SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<Table>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
</Table>
U.S. XPRESS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials:
----------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
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(USXpress Logo)
April 15, 2002
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of U.S.
Xpress Enterprises, Inc. to be held at 10:00 a.m., Eastern Daylight Time, May
14, 2002, at the Company's Corporate Offices at 4080 Jenkins Road, Chattanooga,
Tennessee 37421. The matters to be acted upon at the meeting are described in
detail in the attached Notice of Annual Meeting and Proxy Statement.
Your vote is very important, regardless of the number of shares you own. Whether
or not you plan to attend the meeting in person, we urge you to sign, date, and
mail the enclosed proxy card promptly in the accompanying postage-prepaid
envelope. If you attend the meeting, you may vote your shares in person, even
though you have previously signed and returned your proxy.
Sincerely,
/s/ Patrick E. Quinn
Patrick E. Quinn
Co-Chairman of the Board of Directors
/s/ Max L. Fuller
Max L. Fuller
Co-Chairman of the Board of Directors
(Address)
(USXpress Logo)
4080 Jenkins Road
Chattanooga, Tennessee 37421
---------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 14, 2002
---------------------------
April 15, 2002
To the Stockholders of U.S. Xpress Enterprises, Inc.:
The Annual Meeting of Stockholders of U.S. Xpress Enterprises, Inc. (the
"Company") will be held at 10:00 a.m., Eastern Daylight Time, May 14, 2002, at
the Company's Corporate Offices at 4080 Jenkins Road, Chattanooga, Tennessee
37421, for the following purposes:
1. Election of seven Directors for the coming year;
2. Approval of a Stock Incentive Plan to permit the Company to continue to
issue incentive stock options in accordance with applicable Internal Revenue
Service regulations; and
3. Transaction of such other business that may properly come before the Annual
Meeting of Stockholders or any adjournment(s) thereof.
The close of business on March 21, 2002 has been fixed as the record date for
the determination of stockholders entitled to notice of and to vote at the
Annual Meeting of Stockholders and any adjournment(s) thereof.
Whether or not you plan to attend the meeting, please mark, date, and sign the
accompanying proxy and promptly return it in the enclosed envelope. If you
attend the meeting, you may vote your shares in person, even though you have
previously signed and returned your proxy.
By Order of the Board of Directors,
/s/ Max L. Fuller
Max L. Fuller
Co-Chairman of the Board and Secretary
(USXpress LOGO)
4080 Jenkins Road
Chattanooga, Tennessee 37421
---------------------------
PROXY STATEMENT
---------------------------
This proxy statement is being mailed to stockholders of U.S. Xpress Enterprises,
Inc., a Nevada corporation (the "Company"), on or about April 15, 2002, in
connection with the solicitation of proxies by the Board of Directors of the
Company for use at the Annual Meeting of Stockholders (the "Annual Meeting") of
the Company to be held at 10:00 a.m., Eastern Daylight Time, May 14, 2002, at
the Company's Corporate Offices at 4080 Jenkins Road, Chattanooga, Tennessee
37421.
SOLICITATION OF PROXIES
The Company will bear the cost of solicitation of proxies and will reimburse
brokers, custodians, nominees and fiduciaries for their reasonable expenses in
sending solicitation material to the beneficial owners of the Company's shares.
In addition to soliciting proxies through the mail, proxies also may be
solicited by officers and employees of the Company by telephone or otherwise.
Granting a proxy does not preclude the right of the person giving the proxy to
vote in person, and a person may revoke his or her proxy at any time before it
has been exercised, by giving written notice to the Secretary of the Company, by
delivering a later-dated proxy, or by voting in person at the Annual Meeting.
The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of the Company's Class A Common Stock, $.01 par value (the
"Class A Common Stock"), and Class B Common Stock, $.01 par value (the "Class B
Common Stock"), is necessary to constitute a quorum at the Annual Meeting. If a
quorum is not present or represented at the Annual Meeting, the stockholders
entitled to vote, whether present in person or represented by proxy, have the
power to adjourn the Annual Meeting from time to time, without notice other than
announcement at the Annual Meeting, until a quorum is present or represented. At
any such adjourned Annual Meeting at which a quorum is present or represented,
any business may be transacted that might have been transacted at the Annual
Meeting as originally noticed.
On all matters submitted to a vote of the stockholders at the Annual Meeting or
any adjournment(s) thereof, each stockholder of Class A Common Stock will be
entitled to one vote for each share of Class A Common Stock owned and each
stockholder of Class B Common Stock will be entitled to two votes for each share
of Class B Common Stock owned of record at the close of business on March 21,
2002. The Class A Common Stock and Class B Common Stock vote together as a
single class. The affirmative vote of a majority of the stockholders entitled to
vote and represented in person or by Proxy at the Annual Meeting is required to
elect the Board of Directors' nominees and to approve the Stock Incentive Plan.
Proxies in the accompanying form that are properly executed and returned will be
voted at the Annual Meeting and any adjournment(s) thereof in accordance with
the directions on such proxies. If no directions are specified, such proxies
will be voted according to the recommendations of the Board of Directors as
stated on the proxy. Shares covered by abstentions and broker non-votes, while
counted for purposes of determining the presence of a quorum at the Annual
Meeting, are not considered affirmative votes.
Management knows of no other matters or business to be presented for
consideration at the Annual Meeting. If, however, any other matters properly
come before the Annual Meeting or any adjournment(s) thereof, it is the
intention of the persons named in the enclosed proxy to vote such proxy in
accordance with their best judgment on any such matters. The persons named in
the enclosed proxy, if they deem it advisable, also may vote such proxy to
adjourn the Annual Meeting from time to time.
- 3 -
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
On March 21, 2002, the record date for determining stockholders entitled to
notice of and to vote at the Annual Meeting, the Company had issued and
outstanding and entitled to vote 10,811,882 shares of Class A Common Stock and
3,040,262 shares of Class B Common Stock. The following table sets forth
information regarding beneficial ownership of the Company's Class A and Class B
Common Stock as of March 21, 2002, except as otherwise noted, with respect to
(i) each person known by the Company to own beneficially more than five percent
of the outstanding shares of either class of common stock, (ii) each director
and nominee, (iii) the Co-Chairmen of the Board and the three other most highly
compensated executive officers who earned in excess of $100,000 during 2001, and
(iv) all directors and executive officers as a group:
<Table>
<Caption>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP(1)
------------------------
NAME OF BENEFICIAL OWNER CLASS A CLASS B PERCENT(2)(3)
- -------------------------------------------------------------------------------------------------------
Patrick E. Quinn(4) 2,315,855(5) 1,520,131 27.7
Max L. Fuller(4) 2,623,934(6) 1,520,131 29.9
Capital Group International, Inc.(7) 1,140,300 -- 8.2
Dimensional Fund Advisors, Inc.(8) 774,322 -- 5.6
Cort J. Dondero 80,000 -- *
Ray M. Harlin 94,522 -- *
A. Alexander Taylor, II 17,625 -- *
Robert J. Sudderth, Jr. 10,184 -- *
James E. Hall 400 -- *
E. William Lusk, Jr. 107,139 -- *
All Executive Officers and Directors as a Group (8 persons) 5,249,659 3,040,262 59.1
</Table>
* Less than 1% of the Class A and Class B Common Stock.
(1) Beneficial ownership includes sole voting power and sole investment power
with respect to such shares unless otherwise noted. Share amounts include
shares of Class A Common Stock issuable pursuant to stock options that are
exercisable within 60 days of March 21, 2002 held by the following
individuals: Mr. Dondero -- 20,000 shares, Mr. Hall -- 400 shares, Mr.
Harlin -- 68,500 shares, Mr. Lusk -- 68,521 shares, Mr. Sudderth -- 3,600
shares, and Mr. Taylor -- 7,200 shares.
(2) Percentage reflects the aggregate number of shares of both Class A and Class
B Common Stock.
(3) For the purpose of computing the percentage of outstanding shares owned by
each beneficial owner, the shares issuable pursuant to presently exercisable
stock options held by such beneficial owner are deemed to be outstanding.
Such option shares are not deemed to be outstanding for the purpose of
computing the percentage owned by any other person.
(4) The principal business address for Messrs. Quinn and Fuller is 4080 Jenkins
Road, Chattanooga, Tennessee 37421.
(5) Does not include 400,000 shares of Class A Common Stock held by the Quinn
Family Partnership, as to which shares Mr. Quinn disclaims beneficial
ownership.
(6) Does not include 444,916 shares of Class A Common Stock held by the Fuller
Family Partnership, as to which shares Mr. Fuller disclaims beneficial
ownership.
(7) The principal business address of Capital Group International, Inc. is 11100
Santa Monica Boulevard, Los Angeles, CA 90025. Capital Group International,
Inc. reports that Capital Guardian Trust Company, a bank for which it is the
parent holding company, has sole investment power over all of such shares
and sole voting power with respect to 910,300 of such shares. The reported
information is based upon the Schedule 13G/A filed by Capital Group
International, Inc. with the Securities and Exchange Commission on February,
11, 2002.
(8) The principal business address of Dimensional Fund Advisors, Inc. is 1299
Ocean Avenue, 11th Floor, Santa Monica, CA 90401. Dimensional Fund Advisors,
Inc. reports that it has sole voting and investment power with respect to
all such shares. The reported information is based upon the Schedule 13G/A
filed by Dimensional Fund Advisors, Inc. on February 12, 2002.
- 4 -
PROPOSAL 1: ELECTION OF DIRECTORS
The Board of Directors consists of seven members. All directors are elected for
one-year terms by the Company's stockholders and hold office until their
successors are elected and duly qualified. Executive officers of the Company are
appointed annually by the Board of Directors and serve at the Board's
discretion.
If any nominee for election as a director is unable to serve, which the Board of
Directors does not anticipate, the persons named in the proxy may vote for
another person in accordance with their judgment. The names and ages of the
nominees, their principal occupations or employment during the past five years
and other data regarding them, based upon information received from them, are as
follows:
NOMINEES FOR DIRECTORSHIPS
<Table>
Photo of Patrick E. PATRICK E. QUINN, 55, has served
Quinn as Co-Chairman of the Board of the
Company since 1994 and President
and director of the Company since
its formation in 1989. Mr. Quinn
has served as an officer and
director of U.S. Xpress, Inc.
since 1985.
Photo of Cort J. CORT J. DONDERO, 51, has served as
Dondero Executive Vice President and Chief
Operating Officer of the Company
since July 2000. Previously, Mr.
Dondero was President of Trimac
Logistics, Inc. from 1999 to July
2000 and President and founder of
Service and Administrative
Institute from 1988 to 1999. Mr.
Dondero has been a director of the
Company since July 2000.
Photo of A. A. ALEXANDER TAYLOR, II, 48, has
Alexander Taylor, II served as President and Chief
Operating Officer of Chattem,
Inc., a consumer products company,
since 1998. Previously, Mr. Taylor
was a partner with the law firm of
Miller & Martin LLP since 1983.
Mr. Taylor is a director of
Chattem, Inc. and The Krystal
Company, a quick-service
restaurant company. Mr. Taylor has
been a director of the Company
since 1994.
Photo of Max L. MAX L. FULLER, 49, has served as
Fuller Co-Chairman of the Board of the
Company since 1994 and Vice
President, Secretary and director
of the Company since its formation
in 1989. Mr. Fuller is a director
of SunTrust Bank, Chattanooga,
N.A. Mr. Fuller has served as an
officer and director of U.S.
Xpress, Inc. since 1985.
Photo of Ray M. RAY M. HARLIN, 52, has served as
Harlin Executive Vice President -- Finance
and Chief Financial Officer of the
Company since 1997. Previously,
Mr. Harlin served for 25 years in
auditing and managerial positions,
and as a partner, with Arthur
Andersen LLP. Mr. Harlin has been a
director of the Company since 1997.
Photo of Robert J. ROBERT J. SUDDERTH, JR., 59, has
Sudderth, Jr. served as Chairman and Chief
Executive Officer of SunTrust
Bank, Chattanooga, N.A. since
1989. Mr. Sudderth also is a
director of SunTrust Service
Corporation and The Dixie Group,
Inc., a floorcovering company. Mr.
Sudderth has been a director of
the Company since 1998.
Photo of James E. JAMES E. HALL, 60, has served as a
Hall partner of the law firm of Dillon,
Hall & Lungershausen since
February 2001, heading up the
firm's Washington, D.C. office.
Previously, Mr. Hall was a member
of the National Transportation
Safety Board from 1993 to 2001,
serving as chairman of the Board
from 1994 to 2001. In 1996, Mr.
Hall was appointed to the White
House Commission on Aviation
Safety and Security. Mr. Hall has
been a director of the Company
since 2001.
</Table>
- 5 -
DIRECTORS' MEETINGS
The Board of Directors held three (3) meetings during the year ended December
31, 2001.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has established an Audit Committee and a Compensation
Committee. The functions of the Audit Committee are to meet with the independent
public accountants of the Company; to review and report upon various matters
affecting the independence of the auditors (see the Audit Committee Report
herein); to review the audit plan for the Company; to review the annual audit of
the Company with the accountants, together with any other reports or
recommendations made by the accountants; to recommend whether the auditors
should be continued as auditors of the Company and, if other auditors are to be
selected, to recommend the auditors to be selected. The Audit Committee is also
to review with the auditors for the Company the adequacy of the Company's
internal controls and to perform such other duties as shall be delegated to the
Committee by the Board of Directors. Messrs. Sudderth, Taylor and Hall serve as
the members of the Audit Committee, with Mr. Taylor serving as Chairman. All of
the members of the Audit Committee are "independent directors" as that term is
defined by Rule 4200 of the National Association of Securities Dealers, Inc.
("NASD").
The functions of the Compensation Committee are to recommend to the Board of
Directors policies and plans concerning the salaries, bonuses and other
compensation of the senior executives of the Company, including reviewing the
salaries of the senior executives; to recommend bonuses, stock options and other
forms of additional compensation for them; to establish and review policies
regarding management perquisites and to perform such other duties as shall be
delegated to the Compensation Committee by the Board. Messrs. Sudderth, Taylor
and Hall serve as the members of the Compensation Committee, with Mr. Sudderth
serving as Chairman.
The Audit Committee met a total of four (4) times and the Compensation Committee
met one (1) time during the year ended December 31, 2001.
DIRECTOR COMPENSATION
Directors who receive no other compensation from the Company receive a $10,000
annual retainer, $1,500 for each Board meeting attended, and $1,500 for each
committee meeting that is not held in conjunction with a Board of Directors
meeting. In accordance with the terms of the 1995 Non-Employee Directors Stock
Award and Option Plan, with the exception of Mr. Hall, each of the non-employee
directors currently has elected to receive shares of the Company's Class A
Common Stock in lieu of cash compensation for his service on the Board. In
addition, each non-employee director is granted options to purchase 1,200 shares
of Class A Common Stock on the date he is elected or re-elected. Options are
assigned an exercise price equal to the fair market value of the Company's Class
A Common Stock as of the grant date and vest over a three-year period.
CERTAIN TRANSACTIONS
The information set forth herein briefly describes certain transactions between
the Company and certain affiliated parties. The Company believes that the terms
of these transactions are comparable to the terms that could be obtained from
unaffiliated parties.
Certain entities owned by Messrs. Quinn and Fuller and certain of their family
members own 100% of Paragon Leasing, a Tennessee general partnership
("Paragon"). Paragon purchases, sells and leases used tractors and trailers. In
the year ended December 31, 2001, the Company paid Paragon $325,537 in rent for
leased trailers.
Messrs. Quinn and Fuller, together with the Quinn Family Partnership and the
Fuller Family Partnership, own approximately 45% of Transcommunications, Inc.
("Transcom"). Beginning in 1999, the Company began utilizing Transcom for
over-the-road fuel purchases. The Company paid Transcom a fee of $230,164 for
these services in 2001. Transcom also operates a debit card system through which
long distance phone calls and Internet e-mail access can be debited to the
customer's account. The Company purchases 30 minutes per month of telephone time
per tractor for its drivers through Transcom, in lieu of reimbursing drivers for
telephone expenses. Total payments by the Company to Transcom in the year ended
December 31, 2001 for such debit card services and other telecommunications
services were $445,435.
- 6 -
Four terminals used by the Company during 2001 are owned by Q&F Realty, LLC, of
which Messrs. Quinn and Fuller own 100% of the membership interests. These
terminals are leased to the Company at, in management's opinion, fair market
rent. In the aggregate, rental payments to these entities from the Company and
its subsidiaries in the year ended December 31, 2001 were $887,946.
Substantially all of Messrs. Quinn and Fuller's business time is spent on the
Company's business and affairs. In the case of each of the other companies in
which Messrs. Quinn and Fuller own an interest, that company has other active,
full-time management personnel who operate that company's business.
The Company maintains a banking relationship with SunTrust Bank, Chattanooga,
N.A. Robert J. Sudderth, Jr., a director of the Company, is Chairman and Chief
Executive Officer of such bank.
COMPLIANCE WITH REPORTING REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934, and regulations of the
Securities and Exchange Commission ("SEC") thereunder, require the Company's
executive officers and directors and persons who beneficially own more than 10%
of the Company's Common Stock, as well as certain affiliates of such persons, to
file initial reports of such ownership and monthly transaction reports covering
any changes in such ownership with the SEC and the National Association of
Securities Dealers. Executive officers, directors and persons owning more than
10% of the Company's Common Stock are required by SEC regulations to furnish the
Company with all such reports they file. Based solely on its review of the
copies of such reports received by it and written representations that no other
reports were required for such persons, the Company believes that, during fiscal
year 2001, its executive officers, directors, and owners of more than 10% of the
Company's Common Stock complied with all such applicable filing requirements,
except for one transaction inadvertently reported late by Mr. Dondero.
- 7 -
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table sets forth information concerning compensation paid or
accrued to the Co-Chairmen of the Board and the three other most highly
compensated executive officers of the Company for the twelve months ended
December 31, 2001, the twelve months ended December 31, 2000, and the twelve
months ended December 31, 1999.
SUMMARY COMPENSATION TABLE
<Table>
<Caption>
LONG-TERM COMPENSATION
ANNUAL -------------------------------
COMPENSATION AWARDS PAYOUTS
--------------------------- --------------------- -------
RESTRICTED
STOCK LTIP ALL OTHER
NAME AND PERIOD SALARY BONUS AWARDS OPTIONS/ PAYOUTS COMPENSATION
PRINCIPAL POSITION ENDING ($) ($)(1) (#)(2) SARS(#) ($) ($)(3)
- -----------------------------------------------------------------------------------------------------------
Patrick E. Quinn 12/31/01 500,000 -- -- -- -- 7,310
Co-Chairman, President 12/31/00 500,000 -- -- -- -- 4,802
And Treasurer 12/31/99 500,000 35,000 -- -- -- 4,080
Max L. Fuller 12/31/01 500,000 -- -- -- -- 9,068
Co-Chairman, Vice 12/31/00 500,000 -- -- -- -- 3,403
President 12/31/99 500,000 35,000 -- -- -- 3,075
and Secretary
Ray M. Harlin 12/31/01 260,000 -- -- -- -- 5,250
Executive Vice 12/31/00 247,500 -- 10,000 75,000 -- 5,250
President -- 12/31/99 235,000 13,764 -- -- -- 5,000
Finance and Chief
Financial
Officer
Cort J. Dondero(4) 12/31/01 334,721 50,000 -- -- -- 5,250
Executive Vice 12/31/00 162,500 -- 50,000 100,000 -- --
President --
And Chief Operating
Officer
E. William Lusk, Jr. 12/31/01 214,038 -- -- -- -- 5,170
President -- CSI/Crown, 12/31/00 210,000 -- -- 15,000 -- 4,960
Inc. 12/31/99 210,000 12,438 -- -- -- 5,000
</Table>
(1) Amounts in the twelve-month period ended 12/31/99 represent the Company's
contributions pursuant to the Company's incentive compensation plan of
$35,000, $35,000, $13,764, and $12,438 for each of Messrs. Quinn, Fuller,
Harlin, and Lusk, respectively. Pursuant to Mr. Dondero's employment
agreement with the Company, Mr. Dondero was paid a bonus of $50,000 in the
twelve-month period ended 12/31/01.
(2) Mr. Harlin was granted 10,000 shares of restricted Class A Common Stock and
Mr. Dondero was granted 50,000 shares of restricted Class A Common Stock on
July 1, 2000. The restrictions on one-fifth of these shares lapse at each of
the first, second, third, fourth and fifth anniversary dates of issuance.
All restricted shares are entitled to voting rights and to receive
dividends, if any, as and when declared.
(3) Amounts in the twelve-month period ended 12/31/01 represent the Company's
contributions to the 401(k) Plan of $2,500, $2,500, $5,250, $5,250, and
$5,170 for each of Messrs. Quinn, Fuller, Harlin, Dondero, and Lusk,
respectively, and life insurance premiums of $4,810 and $6,568 paid by the
Company for Messrs. Quinn and Fuller, respectively. Amounts in the
twelve-month period ended 12/31/00 represent the Company's contributions to
the 401(k) Plan of $2,500, $2,500, $5,250, and $4,960 for each of Messrs.
Quinn, Fuller, Harlin, and Lusk, respectively, and life insurance premiums
of $2,302 and $903 paid by the Company for Messrs. Quinn and Fuller,
respectively. Amounts in the twelve-month period ended 12/31/99 represent
the Company's contributions to the 401(k) Plan of $2,500, $2,500, $5,000,
and $5,000 for each of Messrs. Quinn, Fuller, Harlin, and Lusk,
respectively, and life insurance premiums of $1,580 and $575 paid by the
Company for Messrs. Quinn and Fuller, respectively.
(4) Mr. Dondero was appointed Executive Vice President and Chief Operating
Officer effective July 1, 2000.
- 8 -
OPTION EXERCISES AND HOLDINGS
The following table sets forth information with respect to the named executives
concerning the exercise of options during the twelve months ended December 31,
2001 and unexercised options held as of December 31, 2001:
AGGREGATED EXERCISES IN LAST YEAR AND 2001 YEAR-END OPTION VALUES
<Table>
<Caption>
SHARES VALUE OF UNEXERCISED
ACQUIRED VALUE NUMBER OF UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
ON EXERCISE REALIZED AT 12/31/01(#) AT 12/31/01($)(1)
(#) ($) EXERCISABLE / UNEXERCISABLE EXERCISABLE / UNEXERCISABLE
- ----------------------------------------------------------------------------------------------------------------
Patrick E. Quinn -- -- -- -- -- --
Max L. Fuller -- -- -- -- -- --
Cort J. Dondero -- -- 20,000 / 80,000 $19,950 / $79,800
Ray M. Harlin -- -- 62,250 / 70,750 $25,975 / $87,900
E. William Lusk, Jr. -- -- 64,770 / 15,251 $192,121 / $28,800
</Table>
(1) The value of unexercised in-the-money options was computed using the closing
price of the Company's Common Stock as reported on the Nasdaq National
Market at December 31, 2001.
SALARY CONTINUATION AGREEMENT
Messrs. Quinn and Fuller have each entered into an agreement with the Company
pursuant to which the Company is obligated, in the event of either of their
deaths, to continue paying 50% of their current salary for a period of six
months and, in the event of either of their disabilities, to continue paying
their current salary in full for a period of twelve months and 50% of their
current salary for an additional twelve months thereafter. The agreements also
provide that Messrs. Quinn and Fuller will receive payments on account of
personal guarantees of Company indebtedness if either of them or their estates
personally guarantee any Company indebtedness.
EMPLOYMENT AGREEMENT
Cort J. Dondero is employed as the Company's Executive Vice President and Chief
Operating Officer pursuant to the terms of an employment agreement which
commenced July 1, 2000 and extends through June 30, 2005 (with automatic
year-to-year renewals thereafter unless canceled). Mr. Dondero's annual base
salary under the agreement is $325,000, subject to annual review and adjustment
in the same manner as that of the Company's other executives. In addition, Mr.
Dondero has the opportunity to earn an annual performance bonus tied to the
annual rate of increase in the Company's return on sales over that of a base
period prior to Mr. Dondero's employment. The agreement also provides that Mr.
Dondero shall receive annual allowances for automobile expenses, certain club
dues and the purchase of life and disability insurance, and shall be entitled to
participate in the Company's group health and other benefit plans on the same
basis as other employees. In connection with Mr. Dondero's initial employment,
the agreement provided for reimbursement of certain relocation expenses and for
the grant of 50,000 shares of restricted Class A Common Stock and an option to
purchase 100,000 shares of Class A Common Stock at $8.0625 per share (the market
price on the date of grant), each of which vests over five years, under the
Company's 1993 Incentive Stock Plan. The agreement may be terminated by Mr.
Dondero upon 90 days advance notice, or by the Company at any time. If Mr.
Dondero's employment is terminated by the Company without cause or following a
change in control of the Company, Mr. Dondero will receive 100% of his base
salary for a period of 12 months following the date of termination. If Mr.
Dondero's employment is terminated by the Company for cause, or if he
voluntarily terminates his employment, the Company will have no further
obligation to Mr. Dondero under the agreement. Mr. Dondero has agreed not to
compete with the Company for a period of 12 months following any termination of
his employment under the agreement.
- 9 -
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation Committee of the Board of Directors is responsible for
establishing and recommending to the Board of Directors the Company's general
compensation policies. The Compensation Committee also administers the Company's
incentive stock plan and Xpre$$avings 401(k) Plan. The Compensation Committee is
composed of three members, each of whom is an independent, non-employee
director. The Compensation Committee seeks to provide fixed and incentive
compensation of the Company's executive officers that reflects each individual's
performance and the Company's overall performance. Fixed compensation is
designed to attract, motivate and retain executives committed to maximizing
return to stockholders and be competitive with the compensation levels of
executives holding comparable positions and having similar qualifications in
comparable transportation companies and in companies of similar size. Incentive
compensation is designed to provide rewards that are closely linked to the
Company's and individual's performance and to align the interests of the
Company's employees with those of its stockholders. Incentive compensation is
provided through the Company's incentive compensation plan, incentive stock
plan, employee stock purchase plan and through existing stock options held by
certain executive officers.
During the twelve months ended December 31, 2001, the fixed compensation levels
of the Co-Chairmen were reviewed by the Committee, and no increase was
recommended. The Committee seeks to maintain strong incentives for the Co-
Chairmen to maximize financial performance. As holders of approximately 57.6% of
the Company's common stock, Messrs. Quinn and Fuller have substantial incentives
to maximize value to stockholders of the Company.
Submitted by the Compensation Committee of the Company's Board of Directors,
Robert J. Sudderth, Jr., Chairman
A. Alexander Taylor, II, Member
James E. Hall, Member
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The Audit Committee of the Board of Directors is composed of three members, each
of whom is an independent, non-employee director. The Audit Committee operates
under a Written Charter adopted by the Board of Directors. While the Committee
has the responsibilities and powers set forth in its Written Charter, it is not
the duty of the Committee to plan or conduct audits or to determine that the
Company's financial statements are complete and accurate and are prepared in
accordance with generally accepted accounting principles. These functions are
conducted by the Company's management and its independent accountants. It is
further not the duty of the Committee to plan or to conduct investigations, to
resolve disagreements between management and the independent accountants, or to
assure compliance with laws and regulations.
The Committee has reviewed and discussed the audited financial statements of the
Company for the year ended December 31, 2001 (Audited Financial Statements). In
addition, we have discussed with Arthur Andersen LLP, the independent auditing
firm for the Company, the matters required by Codification of Statements on
Auditing Standards No. 61 (SAS 61).
The Committee also has received the written report, disclosure and the letter
from Arthur Andersen, LLP required by Independence Standards Board (ISB)
Statement No. 1, and we have reviewed, evaluated, and discussed with Arthur
Andersen, LLP, its written report and its independence from the Company. We also
have discussed with management of the Company and the auditing firm such other
matters and received such assurances from them as we deemed appropriate.
- 10 -
Based on the foregoing review and discussions and relying thereon, we have
recommended to the Company's Board of Directors the inclusion of the Audited
Financial Statements in the Company's Annual Report for the year ended December
31, 2001 on Form 10-K, to be filed with the Securities and Exchange Commission.
Submitted by the Audit Committee of the Company's Board of Directors,
A. Alexander Taylor, II, Chairman
Robert J. Sudderth, Jr., Member
James E. Hall, Member
COMPANY PERFORMANCE
The following graph shows a comparison of cumulative total returns to
stockholders of the Company, assuming reinvestment of dividends, for the period
commencing on December 31, 1996, including the last trading day of each
succeeding quarter, and ending on the last trading day of 2001, with the return
from: (i) the NASDAQ U.S. Index and (ii) an Index for NASDAQ stocks in the
Trucking and Transportation Standard Industrial Classification.
CUMULATIVE VALUE OF $100
BASED ON 5 YEAR QUARTERLY COMPOUNDED RETURNS
(PERFORMANCE GRAPH)
<Table>
<Caption>
DEC- MAR- JUN- SEP- DEC- MAR- JUN- SEP- DEC- MAR-
96 97 97 97 97 98 98 98 98 99
US XPRESS $100.00 $ 88.19 $124.41 $125.99 $139.38 $130.73 $105.52 $ 77.17 $ 94.49 $ 73.23
NASDAQ US $100.00 $ 94.57 $111.90 $130.82 $122.47 $143.34 $147.28 $132.89 $172.69 $193.68
NASDAQ-TRANSPORT &
TRUCKING $100.00 $ 98.49 $112.74 $132.64 $128.14 $145.29 $136.78 $ 99.24 $115.80 $114.35
<Caption>
JUN- SEP- DEC- MAR- JUN- SEP- DEC- MAR- JUN- SEP- DEC-
99 99 99 00 00 00 00 01 01 01 01
US XPRESS $ 67.33 $ 36.61 $ 46.46 $ 55.51 $ 50.79 $ 39.76 $ 35.04 $ 38.58 $ 44.40 $ 34.32 $ 57.06
NASDAQ US $211.86 $217.14 $320.95 $360.30 $313.28 $288.28 $193.03 $144.10 $169.83 $117.83 $153.18
NASDAQ-TRANSPORT &
TRUCKING $139.74 $113.27 $111.54 $128.27 $106.54 $ 97.91 $101.39 $ 98.38 $119.54 $ 92.57 $120.00
</Table>
- 11 -
PROPOSAL 2: APPROVAL OF 2002 STOCK INCENTIVE PLAN
The Board of Directors has, subject to stockholder approval, adopted the 2002
Stock Incentive Plan attached hereto as ANNEX A to replace the Company's
existing 1993 Incentive Stock Plan. Under applicable Internal Revenue Service
regulations, incentive stock options may only be granted under written plans
which have a maximum term of 10 years. The term of the 1993 Incentive Stock Plan
will expire in 2003. Accordingly, in order to continue to issue incentive stock
options, the Company is adopting a new plan, subject to shareholder approval. As
proposed, the 2002 Stock Incentive Plan is substantially similar to the 1993
Incentive Stock Plan in terms of the types of stock compensation awards which
may be made, except that the new plan also provides for the availability of
Stock Appreciation Rights as a potential complement and/or alternative to option
awards.
The Board of Directors believes that there is a continuing need for a long-term
incentive plan tied to stockholder value and applicable to a broad class of key
employees. Previously, this element of the Company's overall compensation
philosophy was addressed through awards under the 1993 Incentive Stock Plan. The
Board of Directors believes that the Company needs the flexibility of an ongoing
plan that provides for a variety of different types of stock compensation awards
(including tax qualified Incentive Stock Options) in order to structure
executive compensation packages suited to the Company's needs. For these
reasons, the Board of Directors believes that adoption of the new 2002 Stock
Incentive Plan is necessary, with terms substantially similar to the 1993
Incentive Stock Plan, and in the best interests of the Company and its
shareholders, and recommends that shareholders vote in favor of approval and
adoption of the 2002 Stock Incentive Plan. The number of shares reserved for
issuance under the new plan will be set at 1,000,000. If additional availability
is needed, the Company will obtain further shareholder approval.
STOCK INCENTIVE PLAN
The 2002 Stock Incentive Plan has been approved by the Company's Board of
Directors to be effective upon approval by the Company's Shareholders. The
following description of the terms of the plan is qualified in its entirety by
reference to the full text of the plan attached as ANNEX A to this Proxy
Statement. Capitalized terms used but not defined in the following description
are used as defined in the 2002 Stock Incentive Plan.
It is not possible to determine the number of persons who will be eligible to
participate in the 2002 Stock Incentive Plan, because the Compensation Committee
will have full power to determine whether to make Awards under the plan and to
select the recipients of Awards. On April 5, 2002, the most recent practicable
date for which data could be obtained prior to the publication of this Proxy
Statement, the closing market price reported for the Company's common stock on
the Nasdaq National Market was $11.99 per share.
The 2002 Stock Incentive Plan provides for the grant of Stock Options (which may
be either Incentive Stock Options or Non-qualified Stock Options), Stock
Appreciation Rights ("SARS"), Restricted Stock and Performance Share Units to
officers and other key employees and members of the Board of Directors who are
employees of the Company or of any Affiliated Company (as designated by the
Board of Directors) in which the Company holds a substantial direct or indirect
equity interest. These awards may be made in connection with, or independent of,
any deferrals of other compensation payable to plan participants. A total of
1,000,000 shares of the Company's Class A Common Stock have been reserved and
may be issued in connection with awards under the plan. The plan will be
administered by the Compensation Committee of the Company's Board of Directors,
which may adopt, amend or repeal the administrative rules, guidelines and
practices relating to the plan.
INCENTIVE STOCK OPTIONS; NON-QUALIFIED STOCK OPTIONS
The Compensation Committee may award Incentive Stock Options and Non-qualified
Stock Options, and determine the number of shares to be covered by each such
option, the conditions and limitations applicable to the exercise of the option
and the option price thereof, which, in the case of Incentive Stock Options,
must be at least 100% of the fair market value of the Company's Class A Common
Stock as of the date of grant (110% in the case of Incentive Stock Options
granted to a stockholder beneficially owning in excess of 10% of the total
voting power of the Company's common stock). Incentive Stock Options shall be
subject to and comply with Section 422 of the Internal Revenue Code of 1986, as
amended (the "CODE"). Payment of the option exercise price may be made in cash,
through surrender to the Company of shares of common stock or of another Award
held by the Participant under the plan, or by any other method approved by the
Compensation Committee. The option exercise period for Incentive Stock Options
shall not exceed ten years from the
- 12 -
date of grant (or five years if granted to a stockholder beneficially owning in
excess of 10% of the total voting power of the Company's common stock). Neither
Incentive Stock Options nor Non-qualified Stock Options are transferable by any
Participant, other than (i) by will or pursuant to applicable laws of descent
and distribution or (ii) pursuant to a qualified domestic relations order
("QDRO") as defined in section 414(p) of the Code. Options may be exercised
during a Participant's lifetime only by him (or by a duly appointed guardian or
personal representative, or pursuant to the terms of a QDRO).
STOCK APPRECIATION RIGHTS
The Compensation Committee may award SARs entitling recipients on exercise of
the SAR to receive an amount, in cash or stock or a combination thereof,
determined in whole or in part by reference to appreciation in the fair market
value of the Company's Class A Common Stock between the date of the Award and
the exercise of the Award. SARs may be granted in tandem with, or independently
of, options granted under the 2002 Stock Incentive Plan. SARs granted under the
plan will not be transferable by any Participant, other than (i) by will or
pursuant to applicable laws of descent and distribution or (ii) pursuant to a
QDRO. SARs may be exercised during a Participant's lifetime only by him (or by a
duly appointed guardian or personal representative, or pursuant to the terms of
a QDRO).
PERFORMANCE SHARE AWARDS
The Compensation Committee may make Performance Share Awards entitling
recipients to acquire shares of the Company's Class A Common Stock upon the
attainment of specified performance goals, as determined by the Compensation
Committee, which may include earnings per share or revenue targets, completed
acquisitions and other corporate or individual executive objectives. The
Compensation Committee may make Performance Share Awards independent of or in
connection with any other Award under the 2002 Stock Incentive Plan. Performance
Share Awards and all rights with respect to such awards may not be sold,
assigned, transferred, pledged or otherwise encumbered.
RESTRICTED STOCK AWARDS
The Compensation Committee may grant Awards of Restricted Stock to Participants,
subject to the option of the Company to repurchase the Restricted Stock, at such
price as the Compensation Committee fixed when the Award was made or as amended
thereafter, in the event that the conditions specified by the 2002 Stock
Incentive Plan and by the Compensation Committee are not satisfied. Restricted
Stock may not be sold, assigned, transferred, pledged, hypothecated or otherwise
disposed of, except by will or under the laws of descent and distribution, or as
otherwise determined by the Committee, during the applicable Restricted Period.
DILUTION, CHANGE IN CONTROL AND OTHER ADJUSTMENTS
The 2002 Stock Incentive Plan provides that, in the event of any
recapitalization, stock split, stock dividend, exchange, combination, or
reclassification of shares, merger, consolidation, reorganization, or other
change in or affecting the capital structure or capital stock of the Company,
the Board of Directors, upon the recommendation of the Compensation Committee,
may make any appropriate adjustments in the number of shares authorized for
Awards under the plan, either annually or in the aggregate. In any such event,
the plan also permits the Compensation Committee to make such appropriate
adjustments in the terms of any outstanding Award as it deems equitable, in its
absolute discretion, to prevent dilution or enlargement of the rights of
Participants.
Upon the occurrence of any Change in Control (as defined in the 2002 Stock
Incentive Plan), as of the effective date thereof: (A) every then-outstanding
option previously granted under the plan shall immediately become fully vested
and exercisable (although this may have the effect of converting some Incentive
Stock Options into Non-qualified Stock Options); (B) every then-outstanding
Stock Appreciation Right shall immediately become exercisable; and (C) the
Restriction Period shall immediately terminate with respect to every
then-outstanding Award of Restricted Shares previously granted under the plan.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
General. The following is a brief summary of the principal U.S. federal income
tax consequences, based on current federal income tax laws, of the issuance and
exercise of Awards which are either Incentive Stock Options or Non-
- 13 -
qualified Stock Options under the proposed 2002 Stock Incentive Plan. It is
based on federal income tax law, and related regulations and interpretive
authorities, in effect as of the date of this Proxy Statement, which are subject
to change at any time. This summary is not intended to be exhaustive, does not
address Awards under the 2002 Stock Incentive Plan other than options, and does
not describe state, local, or foreign tax consequences. Participants who receive
Awards under the plan are strongly urged to consult their tax advisors regarding
the federal, state, local or other tax consequences of the receipt and exercise
of options and SARs, and Restricted Stock or Performance Share Awards under the
plan.
Incentive Stock Options (ISOs). No taxable income will be recognized by a
grantee upon the grant or exercise of an ISO. If shares of Class A Common Stock
are issued to a grantee pursuant to the exercise of an ISO granted under the
plan and if no disqualifying disposition of such shares is made by such grantee
within two years after the date of grant or within one year after the receipt of
such shares, then (a) upon the sale of such shares, any amount realized in
excess of the option price generally will be taxed to such grantee as a
long-term capital gain and any loss sustained generally will be a long-term
capital loss and (b) no deduction will be allowed to the Company. Additionally,
the exercise of an ISO will give rise to an item of tax preference that may
result in alternative minimum tax liability for the grantee.
If shares of Class A Common Stock acquired upon the exercise of an ISO are
disposed of prior to the expiration of two years from date of grant or one year
from exercise, generally (a) the grantee will recognize ordinary income in the
year of disposition in an amount equal to the excess (if any) of the fair market
value of the shares at exercise (or, if less, the amount realized on the
disposition of the shares) over the option price thereof, and (b) the Company
will be entitled to deduct such amount as compensation expense. Any further gain
or loss recognized by the grantee will be subject to tax as capital gain or
loss, generally will be long-term capital gain or loss if the stock has been
held for more than one year, and will not result in any deduction by the
Company.
If an ISO is exercised at a time when it no longer qualifies as an ISO, the
option will be treated as an NQSO. Subject to certain exceptions for disability
or death, an ISO generally will not be eligible for the federal income tax
treatment described above if it is exercised more than three months following
the termination of employment.
Non-Qualified Options (NQSOs) and Stock Appreciation Rights (SARs). No taxable
income will be recognized by a grantee upon the grant of an NQSO or SAR. Upon
exercise, however, the grantee generally will recognize ordinary income in an
amount equal to the difference between the exercise price and the fair market
value of the shares of Class A Common Stock on the date of exercise, and the
Company generally will be entitled to deduct a like amount as compensation
expense. In the case of NQSOs, the grantee will have a basis in such stock in an
amount equal to such fair market value.
Upon subsequent sale of any shares of Class A Common Stock acquired pursuant to
the exercise of an NQSO, a grantee will have capital gain or loss equal to the
difference between the amount realized upon such sale and the grantee's adjusted
tax basis in the shares of Class A Common Stock. Such gain or loss will be
capital gain or loss and will be long term if the shares of Class A Common Stock
have been held for more than one year from the date the option is exercised.
Company Deductions. As discussed above, if applicable withholding requirements
are met, the Company generally will be entitled to a tax deduction in an amount
equal to any ordinary income realized by the Participant at the time the
Participant recognizes such income. However, Code Section 162(m) contains
specific rules regarding the federal income tax deductibility of compensation
paid to the Company's Chief Executive Officer and to each of the other four most
highly compensated executive officers. The general rule is that annual
compensation paid to any of these specified executives will be deductible only
to the extent that it does not exceed $1 million. However, the Company can
preserve the deductibility of certain compensation in excess of $1 million if it
complies with conditions imposed by the rules, including (1) the establishment
of a maximum number of shares with respect to which Awards may be granted to any
one employee during a specified time period, (2) for Awards other than options,
inclusion in the grant of performance goals which must be achieved prior to
accrual or payment, (3) disclosure to, and approval by, the stockholders of
certain material terms of the Plan and (4) certification by the Compensation
Committee that the performance goals have been met. Assuming approval by
stockholders at the Annual Meeting, the 2002 Stock Incentive Plan has been
designed to permit the Compensation Committee to grant and certify Awards which
satisfy the requirements of Section 162(m).
- 14 -
APPOINTMENT OF AUDITORS
The Company's 2001 financial statements were audited by Arthur Andersen LLP. The
Board of Directors currently is considering, but has not yet made a final
decision, whether it will appoint Arthur Andersen LLP as the independent public
accountants of the Company for the fiscal year ending December 31, 2002. A
representative of Arthur Andersen LLP will be present at the Annual Meeting and
will be given an opportunity to make a statement, if he desires, and to respond
to appropriate questions.
AUDIT FEES
The aggregate fees billed for professional services rendered for the audit of
the Company's annual financial statements for the fiscal year ended December 31,
2001 and the reviews of the financial statements included in the Company's Forms
10-Q for fiscal year 2001 were $160,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
The Company's principal accountant did not perform any financial information
systems design and implementation services for the Company for fiscal year 2001.
ALL OTHER FEES
The aggregate fees billed for all other non-audit services rendered to the
Company by its principal accountant for fiscal year 2001 were $371,534.
The Audit Committee has determined that the provision of financial information
systems design and implementation services and non-audit services rendered to
the Company by its principal accountant is compatible with maintaining such
principal accountant's independence.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the 2003 Annual Meeting
must be received by the Company not later than December 16, 2002, for inclusion
in its Proxy Statement and form of proxy relating to that meeting. Any such
proposals, as well as any questions relating thereto, should be directed to Max
L. Fuller, Secretary, U.S. Xpress Enterprises, Inc., 4080 Jenkins Road,
Chattanooga, Tennessee 37421. A shareholder who intends to present a proposal at
the 2003 Annual Meeting, other than pursuant to Rule 14a-8 under the Securities
Exchange Act of 1934, must provide the Company with notice of such intention by
at least March 1, 2003, or management of the Company will have discretionary
voting authority at the 2003 Annual Meeting with respect to any such proposal
without discussion of the matter in the Company's proxy materials. Proposals of
stockholders must comply with the rules and regulations of the Securities and
Exchange Commission.
A COPY OF THE U.S. XPRESS ENTERPRISES, INC. ANNUAL REPORT ON FORM 10-K FOR THE
YEAR ENDED DECEMBER 31, 2001 IS BEING MAILED TO STOCKHOLDERS WITH THIS NOTICE
AND PROXY STATEMENT. THE COMPANY HEREBY UNDERTAKES TO PROVIDE TO ANY RECIPIENT
OF THIS PROXY STATEMENT, UPON HIS OR HER REQUEST AND PAYMENT OF A FEE OF $0.25
PER PAGE TO REIMBURSE THE COMPANY FOR ITS EXPENSES IN CONNECTION THEREWITH, A
COPY OF ANY OF THE EXHIBITS TO THE ANNUAL REPORT ON FORM 10-K. REQUESTS FOR SUCH
COPIES SHOULD BE DIRECTED TO THE COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICES,
4080 JENKINS ROAD, CHATTANOOGA, TENNESSEE 37421, TELEPHONE: (423) 510-3000,
ATTENTION: CORPORATE SECRETARY.
April 15, 2002
- 15 -
ANNEX A
U.S. XPRESS ENTERPRISES, INC.
2002 STOCK INCENTIVE PLAN
ANNEX A
TABLE OF CONTENTS
<Table>
<Caption>
TOPIC HEADING PAGE NO.
- ------------- --------
1. PURPOSE.................................................................. A-1
2. DEFINITIONS.............................................................. A-1
3. ADMINISTRATION........................................................... A-3
4. ELIGIBILITY.............................................................. A-4
5. SHARES AVAILABLE......................................................... A-4
(a) General..................................................... A-4
(b) Annual Limitation on Awards................................. A-4
6. INCENTIVE STOCK OPTIONS.................................................. A-4
(a) General..................................................... A-4
(b) Option Price................................................ A-5
(c) Duration of Options......................................... A-5
(d) Non-transferability of Options.............................. A-5
(e) Exercise of Options......................................... A-5
(f) Payment of Option Price..................................... A-5
(g) Termination of Options...................................... A-5
(h) Limitation on Vesting and Exercisability.................... A-5
(i) Order of Exercise........................................... A-6
(j) Intent...................................................... A-6
7. NON-QUALIFIED STOCK OPTIONS.............................................. A-6
8. STOCK APPRECIATION RIGHTS................................................ A-6
(a) General..................................................... A-6
(b) Relationship to Options..................................... A-6
(c) Non-transferability of SARs................................. A-6
(d) Exercise.................................................... A-7
(e) Payment..................................................... A-7
(f) Termination of SARs......................................... A-7
(g) Effect of Option Exercise................................... A-7
(h) Deemed Exercise............................................. A-7
9. RESTRICTED SHARES........................................................ A-7
(a) General..................................................... A-7
(b) Restrictions................................................ A-8
(c) Distribution of Restricted Shares........................... A-8
(d) Termination of Employment................................... A-8
(e) Company's Repurchase Option................................. A-8
(f) Waiver of Restrictions...................................... A-9
10. PERFORMANCE SHARE UNITS.................................................. A-9
(a) General..................................................... A-9
(b) Termination of Employment................................... A-9
</Table>
A-i
ANNEX A
TABLE OF CONTENTS -- (CONTINUED)
<Table>
<Caption>
TOPIC HEADING PAGE NO.
- ------------- --------
11. OWNERSHIP RIGHTS WITH RESPECT TO AWARDS.................................. A-9
(a) General..................................................... A-9
(b) Committee Discretion Concerning Dividends................... A-9
12. DEFERRAL OF COMPENSATION................................................. A-10
13. DEFERRED PAYMENT OF AWARDS............................................... A-10
14. AMENDMENT OR SUBSTITUTION OF AWARDS...................................... A-10
15. TERMINATION OF A PARTICIPANT............................................. A-10
16. DILUTION, CHANGE IN CONTROL AND OTHER ADJUSTMENTS........................ A-10
17. REGULATORY APPROVALS..................................................... A-11
18. EFFECTIVE DATE AND TERM OF THE PLAN...................................... A-11
(a) Effective Date.............................................. A-11
(b) Term of the Plan............................................ A-11
19. AMENDMENT OR TERMINATION OF THE PLAN..................................... A-11
20. MISCELLANEOUS............................................................ A-12
(a) Fractional Shares........................................... A-12
(b) Withholding................................................. A-12
(c) Required Filings............................................ A-12
(d) Written Awards; Participant Consent......................... A-12
(e) No Contract of Employment or Employment Rights.............. A-12
(f) No Alienation............................................... A-12
(g) Compliance with ISO Rules, Rule 16b-3 and Other Applicable A-12
Law.........................................................
(h) Plan Expenses and Affiliated Company Participation.......... A-13
(i) Statutory References........................................ A-13
(j) Unfunded Plan............................................... A-13
(k) Governing Law............................................... A-13
(l) Gender and Number........................................... A-13
(m) Determinations of Committee................................. A-13
</Table>
A-ii
U.S. XPRESS ENTERPRISES, INC.
2002 STOCK INCENTIVE PLAN
SECTION 1. PURPOSE
The purpose of this Stock Incentive Plan (the "PLAN"), is to advance the
interests of U.S. Xpress Enterprises, Inc. (the "COMPANY") and its shareholders
by providing an opportunity for selected officers and other key employees of the
Company and its Affiliated Companies (as hereinafter defined) to acquire or
increase a proprietary interest in the Company and thereby to provide an
additional incentive to officers and other key employees to devote their maximum
efforts and skills to the advancement, betterment, and prosperity of the Company
and its shareholders. The Plan provides for the grant of a variety of
equity-based Awards, in accordance with the terms and conditions set forth
below.
SECTION 2. DEFINITIONS
The terms used herein shall have the following meanings unless otherwise
specified or unless a different meaning is clearly required by the context:
Affiliated Company Any entity in which the Company has a substantial
direct or indirect equity interest, as determined
by the Committee.
Award Any one or more of the following: Incentive Stock
Option; Non-qualified Stock Option; Stock
Appreciation Right; Restricted Shares; Performance
Share Units; and Performance Shares.
Award Agreement A written Agreement between the Company and a
Participant documenting the terms of any
individual Award under the Plan with respect to
such Participant.
Beneficiary The person or persons designated in writing by the
Participant as his Beneficiary in respect of
Awards or, in the absence of such a designation or
if the designated person or persons predecease the
Participant, the person or persons who shall
acquire the Participant's rights in respect of
Awards by bequest or inheritance in accordance
with the applicable laws of descent and
distribution. In order to be effective, a
Participant's designation of a Beneficiary must be
made in the manner prescribed by the Committee and
must be on file with the Company before the
Participant's death. Any such designation may be
revoked and a new designation substituted therefor
by the Participant at any time before his death
without the consent of the previously designated
Beneficiary. Payment of amounts due to any
Participant's Beneficiary pursuant to an Award in
accordance with the terms of the Plan shall
relieve the Company, as well as all of the members
of the Board and the Committee, of all liability
to anyone with respect to such payment.
Board of Directors The Board of Directors of the Company.
Change in Control Any event which results in a "person" (as such
term is defined in Sections 3(a)(9) and 13(d)(3)
of the Exchange Act, and the regulations
promulgated thereunder, but excluding one or both
Company Founders) acquiring directly or
indirectly, whether by sale, transfer, assignment,
pledge, hypothecation, gift, or other disposition,
in one or more transactions, beneficial ownership
of 50% or more of the voting power of the capital
stock of the Company. A "Change in Control" shall
also be considered to have occurred upon the
entering into by any such person of any agreement
with the Company, or with one or more shareholders
of the Company, to do any of the foregoing.
A-1
Code The Internal Revenue Code of 1986, as amended from
time to time.
Committee The Compensation Committee of the Board of
Directors, or any other committee or group of
officers and/or directors designated by the Board
to administer the Plan; provided, however, that so
long as Rule 16b-3 shall so require as a condition
to the exemption from Section 16 of the Exchange
Act provided thereby, each member of the Committee
shall be a "non-employee director" within the
meaning of Rule 16b-3. Additionally, unless the
Board should determine that Awards under the Plan
need not qualify as "performance-based
compensation" under Code Section 162(m), each
member of the Committee also shall qualify as an
"outside director" for purposes of Code Section
162(m).
Common Stock The Class A Common Stock of the Company.
Company Founders Patrick E. Quinn, Max L. Fuller and the immediate
family of each of them; provided, however, that,
for purposes of this definition, the "immediate
family" of Patrick E. Quinn shall consist solely
of Anna Marie Quinn, Lisa Marie Quinn Pate,
Patrick Brian Quinn and Renee Anne Quinn, and the
"immediate family" of Max L. Fuller shall consist
solely of Janice B. Fuller, William Eric Fuller,
Christopher Mark Fuller and Stephen Craig Fuller.
Disability A disability that enables the Participant to be
eligible for and receive retirement benefits on
account of total disability under the 401(k)
Savings Plan then in effect for the Company or, if
the Participant is not eligible for benefits under
such plan, under any other retirement plan of the
Company in which he is a participant. If the
Participant is not eligible for benefits under any
such plan, he shall be considered to have a
Disability if the Committee determines that his
physical or mental condition would entitle him to
such benefits if he were eligible therefor. If no
retirement plan sponsored by the Company provides
retirement benefits on account of total
disability, the Committee shall establish
procedures for determining whether a participant
shall be deemed to have terminated his employment
or performance of services for the Company by
reason of Disability.
Employed or Employment Subject to Section 15 of the Plan, the use of the
terms "Employed" or "Employment" with respect to a
Participant shall be deemed to indicate an
employment relationship with the Company or an
Affiliated Company (as applicable) which satisfies
the requirements of Section 1.421-7(h) of the tax
regulations prescribed under the Code (or any
successor regulations).
Exchange Act The Securities Exchange Act of 1934, as amended.
Exercise Gain Shares With respect to a Stock Appreciation Right, all of
the shares of Common Stock received upon exercise
of the Stock Appreciation Right. With respect to
an Option, the portion of the shares of Common
Stock received upon exercise of the Option equal
to the excess of the Fair Market Value, as of the
exercise date, over the Option price, multiplied
by the number of shares purchased under the Option
on the exercise date, divided by such Fair Market
Value, and rounded down to the nearest whole
number of shares.
Fair Market Value The value of Common Stock or any other forms of
payment of Awards under the Plan as of any
specific time shall mean such value as determined
by the Committee in accordance with applicable
law.
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Incentive Stock Option An Option that complies with the terms and
conditions set forth in Section 422(b) of the Code
and is designated by the Committee as an Incentive
Stock Option.
Non-qualified Stock Option An Option granted under the Plan other than an
Incentive Stock Option.
Option Any option to purchase Common Stock granted
pursuant to the provisions of Section 6 or Section
7 of the Plan.
Optionee A Participant who is the holder of an Option.
Participant Any officer or key employee of the Company or an
Affiliated Company selected by the Committee to
participate in the Plan.
Performance Cycle The period of time, designated by the Committee,
over which Performance Shares may be earned.
Performance Shares Shares of Common Stock granted pursuant to Section
10 of the Plan, which may be made subject to the
restrictions and other terms and conditions
prescribed in Section 11 of the Plan.
Performance Share Units Contingent rights to receive Performance Shares
pursuant to Section 10 of the Plan.
Restricted Shares Shares of Common Stock granted pursuant to Section
9 of the Plan and subject to the restrictions and
other terms and conditions set forth therein.
Restriction Period A period of time to be determined by the Committee
in its sole discretion, commencing on the date as
of which Restricted Shares are granted, during
which the restrictions imposed by paragraph (b) of
Section 9 of the Plan shall apply. The Committee
shall determine the length of the Restriction
Period at the time that the Restricted Shares are
granted.
Retirement Early, normal or late retirement from the Company
or an Affiliated Company pursuant to the
provisions of an approved retirement plan of the
Company or an approved retirement plan of an
Affiliated Company (whichever is applicable), or
any other plan or arrangement which may be
approved by the Committee for this purpose.
Rule 16b-3 Rule 16b-3 promulgated by the United States
Securities and Exchange Commission under the
Exchange Act, including any successor to such
rule.
Stock Appreciation Right The right, granted pursuant to the provisions of
Section 8 of the Plan, to receive a payment equal
to the excess of the Fair Market Value of Common
Stock over the Option price of such stock, as
specified in Section 8 of the Plan.
Ten Percent Employee An employee Participant who owns, directly or
indirectly (as determined by reference to Section
424(d) of the Code), stock representing more than
ten percent of the voting power of all classes of
stock of the Company or of its parent or
subsidiary.
SECTION 3. ADMINISTRATION
The Plan shall be administered by the Committee, which, subject to the
limitations set forth herein, shall have the full and complete authority and
sole discretion from time to time to construe and interpret the Plan; to select
the officers and other key employees who shall be granted Awards under the Plan;
to determine the type, size, terms, and conditions of the Award or Awards to be
granted to each such Participant; to authorize the grant of such Awards pursuant
to the Plan; to make any adjustments necessary or desirable as a result of the
granting of Awards to eligible Participants; to prescribe the form of any
instrument embodying an Award and to modify the terms of any Award that has been
granted (subject to Section 19 of the Plan); to adopt, amend and rescind rules
and regulations relating to the Plan; and to make all other
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determinations and take all other action it may deem necessary or advisable for
the implementation and administration of the Plan. The Committee may correct any
defect or supply any omission or reconcile any inconsistency in the Plan or in
any Award in the manner and to the extent the Committee deems necessary or
desirable to carry it into effect. The Committee may authorize the grant of more
than one type of Award, and Awards subject to differing terms and conditions, to
any eligible employee. The Committee's decision to authorize the grant of an
Award to an employee at any time shall not require the Committee to authorize
the grant of an Award to that employee at any other time or to any other
employee at any time; nor shall its determination with respect to the size,
type, or terms and conditions of the Award to be granted to an employee at any
time require it to authorize the grant of an Award of the same type or size or
with the same terms and conditions to that employee at any other time or to any
other employee at any time. The Committee shall not be precluded from
authorizing the grant of an Award to any eligible employee solely because the
employee previously may have been granted an Award of any kind under the Plan.
All such actions of the Committee shall be by a majority of its members (except
that the Committee may authorize any of its members or any officer of the
Company to execute documents or to take any other ministerial action with regard
to the Plan or any Award) and shall be final, conclusive and binding. Each
member of the Committee, while serving as such, shall be considered to be acting
in his capacity as a director of the Company. No member of the Board or of the
Committee, and no officer of the Company or of an Affiliated Company, shall be
liable for anything done or omitted to be done by him, by any other member of
the Board or the Committee, or by any officer of the Company or of an Affiliated
Company, in connection with the implementation or administration of the Plan,
except for his own willful misconduct or as expressly provided by statute.
SECTION 4. ELIGIBILITY
To be eligible for selection by the Committee to participate in the Plan, an
individual must be a full-time salaried officer or key employee who is Employed
by the Company, or by an Affiliated Company, on the date on which the Committee
authorizes the grant to such individual of an Award; provided, however, that
participation in the Plan by employees of an Affiliated Company may be made
subject to such additional terms and conditions (concerning either the
Participant or the Affiliated Company) as the Committee may prescribe from time
to time.
SECTION 5. SHARES AVAILABLE
(a) General -- Subject to the provisions of Section 16 of the Plan, no more than
an aggregate of One Million (1,000,000) shares of the Company's Common Stock may
be issued pursuant to Awards under the Plan. Such shares may be either
authorized but unissued shares, treasury shares, reacquired shares, or any
combination thereof. Any number of shares of Common Stock which were subject to
an Award, and which were not issued prior to the expiration of the Award, shall
thereafter again be added back to the total number of shares available for award
under the Plan. Upon the forfeiture or repurchase of any Restricted Shares, the
number of forfeited or repurchased (as applicable) shares of Common Stock shall
thereafter be added back to the total number of shares available for Awards
under the Plan.
(b) Annual Limitation on Awards -- Notwithstanding any other provision to the
contrary (except for any customary antidilution adjustments pursuant to Section
16 of the Plan), no Participant may be awarded a grant in any one year, which,
when added to any other Award of Options, Restricted Shares, and Performance
Share Units granted in the same year, shall cause the aggregate number of shares
of Common Stock subject to all such Awards to exceed 100,000 shares. If an
Option granted in a given year is canceled, the canceled Option continues to
count against the maximum number of shares for which Options may be granted to a
Participant in such year.
SECTION 6. INCENTIVE STOCK OPTIONS
(a) General -- The Committee may authorize the grant of Incentive Stock Options
to any Participant who is Employed by the Company or an Affiliated Company,
subject to the terms and conditions set forth in this Section 6. Incentive Stock
Options may be granted alone or in tandem with an Award of Stock Appreciation
Rights as provided in Section 8 of the Plan. The grant of an Incentive Stock
Option shall be evidenced by a written Award Agreement between the Company and
the Optionee in the form prescribed by the Committee, setting forth the number
of shares of Common Stock subject to the Incentive Stock Option evidenced
thereby and the terms, conditions, and restrictions applicable thereto.
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(b) Option Price -- The Committee shall determine the Option price for each
share of Common Stock purchased under an Option (which either may be fixed or
may be determined in accordance with a formula prescribed by the Committee),
but, subject to the provisions of Section 16 of the Plan, in no event shall the
Option price for any Incentive Stock Option be less than one hundred percent
(100%) of the Fair Market Value of the Common Stock on the date the Option is
granted (or, in the case of an Incentive Stock Option granted to a Ten Percent
Employee, one hundred ten percent (110%) of such Fair Market Value).
(c) Duration of Options -- The Committee shall fix the term or duration of
Options, provided that such term shall not exceed ten (10) years from the date
the Option is granted (five (5) years in the case of an Incentive Stock Option
granted to a Ten Percent Employee), and that such term shall be subject to
earlier termination pursuant to the provisions of paragraph (g) of this Section
6 or paragraph (f) of Section 8 of the Plan.
(d) Non-transferability of Options -- Options are not transferable other than
(i) by will or the applicable laws of descent and distribution following the
death of the Optionee or (ii) pursuant to a "qualified domestic relations order"
as defined in Section 414(p) of the Code. Options may be exercised during the
lifetime of the Optionee only by him (or by a duly appointed guardian or
personal representative, or pursuant to the terms of a qualified domestic
relations order), and following his death only by his Beneficiary.
(e) Exercise of Options -- The Committee shall determine the time or times at
which Options may be exercised (including any applicable vesting schedule);
provided that such time or times shall not occur before the latest of:
(i) six months following the date on which the Option was granted
(unless waived by the Committee due to the Participant's death, Disability
or Retirement);
(ii) approval of the Plan (or any amendment thereto which requires
stockholder approval) by the stockholders of the Company pursuant to the
requirements of Sections 18 and 19 of the Plan; and
(iii) the effectiveness of any registration statement required to be
filed under the Securities Act of 1933 for the registration of the Common
Stock to be issued upon exercise of the Option.
(f) Payment of Option Price -- The purchase price of Common Stock upon exercise
of an Option shall be paid in full to the Company at the time of the exercise of
the Option in cash or, at the discretion of the Committee and subject to any
limitations or requirements that the Committee may adopt, by the surrender to
the Company of any outstanding Award (or portion thereof) or of shares of
previously acquired Common Stock which, if acquired through the exercise of
another Incentive Stock Option, have been held by the Optionee for at least
twelve (12) months and which shall be valued at Fair Market Value on the date
that the Option is exercised, or, at the discretion of the Committee, by a
combination of cash and any such Award or stock or by any other method approved
by the Committee.
(g) Termination of Options -- No Option shall be exercisable after it expires.
Each Option shall expire upon the earliest of:
(i) the expiration of the term for which the Option was granted;
(ii) (A) in the case of an Optionee whose employment with the Company
or an Affiliated Company is terminated due to Retirement, Disability or
death, the expiration of twelve (12) months after such termination of
employment, or such other date as may be determined by the Committee
(provided, however, that any exercise of any Incentive Stock Option more
than three (3) months after the date of an Optionee's termination due to
Retirement, or more than twelve (12) months after the date of an Optionee's
termination due to Disability, shall convert such Option into a
Non-qualified Stock Option rather than an Incentive Stock Option), or
(B) in the case of an Optionee whose employment with the Company or
an Affiliated Company is terminated for any reason other than
Retirement, Disability, or death, at the close of business on the
ninetieth (90th) day following the last day of active service by the
Optionee with the Company or an Affiliated Company or such other date as
may be determined by the Committee (provided, however, that any exercise
of an Incentive Stock Option more than three (3) months after the date
of an Optionee's termination shall convert such Option into a
Non-qualified Stock Option rather than an Incentive Stock Option).
(h) Limitation on Vesting and Exercisability -- The aggregate Fair Market Value
(determined as of the time the Incentive Stock Option is granted) of the Common
Stock with respect to which Incentive Stock Options (granted on or
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after January 1, 1987) are exercisable for the first time by the Optionee during
any calendar year shall not exceed $100,000.
(i) Order of Exercise -- An Incentive Stock Option granted prior to January 1,
1987, shall not be exercisable while there is outstanding any Incentive Stock
Option which was granted to the Optionee before the grant of the first-mentioned
Incentive Stock Option. For this purpose, an Incentive Stock Option shall be
treated as outstanding until it is exercised in full or expires in accordance
with paragraph (c) of this Section 6.
As used in paragraphs (h) and (i) of this Section 6, the term Incentive Stock
Option shall mean an option to purchase stock which is granted pursuant to the
provisions of this Plan or of any other plan of the Company or of a parent or
subsidiary company (as defined by Section 424(e) and (f) of the Code) and which
complies with the terms and conditions set forth in Section 422(b) of the Code.
(j) Intent -- It is the intent of the Company that Non-qualified Stock Options
granted under the Plan not be classified as Incentive Stock Options, that
Incentive Stock Options granted under the Plan be consistent with and contain or
be deemed to contain all provisions required under Section 422 and the other
appropriate provisions of the Code and any implementing regulations (including
any successor provisions thereto), and that any ambiguities in construction
shall be interpreted in order to effectuate such intent.
SECTION 7. NON-QUALIFIED STOCK OPTIONS
The Committee may authorize the grant of Non-qualified Stock Options subject to
the terms and conditions specified in this Section 7. The grant of a
Non-qualified Stock Option shall be evidenced by a written Award Agreement
between the Company and the Optionee, setting forth the number of shares of
Common Stock subject to the Non-qualified Stock Option evidenced thereby, the
exercise price per share (which either may be fixed or may be determined in
accordance with a formula prescribed by the Committee but, subject to the
provisions of Section 16 of the Plan, in no event may be less than 80% of the
Fair Market Value of the underlying shares) and the terms, conditions, and
restrictions applicable thereto. Non-qualified Stock Options granted pursuant to
the provisions of this Section 7 shall be subject to the terms, conditions, and
restrictions set forth in paragraphs (c) through (g) and (j) of Section 6 of the
Plan. The limitations set forth in paragraphs (h) and (i) of Section 6 of the
Plan shall not apply to Non-qualified Stock Options.
SECTION 8. STOCK APPRECIATION RIGHTS
(a) General -- The Committee may grant Stock Appreciation Rights entitling
recipients on exercise of the SAR to receive an amount determined in whole or in
part by reference to appreciation in the Fair Market Value of the Stock between
the date of the Award and the exercise of the Award. A Stock Appreciation Right
shall entitle the Participant to receive, with respect to each share of Stock as
to which the SAR is exercised, the excess of the share's Fair Market Value on
the date of exercise over its Fair Market Value on the date the SAR was granted.
The grant of a Stock Appreciation Right shall be evidenced either by provisions
in the Award Agreement evidencing a related Option or by a written Award
Agreement between the Company and the Optionee with respect to the Stock
Appreciation Right, identifying the related Option (if any), specifying the
number of shares of Common Stock subject thereto, and setting forth the terms
and conditions applicable to the Stock Appreciation Right.
(b) Relationship to Options -- Stock Appreciation Rights may be granted in
tandem with, or independently of, Options granted under the Plan. A Stock
Appreciation Right granted in tandem with a Non-qualified Stock Option may be
granted either at or after the time the Option is granted. A Stock Appreciation
Right granted in tandem with an Incentive Stock Option may be granted only at
the time the Option is granted. Stock Appreciation Rights granted in tandem with
Options shall be subject to all of the same conditions and limitations as the
associated Option. In addition to the requirements of Section 8(d) below,
exercise of any SAR granted in tandem with an Option shall require the
simultaneous surrender of the related Option, or the portion thereof pertaining
to the shares with respect to which the Stock Appreciation Right is exercised.
Additionally, any Stock Appreciation Right granted in connection with an
Incentive Stock Option may not be exercised on any date on which the Fair Market
Value of a share of Common Stock is less than or equal to the Option price per
share under the related Incentive Stock Option.
(c) Non-transferability of SARs -- SARs are not transferable other than (i) by
will or the applicable laws of descent and distribution following the death of
the Participant or (ii) pursuant to a "qualified domestic relations order" as
defined in
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Section 414(p) of the Code. SARs may be exercised during the lifetime of the
Participant only by him (or by a duly appointed guardian or personal
representative, or pursuant to the terms of a qualified domestic relations
order), and following his death only by his Beneficiary.
(d) Exercise -- The Committee shall determine the time or times at which Stock
Appreciation Rights may be exercised (including any applicable vesting
schedule), provided that such time or times shall not occur before the latest
of:
(i) six months following the date on which the SAR was granted (unless
waived by the Committee due to the Participant's Retirement, death or
Disability);
(ii) approval of the Plan (or any amendment thereto which requires
stockholder approval) by the stockholders of the Company pursuant to the
requirements of Sections 18 and 19 of the Plan; and
(iii) the effectiveness of any registration statement required to be
filed under the Securities Act of 1933 for the registration of the Common
Stock to be issued upon exercise of the SAR.
A Stock Appreciation Right shall be exercised by providing the Company with a
written notice in such form and containing such information (including the
number of shares of Common Stock with respect to which the Stock Appreciation
Right is being exercised) as the Committee may specify. For any SAR granted in
tandem with an Option, the date on which the Company receives such notice shall
be the date on which the related Option, or portion thereof, shall be deemed
surrendered and the Stock Appreciation Right shall be deemed exercised.
(e) Payment -- Upon exercise of a Stock Appreciation Right in the manner
provided in paragraph (d) of this Section 8, the Optionee shall be entitled to
receive Exercise Gain Shares equal to the number of shares of Common Stock that
have an aggregate Fair Market Value on the exercise date equal to the amount by
which the Fair Market Value of a share of Common Stock on the exercise date
exceeds the baseline price per share for the SAR (or the Option price per share
of the related Option, as applicable), multiplied by the number of shares with
respect to which the SAR is being exercised (or the number of shares covered by
the related Option, or portion thereof, surrendered in connection with the
exercise of the Stock Appreciation Right). No fractional shares shall be
delivered under this Section 8(e), but in lieu thereof a cash or other
adjustment may be made as determined by the Committee. In the sole discretion of
the Committee, all or part of the payment in respect of a Stock Appreciation
Right may be made in cash or other property in lieu of Exercise Gain Shares.
(f) Termination of SARs -- The termination provisions prescribed by Section 6(g)
of the Plan for Options also shall apply to any Stock Appreciation Right granted
under the Plan (substituting the phrase "Stock Appreciation Right" for the word
"Option" as appropriate), regardless of whether or not such SAR was granted in
tandem with an Option.
(g) Effect of Option Exercise -- A Stock Appreciation Right granted in tandem
with an Option shall be canceled when, and to the extent that, the related
Option is exercised, and an Option shall be canceled when, and to the extent
that, the Option is surrendered to the Company upon the exercise of a related
Stock Appreciation Right.
(h) Deemed Exercise -- A Stock Appreciation Right may provide that it shall be
deemed to have been exercised at the close of business on the business day
preceding the expiration date of the Stock Appreciation Right or of the related
Option, or such other date as specified by the Committee, if at such time such
Stock Appreciation Right has a positive value. Such deemed exercise shall be
settled or paid in the manner prescribed by Section 8(e) of the Plan.
SECTION 9. RESTRICTED SHARES
(a) General -- The Committee, in its sole discretion, may from time to time
authorize the grant of Restricted Shares to a Participant. Any such Award of
Restricted Shares shall be documented in a written Award Agreement in such form
as the Committee may prescribe, consistent with the Plan, which shall specify
the length of the Restriction Period, the extent (if any) to which such
Restricted Shares shall be issued in exchange for cash, other consideration, or
both, and any other specific terms and conditions applicable to such Award. At
the discretion of the Committee, if an Award of Restricted Shares is to be made
in consideration of a payment of consideration by the Participant, the
Participant may borrow the applicable purchase price from the Company, evidenced
by a recourse note bearing interest at a rate determined by the Committee,
provided that such rate of interest shall not be less than the applicable
federal rate required to prevent the imputation of income to the Participant.
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A certificate or certificates representing the number of Restricted Shares
subject to the Award shall be registered in the name of the Participant, or
shall be evidenced in such other manner permitted by applicable law as
determined by the Committee. Such certificate(s) shall bear an appropriate
legend referring to the applicable restrictions and shall be deposited by the
Award holders with the Company, together with a stock power endorsed in blank.
Until the expiration of the Restriction Period or the lapse of restrictions in
the manner provided in paragraph (d) or paragraph (f) of this Section 9, the
certificate or certificates shall be held by the Company for the account of the
Participant. The Committee, acting in its sole discretion with respect to any
Award of Restricted Shares, shall determine the extent to which the Participant
shall have beneficial ownership of the Restricted Shares during the Restriction
Period, including the right to receive dividends on, and the right to vote, the
Restricted Shares.
(b) Restrictions -- Until the expiration of the Restriction Period or the lapse
of restrictions in the manner provided in paragraph (d) or paragraph (f) of this
Section 9, Restricted Shares shall be subject to the following restrictions and
to any additional restrictions (such as restrictions on dividends or voting
rights) that the Committee, in its sole discretion, may from time to time
prescribe in individual Restricted Share Awards in furtherance of the objectives
of the Plan:
(i) the Participant shall not be entitled to receive the certificate
or certificates representing the Restricted Shares;
(ii) the Restricted Shares may not be sold, transferred, assigned,
pledged, conveyed, hypothecated, or otherwise disposed of, except by will
or the laws of descent and distribution, or as otherwise determined by the
Committee; and
(iii) the Restricted Shares may be forfeited immediately as provided
in paragraph (d) of this Section 9, or repurchased at the option of the
Company as provided in paragraph (e) of this Section 9.
Any attempt to dispose of any Restricted Shares in contravention of the
foregoing restrictions shall be null and void and without effect.
(c) Distribution of Restricted Shares -- If a Participant to whom Restricted
Shares have been granted remains in the continuous Employment of the Company or
an Affiliated Company during the entire Restriction Period, upon the expiration
of the Restriction Period all restrictions applicable to the Restricted Shares
shall lapse, and a new certificate or certificates representing the shares of
Common Stock that were granted to the Participant in the form of Restricted
Shares shall be delivered to the Participant, free of the restrictions
previously noted on the face of the certificate issued in conjunction with the
grant of the Award.
(d) Termination of Employment -- If the Employment of a Participant is
terminated for any reason other than the Retirement, Disability or death of the
Participant before the expiration of the Restriction Period, the Restricted
Shares shall either: (i) subject to the discretion of the Committee, if the
Participant was not required to furnish any consideration upon the issuance of
the Award, be forfeited immediately and all rights of the Participant to such
shares shall terminate immediately without further obligation on the part of the
Company or any Affiliated Company or (ii) if the Participant was required to
furnish any consideration upon the issuance of the Award, or if the Committee
shall otherwise determine, be subject to the repurchase option described in
paragraph (e) of this Section 9. If the Participant's Employment is terminated
by reason of the Retirement, Disability or death of the Participant in service
before the expiration of the Restriction Period, the Restriction Period with
respect to all such shares shall immediately expire.
(e) Company's Repurchase Option -- The Company will have the option to
repurchase the shares subject to the Award at such price as the Committee shall
have fixed when the Award was made or as amended thereafter, which option will
be exercisable: (i) subject to paragraph (d) of this Section 9, in connection
with a Participant's termination of Employment; (ii) if, on or prior to the
expiration of the Restriction Period or the earlier lapse of such repurchase
option, the Participant has not paid to the Company an amount equal to any
federal, state, local or foreign income or other taxes which the Company
determines is required to be withheld in respect of such shares; or (iii) under
such other circumstances as determined and set forth by the Committee in the
terms of the Award. Such repurchase option shall be exercisable at a price per
share equal to the lesser of (i) the Participant's purchase price for such
shares under the terms of the Award or (ii) the Fair Market Value of such shares
on the effective date of the termination of Employment or other event which
triggered such exercise. Subject to the provisions of this paragraph (e), the
repurchase option shall contain such other terms, and be exercisable in such
manner and during such period as shall be determined by the Committee when the
Award is made or as amended thereafter.
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If Common Shares issued pursuant to a Restricted Stock Award shall be
repurchased pursuant to the repurchase option described above, the participant
or his successor shall forthwith deliver to the Secretary of the Company the
certificates for the Common Shares awarded to the participant, accompanied by
such instrument of transfer, if any, as may reasonably be required by the
Secretary of the Company. If the repurchase option described above is not
exercised by the Company by written notice to the participant within 30 days of
the date of the event which triggered such right, the Restricted Period with
respect to any Restricted Shares subject to such Award which are not otherwise
forfeited pursuant to paragraph (d) of this Section 9 (or with respect to any
remaining shares for which the Committee does not exercise the Company's
repurchase option within such 30-day period) shall immediately lapse.
(f) Waiver of Restrictions -- The Committee, in its sole discretion, may waive
any or all restrictions with respect to Restricted Shares (provided, that such
Committee discretion may be used to reduce, but not to increase, the length of
the applicable Restriction Period).
SECTION 10. PERFORMANCE SHARE UNITS
(a) General -- The Committee, in its sole discretion, may from time to time
authorize the grant of Performance Share Units to a Participant, which shall be
documented in an Award Agreement in such form as the Committee may prescribe,
consistent with the Plan, which shall specify the relevant performance goals,
the Performance Cycle, and other terms and conditions of the Award. Performance
Share Units shall entitle the Participant to Performance Shares (or cash or
other property in lieu thereof, as determined by the Committee) upon the
achievement of such performance goals as may be established by the Committee at
the time of grant. The Committee in its sole discretion shall determine the
performance goals, the related Performance Cycle during which performance is to
be measured, and all other limitations and conditions applicable to the awarded
Performance Shares; provided, however, that the Committee may rely on the
performance goals and other standards applicable to any other performance plans
of the Company in setting the standards for Performance Share Awards under the
Plan. At such time as it is certified by the Committee that the performance
goals established by the Committee have been attained or otherwise satisfied,
the Committee shall authorize the payment of cash in lieu of Performance Shares
or the issuance of Performance Shares registered in the name of the Participant.
(b) Termination of Employment -- If the Participant's employment with the
Company or an Affiliated Company is terminated before the end of a Performance
Cycle for any reason other than Participant's Retirement, Disability or death,
or any other reason initiated by the Company (excluding any termination for
cause unless the Committee shall expressly determine otherwise), the Participant
shall forfeit all rights with respect to any Performance Shares that were being
earned during the Performance Cycle. The Committee, in its sole discretion, may
establish guidelines providing that if a Participant's employment is terminated
before the end of a Performance Cycle by reason of the Participant's Retirement,
Disability or death, or for any other reason where the termination is initiated
by the Company (excluding any termination for cause unless the Committee shall
expressly determine otherwise), the Participant shall be entitled to a prorated
payment with respect to any Performance Shares that were being earned during the
Performance Cycle.
SECTION 11. OWNERSHIP RIGHTS WITH RESPECT TO AWARDS
(a) General -- Unless otherwise determined by the Committee pursuant to Section
11(b) below, and except for a Participant's beneficial ownership rights with
respect to Restricted Shares under Section 9 of the Plan, a Participant to whom
an Award is made (or his successor) shall have no rights as a holder with
respect to any shares or other securities issuable pursuant to such Award until
the date of the issuance to him of a stock certificate or other instrument of
ownership representing such securities. Except as provided in Section 16 of the
Plan (and except for a Participant's beneficial ownership rights with respect to
Restricted Shares under Section 9 of the Plan), no adjustment shall be made for
dividends, distributions or other rights (whether ordinary or extraordinary, and
whether in cash, securities, other property or any combination thereof) for
which the record date is prior to the date such stock certificate or other
instrument of ownership is issued.
(b) Committee Discretion Concerning Dividends -- The Committee may authorize the
payment of dividend equivalents on some or all of the shares of Common Stock
covered by any Award granted under the Plan, in an amount equal to, and
commensurate with, dividends declared by the Board of Directors and paid on
Common Stock. Dividend equivalents payable on shares subject to any Award under
this Section 11 may be paid in cash or in Common Stock at the discretion of the
Committee. The Committee may authorize the automatic payment of dividend
equivalents under this Section 11 with
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respect to any Award for all or some portion of its term by including a
specific provision, authorizing such automatic payment, in the written Award
Agreement with respect thereto.
SECTION 12. DEFERRAL OF COMPENSATION
The Committee shall determine whether an Award shall be made in conjunction with
deferral of the Participant's salary, bonus or other compensation, or any
combination thereof, and whether such deferred amounts may be:
(i) forfeited to the Company or to other Participants, or any
combination thereof, under certain circumstances (which may include, but
need not be limited to, certain types of termination of Employment);
(ii) subject to increase or decrease in value based upon the
attainment of or failure to attain, respectively, certain performance
measures; and/or
(iii) credited with income equivalents (which may include, but need
not be limited to, interest, dividends or other rates of return) until the
date or dates of payment of the Award.
SECTION 13. DEFERRED PAYMENT OF AWARDS
In granting any Award, or by subsequent agreement with the recipient thereof,
the Committee may specify that the payment of all or any portion of the cash,
Common Stock or other property a Participant is entitled to receive with respect
to an Award shall be deferred until a later date. Deferrals shall be for such
periods or until the occurrence of such events, and upon such terms, as the
Committee shall determine. Deferred payments of Awards may be made by
undertaking to make payment in the future based upon the performance of certain
investment equivalents (which may include, but need not be limited to,
government securities, Common Stock, other securities, property or
consideration, or any combination thereof), together with such additional
amounts of income equivalents (which may be compounded and may include, but need
not be limited to, interest, dividends or other rates of return, or any
combination thereof) as may accrue thereon until the date or dates of payments,
with such investment equivalents and such additional amounts of income
equivalents to be determined by the Committee.
SECTION 14. AMENDMENT OR SUBSTITUTION OF AWARDS
The terms of any outstanding Award under the Plan may be amended from time to
time by the Committee in any manner that it deems appropriate (including, but
not limited to, acceleration of the date of exercise of any Award and/or
payments thereunder); provided that no such amendment shall reduce the amount of
any benefit which a Participant is then entitled to obtain or collect under such
Award. If the Committee determines that there have occurred or are about to
occur significant changes in the participant's position, duties or
responsibilities, or significant changes in economic, legislative, regulatory,
tax, accounting or cost-benefit conditions which are determined by the Committee
to have or to be expected to have a substantial effect on the performance of the
Company, or any subsidiary, affiliate, division or department thereof, on the
Plan or on any Award under the Plan, then the Committee may amend any
outstanding Award in any manner the Committee deems necessary as a result of
such development. The Committee may require or permit holders of Awards under
the Plan to surrender outstanding Awards in order to exercise or realize the
rights under other Awards, or in exchange for the grant of new Awards, and may
require holders of Awards to surrender outstanding Awards as a condition
precedent to the grant of new Awards under the Plan.
SECTION 15. TERMINATION OF A PARTICIPANT
For all purposes under the Plan, the Committee shall determine whether a
Participant has terminated his Employment; provided, however, that transfers
between the Company and an Affiliated Company or between Affiliated Companies,
and approved leaves of absence may not be deemed such a termination, in the
Committee's discretion.
SECTION 16. DILUTION, CHANGE IN CONTROL AND OTHER ADJUSTMENTS
In the event of a recapitalization, stock split, stock dividend, exchange,
combination, or reclassification of shares, merger, consolidation,
reorganization, or other change in or affecting the capital structure or capital
stock of the Company, the Board of Directors, upon the recommendation of the
Committee, may make appropriate adjustments in the number of shares of Common
Stock authorized for the Plan and in the annual limitation imposed by Section 5
of this Plan; and the
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Committee may make such appropriate adjustments in the terms of any outstanding
Award as it deems equitable, in its absolute discretion, to prevent dilution or
enlargement of the rights of Participants.
Upon the occurrence of any Change in Control, as of the effective date thereof:
(A) every then-outstanding Option previously granted under Sections 6 or 7 of
the Plan shall immediately become exercisable with respect to all shares of
Common Stock subject thereto, notwithstanding any other vesting schedule
prescribed in the related Award Agreement (provided, however, that, to the
extent that such automatic vesting shall violate the limitations on vesting and
exercisability contained in paragraphs (h) and (i) of Section 6 hereof with
respect to any Incentive Stock Option, such Option shall automatically be
converted into a Non-qualified Stock Option with respect to the number of shares
for which such limits are violated); (B) every then-outstanding Stock
Appreciation Right previously granted under Section 8 of the Plan shall
immediately become exercisable; and (C) the Restriction Period shall immediately
terminate with respect to every then-outstanding Award of Restricted Shares
previously granted under Section 9 of the Plan.
SECTION 17. REGULATORY APPROVALS
The exercise of each Option and Stock Appreciation Right, and the grant or
distribution of Restricted Shares and Performance Shares, shall be subject to
the condition that if at any time the Company shall determine in its discretion
that the satisfaction of withholding tax or other tax liabilities, or the
listing, registration, or qualification of any shares of Common Stock upon any
securities exchange or under any Federal or state law, or the consent or
approval of any regulatory body, is necessary or desirable as a condition of, or
in connection with, such exercise, grant, or distribution, then in any such
event such exercise, grant, or distribution shall not be effective unless such
liabilities have been satisfied or such listing, registration, qualification,
consent, or approval shall have been effected or obtained free of any conditions
not acceptable to the Company.
SECTION 18. EFFECTIVE DATE AND TERM OF THE PLAN
(a) Effective Date -- The Plan shall be effective when approved by the Board of
Directors, and Options, Stock Appreciation Rights, and Performance Share Units
may be granted immediately thereafter; provided, that no Option or Stock
Appreciation Right may be exercised and no Restricted Shares or Performance
Shares may be granted under the Plan unless and until the Plan is approved by
the vote of the holders of a majority of the shares of Common Stock present or
represented and entitled to vote at a meeting of the stockholders of the
Company, at which a quorum is present, held within twelve (12) months after the
date of adoption of the Plan by the Board of Directors.
(b) Term of the Plan -- Awards may be granted from time to time under the terms
and conditions of the Plan, but no Incentive Stock Option may be granted after
the expiration of ten (10) years from the date of adoption of the Plan by the
Board of Directors; provided, however, that any future amendment to the Plan
that is approved by the stockholders of the Company in the manner provided under
paragraph (a) of this Section 18 and Section 19 hereof shall be regarded as
creating a new Plan, and an Incentive Stock Option may be granted under such new
Plan until the expiration of ten (10) years from the earlier of the approval by
the Board of Directors, or the approval by the stockholders of the Company, of
such new Plan. Incentive Stock Options theretofore granted may extend beyond the
expiration of that ten-year period, and the terms and conditions of the Plan
shall continue to apply thereto and to shares of Common Stock acquired upon the
subsequent exercise of any such Incentive Stock Option or related Stock
Appreciation Right.
SECTION 19. AMENDMENT OR TERMINATION OF THE PLAN
The Board of Directors may at any time and from time to time alter or amend, in
whole or in part, any or all of the provisions of the Plan, or may at any time
suspend or terminate the Plan, provided that no alteration or amendment may be
made without the approval of the holders of a majority of the Common Stock then
outstanding and entitled to vote if such stockholder approval is necessary to
comply with the requirements of any rules promulgated under Section 16 of the
Securities Exchange Act of 1934, the Incentive Stock Option rules under the
Code, or such other Federal or state laws or regulations, including any
requirements of the Nasdaq National Market of the National Association of
Securities Dealers or of any other exchange or market on which the Company's
stock is then traded, as may be applicable to the Company or the Plan.
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SECTION 20. MISCELLANEOUS
(a) Fractional Shares -- The Company shall not be required to issue or deliver
any fractional share of Common Stock upon the exercise of an Option or Stock
Appreciation Right, or the award of Performance Shares, but may pay, in lieu
thereof, an amount in cash equal to the Fair Market Value of such fractional
share.
(b) Withholding -- The Company and its Affiliated Companies shall have the
right, to the extent permitted by law, to deduct from any payment of any kind
otherwise due to a Participant any Federal, state or local or foreign taxes of
any kind required by law to be withheld with respect to Awards under the Plan,
and to the extent any such withholding requirements are not satisfied, each
Participant shall be required to pay to the Company any Federal, state or local
or foreign taxes of any kind required by law to be withheld with respect to
Awards under the Plan. Subject to approval by the Committee, a Participant may
elect to satisfy this requirement by delivery to the Company of any combination
of cash, securities or other property having a market value equal to the amount
of such obligation; provided, however, that any election by a Participant to
utilize any security of the Company to satisfy such tax liability must fully
comply with all applicable requirements of Rule 16b-3 and of Code Section 422.
Failure by a Participant to satisfy these requirements with respect to any Award
may result in the Participant's forfeiture of all rights with respect to such
Award. In no event shall the Company or any Affiliated Company be required to
make any payment of cash, Common Stock or other property in respect of any Award
until the requirements of this Section 20(b) are satisfied in full.
(c) Required Filings -- The appropriate officers of the Company shall cause to
be filed any reports, returns or other information regarding the Plan and Awards
hereunder or any Common Stock issued pursuant hereto as may be required by the
Code, by the Exchange Act or by any other applicable statute, rule or regulation
(or any successor provisions thereto).
(d) Written Awards; Participant Consent -- No Participant or other person shall
have any right with respect to the Plan, the Common Stock reserved for issuance
under the Plan or in any Award, contingent or otherwise, until written evidence
of the Award shall have been delivered to the Participant and all the terms,
conditions and provisions of the Plan and the Award applicable to such
Participant or his successor have been met. The rights of each Participant shall
be limited to those that are specifically granted in the Plan or in the written
evidence of the Award. Any right not specifically granted therein is reserved
entirely to the discretion of the Board. By accepting any Award or other benefit
under the Plan, each Participant or his successor shall be conclusively deemed
to have indicated his acceptance and ratification of, and consent to, any action
taken under the Plan by the Company, the Board or the Committee or its
delegates.
(e) No Contract of Employment or Employment Rights -- This Plan shall not be
deemed to be an employment contract between the Company or any Affiliated
Company and any Participant or other employee. No action taken with respect to
this Plan and nothing contained herein, or in any agreement, certificate or
other document evidencing, providing for, or setting forth the terms and
conditions applicable to any Awards shall be deemed to confer upon any
Participant or other employee a right to continue in the employment of the
Company or any Affiliated Company, or to interfere with the right of the Company
or any Affiliated Company to terminate the employment of such Participant or
employee at any time.
(f) No Alienation -- Except as may be approved by the Committee where such
approval does not adversely affect compliance of the Plan with Rule 16b-3, a
Participant's rights and interest under the Plan and any Award may not be
assigned or transferred, hypothecated or encumbered in whole or in part either
directly or by operation of law and otherwise (except in the event of a
Participant's death) including, but not by way of limitation, execution, levy,
garnishment, attachment, pledge, bankruptcy or in any other manner. Any
transferee of a Participant's rights approved by the Committee shall be treated
as the "Participant" for all purposes of the Plan, unless the Committee directs
otherwise.
(g) Compliance with ISO Rules, Rule 16b-3 and Other Applicable Law -- No cash,
Common Stock or other forms of payment shall be issued hereunder with respect to
any Award unless counsel for the Company is satisfied that such issuance will be
in compliance with all applicable requirements of Federal, state, local and
foreign laws and regulations, including any requirements of the Nasdaq National
Market of the National Association of Securities Dealers or of any other
exchange or market on which the Company's stock is then traded. Additionally, it
is the intent of the Company that the Plan comply in all respects with Rule
16b-3 and (with respect to Incentive Stock Options) with Section 422 of the
Code, that any ambiguities or inconsistencies in construction of the Plan be
interpreted to give effect to such intention and that if any provision of the
Plan is found not to be in compliance with Rule 16b-3 or with Code Section 422
(as applicable), such provision shall be deemed null and void to the extent
required to permit such compliance. The Board
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shall have the power, without further approval of the Company's shareholders, to
amend the Plan in any respect necessary at any point in time to permit the Plan,
and Awards granted under the Plan, to continue to comply with Rule 16b-3 and
with Section 422 of the Code, as applicable.
(h) Plan Expenses and Affiliated Company Participation -- The expenses of the
Plan shall be borne by the Company. However, in the case of Awards made to
Participants Employed by or performing services for an Affiliated Company, where
the Company does not own (directly or indirectly) 100% of the equity of such
Affiliated Company, the Committee may impose any conditions which it deems
appropriate as a precondition to the granting of such Awards, including without
limitation conditions related to the partial or complete reimbursement of the
costs associated with such Awards to the Company by such Affiliated Company.
(i) Statutory References -- References in the text of the Plan to particular
sections of the Exchange Act, the Code or any other statutes, and to the rules
and regulations of any governmental agency promulgated thereunder, shall be
deemed to refer to such statutes and rules as in effect on the date the Plan is
adopted by the Company's shareholders, as well as to any subsequent amendments
or successor provisions to such statutes, rules and regulations.
(j) Unfunded Plan -- Except as may otherwise be provided in the Plan, the Plan
shall be unfunded. Neither the Company nor any Affiliated Company shall be
required to segregate any assets that may be represented by Options, Stock
Appreciation Rights, or Performance Share Units, and neither the Company nor any
Affiliated Company shall be deemed to be a trustee of any amounts to be paid
under an Option, Stock Appreciation Right, or Performance Share Unit. Any
liability of the Company to pay any Participant or Beneficiary with respect to
an Option, Stock Appreciation Right, or Performance Share Unit shall be based
solely upon any contractual obligations created pursuant to the provisions of
the Plan, and the rights of such Participant or Beneficiary therein shall be no
greater that the rights of the Company's general creditors. No such obligation
shall be deemed to be secured by any pledge or encumbrance on any property of
the Company or an Affiliated Company.
(k) Governing Law -- The Plan, its validity, interpretation, and administration,
and the rights and obligations of all persons having an interest therein, shall
be governed by and construed in accordance with the laws of the State of
Tennessee, except to the extent that such laws may be preempted by Federal law.
(l) Gender and Number -- Wherever used in the Plan, words in the masculine form
shall be deemed to refer to females as well as to males, and words in the
singular or plural shall be deemed to refer also to the plural or singular,
respectively, as the context may require.
(m) Determinations of Committee -- Determinations made by the Committee under
the Plan need not be uniform and may be made selectively among eligible
Participants under the Plan, whether or not such Participants are similarly
situated. All determinations and decisions made by the Committee shall be final,
conclusive, and binding on all parties concerned and are made in the sole and
absolute discretion of the Committee unless a contrary standard for action is
expressly stated in the Plan.
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(USXpress Logo)
4080 Jenkins Road
Chattanooga, Tennessee 37421 1329-PS-2002
DETACH HERE
PROXY
U.S. XPRESS ENTERPRISES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of U.S. XPRESS ENTERPRISES, INC. appoints Max L.
Fuller and Patrick E. Quinn and each of them as proxies, with full power of
substitution, to vote all of the shares of Class A and Class B Common Stock
outstanding in the name of the undersigned at the Annual Meeting of Stockholders
of U.S. Xpress Enterprises, Inc. to be held at the Company's Corporate Offices,
4080 Jenkins Road, Chattanooga, Tennessee at 10:00 a.m., Eastern Daylight Time,
May 14, 2002, and any adjournment or adjournments thereof, on all matters that
may properly come before the Annual Meeting.
<Table>
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
</Table>
U.S. XPRESS ENTERPRISES, INC.
c/o EquiServe
P.O. Box 8040
Boston, MA 02266-8040
DETACH HERE
[X] PLEASE MARK VOTES AS
IN THIS EXAMPLE.
YOU ARE URGED TO CAST YOUR VOTE BY MARKING THE APPROPRIATE BOXES. PLEASE NOTE
THAT UNLESS A CONTRARY DISPOSITION IS INDICATED, THIS PROXY WILL BE VOTED FOR
ITEMS 1 AND 2.
1. The election of seven Directors for the ensuing year. Nominees: (01) Robert
J. Sudderth, Jr., (02) Cort J. Dondero, (03) Max L. Fuller, (04) Ray M.
Harlin, (05) Patrick E. Quinn, (06) A. Alexander Taylor, II, (07) James E.
Hall
[ ] FOR ALL NOMINEES [ ] WITHHELD FROM ALL
NOMINEES
[ ]
- --------------------------------------------------------------------------------
For all nominees except as noted above
2. Approval of the Stock Incentive Plan
<Table>
[ ] FOR [ ] AGAINST [ ] ABSTAIN
</Table>
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournments thereof.
MARK HERE FOR ADDRESS CHANGE AND
NOTE AT LEFT [ ]
IMPORTANT: Please sign your name
or names exactly as shown hereon
and date your proxy in the blank
space provided hereon. For joint
accounts, each joint owner must
sign. When signing as attorney,
executor, administrator,
trustee, or guardian, please
give your full title as such. If
the signer is a corporation,
please sign full corporate name
by duly authorized officer.
SIGNATURE __________ DATE: _____