock Appreciation Right" shall be
substituted in clause (i) of Section 7.2(c) for "per share purchase price under
the related Option."

         7.4 METHOD OF EXERCISE. Stock Appreciation Rights shall be exercised by
a Grantee only by a written notice delivered in accordance with Section 18.4
hereof to the Secretary or an officer of the Company at the Company's principal
executive office, specifying the number of Shares with respect to which the
Stock Appreciation Right is being exercised. If requested by the Committee, the
Grantee shall deliver the Agreement evidencing the Stock Appreciation Right
being exercised and the Agreement evidencing any related Option to the Secretary
or an officer of the Company who shall endorse thereon a notation of such
exercise and return such Agreement to the Grantee.

         7.5 FORM OF PAYMENT. Payment of the amount determined under Sections
7.2(c) or Section 7.3 may be made, in the discretion of the Committee, solely in
whole Shares in a number determined at their Fair Market Value on the date
preceding the date of exercise of the Stock Appreciation Right, or solely in
cash, or in a combination of cash and Shares. If the Committee decides to make
full payment in Shares and the amount payable results in a fractional Share,
payment for the fractional Share shall be made in cash.

         7.6 RESTRICTIONS. No Stock Appreciation Right may be exercised before
the date six (6) months after the date it is granted, unless the death or
Disability of the Grantee occurs before the expiration of the six (6) month
period.

         7.7 TERMINATION OF EMPLOYMENT. The Agreement shall set forth the terms
and conditions of the Award upon the termination of the Grantee's employment
with the Company, Subsidiary or a Division (including a Grantee's ceasing to be
employed by a Subsidiary or Division as a result of the sale of such Subsidiary
or Division or an interest in such Subsidiary or Division) as the Committee may,
in its discretion, determine at the time the Stock Appreciation Right is granted
or thereafter.

         7.8 MODIFICATION OR SUBSTITUTION. Subject to the terms of this Plan,
the Committee may modify outstanding Awards of Stock Appreciation Rights or
accept the surrender of outstanding Awards of Stock Appreciation Rights (to the
extent not exercised) and grant new Awards in substitution therefor.
Notwithstanding the foregoing, no modification of an Award shall adversely alter
or impair any rights or obligations under the Agreement without the Grantee's
consent.

         7.9 EFFECT OF CHANGE IN CONTROL. Notwithstanding anything contained in
this Plan to the contrary, in the event of a Change in Control, subject to
Section 7.6 hereof, all Stock Appreciation Rights shall become immediately and
fully exercisable. Notwithstanding Section 7.2(c), Section 7.3 and Section 7.5
hereof, upon the exercise of a Stock Appreciation Right or any portion thereof
during the sixty (60) day period following a Change in Control, the amount
payable shall be in cash and shall be determined by reference to

                                       13
<PAGE>   18
         (a)      in the case of a Stock Appreciation right related to a
                  Non-Qualified Stock Option or a Stock Appreciation Right not
                  related to an Option, the greater of (i) the Fair Market Value
                  of the Shares on the date preceding the date of such exercise
                  and (ii) the Adjusted Fair Market Value of the Shares on the
                  date of such exercise; or

         (b)      in the case of a Stock Appreciation Right related to an
                  Incentive Stock Option, the Fair Market Value of the Shares on
                  the date of such exercise;

provided, however, that in the case of a Stock Appreciation Right granted within
six (6) months prior to the Change in Control to any Grantee who may be subject
to liability under Section 16(b) of the Exchange Act, such Grantee shall be
entitled to exercise such Grantee's Stock Appreciation Right during the sixty
(60) day period commencing upon the expiration of six (6) months from the date
of grant of any such Stock Appreciation Right.

                                  ARTICLE VIII

                                RESTRICTED STOCK

         The Committee may grant Awards of Restricted Stock, and may issue
Shares of Restricted Stock, which shall be evidenced by an Agreement between the
Company and the Grantee. Each Agreement shall contain such restrictions, terms
and conditions as the Committee may, in its discretion, determine. Without
limiting the generality of the foregoing, such Agreements may require that an
appropriate legend be placed on Share certificates. Awards of Restricted Stock
shall be subject to the following terms and conditions:

         8.1 RIGHTS OF GRANTEE. Shares of Restricted Stock granted pursuant to
an Award hereunder shall be issued in the name of the Grantee as soon as
reasonably practicable after the Award is granted provided that the Grantee
shall have executed an Agreement evidencing the Award, the appropriate blank
stock powers and, in the discretion of the Committee, an escrow agreement and
any other documents which the Committee may require as a condition to the
issuance of such Shares. If a Grantee shall fail to execute the Agreement
evidencing a Restricted Stock Award, the appropriate blank stock powers and, in
the discretion of the Committee, an escrow agreement or any other documents
which the Committee may require within the time period prescribed by the
Committee at the time the Award is granted, the Award shall be null and void. At
the discretion of the Committee, Shares issued in connection with a Restricted
Stock Award shall be deposited together with the stock powers with an escrow
agent designated by the Committee. Unless the Committee determines otherwise and
as set forth in the Agreement, upon delivery of the Shares to the escrow agent,
the Grantee shall have all of the rights of a stockholder with respect to such
Shares, including the right to vote the Shares and to receive all dividends or
other distributions paid or made with respect to the Shares.

         8.2 NON-TRANSFERABILITY. Until any restrictions upon the Shares of
Restricted Stock awarded to a Grantee shall have lapsed in the manner set forth
in Section 8.3 below, such Shares

                                       14
<PAGE>   19
shall not be sold, transferred or otherwise disposed of and shall not be pledged
or otherwise hypothecated, nor shall they be delivered to the Grantee.

         8.3 LAPSE OF RESTRICTIONS.

         (a)      Generally. Restrictions upon Shares of Restricted Stock
                  awarded hereunder shall lapse at such time or times and on
                  such terms and conditions as the Committee may determine.

         (b)      Effect of Change in Control. Notwithstanding anything
                  contained in this Plan to the contrary, in the event of a
                  Change in Control, all restrictions upon any Shares of
                  Restricted Stock (other than Performance Shares) shall lapse
                  immediately and all such Shares shall become fully vested in
                  the Grantee.

         8.4 TERMINATION OF EMPLOYMENT. The Agreement shall set forth the terms
and conditions of an Award of Restricted Stock upon the termination of the
Grantee's employment with the Company, a Subsidiary, or a Division (including a
Grantee's ceasing to be employed by a Subsidiary or Division as a result of the
sale of such Subsidiary or Division or an interest in such Subsidiary or
Division) as the Committee may, in its discretion, determine at the time the
Award is granted or thereafter.

         8.5 MODIFICATION OR SUBSTITUTION. Subject to the terms of this Plan,
the Committee may modify outstanding Awards of Restricted Stock or accept the
surrender of outstanding Awards of Restricted Stock (to the extent not
exercised) and grant new Awards in substitution therefor. Notwithstanding the
foregoing, no modification of an Award shall adversely alter or impair any
rights or obligations under the Agreement without the Grantee's consent.

         8.6 TREATMENT OF DIVIDENDS. At the time an Award of Shares of
Restricted Stock is granted, the Committee may, in its discretion, determine
that the payment to the Grantee of dividends, or a specified portion thereof,
declared or paid on such Shares by the Company shall be (a) deferred until the
lapsing of the restrictions imposed upon such Shares and (b) held by the Company
for the account of the Grantee until such time. In the event of such deferral,
there shall be credited at the end of each year (or portion thereof) interest on
the amount of the account at the beginning of the year at an annual rate as the
Committee, in its discretion, may determine. Payment of deferred dividends,
together with interest accrued thereon, shall be made upon the lapsing of
restrictions imposed on such Shares, and any dividends deferred (together with
any interest accrued thereon) in respect of any Shares of Restricted Stock shall
be forfeited upon the forfeiture of such Shares pursuant to Section 8.4 hereof
or otherwise.

         8.7 DELIVERY OF SHARES. Upon the lapse of the restrictions on Shares of
Restricted Stock, the Committee shall cause a stock certificate to be delivered
to the Grantee with respect to such Shares, free of all restrictions hereunder.

         8.8 VESTING. Subject to Section 8.3 hereof, each Award of Restricted
Stock shall vest at such times as may be designated by the Committee and set
forth in the Agreement.

                                       15
<PAGE>   20
                                   ARTICLE IX

                               PERFORMANCE AWARDS

     9.1 PERFORMANCE GOALS. Performance Goals for Performance Awards may be
expressed in terms of (a) earnings per Share, (b) pre-tax profits, (c) net
earnings or net worth, (d) return on equity or assets, (e) any combination of
the foregoing, or (f) any other standard or standards deemed appropriate by the
Committee at the time the Award is granted subject to ratification by the
shareholders. Performance Goals may be based on the performance of the Company
and its Subsidiaries (which may be on a consolidated basis), a Subsidiary or a
Division. Prior to the end of a Performance Period, the Committee, in its
discretion, may adjust the Performance Goals to reflect a Change in the
Capitalization, a change in the tax rate or book tax rate of the Company or any
Subsidiary, or any other event which may materially affect the performance of
the Company, a Subsidiary or a Division, including, but not limited to, market
conditions or a significant acquisition or disposition of assets or other
property by the Company, a Subsidiary or a Division.

     9.2 PERFORMANCE SHARES. The Committee may, in its discretion, grant Awards
of Performance Shares, which shall be payable as Restricted Stock if Performance
Goals set by the Committee for the Performance Period to which such Performance
Shares relate are met. Performance Shares shall be evidenced by an Agreement
between the Company and the Grantee. Each Agreement may provide for partial
payment of Performance Shares if Performance Goals are not met. Each Agreement
may contain restrictions and terms and conditions as the Committee may, in its
discretion, require. Performance Shares which become Restricted Stock upon
attainment (or partial attainment, if so specified in an Agreement) of a
Performance Goal shall, upon issuance of the Restricted Stock, be subject to the
rules applicable to Restricted Stock as set forth under Article VIII. Unless the
Agreement provides otherwise, if the Grantee's employment with the Company and
its Subsidiaries terminates due to the Grantee's Retirement, Disability or
death, all of the Grantee's unvested shares of Restricted Stock shall vest
immediately. However, unless the Agreement provides otherwise, if the Grantee's
employment with the Company or its Subsidiary terminates for any reason other
than the Grantee's Retirement, Disability or death, the Grantee's unvested
shares of Restricted Stock shall be forfeited on the date of such termination of
employment.

     9.3 CASH AWARDS. The Committee may, in its discretion, grant Cash Awards to
Eligible Employees. Such Awards shall be payable solely in cash from the
Performance Sharing Bank provided Performance Goals set by the Committee for the
Performance Period to which such Cash Awards relate are met. Cash Awards shall
be evidenced by an Agreement between the Company and the Grantee. Each Agreement
may provide for partial payment of Cash Awards if Performance Goals are not met.
Each Agreement may contain restrictions, and terms and conditions as the
Committee may, in its discretion, require.

                                       16
<PAGE>   21

     (a)  Payment of Awards. After the end of each Performance Period, provided
          the specified Performance Goal in the applicable Agreement is met so
          as to justify a Cash Award, a Grantee's Cash Award shall be added to
          his account in the Performance Sharing Bank. After such addition,
          thirty-three percent (33%) of the Grantee's Bank Balance shall be paid
          to him, in cash, as soon as administratively practicable after the
          last day of the Performance Period to which such Award relates. A
          Participant may elect to defer receipt of a Cash Award which would
          otherwise be payable to him during a calendar year if he elects to so
          defer pursuant to the terms of the Company's Deferred Compensation
          Plan.

     (b)  Termination of Employment. The Agreement shall set forth the terms and
          conditions of the grant of Cash Awards upon the termination of the
          Grantee's employment with the Company, a Subsidiary, or a Division
          (including a Grantee's ceasing to be employed by a Subsidiary or
          Division as a result of the sale of such Subsidiary or Division or an
          interest in such Subsidiary or Division) as the Committee may, in its
          discretion, determine at the time the Award is granted or thereafter.
          Unless the Agreement provides otherwise, if the Grantee's employment
          with the Company and its Subsidiaries terminates during the
          Performance Period due to the Grantee's Retirement, Disability, death,
          or involuntary termination without Cause (whether due to corporate
          reorganization, job elimination, Change in Control or otherwise), the
          Grantee shall be entitled to a cash payment of his undistributed Bank
          Balance as soon as administratively practicable after such termination
          of employment. Unless the Agreement provides otherwise, subject to
          Section 9.4, if the Grantee's employment with the Company or a
          Subsidiary terminates during the Performance Period for any reason
          other than the Grantee's Retirement, Disability, death, or involuntary
          termination without Cause (whether due to corporate reorganization,
          job elimination, Change in Control or otherwise), the Grantee's Bank
          Balance will be forfeited on the date of such termination of
          employment. If a Grantee's employment is terminated during a
          Performance Period involuntarily without Cause (whether due to
          corporate reorganization, job elimination, Change in Control or
          otherwise), or due to death or Disability, and a Cash Award would have
          been paid to the Participant's Performance Sharing Bank if the Grantee
          had remained employed throughout the entire Performance Period, then a
          credit shall be made to such Grantee's Performance Sharing Bank equal
          to the credit which would have been made had the Grantee been employed
          for the entire Performance Period, pro rated for the number of days
          the Grantee actually was employed during the Performance Period.

     (c)  Maximum Awards under Sections 9.2 and 9.3. In no event shall a
          Grantee's combined vested Restricted Stock resulting from Performance
          Share Awards (i.e. which vest during the calendar year and become
          Shares) and Cash Awards payable to the Grantee from the Performance
          Sharing Bank for a calendar year exceed $1,000,000, and any excess
          amounts shall be carried forward to the next

                                       17
<PAGE>   22

          calendar year for payment, subject to the same $1,000,000 limitation
          in such succeeding year.

     9.4 EFFECT OF CHANGE IN CONTROL. Notwithstanding anything contained in this
Plan to the contrary, in the event of a Change in Control:

          (a)  With respect to Cash Awards, the Grantee shall be entitled to
               receive a pro rata share of the Cash Award which would have been
               payable for the entire Performance Period in which such Change in
               Control occurs, provided that the Cash Award shall be calculated
               as if the Performance Goal was exactly achieved. The pro rata
               share shall be based on the number of days during the Performance
               Period which precede the date of the Change in Control. Subject
               to any conditions the Committee may specify, the Grantee shall
               also be entitled to receive a cash payment equal to the amount of
               the Grantee's Bank Balance, if any, immediately prior to, upon or
               as soon as administratively practicable after such Change in
               Control.

          (b)  With respect to Performance Shares, all Performance Goals for the
               Performance Period in which the Change of Control occurs shall be
               deemed met and all restrictions on such Performance Shares shall
               lapse immediately. All Performance Shares shall be converted to
               Restricted Stock. All Restricted Stock shall be fully vested, so
               as to convert such Restricted Stock to Shares.

     9.5 NON-TRANSFERABILITY. No Performance Awards shall be transferable by the
Grantee otherwise than by will or the laws of descent and distribution.

     9.6 MODIFICATION OR SUBSTITUTION. Subject to the terms of this Plan, the
Committee may modify outstanding Performance Awards or accept the surrender of
outstanding Performance Awards and grant new Performance Awards in substitution
therefor. Notwithstanding the foregoing, no modification of a Performance Award
shall adversely alter or impair any rights or obligations under the Agreement
without the Grantee's written consent.

                                    ARTICLE X

                                      LOANS

     10.1 LOANS. The Company or any Subsidiary may make loans to a Grantee or
Optionee in connection with the exercise of an Option, subject to the following
terms and conditions and such other terms and conditions not inconsistent with
this Plan including the rate of interest (if any) imposed by the Committee from
time to time.

     10.2 MAXIMUM AMOUNT OF LOAN. No loan made under this Plan shall exceed the
sum of (a) the aggregate purchase price payable pursuant to the Option with
respect to which the loan is made, plus (b) the amount of the reasonably
estimated income taxes payable by the Optionee

                                       18
<PAGE>   23

or Grantee with respect to the Option or Award. In no event may any such loan
exceed the Fair Market Value, at the date of exercise, of any such Shares.

     10.3 TERM. No loan shall have an initial term exceeding ten (10) years;
provided, however, that loans under this Plan shall be renewable at the
discretion of the Committee.

     10.4 REPAYMENT. Loans under this Plan may be satisfied by an Optionee or
Grantee either in cash or, with the consent of the Committee, in whole or in
part by the transfer to the Company of Shares whose Fair Market Value on the
date of such payment is equal to the cash amount for which such Shares are
transferred.

     10.5 SECURITY. Each loan shall be secured by a pledge of Shares with a Fair
Market Value of not less than the principal amount of the loan. After partial
repayment of a loan, pledged Shares no longer required as security may be
released into escrow or pursuant to the terms of the Option, Award or escrow
agreement to the Optionee or Grantee (as the case may be).

                                   ARTICLE XI

                    ADJUSTMENT UPON CHANGES IN CAPITALIZATION

     11.1 ADJUSTMENTS. In the event of a Change in Capitalization, the Committee
shall conclusively determine the appropriate adjustments, if any, to (a) the
maximum number and class of Shares or other stock or securities with respect to
which Options or Awards may be granted under this Plan, (b) the number and class
of Shares or other stock or securities which are subject to outstanding Options
or Awards granted under this Plan, and (c) the purchase price therefor, if
applicable.

     11.2 LIMITATIONS REGARDING INCENTIVE STOCK OPTIONS. Any such adjustment in
the Shares or other stock or securities subject to outstanding Incentive Stock
Options (including any adjustments in the purchase price) shall be made in such
manner as not to constitute a modification as defined by Section 425(h)(3) of
the Code and only to the extent otherwise permitted by Sections 422 and 425 of
the Code.

     11.3 CONTINUATION OF CONDITIONS, RESTRICTIONS, ETC. If, by reason of a
Change in Capitalization, a Grantee of an Award shall be entitled to, or an
Optionee shall be entitled to exercise an Option with respect to, new,
additional or different shares of stock, securities, Performance Units or
Performance Shares (other than rights or warrants to purchase securities), such
new additional or different shares shall thereupon be subject to all of the
conditions, restrictions and performance criteria which were applicable to the
Performance Units or Performance Shares pursuant to the Award or Shares subject
to the Option, as the case may be, prior to such Change in Capitalization.

                                       19
<PAGE>   24

                                   ARTICLE XII

                         EFFECT OF CERTAIN TRANSACTIONS

     Subject to Sections 6.9, 7.9, 8.3(b) and 9.5 hereof, in the event of (a)
the liquidation or dissolution of the Company or (b) a merger or consolidation
of the Company (a "Transaction"), this Plan and the Options and Awards issued
hereunder shall continue in effect in accordance with their respective terms and
each Optionee and Grantee shall be entitled to receive in respect of each Share
subject to any outstanding Options or Awards, as the case may be, upon exercise
of any option or Award or payment or transfer in respect of any Award, the same
number and kind of stock, securities, cash, property, or other consideration
that each holder of a Share was entitled to receive in the Transaction in
respect of a Share.

                                  ARTICLE XIII

                        RELEASE OF FINANCIAL INFORMATION

     A copy of the Company's annual report to stockholders shall be delivered to
each Optionee and Grantee at the time such report is distributed to the
Company's stockholders. Upon reasonable request the Company shall furnish, as
soon as reasonably practicable, to each Optionee and Grantee a copy of its most
recent annual report and each quarterly report and current report filed under
the Exchange Act since the end of the Company's prior fiscal year.

                                   ARTICLE XIV

                     TERMINATION AND AMENDMENT OF THIS PLAN

     14.1 TERMINATION. This Plan shall terminate on the day immediately
preceding the tenth (10th) anniversary of its effective date and no Option or
Award may be granted thereafter. The Board may sooner terminate or amend this
Plan (other than to reduce the rights of Optionees and Grantees, as the case may
be, under Sections 6.9, 7.9, 8.3(b) and 9.5 hereof), at any time and from time
to time; provided, however, that to the extent necessary under Section 16(b) of
the Exchange Act and the rules and regulations promulgated thereunder, no
amendment shall be effective unless approved by the stockholders of the Company
in accordance with applicable law and regulations at an annual or special
meeting held within twelve (12) months before or after the date of adoption of
such amendment.

     14.2 AMENDMENT. Except as provided in Articles XI and XII hereof, rights
and obligations under any Option or Award granted before any amendment of this
Plan shall not be

                                       20
<PAGE>   25

adversely altered or impaired by such amendment, except with the written consent
of the Optionee or Grantee, as the case may be.

                                   ARTICLE XV

                          NON-EXCLUSIVITY OF THIS PLAN

     The adoption of this Plan by the Board and approval by the Company's
shareholders shall not be construed as amending, modifying or rescinding any
previously approved incentive arrangement or as creating any limitations on the
power of the Board to adopt such other incentive arrangements as it may deem
desirable.

                                   ARTICLE XVI

                             LIMITATION OF LIABILITY

     As illustrative of the limitations of liability of the Company, but not
intended to be exhaustive thereof, nothing in this Plan shall be construed to:

          (a)  give any person any right to be granted an Option or Award other
               than at the sole discretion of the Committee;

          (b)  give any person any rights whatsoever with respect to Shares
               except as specifically provided in this Plan;

          (c)  limit in any way the right of the Company to terminate the
               employment of any person at any time; or

          (d)  be evidence of any agreement or understanding, expressed or
               implied, that the Company will employ any person in any
               particular position at any particular rate of compensation or for
               any particular period of time.

                                  ARTICLE XVII

                 REGULATIONS AND OTHER APPROVALS, GOVERNING LAW

     17.1 GOVERNING LAW. This Program and the rights of all persons claiming
hereunder shall be construed and determined in accordance with the laws of the
State of Georgia without giving effect to the conflicts of laws principles
thereof, except to the extent that such law is preempted by federal law.

                                       21
<PAGE>   26

     17.2 CONDITIONS. The obligation of the Company to sell or deliver Shares
with respect to Options and Awards granted under this Plan shall be subject to
all applicable laws, rules and regulations, including all applicable federal and
state securities laws, and the obtaining of all such approvals by governmental
agencies as may be deemed necessary or appropriate by the Board.

     17.3 RULE 16b-3. This Plan is intended to comply with Rule 16b-3
promulgated under the Exchange Act and the Committee shall interpret and
administer the provisions of this Plan or any Agreement in a manner consistent
therewith. Any provisions inconsistent with such Rule shall be inoperative and
shall not affect the validity of this Plan.

     17.4 AUTHORITY OF THE BOARD. The Board may make such changes as may be
necessary or appropriate to comply with the rules and regulations of any
government authority, or to obtain for Eligible Employees granted Incentive
Stock Options the tax benefits under the applicable provisions of the Code and
regulations promulgated thereunder. The Board, in its sole discretion, may also
make Awards to Eligible Directors except in no case shall the Board award such
Eligible Directors Incentive Stock Options.

     17.5 EFFECT OF SECURITIES LAWS. Each Option and Award is subject to the
requirement that, if at any time the Committee determines, in its discretion,
that the listing, registration or qualification of Shares issuable pursuant to
this Plan is required by any securities exchange or under any state or federal
law, or the consent or approval of any governmental regulatory body is necessary
or desirable as a condition of, or in connection with, the grant of an Option or
the issuance of Shares, no Options shall be granted or payment made or Shares
issued, in whole or in part, unless listing, registration, qualification,
consent or approval has been effected or obtained free of any conditions as
acceptable to the Committee.

     17.6 REGISTRATION. The Company shall have no obligation to register, under
any federal or state securities laws, any Shares acquired pursuant to this Plan.
Notwithstanding anything contained in this Plan to the contrary, in the event
that the disposition of Shares acquired pursuant to this Plan is not covered by
a then current registration statement under the Securities Act of 1933, as
amended, and is not otherwise exempt from such registration, such Shares shall
be restricted against transfer to the extent required by the Securities Act of
1933, as amended, and Rule 144 or other regulations thereunder. The Committee
may require any individual receiving Shares pursuant to this Plan, as a
condition precedent to receipt of such Shares (including upon exercise of an
Option), to represent and warrant to the Company in writing that the Shares
acquired by such individual are acquired without a view to any distribution
thereof and will not be sold or transferred other than pursuant to an effective
registration thereof under said Act or pursuant to an exemption applicable under
the Securities Act of 1933, as amended, or the rules and regulations promulgated
thereunder. The certificates evidencing any of such Shares shall bear an
appropriate legend to reflect their status as restricted securities as
aforesaid.

                                       22
<PAGE>   27

                                  ARTICLE XVIII

                                  MISCELLANEOUS

     18.1 MULTIPLE AGREEMENTS. The terms of each Option or Award may differ from
other Options or Awards granted under this Plan at the same time, or at some
other time. The Committee may also grant more than one Option or Award to a
given Eligible Employee during the term of this Plan, either in addition to, or
in substitution for, one or more Options or Awards previously granted to that
Eligible Employee. The grant of multiple Options, Awards, or both may be
evidenced by a single Agreement or multiple Agreements, as determined by the
Committee.

     18.2 WITHHOLDING OF TAXES.

     (a)  The Company shall have the right to deduct from any distribution of
          cash to any Optionee or Grantee an amount equal to the federal, state
          and local income taxes and other amounts as may be required by law to
          be withheld (the "Withholding Taxes") with respect to any Option or
          Award. If an Optionee or Grantee is entitled to receive Shares upon
          exercise of an Option or pursuant to an Award, the Optionee or Grantee
          shall pay the Withholding Taxes to the Company prior to the issuance,
          or release from escrow, of such Shares. In satisfaction of the
          Withholding Taxes to the Company, the Optionee or Grantee may make a
          written election (the "Tax Election") which may be accepted or
          rejected in the discretion of the Committee, to have withheld a
          portion of the Shares issuable to him or her upon exercise of the
          Option or pursuant to an Award having an aggregate Fair Market Value
          equal to the Withholding Taxes, provided that (i) in respect of an
          Optionee or Grantee who may be subject to liability under Section
          16(b) of the Exchange Act (unless his or her employment was terminated
          due to Disability or death), (A) the Optionee or Grantee makes the Tax
          Election at least six (6) months after the date the Option or Award
          was granted and (B) the Tax Election is made either at least six (6)
          months prior to the date that the amount of the Withholding Taxes are
          determined (the "Tax Date") or during the ten (10) day period
          beginning on the third business day and ending on the twelfth business
          day following the release for publication of the Company's quarterly
          or annual statements of earnings, (ii) the Tax Election is made prior
          to the Tax Date, and (iii) the Tax Election is irrevocable; provided,
          however, in the event that the Tax Date occurs subsequent to the
          exercise of the Option or issuance of Shares, the Optionee or Grantee
          shall tender back to the Company on the Tax Date that

                                       23
<PAGE>   28

          number of Shares having a Fair Market Value on the date preceding the
          Tax Date at least equal to the Withholding Taxes.

     (b)  If an Optionee makes a disposition, within the meaning of Section
          425(c) of the Code and Regulations promulgated thereunder, of any
          Share or Shares issued to him pursuant to his exercise of the Option
          within the two (2) year period commencing on the day after the date of
          the grant or within the one year period commencing on the day after
          the date of transfer of such Share or Shares to the Optionee pursuant
          to such exercise, the Optionee shall, within ten (10) days such
          disposition, notify the Company thereof, by delivery of written notice
          to the Company at its principal executive office, and immediately
          deliver to the Company the amount of Withholding Taxes.

     18.3 DESIGNATION OF BENEFICIARY. Each Optionee and Grantee may designate a
person or persons to receive, in the event of his or her death, any Option or
Award or any amount payable pursuant thereto, to which he or she would then be
entitled. Such designation will be made upon forms supplied by and delivered to
the Company and may be revoked in writing. If an Optionee or Grantee fails
effectively to designate a beneficiary, then his or her estate shall be deemed
to be the beneficiary.

     18.4 NOTICES. All notices, requests, demands and other communications
required of or from any Grantee or Optionee under, or in connection with, this
Plan (other than pursuant to Article XIII hereof) shall be in writing, and shall
be deemed to have been duly given if delivered or mailed by registered or
certified mail and return receipt requested, postage prepaid, or by overnight
courier service, charges prepaid, to the Company at its then current main
business office address; all such notices shall be deemed duly given on the day
delivered or, if mailed, on the fifth day following the postmark date.

                                   ARTICLE XIX

                                 EFFECTIVE DATE

     The effective date of this Plan shall be January 1, 2001 provided that any
Awards issued after 2000 shall be subject to the approval of this Restated Plan
by the affirmative vote of the holders of a majority of the securities of the
Company present, or represented, and entitled to vote at a meeting of
stockholders duly held in accordance with the applicable laws of the State of
Georgia within twelve (12) months of such adoption.

                                       24
<PAGE>   29

     IN WITNESS WHEREOF, the Company has caused this Plan to be executed and
delivered by its officer, all as of the _____ day of __________, 200_.

ATTEST:                                   ALLIED HOLDINGS, INC.

____________________________________      By:_________________________________
Its Secretary

[CORPORATE SEAL]                          Title:_______________________________

                                       25
<PAGE>   30

                              ALLIED HOLDINGS, INC.
                           PERFORMANCE SHARE AGREEMENT

     THIS PERFORMANCE SHARE AGREEMENT is made as of the _____ day of
___________, _____ (the "Grant Date"), between Allied Holdings, Inc., a Georgia
corporation (the "Company"), and ___________________________ (the "Grantee").

     WHEREAS, the Company has adopted the Allied Holdings, Inc. Long-Term
Incentive Plan, as restated as of January 1, 2001, to provide additional
incentive to certain officers and employees of the Company and its Subsidiaries
(the "Plan"); and

     WHEREAS, the Grantee has been selected to receive a Performance Share Award
on the terms and conditions hereinafter set forth;

     NOW, THEREFORE, for and in consideration of the mutual covenants and
conditions hereinafter set forth, and other good and valuable consideration, the
receipt, adequacy and sufficiency of which is hereby acknowledged, the parties
hereto agree as follows:

     1. INCORPORATION OF PLAN. This Agreement shall be construed in accordance
and consistent with, and subject to, the provisions of the Plan, the provisions
of which are incorporated herein by reference, and, except as otherwise
expressly set forth herein, the capitalized terms used in this Agreement shall
have the same definitions as set forth in the Plan. The Grantee hereby
acknowledges receipt of a copy of the Plan and agrees to be bound by all of the
terms and provisions thereof.

     2. SPECIAL DEFINITIONS. As used in this Agreement, the following terms
shall have the meaning set forth:

     (a) "Actual Net Income" means the Net Income of the Company, or if the
Performance Goal is limited to a Subsidiary or Division, the Net Income of such
Subsidiary or Division, for the Performance Period.

     (b) "Maximum Stock Award" means the maximum number of Shares available to
be awarded as Restricted Stock as set forth on Exhibit A.

     (c) "Net Income" means the income, net of expenses of the Company (or a
Subsidiary or Division, if applicable) calculated for Performance Period
according to generally accepted accounting principles (GAAP).

     (d) "Net Income Threshold" means the dollar amount equal to the percentage
specified in Exhibit A under "Net Income Threshold" multiplied by the
Performance Goal for Net Income for the Performance Period.

                                  Page 1 of 6
<PAGE>   31

     (e) "Performance Goal for Net Income" shall mean a Net Income amount which,
if it is exactly realized by the Company (or Division or Subsidiary if
applicable) for a Performance Period, shall result in full crediting of a
Maximum Stock Award.

     3. GRANT OF STOCK

     (a) The Company hereby grants to Grantee such whole Shares (the "Restricted
Stock") as set forth in Exhibit A, the provisions of which are incorporated
herein by reference, subject to, and in accordance with, the terms and
conditions set forth in this Agreement, and subject to the restrictions of
Section 3(b) of this Agreement.

     (b) Grantee shall be awarded such percentage of the Maximum Stock Award as
Restricted Stock as follows:

          (i) If the Performance Goal for Net Income is achieved or exceeded
     during the Performance Period, Grantee shall be awarded 100% of the Maximum
     Stock Award.

          (ii) If the Net Income Threshold is not achieved during the
     Performance Period, Grantee shall be awarded 50% of the Maximum Stock
     Award.

          (iii) If the Net Income Threshold is achieved but the Performance Goal
     for Net Income is not achieved, Performance Shares shall be awarded in a
     number which shall equal the ratio of the Actual Net Income divided by the
     Performance Goal for the Net Income multiplied by the Maximum Stock Award.

     4. VESTING. Each Award of Restricted Stock shall be one-third (1/3) vested
as of the first day following the Performance Period to which such Award
relates. (This is so even though the exact Award is not determined until after
such day.) Thereafter, provided the Grantee remains employed by the Company or
its Subsidiary, an additional one-third (1/3) of the Restricted Stock shall vest
on the first anniversary of the first day following the Performance Period to
which the award of such Shares relate. Provided the Grantee remains employed by
the Company or its Subsidiary, all shares of an Award of Restricted Stock shall
be one hundred percent (100%) vested on the second anniversary of the first day
following the Performance Period to which the Award of such Shares relates. If
the Grantee's employment with the Company or its Subsidiary terminates due to
the Grantee's Retirement, Disability or death, all of the Grantee's unvested
shares of Restricted Stock shall immediately become one hundred percent (100%)
vested. If the Grantee's employment with the Company or its Subsidiary is
terminated for any other reason, the Grantee shall be entitled to all shares of
Restricted Stock already vested and all unvested shares of such Restricted Stock
shall be forfeited. If any shares are forfeitable upon such termination, Grantee
shall surrender his Certificate to the Company for cancellation, and the Company
shall issue a new stock certificate to the Grantee for the Restricted Stock
which was nonforfeitable on the date of such termination.

     5. WITHHOLDING OF TAXES. The Company may deduct and withhold from the
wages, salary, bonus and other income paid by the Company or such Subsidiary to
the Grantee the

                                  Page 2 of 6
<PAGE>   32

requisite tax upon the amount of taxable income, if any, recognized by the
Grantee in connection with the issuance of any Restricted Stock, or the effect
of any Restricted Stock becoming nonforfeitable, as may be required from time to
time under any federal or state tax laws and regulations. This withholding of
tax shall be made from the Company's concurrent or next payment of wages,
salary, bonus or other income to the Grantee or by payment to the Company by the
Grantee of the required withholding tax, as shall be determined by the Company.

     6. DIVIDENDS AND VOTING RIGHTS. The Participant shall be entitled to
receive any dividends paid with respect to shares of Restricted Stock that
become payable during the Restricted Period; provided, however, that no
dividends shall be payable to or for the benefit of the Participant with respect
to record dates occurring prior to the Grant Date, or with respect to record
dates occurring on or after the date, if any, on which the Participant has
forfeited the Restricted Stock. The Participant shall be entitled to vote the
shares of Restricted Stock during the Restricted Period to the same extent as
would have been applicable to the Participant if the Participant was then vested
in the shares; provided, however, that the Participant shall not be entitled to
vote the shares with respect to record dates for such voting rights arising
prior to the Grant Date, or with respect to record dates occurring on or after
the date, if any, on which the Participant has forfeited the Restricted Stock.

     7. EFFECT OF CHANGE IN CONTROL. Notwithstanding anything contained in this
Agreement to the contrary, in the event of a Change in Control, all Restricted
Stock shall become immediately nonforfeitable as of the effective date of such
Change of Control.

     8. NONTRANSFERABILITY. The rights herein granted to Grantee shall not be
transferable other than by will or by the laws of descent and distribution.

     9. LEGEND ON STOCK CERTIFICATE. Any Restricted Stock issued pursuant to
this Agreement shall have endorsed thereon legends substantially as follows:

          "THE VOTING AND OWNERSHIP RIGHTS IN THE SHARES EVIDENCED BY THIS
          CERTIFICATE ARE SUBJECT TO THAT CERTAIN PERFORMANCE SHARE AGREEMENT
          (THE "AGREEMENT") DATED AS OF ______________, _____, BY AND BETWEEN
          ALLIED HOLDINGS, INC. (THE "COMPANY") AND THE HOLDER HEREOF, A COPY OF
          WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE
          COMPANY. PURSUANT TO THE AGREEMENT (A) ONE-THIRD (1/3) OF THE SHARES
          EVIDENCED BY THIS CERTIFICATE BECOME NONFORFEITABLE ON THE FIRST
          ANNIVERSARY OF THE LAST DAY OF THE PERFORMANCE PERIOD TO WHICH SUCH
          AWARD RELATES AND AN ADDITIONAL ONE-THIRD (1/3) BECOME NONFORFEITABLE
          ON EACH OF THE SECOND AND THIRD ANNIVERSARIES OF SAID LAST DAY OF THE
          PERFORMANCE PERIOD TO WHICH SUCH AWARD RELATES; AND (B) ALL SHARES
          EVIDENCED BY THIS CERTIFICATE NOT PREVIOUSLY

                                  Page 3 of 6
<PAGE>   33

          NONFORFEITABLE BECOME NONFORFEITABLE UPON THE OCCURRENCE OF A "CHANGE
          OF CONTROL," AS DEFINED IN THE PLAN PURSUANT TO WHICH THE AGREEMENT
          WAS CREATED.

          THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
          UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR APPLICABLE
          STATE SECURITIES LAWS. THE SHARES MAY NOT BE SOLD, TRANSFERRED OR
          ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR
          THESE SHARES UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR AN
          OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS
          NOT REQUIRED UNDER THE ACT OR SUCH STATE SECURITIES LAW.

In addition, the Certificate or any other certificates evidencing Restricted
Stock shall bear such legends and shall be subject to such restrictions on
transfer as may be necessary to comply with all applicable federal and state
securities laws and regulations.

     10. NO RIGHT TO CONTINUED EMPLOYMENT. Nothing in this Agreement or the Plan
shall be interpreted or construed to confer upon the Grantee any right with
respect to continuance of employment by the Company nor shall this Agreement or
the Plan interfere in any way with the right of the Company to terminate the
Grantee's employment at any time.

     11. ADJUSTMENTS. In the event of a Change in Capitalization, the Board or
the Committee, as applicable, shall make appropriate adjustments to the number
and class of Restricted Stock or other stock or securities subject to the Plan.
Such adjustment shall be made in accordance with the provisions of Article XI of
the Plan and shall be effective and final, binding, and conclusive for all
purposes of the Plan and this Agreement.

     12. TERMINATING EVENTS. Subject to Section 4 hereof, upon the effective
date of a merger or consolidation of the Company (hereinafter referred to as a
"Transaction"), all rights with respect to the Restricted Stock shall continue
in effect and the Grantee shall be entitled to receive in respect of all
Restricted Stock, the same number and kind of stock, securities, cash, property,
or other consideration that each holder of nonforfeitable the Company stock was
entitled to receive in the Transaction.

     13. MODIFICATION OF AGREEMENT. This Agreement can be modified, amended,
suspended or terminated, and any terms or conditions can be waived, but only by
a written instrument executed by the parties hereto.

     14. SEVERABILITY. If any provision of this Agreement shall be held by a
court of competent jurisdiction to be unenforceable or invalid for any reason,
the remaining provisions of this Agreement shall not be affected by such holding
and shall continue in full force in accordance with their terms.

                                  Page 4 of 6
<PAGE>   34

     15. GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Georgia without giving effect to the conflicts-of-laws principles thereof.

     16. SUCCESSORS IN INTEREST. This Agreement shall inure to the benefit of,
and be binding upon, each successor to the Company. This Agreement shall inure
to the benefit of the Grantee's legal representatives. All obligations imposed
upon the Grantee and all rights granted to the Company under this Agreement
shall be final, binding and conclusive upon the Grantee and Grantee's heirs,
executors, administrators and successors.

     17. RESOLUTION OF DISPUTES. Any dispute or disagreement which may arise
under, or as a result of, or in any way relate to, the interpretation,
construction or application of this Agreement shall be determined by the
Company's Board of Directors or Committee. Any determination made hereunder
shall be final, binding, and conclusive on the Grantee and the Company for all
purposes.

     18. MISCELLANEOUS. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original, but all of which
together shall constitute but a single document. As used herein, the masculine,
feminine and neuter shall each include the others and the singular and plural
shall each include the other, and this Agreement shall be read accordingly when
required by the facts. As used herein, "the Company" includes not only Allied
Holdings, Inc., but also each subsidiary thereof, and this Agreement shall be
read accordingly when required by the facts.

     IN WITNESS WHEREOF, the Grantee has executed this Agreement and the Company
has caused this Agreement to be executed by its duly authorized Officers, all
the day and year first set forth above.

GRANTEE:                                  ALLIED HOLDINGS, INC.

____________________________________      By:_________________________________
[NAME]
                                          Its:________________________________

                                  Page 5 of 6
<PAGE>   35

                                    EXHIBIT A

                  PERFORMANCE MEASURES AND MAXIMUM STOCK AWARD

     Following are the performance measures and Maximum Stock Award pursuant to
the attached Agreement:

      Grantee:__________________________________________________________

      Grant Date:_______________________________________________________

      Performance Period--Fiscal Year of the Company Ended:_____________

      Maximum Stock Award:___________________________________

      Net Income Threshold (%):______________________________

      Performance Goal for Net Income:_______________________

Dated:______________________________

GRANTEE:____________________________             ALLIED HOLDINGS, INC.

____________________________________      By:_________________________________
[NAME]
                                          As Its:_____________________________

                                  Page 6 of 6
<PAGE>   36

                              ALLIED HOLDINGS, INC.
                              CASH AWARD AGREEMENT

     THIS CASH AWARD AGREEMENT is made as of the _____ day of ___________, _____
(the "Grant Date"), between Allied Holdings, Inc., a Georgia corporation (the
"Company"), and ___________________________ (the "Grantee").

     WHEREAS, the Company has adopted the Allied Holdings, Inc. Long-Term
Incentive Plan, as restated as of January 1, 2001, to provide additional
incentive to certain officers and employees of the Company and its Subsidiaries
(the "Plan"); and

     WHEREAS, the Grantee has been selected to receive a Cash Award on the terms
and conditions hereinafter set forth;

     NOW, THEREFORE, for and in consideration of the mutual covenants and
conditions hereinafter set forth, and other good and valuable consideration, the
receipt, adequacy and sufficiency of which is hereby acknowledged, the parties
hereto agree as follows:

     1. INCORPORATION OF PLAN. This Agreement shall be construed in accordance
and consistent with, and subject to, the provisions of the Plan, the provisions
of which are incorporated herein by reference, and, except as otherwise
expressly set forth herein, the capitalized terms used in this Agreement shall
have the same definitions as set forth in the Plan. The Grantee hereby
acknowledges receipt of a copy of the Plan and agrees to be bound by all of the
terms and provisions thereof.

     2. SPECIAL DEFINITIONS. As used in this Agreement, the following terms
shall have the meaning set forth:

     (a) "Actual Net Income" means the Net Income of the Company, or if the
Performance Goal is limited to a Subsidiary or Division, the Net Income of such
Subsidiary or Division, for the Performance Period.

     (b) "Award Percentage" means the Grantee's percentage share of the total
Award Pool.

     (c) "Award Pool" means the total amount awarded to all Grantees under the
Cash Award portion of the Plan for the Performance Period.

     (d) "Maximum Award Pool" means Award Pool which shall be granted if the
Actual Net Income equals or exceeds the Maximum Awardable Net Income.

     (e) "Maximum Awardable Net Income" means the Net Income amount necessary to
produce the Maximum Award Pool.

                                  Page 1 of 6
<PAGE>   37

     (f) "Net Income" means the income, net of expenses, of the Company (or a
Subsidiary or Division, as applicable) calculated for the Performance Period
according to generally accepted accounting principles (GAAP).

     (g) "Net Income Threshold" means the percentage (not more than 100%) of the
Performance Goal for Net Income for the Performance Period as specified in
Exhibit A.

     (h) "Performance Goal for Net Income" shall mean a Net Income amount which,
if it is exactly realized by the Company (or Division or Subsidiary if
applicable) for a Performance Period, shall result in full crediting of a Cash
Award equal to the Grantee's Award Percentage of the Full Award to the Grantee's
Performance Sharing Bank.

     (i) "Full Award" shall mean the amount which shall be credited to all
Grantees' Performance Sharing Banks if the Performance Goal for Net Income is
attained but not exceeded.

     3. GRANT OF AWARD.

     (a) The Company hereby grants to Grantee such Cash Award as set forth in
Exhibit A, the provisions of which are incorporated herein by reference, subject
to, and in accordance with, the terms and conditions set forth in this
Agreement, subject to the provisions of Section 3(b).

     (b) Grantee shall be awarded a Cash Award equal to the following:

            (i) If the Actual Net Income for the Performance Period does not
      equal at least the Net Income Threshold, Grantee shall not receive a Cash
      Award for the Performance Period.

            (ii) If the Actual Net Income for the Performance Period equals or
      exceeds the Net Income Threshold, Grantee shall be awarded a Cash Award
      equal to the product of the Award Percentage multiplied by the Award Pool.
      The Award Pool shall equal one-hundred percent (100%) of the Full Award,
      but no more, if the Performance Goal for Net Income is exactly attained.
      If the Actual Net Income exceeds the Net Income Threshold but does not
      exceed the Performance Goal for Net Income, then the Award Pool shall
      equal the Full Amount multiplied by the ratio of the Actual Net Income
      divided by the Performance Goal for Net Income. If the Actual Net Income
      equals or exceeds the Maximum Awardable Net Income, then the Award Pool
      shall equal the Maximum Award Pool. If the Actual Net Income exceeds the
      Performance Goal for Net Income, but is less than the Maximum Awardable
      Net Income, then the Award Pool shall be increased proportionately from
      the Full Award to the Maximum Award Pool to the degree the excess of the
      Actual Net Income over the Performance Goal for Net Income compares to the
      excess of Maximum Awardable Net Income over the Performance Goal for Net
      Income.

                                  Page 2 of 6
<PAGE>   38

     4. PERFORMANCE SHARING BANK. The Cash Award shall be added to the Grantee's
Performance Sharing Bank account. After taking into account any addition to the
Grantee's Performance Sharing Bank for the immediately preceding Performance
Period (if any), thirty-three percent (33%) of the Grantee's Bank Balance shall
be distributed to the Grantee in one lump-sum cash payment.

     5. WITHHOLDING.

     The Company may deduct and withhold from the wages, salary, bonus and other
income paid by the Company or such Subsidiary to the Grantee the requisite tax
upon the amount of taxable income, if any, recognized by the Grantee in
connection with the payment of such portion of the Bank Balance as is set forth
in Section 4 of this Agreement, as may be required from time to time under any
federal or state tax laws and regulations. This withholding of tax shall be made
from the Company's concurrent or next payment of wages, salary, bonus or other
income to the Grantee or by payment to the Company by the Grantee of the
required withholding tax, as shall be determined by the Company.

     6. EFFECT OF CHANGE IN CONTROL, RETIREMENT, DEATH, DISABILITY AND OTHER
TERMINATION. Notwithstanding anything contained in this Agreement to the
contrary, in the event of a Change in Control, Retirement, death of the Grantee,
Disability of Grantee, or involuntary termination of Grantee without Cause
(whether due to corporate reorganization, job elimination or otherwise), the
Grantee's entire Bank Balance shall become immediately distributable as of the
effective date of such Change of Control, Retirement, death, Disability, or
involuntary termination without Cause. If the Grantee's employment with the
Company is terminated either voluntarily on the Grantee's part or for Cause by
the Company, the Grantee's entire Bank Balance shall be forfeited.

     7. NONTRANSFERABILITY. The rights herein granted to Grantee shall not be
transferable other than by will or by the laws of descent and distribution.

     8. NO RIGHT TO CONTINUED EMPLOYMENT. Nothing in this Agreement or the Plan
shall be interpreted or construed to confer upon the Grantee any right with
respect to continuance of employment by the Company nor shall this Agreement or
the Plan interfere in any way with the right of the Company to terminate the
Grantee's employment at any time.

     9. TERMINATING EVENTS. Subject to Section 4 hereof, upon the effective date
of a merger or consolidation of the Company (hereinafter referred to as a
"Transaction"), all rights with respect to the Cash Awards shall continue in
effect.

     10. MODIFICATION OF AGREEMENT. This Agreement can be modified, amended,
suspended or terminated, and any terms or conditions can be waived, but only by
a written instrument executed by the parties hereto.

     11. SEVERABILITY. If any provision of this Agreement shall be held by a
court of competent jurisdiction to be unenforceable or invalid for any reason,
the remaining provisions of

                                  Page 3 of 6
<PAGE>   39

this Agreement shall not be affected by such holding and shall continue in full
force in accordance with their terms.

     12. GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Georgia without giving effect to the conflicts-of-laws principles thereof.

     13. SUCCESSORS IN INTEREST. This Agreement shall inure to the benefit of,
and be binding upon, each successor to the Company. This Agreement shall inure
to the benefit of the Grantee's legal representatives. All obligations imposed
upon the Grantee and all rights granted to the Company under this Agreement
shall be final, binding and conclusive upon the Grantee and Grantee's heirs,
executors, administrators and successors.

     14. RESOLUTION OF DISPUTES. Any dispute or disagreement which may arise
under, or as a result of, or in any way relate to, the interpretation,
construction or application of this Agreement shall be determined by the
Company's Board of Directors or Committee. Any determination made hereunder
shall be final, binding, and conclusive on the Grantee and the Company for all
purposes.

     15. MISCELLANEOUS. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original, but all of which
together shall constitute but a single document. As used herein, the masculine,
feminine and neuter shall each include the others and the singular and plural
shall each include the other, and this Agreement shall be read accordingly when
required by the facts. As used herein, "the Company" includes not only Allied
Holdings, Inc., but also each subsidiary thereof, and this Agreement shall be
read accordingly when required by the facts.

                                  Page 4 of 6
<PAGE>   40

     IN WITNESS WHEREOF, the Grantee has executed this Agreement and the Company
has caused this Agreement to be executed by its duly authorized Officers, all
the day and year first set forth above.

GRANTEE:                                  ALLIED HOLDINGS, INC.

____________________________________      By:_________________________________
[NAME]
                                          Its:________________________________

                                  Page 5 of 6
<PAGE>   41

                                    EXHIBIT A

                       PERFORMANCE MEASURES AND CASH AWARD

      Grantee:__________________________________________________________

      Grant Date:_______________________________________________________

      Performance Period--Fiscal Year of the Company Ended:_____________

      Performance Goal for Net Income:__________________________________

      Full Award:_______________________________________________________

      Net Income Threshold:_____________________________________________

      Award Percentage:_________________________________________________

      Maximum Award Pool:_______________________________________________

      Maximum Awardable Net Income:_____________________________________

Dated:______________________________

GRANTEE:____________________________      ALLIED HOLDINGS, INC.

____________________________________      By:_________________________________
[NAME]
                                          As Its:_____________________________

                                  Page 6 of 6<PAGE>   1

                                                                    EXHIBIT 10.1

         SEVERANCE COMPENSATION AGREEMENT, dated as of April 5, 2001, between
O'Charley's Inc., a Tennessee corporation (the "Company"), and Steven J. Hislop
(the "Executive").

         The Company's Board of Directors has determined that it is appropriate
to reinforce and encourage the continued attention and dedication of certain
members of the Company's senior management, including the Executive, to their
assigned duties without distraction in potentially disturbing circumstances
arising from the possibility of a change in control of the Company.

         This Agreement sets forth the severance compensation which the Company
agrees it will pay to the Executive if the Executive's employment with the
Company terminates under one of the circumstances described herein following a
Change In Control of the Company (as defined herein).

         1.       TERM. This Agreement shall terminate, except to the extent
that any obligation of the Company hereunder remains unpaid as of such time,
upon the earliest of (i) three years from the date hereof if a Change in Control
of the Company has not occurred within such three-year period; (ii) the
termination of the Executive's employment with the Company based on death,
Disability (as defined in Section 3(b)), Retirement (as defined in Section 3(c))
or Cause (as defined in Section 3(d)) or by the Executive other than for Good
Reason (as defined in Section 3(e)); and (iii) eighteen months from the date of
a Change in Control of the Company if the Executive has not terminated his
employment for Good Reason as of such time.

         2.       CHANGE IN CONTROL. No compensation shall be payable under this
Agreement unless and until (a) there shall have been a Change in Control of the
Company while the Executive is still an employee of the Company and (b) the
Executive's employment by the Company thereafter shall have been terminated in
accordance with Section 3. For purposes of this Agreement, a Change in Control
means the happening of any of the following:

                           (i)      any person or entity, including a "group" as
         defined in Section 13(d)(3) of the Securities Exchange Act of 1934,
         other than the Company, a wholly-owned subsidiary thereof, any employee
         benefit plan of the Company or any of its Subsidiaries becomes the
         beneficial owner of the Company's securities having 30% or more of the
         combined voting power of the then outstanding securities of the Company
         that may be cast for the election of directors of the Company (other
         than as a result of an issuance of securities initiated by the Company
         in the ordinary course of business); or

                          (ii)      as the result of, or in connection with, any
         cash tender or exchange offer, merger or other business combination,
         sale of assets or contested election, or any combination of the
         foregoing transactions less than a majority of the combined voting
         power of the then outstanding securities of the Company or any
         successor corporation or entity entitled to vote generally in the
         election of the directors of the Company or such other corporation or
         entity after such transaction are held in the aggregate by the holders
         of the Company's securities entitled to vote generally in the election
         of directors of the Company immediately prior to such transaction; or

<PAGE>   2

                         (iii)      during any period of two consecutive years,
         individuals who at the beginning of any such period constitute the
         Board cease for any reason to constitute at least a majority thereof,
         unless the election, or the nomination for election by the Company's
         shareholders, of each director of the Company first elected during such
         period was approved by a vote of at least two-thirds of the directors
         of the Company then still in office who were directors of the Company
         at the beginning of any such period.

         3.       TERMINATION FOLLOWING CHANGE IN CONTROL. (a) If a Change in
Control of the Company shall have occurred while the Executive is still an
employee of the Company, the Executive shall be entitled to the compensation
provided in Section 4 upon the subsequent termination of the Executive's
employment with the Company by the Executive or by the Company unless such
termination is as a result of (i) the Executive's death; (ii) the Executive's
Disability (as defined in Section (3)(b) below); (iii) the Executive's
Retirement (as defined in Section 3(c) below); (iv) the Executive's termination
by the Company for Cause (as defined in Section 3(d) below); or (v) the
Executive's decision to terminate employment other than for Good Reason (as
defined in Section 3(e) below).

                  (b)      DISABILITY. If, as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall have been
absent from his duties with the Company on a full-time basis for six months and
within 30 days after written notice of termination is thereafter given by the
Company the Executive shall not have returned to the full-time performance of
the Executive's duties, the Company may terminate this Agreement for
"Disability."

                  (c)      RETIREMENT. The term "Retirement" as used in this
Agreement shall mean termination by the Company or the Executive of the
Executive's employment based on the Executive's having reached age 65 or such
other age as shall have been fixed in any arrangement established with the
Executive's consent with respect to the Executive.

                  (d)      CAUSE. The Company may terminate the Executive's
employment for Cause. For purposes of this Agreement only, the Company shall
have "Cause" to terminate the Executive's employment hereunder only on the basis
of fraud, misappropriation or embezzlement on the part of the Executive.
Notwithstanding the foregoing, the Executive shall not be deemed to have been
terminated for Cause unless and until there shall have been delivered to the
Executive a copy of a resolution duly adopted by the affirmative vote of not
less than three-quarters of the membership of the Company's Board of Directors
(excluding the Executive if the Executive is then a member of the Board of
Directors) at a meeting of the Board called and held for the purpose (after
reasonable notice to the Executive and an opportunity for the Executive,
together with the Executive's counsel, to be heard before the Board), finding
that in the good faith opinion of the Board the Executive was guilty of conduct
set forth in the second sentence of this Section 3(d) and specifying the
particulars thereof in detail.

                                        2
<PAGE>   3

                  (e)      GOOD REASON. The Executive may terminate the
Executive's employment for Good Reason at any time during the term of this
Agreement. For purposes of this Agreement, "Good Reason" shall mean any of the
following (without the Executive's express written consent):

                           (i)      the assignment to the Executive by the
         Company of duties inconsistent with the Executive's position, duties,
         responsibilities and status with the Company immediately prior to a
         Change in Control of the Company, or a change in the Executive's titles
         or offices as in effect immediately prior to a Change in Control of the
         Company, or any removal of the Executive from or any failure to reelect
         the Executive to any of such positions, except in connection with the
         termination of his employment for Disability, Retirement or Cause or as
         a result of the Executive's death or by the Executive other than for
         Good Reason;

                          (ii)      a reduction by the Company in the
         Executive's base salary as in effect on the date hereof or as the same
         may be increased from time to time during the term of this Agreement;

                         (iii)      a relocation of the Company's principal
         executive offices to a location outside of Nashville, Tennessee, or the
         Executive's relocation to any place other than the location at which
         the Executive performed the Executive's duties prior to a Change in
         Control of the Company, except for required travel by the Executive on
         the Company's business to an extent substantially consistent with the
         Executive's business travel obligations at the time of a Change in
         Control of the Company;

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

                           (v)      any failure by the Company to obtain the
         assumption of this Agreement by any successor or assign of the Company;
         or

                           (vi)     any purported termination of the Executive's
         employment which is not effected pursuant to a Notice of Termination
         satisfying the requirements of Section 3(f), and for purposes of this
         Agreement, no such purported termination shall be effective.

                  (f)      NOTICE OF TERMINATION. Any termination by the Company
pursuant to Section 3(b), 3(c) or 3(d) shall be communicated by a Notice of
Termination. For purposes of this Agreement, a "Notice of Termination" shall
mean a written notice which shall indicate those specific termination provisions
in this Agreement relied upon and which sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated. For purposes of this
Agreement, no such purported termination by the Company shall be effective
without such Notice of Termination.

                                       3
<PAGE>   4

                  (g)      DATE OF TERMINATION. "Date of Termination" shall mean
(a) if this Agreement is terminated by the Company for Disability, 30 days after
Notice of Termination is given to the Executive (provided that the Executive
shall not have returned to the performance of the Executive's duties on a
full-time basis during such 30-day period) or (b) if the Executive's employment
is terminated by the Company for any other reason, the date on which a Notice of
Termination is given.

         4.       SEVERANCE COMPENSATION UPON TERMINATION OF EMPLOYMENT. (a) If
the Company shall terminate the Executive's employment following a Change in
Control other than pursuant to Section 3(b), 3(c) or 3(d) or if the Executive
shall terminate his employment following a Change in Control for Good Reason,
then the Company shall pay to the Executive as severance pay in a lump sum, in
cash, on the fifth day following the Date of Termination, an amount equal to the
sum of (i) 150% of the average of the aggregate annual salary paid to the
Executive by the Company during the three calendar years preceding the Change in
Control of the Company and (ii) 150% of the highest bonus compensation paid to
the Executive for any of the three calendar years preceding the Change in
Control of the Company; provided, however, that if the lump sum severance
payment under this Section 4, either alone or together with other payments which
the Executive has the right to receive from the Company, would constitute a
"parachute payment" (as defined in Section 28OG of the Internal Revenue Code of
1986, as amended (the "Code")), such lump sum severance payment shall be reduced
to the largest amount as will result in no portion of the lump sum severance
payment under this Section 4 being subject to the excise tax imposed by Section
4999 of the Code.

                  (b)      In addition to the lump sum payment provided in
Section 4(a), if the Company shall terminate the Executive's employment
following a Change in Control other than pursuant to Section 3(b), 3(c) or 3(d)
or if the Executive shall terminate his employment following a Change in Control
for Good Reason, then the Company shall provide to the Executive health
insurance equivalent to that provided to the Executive immediately prior to
termination until the earlier of: (i) eighteen months following the Date of
Termination or (ii) such time as Executive is employed by another employer and
is covered or permitted to be covered by benefit plans of another employer
providing substantially similar coverage.

         5.       NO OBLIGATION TO MITIGATE DAMAGES; NO EFFECT ON OTHER
CONTRACTUAL RIGHTS. (a) The Executive shall not be required to mitigate damages
or the amount of any payment provided for under this Agreement by seeking other
employment or otherwise, nor shall the amount of any payment provided for under
this Agreement be reduced by any compensation earned by the Executive as the
result of employment by another employer after the Date of Termination, or
otherwise.

                  (b)      The provisions of this Agreement, and any payment
provided for hereunder, shall not reduce any amounts otherwise payable, or in
any way diminish the Executive's existing rights, or rights which would accrue
solely as a result of the passage of time, under any benefit plan, incentive
plan or stock option plan, employment agreement or other contract, plan or
arrangement.

                                       4
<PAGE>   5

         6.       SUCCESSOR TO THE COMPANY. (a) The Company will require any
successor or assign (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company, by agreement in form and substance satisfactory to the
Executive, expressly, absolutely and unconditionally to 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. Any failure of the Company to obtain such agreement prior to the
effectiveness of any such succession or assignment shall be a material breach of
this Agreement and shall entitle the Executive to terminate the Executive's
employment for Good Reason. As used in this Agreement, "Company" shall mean the
Company as hereinbefore defined and any successor or assign to its business
and/or assets as aforesaid which executes and delivers the agreement provided
for in this Section 6 or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law. If at any time during the term
of this Agreement the Executive is employed by any corporation a majority of the
voting securities of which is then owned by the Company, "Company" as used in
Sections 3, 4, 11 and 12 hereof shall in addition include such employer. In such
event, the Company agrees that it shall pay or shall cause such employer to pay
any amounts owed to the Executive pursuant to Section 4 hereof.

                  (b)      This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal and legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive should die while any amounts are still payable to him hereunder, all
such amounts, unless otherwise provided herein, shall be paid in accordance with
the terms of this Agreement to the Executive's devisee, legatee, or other
designee or, if there be no such designee, to the Executive's estate.

         7.       NOTICE. For purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, as follows:

                           If to the Company:

                           O'Charley's Inc.
                           3038 Sidco Drive
                           Nashville, Tennessee 37204
                           Attention: Chief Executive Officer

                           If to the Executive:

                           Steven J. Hislop
                           3038 Sidco Drive
                           Nashville, Tennessee 37204

                                       5
<PAGE>   6

or such other address as either party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.

         8.       MISCELLANEOUS. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing 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, or
compliance with, 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. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement. This Agreement shall be governed by and construed
in accordance with the laws of the State of Tennessee.

         9.       VALIDITY. The invalidity or unenforceability of any provisions
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.

         10.      COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

         11.      LEGAL FEES AND EXPENSES. The Company shall pay all legal fees
and expenses which the Executive may incur as a result of the Company's
contesting the validity, enforceability or the Executive's interpretation of, or
determinations under, this Agreement.

         12.      CONFIDENTIALITY. The Executive shall retain in confidence any
and all confidential information known to the Executive concerning the Company
and its business so long as such information is not otherwise publicly
disclosed. The provisions of this Section 12 are not intended to restrict the
ability of the Executive following termination of employment for any reason to
engage in any business which is, directly or indirectly, competitive with the
business conducted by the Company.

                                       6
<PAGE>   7

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

                                       O'CHARLEY'S INC.

                                       By: /s/ Gregory L. Burns
                                          --------------------------------------
                                           Name: Gregory L. Burns
                                           Title: Chief Executive Officer

                                         /s/ Steven J. Hislop
                                       -----------------------------------------
                                       Steven J. Hislop

                                       7

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