Document:

<PAGE>

               SECOND AMENDMENT TO AND WAIVER UNDER AMENDED AND
                           RESTATED CREDIT AGREEMENT

     THIS SECOND AMENDMENT TO AND WAIVER UNDER AMENDED AND RESTATED CREDIT
AGREEMENT (this "Second Amendment and Waiver") is dated as of the 11th day of
July, 2001 by and among US XPRESS ENTERPRISES, INC. (the "Borrower"), WACHOVIA
BANK, N.A., as Administrative Agent (the "Administrative Agent"), BANK OF
AMERICA, N.A., as Syndication Agent, FLEET NATIONAL BANK, as Documentation
Agent, SUNTRUST BANK, as Co-Agent, and WACHOVIA BANK, N.A., BANK OF AMERICA,
N.A., FLEET NATIONAL BANK, SUNTRUST BANK, AMSOUTH BANK, THE CHASE MANHATTAN
BANK, LASALLE BANK NATIONAL ASSOCIATION, and FIRST TENNESSEE BANK, N.A., as
Banks (collectively, the "Banks");

                             W I T N E S S E T H :
                             - - - - - - - - - -

     WHEREAS, the Borrower, the Administrative Agent and the Banks executed and
delivered that certain Amended and Restated Credit Agreement, dated as of the
31st day of January, 2001, as amended by Waiver Under and First Amendment to
Credit Agreement dated April 27, 2001, but effective as of March 31, 2001 (as so
amended, the "Credit Agreement");

     WHEREAS, the Borrower has indicated that for the Fiscal Quarter ending June
30, 2001 (the "Second Quarter FY2001"), (i) it may breach the covenant
concerning the ratio of Consolidated Total Adjusted Debt to Consolidated EBILTDA
contained in Section 6.21 of the Credit Agreement, and (ii), it will breach the
covenant concerning the ratio of Consolidated EBILT to Consolidated Fixed
Charges contained in Section 6.22 of the Credit Agreement and the minimum
requirement for Consolidated Net Worth contained in Section 6.23 of the Credit
Agreement (collectively, the "Specified Second Quarter FY2001 Financial
Covenants"), and requested that the Agent and the Banks waive any Event of
Default which has occurred under Sections 6.21, 6.22 and 6.23 of the Credit
Agreement as a result thereof, and the Administrative Agent and the Required
Banks have agreed to such waiver, subject to the terms and conditions hereof;

     WHEREAS, the Borrower has requested and the Administrative Agent and the
Banks have agreed to certain amendments to the Credit Agreement, subject to the
terms and conditions hereof;

     NOW, THEREFORE, for and in consideration of the above premises and other
good and valuable consideration, the receipt and sufficiency of which hereby is
acknowledged by the parties hereto, the Borrower, the Administrative Agent and
the Banks hereby covenant and agree as follows:
<PAGE>

     1. Definitions.  Unless otherwise specifically defined herein, each term
        -----------
used herein which is defined in the Credit Agreement shall have the meaning
assigned to such term in the Credit Agreement. Each reference to "hereof",
"hereunder", "herein" and "hereby" and each other similar reference and each
reference to "this Agreement" and each other similar reference contained in the
Credit Agreement shall from and after the date hereof refer to the Credit
Agreement as amended hereby.

     2. Amendment to Section 1.01. Section 1.01 of the Credit Agreement hereby
        -------------------------
is amended by deleting the definitions of "Commitment", "Commitment Reduction
Date", "Consolidated EBILT", "Consolidated Net Worth", "Interest Period" and
"Performance Pricing Determination Date", and adding the following definitions
of "Capital Expenditures", "Commitment", "Commitment Reduction Date",
"Consolidated EBILT", "Consolidated EBITDA", "Interest Period" and "Second
Amendment Date":

               "Capital Expenditures" means for any period the sum of all
     capital expenditures incurred and paid in cash during such period by the
     Borrower and its Consolidated Subsidiaries, as determined in accordance
     with GAAP.

               "Commitment" means, with respect to each Bank, (i) the amount set
     forth opposite the name of such Bank on the schedule below, and (ii) as to
     any Bank which enters into any Assignment and Acceptance (whether as
     transferor Bank or as Assignee thereunder), the amount of such Bank's
     Commitment after giving effect to such Assignment and Acceptance, in each
     case as such amount may be reduced from time to time pursuant to Sections
     2.07 and 2.08, and "Commitment Share" means the percentage of the total
     Commitment set forth opposite the name of such Bank on the schedule below,
     as such percentage may be adjusted from time to time pursuant to Section
     10.08(c):

<TABLE>
<CAPTION>
          Bank                                             Commitment          Commitment Share
          ----                                             ----------          ----------------
          <S>                                             <C>                  <C>
          Bank of America, N.A.                           $ 41,925,000               21.50%

          AmSouth Bank                                    $ 32,662,500               16.75%

          Wachovia Bank, N.A.                             $ 29,250,000               15.00%

          SunTrust Bank                                   $ 26,812,500               13.75%

          Fleet National Bank                             $ 26,812,500               13.75%

          The Chase Manhattan  Bank                       $ 15,112,500                7.75%

          LaSalle Bank National Association               $ 15,112,500                7.75%

          First Tennessee Bank, N.A.                      $  7,312,500                3.75%
                                                          ------------               -----
          TOTAL COMMITMENT                                $195,000,000                 100%
</TABLE>

                                       2
<PAGE>

               "Commitment Reduction Date" means September 30, 2001.

               "Consolidated EBILT" means the sum of the following, calculated
     on a consolidated basis in accordance with GAAP for the Borrower and the
     Consolidated Subsidiaries at the end of each Fiscal Month: (i) Consolidated
     Net Income; plus (ii) income tax expenses included in Consolidated Net
     Income; plus (iii) all payment obligations of the Borrower and the
     Consolidated Subsidiaries under all operating leases and operating rental
     agreements (other than between or among the Borrower and the Consolidated
     Subsidiaries), specifically including payment obligations of the Borrower
     under the Synthetic Lease Documents; plus (iv) Consolidated Interest
     Expense.

               "Consolidated EBITDA" means the sum of the following, calculated
     on a consolidated basis in accordance with GAAP for the Borrower and the
     Consolidated Subsidiaries at the end of each Fiscal Month: (i)
     Consolidated Net Income; plus (ii) income tax expenses included in
     Consolidated Net Income; plus (iii) Consolidated Interest Expense; plus
     (iv) depreciation and amortization expense.

               "Consolidated Net Worth" means, at any time, the shareholders'
     equity of the Borrower and its Consolidated Subsidiaries, as set forth or
     reflected on the most recent consolidated balance sheet of the Borrower and
     its Consolidated Subsidiaries prepared in accordance with GAAP, but
                                                                     ---
     excluding (i) any Redeemable Preferred Stock of the Borrower or any of its
     ---------
     Consolidated Subsidiaries and (ii) any mark to market requirements under
     FASB No. 133.  Shareholders' equity generally would include, but not be
     limited to (i) the par or stated value of all outstanding Capital Stock,
     (ii) capital surplus, (iii) retained earnings, and (iv) various  deductions
     such as (A) purchases of treasury stock, (B) valuation allowances, (C)
     receivables due from an employee stock ownership plan, (D) employee stock
     ownership plan debt guarantees, and (E) translation adjustments for foreign
     currency transactions.

               "Interest Period" means : (1) with respect to each Euro-Dollar
     Borrowing, the period commencing on the date of such Borrowing and ending
     on the numerically corresponding day in the first month thereafter;
     provided that:
     --------

                    (a)  any Interest Period (subject to paragraph (c) below)
          which would otherwise end on a day which is not a Euro-Dollar Business
          Day shall be extended to the next succeeding Euro-Dollar Business Day
          unless such Euro-Dollar Business Day falls in another calendar month,
          in which case such Interest Period shall end on the next preceding
          Euro-Dollar Business Day;

                    (b)  any Interest Period which begins on the last Euro-
          Dollar Business Day of a calendar month (or on a day for which there
          is no numerically corresponding day in the appropriate subsequent
          calendar month) shall, subject to paragraph (c) below, end on the last
          Euro-Dollar Business Day of the appropriate subsequent calendar month;
          and

                                       3
<PAGE>

                    (c)  no Interest Period may be selected which begins before
          the Termination Date and would otherwise end after the Termination
          Date.

               (2)  with respect to each Base Rate Borrowing, the period
     commencing on the date of such Borrowing and ending 30 days thereafter;
     provided that:
     --------

                    (a)  any Interest Period (subject to paragraph (b) below)
          which would otherwise end on a day which is not a Domestic Business
          Day shall be extended to the next succeeding Domestic Business Day;
          and

                    (b)  any Interest Period which would otherwise end after the
          Termination Date shall end on the Termination Date.

                    "Second Amendment Date" means July 11, 2001, the date of the
          Second Amendment to and Waiver Under Amended and Restated Credit
          Agreement amending this Agreement.

     3.   Amendment to Section 2.05. Section 2.05(c)of the Credit Agreement
          -------------------------
hereby is deleted and the following is substituted therefor:

               Section 2.05.  Interest Rates.
                              --------------

               (a)  "Applicable Margin" means, for any Interest Period
          commencing during the periods set forth below (for the entire Interest
          Period), the rate set forth below for Base Rate Loans or Euro-Dollar
          Loans, as applicable:

<TABLE>
<CAPTION>
          -----------------------------------------------------------------------------------------------
           Period                                    Base Rate Loans              Euro-Dollar Loans
          -----------------------------------------------------------------------------------------------
          <S>                                    <C>                             <C>
           May 15, 2001 through                       1.75%                         3.50%
            September 29,2001
          -----------------------------------------------------------------------------------------------
           September 30, 2001 through                 2.00%                         3.75%
            December 30, 2001
          -----------------------------------------------------------------------------------------------
           From and after December
            31, 2001                                  2.25%                         4.00%
          -----------------------------------------------------------------------------------------------
</TABLE>

               (b)  Each Base Rate Loan shall bear interest on the outstanding
          principal amount thereof, for each day from the date such Loan is made
          until it becomes due, at a rate per annum equal to the Base Rate for
          such day plus the Applicable Margin.  Such interest shall be payable
          for each Interest Period on the last day thereof.  Any overdue
          principal of and, to the extent permitted by applicable law, overdue
          interest on any Base Rate Loan shall bear interest, payable on demand,
          for each day until paid at a rate per annum equal to the Default Rate.

                                       4
<PAGE>

               (c)  Each Euro-Dollar Loan shall bear interest on the outstanding
          principal amount thereof, for the Interest Period applicable thereto,
          at a rate per annum equal to the sum of the Applicable Margin plus the
          applicable Adjusted London Interbank Offered Rate for such Interest
          Period.  Such interest shall be payable for each Interest Period on
          the last day thereof.  Any overdue principal of and, to the extent
          permitted by law, overdue interest on any Euro-Dollar Loan shall bear
          interest, payable on demand, for each day until paid at a rate per
          annum equal to the Default Rate.

               The "Adjusted London Interbank Offered Rate" applicable to any
          Interest Period means a rate per annum  equal to the quotient obtained
          (rounded upwards, if necessary, to the next higher 1/100th of 1%) by
          dividing (i) the applicable London Interbank Offered Rate for such
          Interest Period by (ii) 1.00 minus the Euro-Dollar Reserve Percentage.

               The "London Interbank Offered Rate" applicable to any Euro-Dollar
          Loan means for the Interest Period of such Euro-Dollar Loan, the rate
          per annum determined on the basis of the offered rate for deposits in
          Dollars of amounts equal or comparable to the principal amount of such
          Euro-Dollar Loan offered for a term comparable to such Interest
          Period, which rates appear on the Telerate Page 3750 effective as of
          11:00 A.M., London time, 2 Euro-Dollar Business Days prior to the
          first day of such Interest Period, provided that if no such offered
                                             --------
          rates appear on such page, the "London Interbank Offered Rate" for
          such Interest Period will be the arithmetic average (rounded upward,
          if necessary, to the next higher 1/100th of 1%) of rates quoted by not
          less than 2 major banks in New York City, selected by the
          Administrative Agent, at approximately 10:00 A.M., New York City time,
          2 Euro-Dollar Business Days prior to the first day of such Interest
          Period, for deposits in Dollars offered by leading European banks for
          a period comparable to such Interest Period in an amount comparable to
          the principal amount of such Euro-Dollar Loan.

               "Euro-Dollar Reserve Percentage" means for any day that
          percentage (expressed as a decimal) which is in effect on such day, as
          prescribed by the Board of Governors of the Federal Reserve System (or
          any successor) for determining the maximum reserve requirement for a
          member bank of the Federal Reserve System in respect of "Eurocurrency
          liabilities" (or in respect of any other category of liabilities which
          includes deposits by reference to which the interest rate on Euro-
          Dollar Loans is determined or any category of extensions of credit or
          other assets which includes loans by a non-United States office of any
          Bank to United States residents).  The Adjusted London Interbank
          Offered Rate shall be adjusted automatically on and as of the
          effective date of any change in the Euro-Dollar Reserve Percentage.

               (d)  The Administrative Agent shall determine each interest rate
          applicable to the Loans hereunder.  The Administrative Agent shall
          give prompt

                                       5
<PAGE>

          notice to the Borrower and the Banks by telecopier of each rate of
          interest so determined, and its determination thereof shall be
          conclusive in the absence of manifest error.

               (e)  After the occurrence and during the continuance of an Event
          of Default, the principal amount of the Loans (and, to the extent
          permitted by applicable law, all accrued interest thereon) may, upon
          notice from the Administrative Agent (except during any Event of
          Default specified in Section 7.01(g) or (h), as to which no notice
          shall be required), at the election of the Required Banks, bear
          interest at the Default Rate.

     4.   Amendment to Section 2.06. Section 2.06 of the Credit Agreement hereby
          -------------------------
is deleted and the following is substituted therefor:

               (a)  The Borrower shall pay to the Administrative Agent, for the
          ratable account of each Bank, a commitment fee, on the average daily
          amount of such Bank's Unused Commitment, at a rate per annum equal to
          0.50%.

          Such commitment fees shall accrue from and including the Second
          Amendment Date to but excluding the Termination Date and shall be
          payable on each June 30, September 30 and December 31 and on the
          Termination Date.

               (b)  The Borrower shall pay to the Administrative Agent, for the
          account and sole benefit of the Administrative Agent, such fees and
          other amounts at such times as set forth in the Arranger's Letter
          Agreement.

               (c)  The Borrower shall pay to the Agent, an additional fee equal
          to: (i) on the Second Amendment Date, for the ratable account of the
          Banks which execute and deliver this Second Amendment by 5:00 P.M.
          (Atlanta, Georgia time) on the Second Amendment Date, $400,000; and
          (ii) on each other date set forth below, for the ratable account of
          the Banks, unless all Revolver Obligations have been paid in full and
          the Commitments have been terminated entirely as of such date, an
          additional fee in an amount equal to the percentage set forth below
          for such date times the aggregate Commitments in effect on such date:

          ----------------------------------------------------------------
           Date                                Additional Fee (expressed
                                               as a percentage of the
                                               Commitments)
          ----------------------------------------------------------------

           October 31, 2001                               0.10%
          ----------------------------------------------------------------
           November 30, 2001                              0.15%
          ----------------------------------------------------------------

                                       6
<PAGE>

              ---------------------------------------------------

              December 31, 2001                     0.25%
              ---------------------------------------------------

     5.   Amendment to Section 2.08(c).  Section 2.08(c) of the Credit Agreement
          ----------------------------
hereby is deleted and the following is substituted therefor:

               (c)  The aggregate amount of Commitments shall be reduced to
     $190,000,000 on the Commitment Reduction Date, if they have not previously
     been reduced to or below such amount pursuant to Section 2.07 or this
     Section 2.08.

     6.   Amendment to Section 3.08(a).  Section 3.08(a) of the Credit Agreement
          ----------------------------
hereby is deleted and the following is substituted therefor:

               (a)  Letter of Credit Fees.  The Borrower shall pay to the
                    ---------------------
     Administrative Agent with respect to each Letter of Credit issued hereunder
     a per annum letter of credit fee ("Letter of Credit Fee") equal to the
     Applicable Margin for Euro-Dollar Loans from time to time as set forth in
     Section 2.05(a) on the average daily maximum amount available to be drawn
     under such Letter of Credit, accruing from the date of issuance to the date
     of expiration, and payable on each June 30, September 30 and December 31
     and on the Termination Date. Letter of Credit Fees payable hereunder shall
     be computed on the basis of a year of 360 days and paid for the actual
     number of days elapsed (including the first day but excluding the last
     day). The Administrative Agent shall promptly remit such Letter of Credit
     Fees, when paid, to the Banks in accordance with their Commitment Shares
     thereof.

     7.   Amendment to Section 6.21.  Section 6.21 of the Credit Agreement
          -------------------------
hereby is deleted and the following is substituted therefor:

               SECTION 6.21.  Ratio of Consolidated Total Adjusted Debt to
                              --------------------------------------------
     Consolidated EBILTDA.  The ratio of Consolidated Total Adjusted Debt to
     --------------------
     Consolidated EBILTDA will not, at the end of any Fiscal Quarter, exceed
     3.00.

     8.   Amendment to Section 6.22.  Section 6.22 of the Credit Agreement
          -------------------------
hereby is deleted and the following is substituted therefor:

               SECTION 6.22. Ratio of Consolidated EBILT to Consolidated Fixed
                             -------------------------------------------------
     Charges.  The ratio of (a) Consolidated EBILT to (b) Consolidated Fixed
     -------
     Charges will, as of the end of any Fiscal Month, exceed the following
     amounts during the corresponding periods set forth below:

<TABLE>
<CAPTION>
               Period                                   Amount
               ------                                   ------
     <S>                                             <C>
     Fiscal Month ending 07/31/01                    0.90 to 1.00
     Each Fiscal Month ending thereafter             1.00 to 1.00
</TABLE>

                                       7
<PAGE>

     9.   Amendment to Section 6.23.  Section 6.23 of the Credit Agreement
hereby is deleted and the following is substituted therefor:

               SECTION 6.23. Minimum Consolidated Net Worth. Consolidated Net
                             -----------------------------
     Worth will at no time be less than the Consolidated Net Worth reflected on
     the balance sheet of the Borrower as at June 30, 2001, minus $500,000, plus
     the sum of (i) 75% of the cumulative Reported Net Income of the Borrower
     and its Consolidated Subsidiaries during any period after June 30, 2001
     (taken as one accounting period), calculated quarterly at the end of each
     Fiscal Quarter but excluding from such calculations of Reported Net Income
     for purposes of this clause (i), any Fiscal Quarter in which the Reported
     Net Income of the Borrower and its Consolidated Subsidiaries is negative,
     and (ii) 100% of the cumulative Net Proceeds of Capital Stock received
     during any period after the Closing Date, calculated quarterly at the end
     of each Fiscal Quarter.

     10.  New Section 6.29.  A new Section 6.29 hereby is added to the Credit
Agreement as follows:

               SECTION 6.29.  Minimum Consolidated EBITDA.  At the end of each
                              ---------------------------
     Fiscal Month, Consolidated EBITDA shall not be less than the amount set
     forth below for such Fiscal Month and the immediately preceding Fiscal
     Month:

<TABLE>
<CAPTION>
          Period                                       Consolidated EBITDA
          ------                                       -------------------
<S>                                                    <C>
Fiscal Month ending 07/31/01                           $7,000,000

Fiscal Month ending 08/31/01                           $7,500,000

Fiscal Month ending 09/30/01                           $8,000,000

Fiscal Month ending 10/31/01                           $8,500,000

Each Fiscal Month ending thereafter                    $9,000,000
</TABLE>

     11.  New Section 6.30.  A new Section 6.30 hereby is added to the Credit
Agreement as follows:

               SECTION 6.30.  Capital Expenditures.  At the end of each Fiscal
                              --------------------
     Quarter, Capital Expenditures shall not exceed the amount set forth below
     for such Fiscal Quarter:

                                       8
<PAGE>

<TABLE>
<CAPTION>
          Period                                  Capital Expenditures
          ------                                  --------------------
<S>                                               <C>
Fiscal Quarter ending 09/30/01                    $15,000,000

Fiscal Quarter ending 12/31/01                    $15,000,000
</TABLE>

     12.  New Section 6.31.  A new Section 6.31 hereby is added to the Credit
          ----------------
Agreement as follows:

               SECTION 6.31.  Engagement of Financial Consultant.  On or before
                              ----------------------------------
     the date that is 30 days after the Second Amendment Date, the Borrower
     shall engage a financial consultant acceptable to the Administrative Agent
     and the Required Banks to assist the Borrower in identifying, evaluating
     and pursuing alternatives for the refinancing of the Revolving Obligations
     and the Commitments (a "Refinancing") or other means of recapitalizing the
     Borrower to permit payment of the Revolving Obligations and the termination
     of the Commitments, unless, on or before the date that is 30 days after the
     Second Amendment Date, the Borrower has furnished to the Administrative
     Agent and the Banks a commitment satisfactory to the Administrative Agent
     and the Banks for a Refinancing from a lender or lenders acceptable to the
     Administrative Agent and the Banks.

     13.  New Section 6.32.  A new Section 6.32 hereby is added to the Credit
          ----------------
Agreement.

               SECTION 6.32.  Depositary Accounts.  The Borrower shall maintain
                              -------------------
     all bank depositary accounts with the Collateral Agent and/or one or more
     of the Banks, and all of such depositary accounts and the balances therein
     shall constitute part of the Collateral, subject to the Lien and security
     interest of the Collateral Agent pursuant and subject to the Security
     Agreement.

     14.  Replacement of Exhibit F (Compliance Certificate).  Exhibit F to the
          -------------------------------------------------
Credit Agreement hereby is deleted and Exhibit F hereto is substituted therefor.

     15.  Waiver.  Effective upon satisfaction of the conditions to
          ------
effectiveness set forth in Section 24 hereof, and subject to the other terms and
conditions set forth herein, the Administrative Agent and the Required Banks
waive the right to assert any Event of Default arising under the Specified
Second Quarter FY2001 Financial Covenants, but only for the Second Quarter
FY2001.

     16.  Restatement of Representations and Warranties.  The Borrower hereby
          ---------------------------------------------
restates and renews each and every representation and warranty heretofore made
by it in the Credit Agreement and the other Loan Documents as fully as if made
on the date hereof (but after giving effect to the waiver contained in Section
15 hereof) and with specific reference to this Second Amendment and Waiver and
all other loan documents executed and/or delivered in connection herewith.

                                       9
<PAGE>

     17.  Effect of Amendment and Waiver.  Except as set forth expressly
          ------------------------------
hereinabove, all terms of the Credit Agreement and the other Loan Documents
shall be and remain in full force and effect, and shall constitute the legal,
valid, binding and enforceable obligations of the Borrower. The amendments
contained herein shall be deemed to have prospective application only, unless
otherwise specifically stated herein. The waiver set forth in Section 15 hereof
shall relate only to the Events of Default arising under the Specified Second
Quarter FY2001 Financial Covenants, but only for the Second Quarter FY2001, and
shall be subject to the satisfaction of the conditions precedent set forth in
Section 24 hereof. The waiver hereby granted by the Administrative Agent and the
Required Banks shall not apply to any other past, present or future
noncompliance with any provision of the Credit Agreement or any of the other
Loan Documents that is not one of the Specified Second Quarter FY2001 Financial
Covenants waived pursuant hereto, and all rights, powers and remedies of the
Administrative Agent and the Banks are reserved with respect thereto).

     18.  Ratification.  The Borrower hereby restates, ratifies and reaffirms
          ------------
each and every term, covenant and condition set forth in the Credit Agreement
and the other Loan Documents effective as of the date hereof.

     19.  Counterparts.  This Second Amendment and Waiver may be executed in any
          ------------
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which counterparts, taken together, shall constitute but one and the
same instrument.

     20.  Section References.  Section titles and references used in this Second
          ------------------
Amendment and Waiver shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreements among the parties hereto
evidenced hereby.

     21.  No Default.  To induce the Administrative Agent and the Banks to enter
          ----------
into this Second Amendment and Waiver and to continue to make advances pursuant
to the Credit Agreement, the Borrower hereby acknowledges and agrees that, as of
the date hereof, and after giving effect to the terms hereof (including the
waiver contained in Section 15, hereof), there exists (i) no Default or Event of
Default and (ii) no right of offset, defense, counterclaim, claim or objection
in favor of the Borrower arising out of or with respect to any of the Loans or
other obligations of the Borrower owed to the Banks under the Credit Agreement.

     22.  Further Assurances.  The Borrower agrees to take such further actions
          ------------------
as the Administrative Agent shall reasonably request in connection herewith to
evidence the amendments herein contained.

     23.  Governing Law.  This Second Amendment and Waiver shall be governed by
          -------------
and construed and interpreted in accordance with, the laws of the State of
Georgia.

     24.  Conditions Precedent.  This Second Amendment and Waiver shall become
          --------------------
effective only upon (i) execution and delivery of this Second Amendment and
Waiver by the Borrower, the Administrative Agent and the Required Banks, (ii)
execution and delivery of the Consent and Reaffirmation of Guarantors at the end
hereof by each of the Guarantors, and (iii) payment to the Administrative Agent,
for the ratable account of the Banks which execute and deliver this

                                       10
<PAGE>

Second Amendment and Waiver by 5:00 P.M. (Atlanta, Georgia time), on July 11,
2001, the additional fee in the amount of $400,000.

                      [SIGNATURES COMMENCE ON NEXT PAGE]

                                       11
<PAGE>

     IN WITNESS WHEREOF, the Borrower, the Administrative Agent and each of the
Banks has caused this Second Amendment and Waiver to be duly executed, under
seal, by its duly authorized officer as of the day and year first above written.

                                         U.S. XPRESS ENTERPRISES, INC.,
                                         as the Borrower                  (SEAL)

                                         By: /s/ Ray M. Harlin
                                             ----------------------------
                                             Title: Assistant Secretary

                                         WACHOVIA BANK, N.A.,
                                         as Administrative Agent and
                                         as a Bank                        (SEAL)

                                         By: /s/ William W. Teegarden
                                             ----------------------------
                                             Title: Senior Vice President

                                         BANK OF AMERICA, N.A.,
                                         as Syndication Agent and as a
                                         Bank                             (SEAL)

                                         By: /s/ Leonard Norman
                                             ----------------------------
                                             Title: Managing Director

                                         FLEET NATIONAL BANK,
                                         as Documentation Agent and as a
                                         Bank                             (SEAL)

                                         By: /s/ Jeffrey G. Millman
                                             ----------------------------
                                             Title: Director

                                         SUNTRUST BANK,
                                         as Co-Agent and a Bank           (SEAL)

                                         By: /s/ William Crawford
                                             ----------------------------
                                             Title: Vice President

                                         By:
                                             ----------------------------
                                               Title:

                                       12
<PAGE>

                                         AMSOUTH BANK,
                                         as a Bank                        (SEAL)

                                         By: /s/ William T. Carroll
                                             ---------------------------
                                             Title: Vice President

                                         THE CHASE MANHATTAN BANK,
                                         as a Bank                        (SEAL)

                                         By: /s/ Mike Lister
                                             ---------------------------
                                             Title: Vice President

                                         LASALLE BANK NATIONAL ASSOCIATION,
                                         as a Bank                        (SEAL)

                                         By: /s/ David J. Thomas
                                             ---------------------------
                                             Title: First Vice President

                                         FIRST TENNESSEE BANK, N.A.,
                                         as a Bank                        (SEAL)

                                         By: /s/ Robert T. Lusk
                                             ---------------------------
                                             Title: Vice President

                                       13
<PAGE>

                    CONSENT AND REAFFIRMATION OF GUARANTORS

     Each of the undersigned (i) acknowledges receipt of the foregoing Second
Amendment and Waiver to Amended and Restated Credit Agreement (the "Second
Amendment and Waiver"), (ii) consents to the execution and delivery of the
Second Amendment and Waiver by the parties thereto and (iii) reaffirms all of
its obligations and covenants under the Guaranty Agreement dated as of January
31, 2001 executed by it, and agrees that none of such obligations and covenants
shall be affected by the execution and delivery of the Second Amendment and
Waiver.  This Consent and Reaffirmation may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which counterparts, taken together, shall constitute but one and the same
instrument.

                                              U.S. XPRESS, INC.,
                                              a Nevada corporation     (SEAL)

                                              By: /s/ Ray M. Harlin
                                                  --------------------------
                                                  Title: Assistant Secretary

                                              CSI/CROWN, INC.,
                                              a Georgia corporation    (SEAL)

                                              By: /s/ Ray M. Harlin
                                                  --------------------------
                                                  Title: Assistant Secretary

                                              XPRESS HOLDINGS, INC.,
                                              a Nevada corporation     (SEAL)

                                              By: /s/ Richard Klump
                                                  --------------------------
                                                  Title: President

                                              XPRESS COMPANY STORE, INC.,
                                              a Tennessee corporation  (SEAL)

                                              By: /s/ Ray M. Harlin
                                                  --------------------------
                                                  Title: Assistant Secretary

                                              XPRESS AIR, INC.,
                                              a Tennessee corporation   (SEAL)

                                       14
<PAGE>

                                              By: /s/ Ray M. Harlin
                                                  --------------------------
                                                  Title: Assistant Secretary

                                              U.S. XPRESS LEASING, INC.,
                                              a Tennessee corporation   (SEAL)

                                              By: /s/ Ray M. Harlin
                                                  --------------------------
                                                  Title: Assistant Secretary

                                              CSI ACQUISITION CORPORATION
                                              a Georgia corporation     (SEAL)

                                              By: /s/ Ray M. Harlin
                                                  --------------------------
                                                  Title: Assistant Secretary

                                              DEDICATED XPRESS SERVICES, INC.,
                                              a Nevada corporation      (SEAL)

                                              By: /s/ Ray M. Harlin
                                                  --------------------------
                                                  Title: Assistant Secretary

                                       15
<PAGE>

                                                                       EXHIBIT F
                                                                       ---------

                            COMPLIANCE CERTIFICATE

  Reference is made to the Amended and Restated Credit Agreement dated as of
January 31, 2001, as amended by Second Amendment and Waiver to Amended and
Restated Credit Agreement dated as of June 27, 2001 (as so amended, and as
hereafter modified and supplemented and in effect from time to time, the "Credit
Agreement") by and among US Xpress Enterprises, Inc. (the "Borrower"), Wachovia
Bank, N.A., as Administrative Agent (the "Administrative Agent"), Bank Of
America, N.A., as Syndication Agent, Fleet National Bank, as Documentation
Agent, SunTrust Bank, as Co-Agent, and the Banks party thereto from time to
time.  Capitalized terms used herein shall have the meanings ascribed thereto in
the Credit Agreement; all amounts shown herein, unless expressly set forth to
the contrary, shall be without duplication.

  Pursuant to Section 6.01(c) of the Credit Agreement, _____________, the duly
authorized chief financial officer of the Borrower, hereby (i) certifies to the
Administrative Agent and the Banks that the information contained in the
Compliance Check List attached hereto is true, accurate and complete as of
_________, _____, and that, to the best of his knowledge, no Default is in
existence on and as of the date hereof, and (ii) restates and reaffirms that the
representations and warranties contained in Article V of the Credit Agreement
are true on and as of the date hereof as though restated on and as of this date
(except to the extent any such representation or warranty is expressly made as
of a prior date).

                                   U.S. XPRESS ENTERPRISES, INC.
                                          (SEAL)

                                      By:___________________________________
                                      Title:________________________________
<PAGE>

                            COMPLIANCE CERTIFICATE
                            ----------------------

                         U.S. XPRESS ENTERPRISES, INC.

                           _________________________

                            _______________, ______

1.   Consolidations, Mergers and Sales of Assets. (Section 6.05)

     The Borrower will not, nor will it permit any Subsidiary to, consolidate or
     merge with or into, or sell, lease or otherwise transfer all or any
     substantial part of its assets to, any other Person, or discontinue or
     eliminate any business line or segment, provided that (a) the Borrower may
                                             --------
     merge with another Person if (i) such Person was organized under the laws
     of the United States of America or one of its states, (ii) the Borrower is
     the corporation surviving such merger and (iii) immediately after giving
     effect to such merger, no Default shall have occurred and be continuing,
     (b) Subsidiaries of the Borrower may merge with one another, and (c) the
     foregoing limitation on the sale, lease or other transfer of assets and on
     the discontinuation or elimination of a business line or segment shall not
     prohibit (1) a sale of Revenue Equipment as part of the Revenue Equipment
     Sales and Replacement Program or any Off-Lease Purchase and Resale
     Arrangement, or (2) subject to Sections 2.08(b) and 2.10(b), during any
     Fiscal Quarter, any other transfer of assets or the discontinuance or
     elimination of a business line or segment (in a single transaction or in a
     series of related transactions) unless the aggregate assets to be so
     transferred or utilized in a business line or segment to be so
     discontinued, when combined with all other assets transferred, and all
     other assets utilized in all other business lines or segments discontinued,
     during such Fiscal Quarter and the immediately preceding 3 Fiscal Quarters,
     either (x) constituted more than 10% of Consolidated Total Assets at the
     end of the most recent Fiscal Year immediately preceding such Fiscal
     Quarter, or (y) contributed more than 10% of Consolidated Operating Profits
     during the 4 Fiscal Quarters immediately preceding such Fiscal Quarter
     (and, upon request of the Borrower, the Collateral Agent shall release any
     Collateral sold as part of any transfers permitted by this Section
     6.05(c)).

     (a)   Value of assets transferred or business lines or       $___________
           segments discontinued/1/

     (b)   Consolidated Total Assets                              $___________

     (c)   10% of (b)                                             $___________

     (d)   Consolidated Operating Profits  - Schedule 1           $___________

     (e)   10% of (d)                                             $___________

_____________________

/1/  Exclude transfers as part of the Revenue Equipment Sale and Replacement
     Program.

                                       17
<PAGE>

               Limitation: (a) may not exceed (c) or (e)

2.   Loans and Advances (Section 6.16)

     Neither the Borrower nor any of its Subsidiaries shall make loans or
     advances at any time after January 10, 2001 to any Person except as
     permitted by Section 6.17 and except: (i) deposits required by government
     agencies or public utilities; and (ii) loans and advances to Wholly Owned
     Subsidiaries; (iii) advances to drivers made in the ordinary course of
     business and consistent with practices existing on the Closing Date; and
     (iv) other loans and advances not exceeding an aggregate principal amount
     outstanding at any time of $250,000; provided that after giving effect to
     the making of any loans, advances or deposits permitted by this Section, no
     Default shall be in existence or be created thereby.

     (a)   Loans and advances not permitted by clauses (i)      $__________
           through (iii), inclusive

           Limitation:  (a) may not exceed $250,000

3.   Liens (Section 6.18)

     Neither the Borrower nor any Consolidated Subsidiary will create, assume or
     suffer to exist any Lien on any asset now owned or hereafter acquired by
     it, except:

     (a)   Liens securing the Secured Obligations;

     (b)   Liens existing on the date of this Agreement (other than those
           relating to the Secured Obligations) securing Debt outstanding on the
           date hereof described in Schedule 6.20 in the aggregate amount of
           $12,410,000;

     (c)   Liens securing Debt owing by any Subsidiary to the Borrower;

     (d)   any Lien arising out of the refinancing, extension, renewal or
           refunding of any Debt secured by any Lien permitted by any of the
           foregoing paragraphs of this Section 6.18, provided that (i) such
                                                      --------
           Debt is not secured by any additional assets, and (ii) the amount of
           such Debt secured by any such Lien is not increased; and

     (e)   Liens incidental to the conduct of its business or the ownership of
           its assets which (i) do not secure Debt and (ii) do not in the
           aggregate materially detract from the value of its assets or
           materially impair the use thereof in the operation of its business.

                                       18
<PAGE>

     Description of Lien and                                  Amount of
     Property subject to same                               Debt Secured
     ------------------------                               ------------

     a.   __________________                               $___________

     b.   __________________                               $___________

     c.   __________________                               $___________

     d.   __________________                               $___________

     e.   __________________                               $___________

               Total                                       $===========

     (a)  Liens on specific fixed assets securing Debt
          incurred or assumed for the purpose of financing
          all or any part of the cost of acquiring or
          constructing such asset/2/                       $___________

4.   Ratio of Consolidated Total Adjusted Debt to Consolidated EBILTDA. (Section
     6.21)

     The ratio of Consolidated Total Adjusted Debt to Consolidated EBILTDA will
     not, at the end of any Fiscal Quarter, exceed 3.00 to 1.00.

     (a)  Consolidated Total Adjusted Debt                 $___________

     (b)  Consolidated EBILTDA  - Schedule 2               $___________

     (c)  Actual Ratio of (a) to (b)                       ____ to 1.00

          Maximum Ratio                                    3.00 to 1.00]

5.   Ratio of Consolidated EBILT to Consolidated Fixed Charges   (Section 6.22)

     The ratio of (a) Consolidated EBILT to (b) Consolidated Fixed Charges will,
     as of the end of any Fiscal Month, exceed the following amounts during the
     corresponding periods set forth below:

                   Period                                     Amount
                   ------                                     ------
       Fiscal Month ending 07/31/01                        0.90 to 1.00

       Each Fiscal Month ending thereafter                 1.00 to 1.00

____________
/2/  Include only if Lien attached within 30 days of acquisition or completion
of construction

                                       19
<PAGE>

     (a)  Consolidated EBILT - Schedule 4                    $___________

     (b)  Consolidated Interest Expense
          - Schedule 4                                       $___________

     (c)  Payment obligations under operating
          leases and rental agreements - Schedule 4          $___________

     (d)  Sum of (b) and (c)                                 $___________

     (e)  Actual ratio of (a) to (d)                         _____ to 1.0

          Minimum ratio                                      [0.90 to 1.00]
                                                             [1.00 to 1.00]

6.   Minimum Consolidated Net Worth. (Section 6.23)

     Consolidated Net Worth will at no time be less than the Consolidated Net
     Worth reflected on the balance sheet of the Borrower as at June 30, 2001,
     minus $500,000, plus the sum of (i) 75% of the cumulative Reported Net
     Income of the Borrower and its Consolidated Subsidiaries during any period
     after June 30, 2001 (taken as one accounting period), calculated quarterly
     at the end of each Fiscal Quarter but excluding from such calculations of
     Reported Net Income for purposes of this clause (i), any Fiscal Quarter in
     which the Reported Net Income of the Borrower and its Consolidated
     Subsidiaries is negative, and (ii) 100% of the cumulative Net Proceeds of
     Capital Stock received during any period after the Closing Date, calculated
     quarterly at the end of each Fiscal Quarter.

     (a)  actual Consolidated Net Worth - Schedule 3         $___________

     (b)  Consolidated Net Worth as at June 30, 2001         $___________

     (c)  (b) less $500,000                                  $___________

     (d)  Cumulative positive Reported Net Income
          after June 30, 2001                                $___________

     (e)  75% of (d)                                         $___________

     (f)  cumulative Net Proceeds of Capital Stock
          received after Closing Date                        $___________

     (g)  sum of (c), plus (e), plus (f)                     $___________

          Limitation: (a) must equal or exceed (g)

                                       20
<PAGE>

7.   Minimum Consolidated EBITDA

     (Section 6.29)  At the end of each Fiscal Month, Consolidated EBITDA shall
     not be less than the amount set forth below for such Fiscal Month and the
     immediately preceding Fiscal Month:

             Period                                  Consolidated EBITDA
             ------                                  -------------------

  Fiscal Month ending 07/31/01                       $7,000,000

  Fiscal Month ending 08/31/01                       $7,500,000

  Fiscal Month ending 09/30/01                       $8,000,000

  Fiscal Month ending 10/31/01                       $8,500,000

  Each Fiscal Month ending thereafter                $9,000,000

     (a)  Consolidated EBITDA - Schedule 4                   $___________

          Minimum EBITDA                                     [$7,000,000]
                                                             [$7,500,000]
                                                             [$8,000,000]
                                                             [$8,500,000]
                                                             [$9,000,000]

                                       21
<PAGE>

8.   Capital Expenditures     (Section 6.30)

               At the end of each Fiscal Quarter, Capital Expenditures shall not
     exceed the amount set forth below for such Fiscal Quarter:

          Period                                     Capital Expenditures
          ------                                     --------------------

  Fiscal Quarter ending 09/30/01                     $15,000,000

  Fiscal Quarter ending 12/31/01                     $15,000,000

     (a)  Capital Expenditures - Schedule 5                  $____________

          Maximum Capital Expenditures                       $15,000,000

                                       22
<PAGE>

                                                                      Schedule 1
                                                                      ----------

                         CONSOLIDATED OPERATING PROFITS

     Consolidated Operating Profits

     _____ quarter _____                              $_______

     _____ quarter _____                              $_______

     _____ quarter _____                              $_______

     _____ quarter _____                              $_______

     Total                                            $_______

                                       23
<PAGE>

                                                                      Schedule 2
                                                                      ----------

                                    EBILTDA

(a)            Consolidated Net Income for:
               _____ quarter _____                                $_______

               _____ quarter _____                                $_______

               _____ quarter _____                                $_______

               _____ quarter _____                                $_______

               Total                                              $_______

(b)            Income taxes/3/ for:                               $_______

               _____ quarter _____                                $_______

               _____ quarter _____                                $_______

               _____ quarter _____                                $_______

               _____ quarter _____                                $_______

               Total                                              $_______

(c)            payment obligations under operating leases and
               operating rental agreements/4/

(d)            Consolidated Interest Expense for:

               _____ quarter _____                                $_______

               _____ quarter _____                                $_______

               _____ quarter _____                                $_______

               _____ quarter _____                                $_______

               Total                                              $_______

__________________________

/3/ To the extent included in Consolidated Net Income
/4/ Excluding those between or among the Company and the Consolidated
Subsidiaries, but including those under the Synthetic Lease Documents

                                       24
<PAGE>

(e)            If applicable, $2,000,000 FY 2000 bad debt
               charge for:

               _____ quarter _____                                $_______

               _____ quarter _____                                $_______

               _____ quarter _____                                $_______

               _____ quarter _____                                $_______

               Total                                              $_______

(f)            Depreciation expense for:

               _____ quarter _____                                $_______

               _____ quarter _____                                $_______

               _____ quarter _____                                $_______

               _____ quarter _____                                $_______

               Total                                              $_______

(g)            Amortization expense for:

               _____ quarter _____                                $_______

               _____ quarter _____                                $_______

               _____ quarter _____                                $_______

               _____ quarter _____                                $_______

               Total                                              $_______

               TOTAL EBILTDA (sum of (a) through (g))             $_______

                                       25
<PAGE>

                                                                      Schedule 3
                                                                      ----------

                            CONSOLIDATED NET WORTH

(a)        par or stated value of all outstanding Capital Stock    $_________

(b)        capital surplus                                         $_________

(c)        retained earnings                                       $_________

(d)        sum of (a), plus (b), plus (c)/5/                       $_________

(e)        Redeemable Preferred Stock                              $_________

(f)        purchases of treasury stock                             $_________

(g)        valuation allowances                                    $_________

(h)        receivables due from an employee stock ownership plan   $_________

(i)        employee stock ownership plan debt guarantees           $_________

(j)        translation adjustments for foreign currency            $_________
           transactions

(k)        sum of (e), plus (f), plus (g), plus (h), plus (i),     $_________
           plus (j)/6/

           CONSOLIDATED NET WORTH                                  $_________
           (sum of (d), less (k))

_____________________

/5/ Add any additional items included in shareholders' equity
/6/ Add any additional deductions from shareholders' equity

                                       26
<PAGE>

                                                                      Schedule 4
                                                                      ----------

 EBILT/EBITDA (Fiscal Month just ended and immediately preceding Fiscal Month)

     I.  EBILT:
         -----

<TABLE>
<CAPTION>
(a)               Consolidated Net Income for:
<S>               <C>                                                                  <C>
                  ______________, 2001                                                 $___________

                  ______________, 2001                                                 $___________

                  Total                                                                $___________

(b)               Income taxes for/7/:
                  ______________, 2001                                                 $___________

                  ______________, 2001                                                 $___________

                  Total                                                                $___________

(c)               payment obligations under operating leases and operating
                  rental agreements for/8/
                  ______________, 2001                                                 $___________

                  ______________, 2001                                                 $___________

                  Total                                                                $___________

(d)               Consolidated Interest Expense for:
                  ______________, 2001                                                 $___________

                  ______________, 2001                                                 $___________

                  Total                                                                $___________

                  TOTAL EBILT (sum of (a) through (d))                                 $___________
</TABLE>

II.               EBITDA
                  ------
_________________________
/7/ To the extent included in Consolidated Net Income
/8/ Excluding those between or among the Company and the Consolidated
Subsidiaries, but including those under the Synthetic Lease Documents

                                       27
<PAGE>

(a)            sum of (a), (b) and (d) from Part I:               $___________

(b)            Depreciation expense for:
               ______________, 2001                               $___________

               ______________, 2001                               $___________

               Total                                              $___________

               Amortization expense for:
               ______________, 2001                               $___________

               ______________, 2001                               $___________

(c)            Total                                              $___________

               TOTAL EBITDA (sum of (a) through (c))              $___________

                                       28
<PAGE>

                                                                      Schedule 5
                                                                      ----------

                             Capital Expenditures

                  Capital Expenditures for:

                  _____ quarter _____

                  _____ quarter _____                           $___________

                  _____ quarter _____                           $___________

                  Total                                         $___________

                                       29<PAGE>

                                                                    Exhibit 10.1

                           PEMCO AVIATION GROUP, INC.
                         NONQUALIFIED STOCK OPTION PLAN
                               Dated June 1, 1999
                      As Amended and Restated May 17, 2001

     Section 1.  Purpose.  The purpose of the PEMCO AVIATION GROUP, INC. (the
                 -------
"Company") Nonqualified Stock Option Plan (the "Plan") is to provide incentives
for selected persons to promote the financial success and progress of the
Company by granting such persons awards ("Awards") of incentives in the form of
options to purchase shares of the Company's Common Stock ("Options"), stock
appreciation rights ("SARs"), and Common Stock of the Company ("Stock Grants").
An Award may consist of one or a combination of such incentives and may be made
at any time or from time to time.

     Section 2.   General Provisions.
                  ------------------

             A.  Administration.  The Plan shall be administered by the
                 --------------
Compensation Committee, which shall be comprised of two or more independent
outside directors appointed by the Board of Directors (the "Committee").
Notwithstanding the foregoing, if it would be consistent with all applicable
laws, including, without limitation, Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, as amended ("Rule 16b-3"), and the Internal Revenue Code
of 1986, as amended (the "Code"), and the regulations promulgated thereunder
(including, without limitation, the regulations relating to Section 162(m) of
the Code), then the Plan may be administered by the Board of Directors, and if
so administered all subsequent references to the Committee shall refer to the
Board of Directors. Any action of the Committee shall be taken by majority vote
or the unanimous written consent of the Committee members.

             B.  Authority of the Committee.  Subject to other provisions of the
                 --------------------------
Plan, and with a view towards furtherance of its purpose, the Committee shall
have sole authority and absolute discretion:

                 1.  to construe and interpret the Plan;

                 2.  to define the terms used herein;

                 3.  to prescribe, amend and rescind rules and regulations
                     relating to the Plan;

                 4.  to determine the persons to whom Awards are granted;

                 5.  to determine the time or times at which Awards shall be
                     granted;

                 6.  to determine the number of shares subject to each Award;

                 7.  to determine all of the other terms and conditions of the
                     Options, SARs, and Stock Grants awarded hereunder; and

                                      -1-
<PAGE>

                 8.  to make all other determinations necessary or advisable for
                     the administration of the Plan and to do everything
                     necessary or appropriate to administer the Plan.

All decisions, determinations and interpretations made by the Committee shall be
binding and conclusive on all participants in the Plan and on their legal
representatives, heirs and beneficiaries.

             C.  Maximum Number of Shares Subject to the Plan.  The maximum
                 --------------------------------------------
aggregate number of shares of Common Stock subject to the Plan shall be
1,500,000, subject to adjustment as provided in Section 2.G of the Plan. The
Common Stock subject to the Plan may be divided among the various types of
Awards as the Committee determines in its sole discretion from time to time. For
purposes of calculating the maximum number of shares of Common Stock which may
be issued under the Plan, (a) all shares underlying an Option (including the
shares, if any, withheld for tax withholding requirements) shall be counted when
cash is used as full payment for shares issued upon exercise of the Option; (b)
in the case of net exercise of an Option, only the net shares issued (including
the shares, if any, withheld for tax withholding requirements) shall be counted
when shares of Common Stock are used as full or partial payment for shares
issued upon exercise of an Option; (c) all shares underlying an SAR (including
the shares, if any, withheld for tax withholding requirements) shall be counted
upon exercise of an SAR; and (d) all shares issued pursuant to a Stock Grant
(including the shares, if any, withheld for tax withholding requirements) shall
be counted when the shares are no longer subject to any conditions, such as a
vesting schedule, and certificates representing such shares have been issued and
delivered. If any Options or SARs granted under the Plan expire or terminate for
any reason before they have been exercised, the shares subject to such Options
or SARs shall again be available under the Plan.

             D.  Eligibility and Participation.  Subject to the terms of the
                 -----------------------------
Plan, Awards may be granted to such employees, officers, directors, consultants
and independent contractors of the Company or any Parent, Subsidiary or
Affiliate of the Company, as defined below, as the Committee may select from
time to time in its sole discretion. Employees of the Company are eligible to
receive Awards for no more than an aggregate of 500,000 shares of the Company's
Common Stock per employee under the Plan. If any Options or SARs granted to an
employee expire unexercised or terminate before vesting, they shall not be
included in the foregoing maximum aggregate of 500,000 shares per employee. The
Committee, in its sole discretion, shall determine the number of shares of the
Company's Common Stock covered by any Award made to executive officers or other
employees under the Plan. Grants to non-employee directors of the Company may
only be made pursuant to formula grants in the manner and amounts set forth in
Section 7 hereof, provided that, if, and to the extent that, the Committee or
the Board of Directors could exercise authority to determine the amount, price
and timing of grants hereunder to its members, consistent with all applicable
laws, including, without limitation Rule 16b-3, grants to non-employee directors
may be made by the Committee or the Board of Directors as permitted by law. A
person may be granted more than one Award under the Plan. As used in the Plan,
the following terms shall have the following meanings:

                 1.  "Parent" means any corporation (other than the Company) in
                      ------
an unbroken chain of corporations ending with the Company if, at the time of the
granting of an Award, each of such corporations other than the Company owns
stock possessing 50% or more

                                      -2-
<PAGE>

of the total combined voting power of all classes of stock in one of the other
corporations in such chain.

                 2.  "Subsidiary" means any corporation (other than the Company)
                      ----------
in an unbroken chain of corporations beginning with the Company if, at the time
of granting of an Award, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

                 3.  "Affiliate" means any corporation that directly, or
                      ---------
indirectly through one or more intermediaries, controls or is controlled by, or
is under common control with, another corporation, where "control" (including
the terms "controlled by" and "under common control with") means the possession,
direct or indirect, of the power to cause the direction of the management and
policies of the corporation, whether through the ownership of voting securities,
by contract or otherwise.

                 4.  "Common Stock" means shares of the Company's $.0001 par
                      ------------
value common stock, or such other shares as are substituted pursuant to Section
2.G hereof.

             E.  Effective Date of Plan.  The Plan was adopted by the Company on
                 ----------------------
September 8, 1989 and has been amended thereafter from time to time.

             F.  Termination and Amendment of Plan.  The Plan shall terminate on
                 ---------------------------------
September 8, 2009.  No Options, SARs, or Stock Grants shall be granted under the
Plan after that date. Subject to the limitation contained in Section 2.H of the
Plan, the Board or the Committee may at any time amend or revise the terms of
the Plan, including the form and substance of the Options, SARs, and Stock
Grants granted hereunder, provided that no such amendment or revision shall (i)
increase the maximum aggregate number of shares that may be issued pursuant to
Awards granted under the Plan, except as permitted under Section 2.G of the
Plan; or (ii) effect any change to the Plan which is required to be approved by
shareholders by law, including without limitation the regulations promulgated
under Section 162(m) of the Code.

             G.  Adjustments.  If the outstanding shares of Common Stock are
                 -----------
increased, decreased, changed into or exchanged for a different number or kind
of shares or securities through merger, consolidation, combination, exchange of
shares, reorganization, recapitalization, reclassification, stock dividend,
stock split or reverse stock split, an appropriate and proportionate adjustment
shall be made in the maximum number and kind of shares as to which Options,
SARs, and Stock Grants may be granted under the Plan. A corresponding adjustment
shall be made to the number or kind of shares allocated to unexercised Options
and SARs, or portions thereof, and to unvested Options, SARs, and Stock Grants
granted prior to any such change. Any such adjustment in outstanding Options or
SARs shall be made without change in the aggregate purchase price applicable to
the unexercised portion of such Options or SARs, but with a corresponding
adjustment in the price for each share covered by the Options or SARs.

             H.  Prior Options and Obligations.  No amendment, suspension or
                 -----------------------------
termination of the Plan shall, without the consent of the person who has
received an Award, alter or impair any

                                      -3-
<PAGE>

of that person's Options or obligations under any Award granted under the Plan
prior to that amendment, suspension or termination.

             I.  Privileges of Stock Ownership.  Notwithstanding the exercise of
                 -----------------------------
any Option or SAR, or the receipt of any Stock Grant, granted pursuant to the
terms of the Plan, no person shall have any of the rights or privileges of a
shareholder of the Company with respect to any shares of stock until
certificates representing such shares have been issued and delivered. No shares
shall be required to be issued and delivered upon exercise of any Option or SAR,
or pursuant to a Stock Grant, until there has been compliance with all of the
requirements of law and of all regulatory agencies having jurisdiction over the
issuance and delivery of the securities.

             J.  Reservation of Shares of Common Stock.  During the term of the
                 -------------------------------------
Plan, the Company will at all times reserve and keep available such number of
shares of its Common Stock as shall be sufficient to satisfy the requirements of
the Plan. In addition, the Company will from time to time, as is necessary to
accomplish the purposes of the Plan, seek or obtain from any regulatory agency
having jurisdiction any requisite authority in order to issue shares of common
stock hereunder. The inability of the Company to obtain from any regulatory
agency having jurisdiction the authority deemed by the Company's counsel to be
necessary to the lawful issuance of any Award or shares of its stock hereunder
shall relieve the Company of any and all liability with respect to the
nonissuance of the Award or the shares of Common Stock as to which the requisite
authority shall not have been obtained.

             K.  Tax Withholding.  The exercise of any Option or SAR, and the
                 ---------------
receipt of any Stock Grant, is subject to the condition that if at any time the
Company shall determine, in its discretion, that the satisfaction of withholding
tax or other withholding obligations under any state or federal law is necessary
or desirable as a condition of, or in connection with, such exercise or delivery
or purchase of shares pursuant thereto, then in such event, the exercise of an
Option or SAR, or the receipt of a Stock Grant, shall not be effective unless
such withholding shall have been effected or obtained in a manner acceptable to
the Company.

             L.  Fair Market Value.  The "fair market value" of the Common Stock
                 -----------------
means if there is an established market for the Company's Common Stock on a
stock exchange, in an over-the-counter market or otherwise, the mean of the
highest and lowest quoted selling prices on the date upon which an Option or SAR
is granted or (b) if there were no such sales on such date, then in accordance
with Treasury Regulation Section 20.2031-2 or successor regulations.

     Section 3.  Options.
                 -------

             A.  Option Price.  The option price for shares acquired pursuant to
                 ------------
the exercise of any Option, in whole or in part, shall be determined by the
Committee at the time of the grant of the Option. Such option price may be less
than the fair market value of the Company's Common Stock on the date of grant,
but in no event shall the option price be less than fifty percent (50%) of the
fair market value of the Common Stock on the date of grant. The foregoing
notwithstanding, the option price of Options granted to officers or directors
shall be 100% of the fair market value of the Company's Common Stock on the date
of grant.

                                      -4-
<PAGE>

             B.  Exercise of Options.  Each Option shall be exercisable in one
                 -------------------
or more installments during its term, and the right to exercise may be
cumulative, as determined by the Committee. No Option may be exercised for a
fraction of a share of Common Stock. The option price shall be paid at the time
of exercise of the Option in cash or shares of the Company's Common Stock, or in
a combination thereof. If permitted by the Committee, payment may also be made
by delivering a properly executed notice together with irrevocable instructions
to a broker to promptly deliver to the Company the amount of sale or loan
proceeds attributable to the purchased shares needed to pay the exercise price.
If any portion of the purchase price at the time of exercise is paid in shares
of Common Stock, those shares shall be tendered at their fair market value on
the date of exercise. The Committee may also permit a participant to effect a
net exercise of an Option without tendering any shares of the Company's Common
Stock as payment for the Option. In such an event, the participant will be
deemed to have paid for the exercise of the Option with shares of the Company's
stock and shall receive from the Company a number of shares equal to the
difference between the shares that would have been tendered and the number of
Options exercised. The Committee may in its discretion and subject to
ratification by the entire Board of Directors, loan one or more participants all
or a portion of the exercise price, together with the amount of any tax
liability incurred by the participant as a result of the exercise of the Option,
for up to three (3) years with interest payable at the prime rate quoted in the
Wall Street Journal on the date of exercise. Non-employee directors may receive
such loans for the exercise of their Options without Committee approval or Board
ratification.

             C.  Acceleration of Options.  Notwithstanding the first sentence of
                 -----------------------
Section 3.B of the Plan, if the Company or its shareholders enter into an
agreement to dispose of all or substantially all of the assets or stock of the
Company by means of a sale, merger or other reorganization, liquidation, or
otherwise, any Option granted pursuant to the Plan shall become immediately
exercisable with respect to the full number of shares subject to that Option
during the period commencing as of the date of the agreement to dispose of all
or substantially all of the assets or stock of the Company and ending when the
disposition of assets or stock contemplated by that agreement is consummated or
the Option is otherwise terminated in accordance with its provisions or the
provisions of the Plan, whichever occurs first; provided that no Option shall be
immediately exercisable under this Section on account of any agreement of merger
or other reorganization where the shareholders of the Company immediately before
the consummation of the transaction will own at least 50% of the total combined
voting power of all classes of stock entitled to vote of the surviving entity
(whether the Company or some other entity) immediately after the consummation of
the transaction. In the event the transaction contemplated by the agreement
referred to in this Section is not consummated, but rather is terminated,
canceled or expires, the Options granted pursuant to the Plan shall thereafter
be treated as if that agreement had never been entered into.

             D.  Written Notice Required.  Any Option granted pursuant to the
                 -----------------------
Plan shall be exercised when written notice of that exercise has been given to
the Company at its principal office by the person entitled to exercise the
Option and full payment for the shares with respect to which the Option is
exercised has been received by the Company.

     Section 4.  Reload Options.  Concurrently with the award of Options under
                 --------------
the Plan, the Committee may authorize reload options ("Reload Options") to
purchase, for cash or shares, the number of shares of Common Stock used to
exercise the underlying Option.

                                      -5-
<PAGE>

             A.  Reload Option Amendment.  Each notice evidencing the grant of
                 -----------------------
an Option shall state whether the Committee has authorized Reload Options with
respect to the underlying Option. Upon the exercise of an underlying Option, the
Reload Option will be evidenced by an amendment to the notice of grant of the
underlying Option. Reload Options shall be subject to the terms and conditions
in the underlying option agreement and shall be subject to the terms and
conditions set forth in the Plan.

             B.  Reload Option Price.  The option price per share of Common
                 -------------------
Stock deliverable upon exercise of a Reload Option shall be the fair market
value of a share of Common Stock on the date of exercise of the underlying
Option.

             C.  Term and Exercise.  Each Reload Option is fully exercisable
                 -----------------
from the date of exercise of the underlying Option and shall remain exercisable
for the remaining term of the underlying Option. Reload Options may be exercised
in the same manner as the underlying Options in accordance with the Plan.

             D.  Termination of Employment.  No additional Reload Options shall
                 -------------------------
be granted to participants in the Plan when an Option or Reload Option is
exercised pursuant to the terms of the Plan following termination of the
participant's employment or the cessation of the participant's service to the
Company as a director, consultant or independent contractor.

     Section 5.  Stock Appreciation Rights.  The Committee may, from time to
                 --------------------------
time in its sole discretion, grant SARs in addition to or in conjunction with
Options granted hereunder, either at the time of the grant of the Options or at
any subsequent time during the term of the Options. Subject to the terms of the
Plan, the Committee shall determine and designate the recipients of SARs, the
dates SARs are granted, the number of shares subject to SARs, the duration of
each SAR, and whether SARs are alternative to any previously or
contemporaneously granted Option or Reload Option ("Related Options").  SARs
shall be subject to the terms and conditions and evidenced by agreements in the
form determined from time to time by the Committee.

             A.  Value of SARs.  SARs shall entitle their holders to receive a
                 -------------
number of shares of the Company's Common Stock equal to (i) the excess of the
fair market value of a share of the Company's Common Stock on the date of
exercise over a specified price fixed by the Committee, which price may not be
less than 100% of the fair market value of a share of Common Stock on the date
of the grant, multiplied by (ii) the number of shares as to which the holder is
exercising the SAR.

             B.  Duration.  The term of an SAR granted as an alternative to an
                 --------
Option will be the same as the term of its Related Option; upon exercise of the
SAR, the Related Option will terminate, and upon exercise of the Related Option,
the SAR will terminate. The term of an SAR granted in addition to and separately
from any Option shall be specified by the Committee at the time such SAR is
granted.

             C. Exercise of SARs.  SARs may be exercised according to their
                ----------------
terms by providing written notice to the Company at any time prior to the
expiration of the SAR. No SAR

                                      -6-
<PAGE>

may be exercised for a fraction of a share of Common Stock. If the SAR is
alternative to an Option, the Related Option shall be deemed terminated to the
extent the SAR is exercised.

     Section 6.  Stock Grants.  The Committee may, from time to time in its sole
                 ------------
discretion, grant shares of the Company's Common Stock under the Plan.  Such
Stock Grants may be awarded with or without conditions, such as vesting
schedules or performance requirements. Recipients of Stock Grants will not be
required to pay for the acquisition of the Company's Common Stock but will be
subject to tax consequences and resale restrictions.

     Section 7.  Grants to Outside Directors.  On the same date in 2001 and each
                 ---------------------------
year thereafter on which the Committee makes its annual grant of Options to the
Company's officers and other key employees, each director who is not an employee
of the Company shall be granted an Option for 20,000 shares of Common Stock,
without further action by the Committee.  The exercise price for Options granted
to outside directors under this Section shall be 100% of the fair market value
of the Common Stock on the date of grant.  Each Option granted in accordance
with this Section shall include authorization for a Reload Option in accordance
with Section 4 of the Plan.

     Section 8.  Terms and Conditions May Differ.   The terms and conditions of
                 -------------------------------
Awards granted under the Plan may differ as the Committee shall in its
discretion determine so long as all Awards satisfy the requirements of the Plan.

     Section 9.  Duration of Options and SARs.  Each Option and each SAR granted
                 ----------------------------
pursuant to the Plan shall expire on the date determined by the Committee which
shall be not later than ten years after the date of grant and shall be subject
to early termination as provided in the Plan. Subject to the foregoing, Options
granted to outside directors pursuant to Section 7 hereof shall be fully vested
on the date of grant and shall be exercisable for a period of ten years.

     Section 10.  Limitations on Acquiring Voting Stock.  No Award may be
                  -------------------------------------
granted to persons who are not officers or directors of the Company if such
Award would cause that person to hold, beneficially or of record, in excess of
5% of the outstanding voting stock of the Company.

     Section 11.  Compliance with Securities Laws.  Shares of Common Stock shall
                  -------------------------------
not be issued with respect to any Award granted under the Plan unless the
issuance and delivery of the shares pursuant thereto shall comply with all
relevant provisions of state and federal law, including without limitation the
Securities Act of 1933, as amended, the rules and regulations promulgated
thereunder and the requirements of any stock exchange upon which the shares may
then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.  Further, each recipient of an Award
hereunder shall consent to the imposition of a legend on the certificate
representing the shares of Common Stock issued hereunder restricting the
transferability of such shares as required by law, the Award, or by the Plan.

     Section 12.  Employment.  Each recipient of an Award, if requested by the
                  ----------
Committee, must agree in writing as a condition of the granting of his or her
Award, to remain in the employ of the Company or to remain as a consultant to
the Company, or any of its Subsidiaries, following the date of the granting of
that Award for a period or periods specified by the

                                      -7-
<PAGE>

Committee, which period(s) shall in no event exceed an aggregate of four years.
Nothing in the Plan or in any Award granted hereunder shall confer upon any
Award recipient any right to continued employment or retainer by the Company or
any of its Subsidiaries, or limit in any way the right of the Company or any
Subsidiary at any time to terminate or alter the terms of that employment or
consulting arrangement.

     Section 13.  Rights Upon Termination of Employment, Director, Consultant or
                  --------------------------------------------------------------
Independent Contractor Status.  If an Award recipient ceases to be employed by
-----------------------------
the Company or ceases to serve as a director, consultant or independent
contractor of the Company, or any Subsidiary, for any reason other than death or
retirement, his or her Award shall terminate one year from the date of the Award
recipient ceases to be employed by or serve as a director, consultant or
independent contractor of the Company; provided that the Committee may, in its
discretion, allow Options and SARs to remain exercisable (to the extent
exercisable on the date of termination of employment or retainer) for up to one
additional year for each year of service to the Company by the Award recipient
(up to a maximum of five years after the date of termination), unless the
Option, SAR, or the Plan otherwise provides for earlier termination; and
provided further that, for purposes of determining when a director no longer
serves the Company, the period during which post-retirement or similar benefits
are paid to the director by the Company shall be deemed to be continued service.

     Section 14.  Rights Upon Death.  Except as otherwise limited by the
                  -----------------
Committee at the time of the grant of an Option or SAR, if the recipient dies
while he or she is an employee, director or consultant of the Company or any
Subsidiary, his or her Options and SARs shall remain exercisable for one year
after the date of death, unless the Options, SARs, or the Plan otherwise provide
for earlier termination.  During such exercise period after death, Options and
SARs may be fully exercised, to the extent that they remain unexercised on the
date of the recipient's death, by the person or persons to whom the recipient's
rights to the Options or SARs shall pass by will or by laws of descent and
distribution.

     Section 15.  Waiver of Vesting Restrictions in the Event of Retirement.
                  ---------------------------------------------------------
Notwithstanding any provision of the Plan, in the event an Award recipient
retires as an employee or director of the Company, or any Subsidiary, the
Committee shall have the discretion to waive any vesting restrictions on the
retiree's Options, SARs, or Stock Grants.

     Section 16.  Awards Not Transferable.  Awards granted pursuant to the Plan
                  -----------------------
may not be sold, pledged, assigned or transferred in any manner otherwise than
by will or the laws of descent and distribution.  During the lifetime of the
Award recipient, Options and SARs may only be exercised by that recipient or by
his or her guardian or legal representative.

     Section 17.  Reports to Shareholders.  Upon written request, the Company
                  -----------------------
shall furnish to each Award recipient a copy of its most recent Form 10-K Annual
Report and each quarterly report to shareholders issued since the end of the
Company's most recent fiscal year.

                                      -8-

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