10-Q

FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

(Mark One)                                                                                                                                         
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2002

OR

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________________ to _____________________

Commission File Number                                                 0-23948                                                        

Boyd Bros. Transportation Inc.
(Exact name of Registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization) 63-6006515
(IRS Employer Identification
Number)

3275 Highway 30, Clayton, Alabama 36016
(Address of principal executive offices)
(Zip Code)

(334) 775-1400
(Registrant’s telephone number, including area code)

Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) Yes  X  No     , and (2) has been subject to such filing requirements for the past 90 days. Yes  X  No     

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of August 14, 2002.

Common Stock, $.001 Par Value	2,708,105
(Class)	(Number of Shares)

INDEX

		Page Number
Part I	Financial Information
	Item 1.     Consolidated Financial Statements
	Consolidated Balance Sheets                       June 30, 2002 (unaudited) and December 31, 2001	3
	Consolidated Statements of Operations (unaudited)                       Three- and Six-month Periods Ended June 30, 2002 and 2001	5
	Consolidated Statements of Cash Flows (unaudited)                       Six-month Periods Ended June 30, 2002 and 2001	6
	Notes to Consolidated Financial Statements	7
	Item 2.     Management’s Discussion and Analysis of Financial                  Condition and Results of Operations	11
	Item 3.     Quantitative and Qualitative Disclosures about Market Risk	18
Part II	Other Information
	Item 4.     Submission of Matters to a Vote of Security Holders	19
	Item 6.     Exhibits and Reports on Form 8-K	19
Signatures		20

2

BOYD BROS. TRANSPORTATION INC.

CONSOLIDATED BALANCE SHEETS

			JUNE 30,		DECEMBER 31,
			2002		2001
			(UNAUDITED)
ASSETS
CURRENT ASSETS:
	Cash and cash equivalents		$	394,339	$	2,221,455
	Short-term investments			278,000		278,000
	Accounts receivable:
		Trade and interline		12,785,640		10,055,894
		Other		627,922		956,576
	Current portion of net investment in sales-type leases			1,351,243		1,200,175
	Income tax receivable			272,429		339,220
	Parts and supplies inventory			506,592		497,637
	Tires on revenue equipment			97,900		152,300
	Prepaid licenses and permits			1,188,418		946,054
	Other prepaid expenses			627,774		1,157,370
	Deferred income taxes			1,497,047		1,497,047
		Total current assets		19,627,304		19,301,728
PROPERTY AND EQUIPMENT:
	Land and land improvements			2,879,507		2,800,523
	Buildings			7,658,299		7,635,280
	Revenue equipment			69,472,823		70,927,529
	Other equipment			12,211,416		12,090,626
	Leasehold improvements			384,884		384,884
		Total		92,606,929		93,838,842
	Less accumulated depreciation and amortization			34,201,112		35,325,568
		Property and equipment, net		58,405,817		58,513,274
OTHER ASSETS:
	Net investment in sales-type leases			4,945,993		3,850,821
	Goodwill			3,452,446		3,452,446
	Revenue equipment held for lease			741,793		500,125
	Deposits and other assets			302,312		465,112
		Total other assets		9,442,544		8,268,504
TOTAL			$	87,475,665	$	86,083,506

See notes to unaudited consolidated financial statements.

3

BOYD BROS. TRANSPORTATION INC.

CONSOLIDATED BALANCE SHEETS

			JUNE 30,			DECEMBER 31,
			2002			2001
			(UNAUDITED)
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
	Line of credit		$	–		$	210,540
	Accounts payable — trade and interline			5,009,103			3,339,973
	Current maturities of long-term debt			13,677,272			13,580,359
	Accrued liabilities:
		Self-insurance claims		3,602,650			2,820,773
		Salaries and wages		774,725			485,599
		Other		1,180,454			953,694
		Total current liabilities		24,244,204			21,390,938
LONG-TERM DEBT				23,904,697			25,606,297
DEFERRED INCOME TAXES				13,761,640			13,798,144
		Total liabilities		61,910,541			60,795,379
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY:
	Preferred stock, $.001 par value - 1,000,000 shares authorized; no shares issued and outstanding
	Common stock, $.001 par value - 10,000,000 shares authorized; 4,069,640 shares issued and outstanding			4,070			4,070
	Treasury stock at cost; 1,361,535 shares (2002) and 1,355,041 (2001)			(9,651,444	)		(9,609,190	)
	Additional paid-in capital			16,884,621			16,884,622
	Retained earnings			18,327,877			18,008,625
		Total stockholders’ equity		25,565,124			25,288,127
TOTAL			$	87,475,665		$	86,083,506

See notes to unaudited consolidated financial statements.

4

BOYD BROS. TRANSPORTATION INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

		Three Months Ended June 30,						Six Months Ended June 30,
		2002			2001			2002			2001
OPERATING REVENUES		$	32,710,472		$	31,670,305		$	63,303,441		$	61,929,025
OPERATING EXPENSES:
	Salaries, wages and employee benefits		9,302,994			9,969,417			18,652,139			20,463,996
	Cost of independent contractors		10,063,793			7,581,321			19,042,758			14,164,470
	Fuel		3,558,459			3,953,194			6,899,828			7,953,903
	Operating supplies		2,682,738			3,002,257			5,278,581			5,955,234
	Operating taxes and licenses		673,171			455,987			1,358,139			978,135
	Insurance and claims		1,236,558			1,800,101			3,395,066			3,525,506
	Communications and utilities		324,325			374,000			650,220			765,006
	Depreciation and amortization		2,973,891			3,117,352			5,885,837			6,282,353
	Gain on disposition of property and equipment, net		(50,899	)		(74,964	)		(86,395	)		(581,768	)
	Other		415,340			319,866			751,819			797,072
	Total operating expenses		31,180,370			30,498,531			61,827,992			60,303,907
OPERATING INCOME			1,530,102			1,171,774			1,475,449			1,625,118
OTHER INCOME (EXPENSES):
	Interest income		3,065			16,389			8,776			32,900
	Interest expense		(511,393	)		(645,349	)		(911,925	)		(1,546,581	)
	Other income		—			491			(1,000	)		491
	Other expenses, net		(508,328	)		(628,469	)		(904,149	)		(1,513,190	)
INCOME BEFORE PROVISION FOR INCOME TAXES			1,021,774			543,305			571,300			111,928
PROVISION FOR INCOME TAXES			414,424			260,594			252,051			122,119
NET INCOME (LOSS)		$	607,350		$	282,711		$	319,249		$	(10,191	)
NET INCOME (LOSS) PER SHARE (Basic and Diluted)		$	0.22		$	0.10		$	0.12		$	(0.00	)
WEIGHTED AVERAGE SHARES OUTSTANDING — Basic			2,708,105			2,841,379			2,708,967			2,886,619
WEIGHTED AVERAGE SHARES OUTSTANDING — Diluted			2,741,712			2,841,379			2,732,590			2,886,619

See notes to unaudited consolidated financial statements.

5

BOYD BROS. TRANSPORTATION INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

					Six Months Ended June 30,
					2002			2001
OPERATING ACTIVITIES:
		Net income (loss)			$	319,249		$	(10,191	)
		Adjustments to reconcile net income (loss) to net cash provided by operating activities:
			Depreciation and amortization			5,885,837			6,282,353
			Net effect of sales-type leases on cost of independent contractors			(953,149	)		322,493
			Gain on disposal of property and equipment, net			(86,395	)		(581,768	)
			Provision for deferred income taxes			(36,504	)		—
			Changes in assets and liabilities provided (used) cash:
				Accounts receivable		(2,401,092	)		(1,284,128	)
				Refundable income taxes		66,791			1,449,894
				Other current assets		332,677			6,856
				Deposits and other assets		162,800			(28,508	)
				Accounts payable- trade and interline		1,669,130			204,633
				Accrued liabilities and other current liabilities		1,297,763			18,995
				Net cash provided by operating activities		6,257,107			6,380,629
INVESTING ACTIVITIES:
		Payments received on sales-type leases				1,763,801			1,195,026
		Capital expenditures:
			Revenue equipment			(3,677,307	)		(1,400,293	)
			Other equipment			(757,469	)		(229,035	)
		Construction in process				—			(107,040	)
		Proceeds from disposals of property and equipment				258,180			1,137,432
				Net cash (used in) provided by investing activities		(2,412,795	)		596,090
FINANCING ACTIVITIES:
		Purchase of treasury stock				(42,254	)		(738,041	)
		(Payments on) proceeds from line of credit — net				(210,540	)		1,450,169
		Proceeds from long-term debt				3,286,003			391,047
		Principal payments on long-term debt				(8,704,637	)		(6,421,754	)
				Net cash used in financing activities		(5,671,428	)		(5,318,579	)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS						(1,827,116	)		1,658,140
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD						2,221,455			1,273,281
	BALANCE AT END OF PERIOD				$	394,339		$	2,931,421
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
		Cash paid (received) during the year for :
		Income taxes, net of refunds			$	139,937		$	(215,290	)
		Interest			$	911,925		$	1,546,580
SUPPLEMENTAL NONCASH INVESTING AND FINANCING ACTIVITIES:
		Net investment in sales-type leases			$	(842,829	)	$	(472,826	)
		Dealer financed purchases of revenue equipment			$	3,818,973		$	—

See notes to unaudited consolidated financial statements.

6

BOYD BROS. TRANSPORTATION INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

The accompanying consolidated financial statements have been prepared in compliance with Form 10-Q instructions and, thus, do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, the statements reflect all adjustments, including those of normal recurring nature, necessary to present fairly the results of the reported interim periods. Interim results are not necessarily indicative of results for a full year. The statements should be read in conjunction with the summary of accounting policies and notes to financial statements included in the Company’s latest annual report on Form 10-K.

2. Principles of Consolidation

The consolidated financial statements include the accounts of Boyd Bros. and its wholly owned subsidiary, WTI Transport, Inc. (“WTI”). Boyd Bros. and WTI are referred to herein collectively as the “Company”. All significant inter-company balances, transactions and stockholdings have been eliminated.

3. Tires on Revenue Equipment

On April 3, 2002, the Internal Revenue Service issued Revenue Procedure 2002-27, effective for assets placed in service after December 31, 2001, which outlines an “original tire capitalization method” of accounting for the cost of original and replacement tires on trucks used in business activities. The rule provides for the capitalization of the cost of original tires and depreciation using the same depreciation method, recovery period, and convention that apply to the vehicle on which the tires were first installed. These original tires are considered to be part of the vehicle and are to be “disposed of” at the same time as the vehicle those tires were first installed on. For tires acquired on or prior to December 31, 2001, tires placed in service on newly purchased revenue equipment were carried at cost and depreciated over their useful lives, estimated to be eighteen months. Under the new method, replacement tires are to be expensed in the year installed, which is consistent with the Company’s past practice.

The original tire capitalization method was adopted for all tires placed into service after December 31, 2001. The tires applicable to tractor units and trailers are depreciated according to the asset they are considered a part of. There is no adjustment to the accounting for those tires already in service. A depreciation method being adopted for newly acquired assets that differs from the method(s) used for previously recorded assets of a similar class does not constitute a change in accounting principle but, rather, a change in accounting estimate.

The Company believes the new method will more appropriately reflect its financial results by better allocating costs of new tires over the useful lives of the vehicles they are considered to be part of. In addition, the new method more closely conforms to that prevalent in the industry in which the Company operates. The adoption of this method does not cause a lack of comparability of financial statements. The Company recognized approximately $44,000 less in operating expenses during the first six months of 2002 by applying the new method of depreciation.

4. Environmental Matters

The Company’s operations are subject to certain federal, state, and local laws and regulations concerning the environment. Certain of the Company’s facilities are located in historically industrial areas, and, therefore, there is the possibility of environmental liability as a result of operations by prior owners, as well as the Company’s use of fuels and underground storage tanks at its regional service centers.

7

5. Stockholders’ Equity

Earnings Per Share – For 2002, stock options of 33,607 and 23,623 were included in the computation of diluted net income for the three and six-month periods, respectively. The inclusion of the options in the dilutive earnings per share calculation had no effect on basic earnings per share for either period. No options were included in the diluted net income calculation for the comparative periods in 2001 because to do so would have been anti-dilutive as the exercise prices of all stock options were above the market price of the Company’s common stock.

Stock Purchase Plan - In February 1999, the Company’s Board of Directors authorized a program under which the Company may purchase up to 600,000 shares of its common stock in open market or negotiated transactions. During the second quarter of 2002, the Company did not purchase any shares under this program. However, during the first quarter of 2002, the Company purchased 6,500 shares of its common stock from related parties for $42,254, in accordance with the terms of the acquisition agreement pursuant to which the Company acquired WTI Transport in 1997.

6. Related Party Transactions

The Company entered into a consulting agreement with its Chairman Emeritus, Dempsey Boyd, effective January 1, 2002 through December 31, 2003. Mr. Boyd will be paid $145, 000 annually under this consulting agreement.

7. Goodwill

In June 2001, the Financial Accounting Standards Board (the “FASB”) issued SFAS No. 141, “Business Combinations,” and SFAS No.142, “Goodwill and Other Intangible Assets.” SFAS No. 141 requires the use of the purchase method of accounting and prohibits the use of the pooling-of-interests method of accounting for business combinations initiated after June 30, 2001. This statement also requires that the Company recognize acquired intangible assets apart from goodwill if the acquired intangible assets meet certain criteria. SFAS No.142 requires, among other things, that companies no longer amortize goodwill, but instead test goodwill for impairment at least annually.

In addition, SFAS No. 142 requires that the Company identify reporting units for purposes of assessing potential future impairments of goodwill, reassess the useful lives of other existing recognized finite-lived intangible assets, and cease amortization of intangible assets with an indefinite useful life. An intangible asset with an indefinite useful life should be tested for impairment in accordance with the guidance in SFAS No. 142. This statement is required to be applied in fiscal years beginning after December 15, 2001, to all goodwill and other intangible assets recognized at that date, regardless of when those assets were initially recognized. SFAS No. 142 requires the Company to complete a transitional goodwill impairment test within six months from the date of adoption and reassess the useful lives of other intangible assets within the first interim quarter after adoption.

The Company adopted SFAS Nos. 141 and 142 on January 1, 2002 and, accordingly, ceased amortization of goodwill at that time. Goodwill amortization expense of $55,950 and $111,900 was included in the consolidated financial statements for the three and a six-months ended June 30, 2001, respectively. Had goodwill amortization expense not been recognized in 2001, earnings per share would have increased from $0.10 per share to $0.12 per share for the three months ended June 30, 2001 and from $(0.00) per share to $0.04 per share for the six months ended June 30, 2001.

As of June 30, 2002, the Company completed the first phase of transitional testing for the potential impairment of goodwill relating to its WTI subsidiary. The Company used a multiple of EBITDA (earnings before interest, tax, depreciation and amortization expenses) in evaluating the fair value of WTI. This was consistent with the valuation method used in calculating the original purchase price of WTI in 1997. As a result of such testing, the Company determined there was no impairment of goodwill that should be included in the accompanying financial statements. At June 30, 2002, the net book value recorded for goodwill was $3,452,446.

8

8. Accounting Standards Not Yet Adopted

In August 2001, the FASB issued SFAS No. 143, “Accounting for Asset Retirement Obligations.” SFAS No. 143 covers all legally enforceable obligations associated with the retirement of tangible long-lived assets and provides the accounting and reporting requirements for such obligations. SFAS No. 143 is effective for the Company beginning January 1, 2003. The Company has not assessed the impact of this new statement on its financial position or results of operations.

9. Debt

The Company was not in compliance with certain financial covenant ratio requirements required by its loan agreement with its major lenders, including the term loan for the new Birmingham terminal, as of June 30, 2002. Management believes that its relationships with these lenders continues to be satisfactory, as it has in the past, despite the fact that from time to time the Company has been out of compliance with certain debt covenants. The Company has not yet obtained a waiver of these financial covenant ratio requirements, but the Company does expect to obtain such a waiver from the lender. There can be no assurance that the Company will be able to comply with these covenants in the future or that the Company’s lenders will provide waivers with respect to any such noncompliance. If the Company cannot obtain such waivers, the lenders may exercise their remedies under the applicable loan agreements, which may have a material adverse effect on the Company’s financial condition.

10. Segment Information

The Company has two reportable segments: Boyd and WTI. The Boyd division is a flatbed carrier that hauls primarily steel and building products throughout most of the continental United States, and operates 753 trucks. Boyd had 558 company drivers and 195 owner-operators as of June 30, 2002. The WTI division is a flatbed carrier that hauls steel and roofing products, primarily in the eastern two-thirds of the United States, and operates 217 trucks. WTI had 35 company drivers and 182 owner-operators as of June 30, 2002. Unaudited segment reporting information for the three and six-month periods ended June 30, 2002 and 2001 is as follows:

9

Results of Operations Three Months Ended June 30, 2002
			Boyd			WTI			Eliminations			Total
		Operating revenues	$	27,210,095		$	5,500,377		$	–		$	32,710,472
		Operating expenses		25,865,824			5,314,546			–			31,180,370
		Operating income		1,344,271			185,831			–			1,530,102
		Operating ratio		95.1	%		96.6	%					95.3	%
	Three Months Ended June 30, 2001
			Boyd			WTI			Eliminations			Total
		Operating revenues	$	26,614,728		$	5,055,577		$	–		$	31,670,305
		Operating expenses		25,567,830			4,930,701			–			30,498,531
		Operating income		1,046,898			124,876			–			1,171,774
		Operating ratio		96.1	%		97.5	%					96.3	%
	Six Months Ended June 30, 2002
			Boyd			WTI			Eliminations			Total
		Operating revenues	$	53,040,217		$	10,299,681		$	(36,457	)	$	63,303,441
		Operating expenses		51,908,503			9,955,946			(36,457	)		61,827,992
		Operating income		1,131,714			343,735			–			1,475,449
		Operating ratio		97.9	%		96.7	%					97.7	%
	Six Months Ended June 30, 2001
			Boyd			WTI			Eliminations			Total
		Operating revenue	$	52,457,879		$	9,582,782		$	(111,636	)	$	61,929,025
		Operating expenses		50,667,801			9,747,742			(111,636	)		60,303,907
		Operating income		1,790,078			(164,960	)		–			1,625,118
		Operating ratio		96.6	%		101.7	%					97.4	%
Identifiable Assets As of June 30, 2002
			Boyd			WTI						Total
		Cash and cash equivalents	$	604,868		$	(210,529	)				$	394,339
		Property and equipment		53,511,017			4,894,800						58,405,817
		Long-term debt (including current maturities)		35,101,696			2,480,273						37,581,969
	As of December 31, 2001
			Boyd			WTI						Total
		Cash and cash equivalents	$	943,574		$	1,277,881					$	2,221,455
		Property and equipment		54,740,848			3,772,426						58,513,274
		Long-term debt (including current maturities)		37,587,257			1,599,399						39,186,656

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the attached interim condensed consolidated financial statements and with the Company’s 2001 Annual Report to Stockholders, which included audited financial statements and notes thereto for the fiscal year ended December 31, 2001, as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Overview

The Company, headquartered in Clayton, Alabama, is a flatbed truckload carrier that has two reportable segments: Boyd Bros. and WTI Transport (“WTI”). The Boyd Bros. division operates throughout most of the continental United States, hauling steel and building products. The WTI division hauls steel and roofing products, primarily in the eastern two-thirds of the United States. The Company typically serves high-volume, time-sensitive shippers that demand time definite delivery.

Historically, the Company has owned its revenue equipment and operated through employee-operators. The Company’s expansion in the past, therefore, required significant capital expenditures that have been funded through secured borrowings. In the last five years, the Company began adding owner-operators to its fleet as a strategy to expand its potential for growth without the concomitant increase in capital expenditures typically related to owned equipment. The Company accelerated the implementation of this strategy in December 1997 with the acquisition of WTI, which specializes in short-haul routes using a largely owner-operator fleet.

The Company continues to focus on marketing efforts and is broadening its customer base in diverse industries as well as stressing best-in-business service to its customers. The Company also remains committed to its emphasis on safety, and working to reduce insurance claims and costs. The Company believes these efforts are beginning to yield results in the form of profitable operations in the second quarter of 2002. Although results to date are not necessarily indicative of the Company’s performance for the year, the Company is encouraged by recent results. See “Factors That May Affect Future Results”, below.

Critical Accounting Policies

The methods, estimates and judgments the Company’s management uses in applying Company accounting policies may have a significant effect on the results the Company reports in its financial statements. The estimates and judgments in applying those accounting policies which may have the most significant effect on the Company’s financial statements and operating results include: allowance for doubtful accounts for tractors leased to owner-operators; determinations of impairment of long-lived assets; estimates of accrued liabilities for insurance and workers’ compensation; estimates of useful lives and salvage values for the depreciation of tractors and trailers; and allowance for doubtful accounts receivable. Please refer to “Management’s Discussion and Analysis of Financial Condition – Critical Accounting Policies” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2001 for a fuller description of the Company’s critical accounting policies.

Additionally, on April 3, 2002, the Internal Revenue Service issued Revenue Procedure 2002-27, effective for assets placed in service after December 31, 2001, which outlines an “original tire capitalization method” of accounting for the cost of original and replacement tires on trucks used in business activities. The rule provides for the capitalization of the cost of original tires and depreciation using the same depreciation method, recovery period, and convention that apply to the vehicle on which the tires were first installed. These original tires are considered to be part of the vehicle and are to be “disposed of” at the same time as the vehicle on which those tires were first installed on. Replacement tires are to be expensed in the year installed.

This new tire capitalization method was adopted for all tires placed in service by the Company after December 31, 2001, and the tires applicable to tractor units and trailers are depreciated according to the asset of which they are considered a part of. Tires, which were already in service at December 31, 2001, are carried at cost and depreciated over their useful lives, estimated to be eighteen months. The effect of this change in accounting policy was that the Company recognized approximately $44,000 less in operating expenses during the first six months of 2002 than

11

would have been recognized if the old method had been used. This expense will be recognized by the Company, but over a longer period of time.

Quarterly Review:

The following tables set forth, by segment, the percentage relationship of expense items to operating revenues and certain other operating statistics for the periods indicated:

		Company						Boyd						WTI
								Quarter Ended June 30,
		2002			2001			2002			2001			2002			2001
Operating revenues			100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Operating expenses
	Salaries, wages, and employee benefits		28.4			31.5			31.7			34.9			12.5			13.2
	Cost of independent contractors		30.8			23.9			24.3			16.6			62.7			62.7
	Fuel		10.9			12.5			12.2			14.3			4.4			2.7
Operating supplies			8.2			9.5			9.0			10.3			4.5			5.1
	Operating taxes and licenses		2.1			1.4			2.1			1.5			1.9			0.9
	Insurance and claims		3.8			5.7			3.9			6.0			3.0			4.1
	Communications and utilities		1.0			1.2			1.1			1.2			0.6			1.0
	Depreciation and amortization		9.1			9.8			10.1			10.6			4.2			5.9
	Gain on disposition of property and equipment, net		(0.2	)		(0.2	)		(0.2	)		(0.3	)		0.1			(0.1	)
	Other		1.3			1.0			1.0			0.8			2.7			1.9
Total operating expenses			95.4			96.3			95.2			95.9			96.6			97.4
Operating income			4.6			3.7			4.8			4.1			3.4			2.6
Interest expense, net			(1.6	)		(2.0	)		(1.7	)		(2.2	)		(1.0	)		(0.9	)
Other income			—			—			—			—			—			—
Income (loss) before income taxes			3.0			1.7			3.1			1.9			2.4			1.7
	Income taxes (benefit)		1.3			0.8			1.3			0.8			1.1			1.2
Net income (loss)			1.7	%		0.9	%		1.8	%		1.1	%		1.3	%		0.5	%

	Company						Boyd						WTI
							Quarter Ended June 30,
	2002			2001			2002			2001			2002			2001
Company operated tractors		593			678			558			643			35			35
Owner-operated tractors		377			299			195			126			182			173
Total tractors		970			977			753			769			217			208
Company operated tractor %		61	%		69	%		74	%		84	%		16	%		17	%
Owner-operated tractor %		39	%		31	%		26	%		16	%		84	%		83	%
Total %		100	%		100	%		100	%		100	%		100	%		100	%

Quarterly Results of Operations

The Company’s total operating revenues increased $1,040,167 or 3.3% to $32,710,472 for the quarter ended June 30, 2002, compared with $31,670,305 for the same period in 2001. This change reflected an increase of $593,368 or 2.2% in the Boyd division and an increase of $444,799 or 8.8% in the WTI division. These changes are reflective of stronger freight conditions and also an increase in brokerage revenue for the Company.

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Total operating expenses increased $681,839 or 2.2% to $31,180,370 for the second quarter ended June 30, 2002, compared to $30,498,531 for the same three months last year. Of this increase, $297,995 was attributable to the Boyd division. The WTI division accounted for $383,844 of the total increase. These increases are directly proportional to the increases in operating revenues.

As a percentage of revenues, the following operating expense accounts decreased for the total Company: salaries, wages and employee benefits, fuel, and operating supplies. Expenses related to company drivers are primarily in these accounts. As a percentage of revenues, cost of independent contractors increased by an amount approximating the sum decrease of the above-mentioned operating expense accounts. In the Boyd division, the number of company drivers decreased while the number of owner-operators increased, causing these shifts in expenses. These changes are primarily attributable to the Boyd division, as shown above in Boyd’s percentages.

Taxes and licenses increased $217,184 or 47.6% to $673,171 in the second quarter of 2002 compared to $455,987 in the second quarter of 2001. This increase was attributable to the increase in tractor values that are used for application of licensing and permitting. The Company acquired approximately fifty new tractors during the three months ended June 30, 2002.

During the second quarter of 2002, insurance and claims expense decreased $563,543 or 31.3% from the second quarter of 2001. This decrease is attributable to fewer claims and a lower accident rate during the second quarter of 2002. Additionally, insurance premiums were lower during 2002 due to the increase in the retention amount per occurrence of $500,000.

Depreciation and amortization decreased $143,461 or 4.6% to $2,973,889 from $3,117,352 in the second quarter of 2001. The decrease in depreciation and amortization for the quarter was primarily due to conversion of some company tractors to owner-operated tractors subject to lease/purchase arrangements. Effective January 1, 2002, the Company discontinued amortization of goodwill at its WTI division in accordance with SFAS No. 142 and changed its depreciation method of tires on revenue equipment. Because of these changes, the Company recognized approximately $78,000 less expense during the quarter ended June 30, 2002 as compared to the comparative period in 2001.

Interest expense for the second quarter declined $133,956 or 20.8% to $511,393 from $645,349 in the second quarter of 2001. Most of the Company’s revenue equipment financing is associated with the Boyd division because of its larger company-owned fleet, thus most of the decline in interest expense for the second quarter related to the Boyd division and reflected both lower debt levels and a lower LIBOR rate on borrowed funds.

Income tax expense for the three-month period ended June 30, 2002 was $414,424 resulting in an effective tax rate of 40.6%. This rate is greater than the Federal statutory rate primarily due to the effect of state taxes and the permanent non-deductibility of certain expenses for tax purposes.

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Year-to-date Review:

		Company						Boyd						WTI
								Six Months Ended June 30,
		2002			2001			2002			2001			2002			2001
Operating revenues			100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Operating expenses
	Salaries, wages, and employee benefits		29.5			33.0			32.6			36.6			13.2			13.1
	Cost of independent contractors		30.1			22.9			24.0			15.4			61.4			64.9
	Fuel		10.9			12.8			12.2			14.8			4.2			2.1
Operating supplies			8.3			9.6			9.0			10.2			4.8			6.0
	Operating taxes and licenses		2.1			1.6			2.2			1.7			1.8			1.1
	Insurance and claims		5.4			5.7			5.7			5.7			3.5			5.4
	Communications and utilities		1.0			1.2			1.1			1.3			0.7			1.1
	Depreciation and amortization		9.3			10.1			10.2			10.9			4.4			6.1
	Gain on disposition of property and equipment, net		(0.1	)		(0.9	)		(0.2	)		(1.0	)		0.0			(0.5	)
	Other		1.2			1.3			0.9			1.1			2.6			2.3
Total operating expenses			97.7			97.3			97.7			96.7			96.6			101.6
Operating income			2.3			2.7			2.3			3.3			3.4			(1.6	)
Interest expense, net			(1.4	)		(2.4	)		(1.5	)		(2.7	)		(0.8	)		(1.1	)
Other income			—			—			—			—			—			—
Income (loss) before income taxes			0.9			0.3			0.8			0.6			2.6			(2.7	)
	Income taxes (benefit)		0.4			0.2			0.2			0.3			1.2			(0.5	)
Net income (loss)			0.5	%		0.1	%		0.6	%		0.3	%		1.4	%		(3.2	)%

	Company						Boyd						WTI
							Six Months Ended June 30,
	2002			2001			2002			2001			2002			2001
Company operated tractors		583			662			548			637			35			25
Owner-operated tractors		378			299			196			126			182			173
Total tractors		961			961			744			763			217			198
Company operated tractor %		61	%		69	%		74	%		83	%		16	%		13	%
Owner-operated tractor %		39	%		31	%		26	%		17	%		84	%		87	%
Total %		100	%		100	%		100	%		100	%		100	%		100	%

Year-to-date Results of Operations

The Company’s total operating revenues increased $1,374,416 or 2.2% to $63,303,441 for the six months ended June 30, 2002, compared with $61,929,025 for the same period in 2001. Of this increase, $1,040,167 occurred during the second quarter of 2002 as noted in the discussion of quarterly results above. These changes are reflective of stronger freight conditions and also an increase in the brokerage revenue for the Company.

Total operating expenses increased $1,524,085 or 2.5% to $61,827,992 for the six months ended June 30, 2002, compared to $60,303,907 for the first six months of 2001. The change in the Company’s operating expenses reflected primarily lower expenses for salaries, wages and employee benefits, fuel, operating supplies, and depreciation and amortization, together with reduced gains on the disposition of property and equipment, net, which were more than offset primarily by higher net cost of independent contractors.

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As a percentage of revenues, the following operating expense accounts decreased for the total Company: salaries, wages and employee benefits, fuel, and operating supplies. Expenses related to company drivers are primarily in these accounts. These accounts changed due to the shift in the overall Company fleet. The fleet was 69.0% company operated for the first six months of 2001, and for the same period in 2002, the fleet was 61.0% company operated.

Depreciation and amortization decreased $396,516 or 6.3% during the first six months of 2002 to $5,885,837 from $6,282,353 during the same period of 2001. The decrease in depreciation and amortization was primarily associated with the Boyd division, which during the past year has converted some company tractors to owner-operated tractors subject to lease/purchase arrangements. Effective January 1, 2002, the Company discontinued amortization of goodwill at its WTI division in accordance with SFAS No.142 and changed its depreciation method of tires on revenue equipment. Because of these changes, the Company recognized approximately $156,000 less expense during the first six months of 2002 as compared to the comparative period in 2001.

Gain on disposition of property and equipment, net declined $495,373 or 85.1% to $86,395 in the first six months of 2002 from $581,768 in the first six months of 2001. As a percentage of operating revenues, gain on disposition of property and equipment, net declined to 0.1% from 0.9%. The lower gains related almost entirely to the Boyd division because it operates primarily with company-owned power units, which were effected by lower trade-in activity and depressed trade-in values for used tractors. The gains that are generated by entering into lease-purchase agreements with owner-operators are included in the net cost of independent contractors. The prior-year amount also included a gain of approximately $407,000 on the sale of the Company’s airplane during the first quarter of 2001.

Taxes and licenses increased $380,004 or 38.8% to $1,358,139 from $978,135 in the first six months of 2001. As a percentage of operating revenues, taxes and licenses increased to 2.1% from 1.6%. The increase in taxes and licenses reflected an increase in the new tractor values that are used for applying for permits. The Company acquired approximately one hundred new tractors during the first six months of 2002.

Interest expense for the first six months of 2002 decreased by $634,656 or 41.0% to $911,925 from $1,546,580 in the first six months of 2001. As a percentage of operating revenues, interest expense declined to 1.4% from 2.4%. Most of the Company’s revenue equipment financing is associated with the Boyd division because of its larger company-owned fleet, thus most of the decline in interest expense for the first six months of 2002 related to the Boyd division and reflected both lower debt levels and a lower LIBOR rate on borrowed funds.

Income tax expense for the six-month period ended June 30, 2002 was $252,051 and the effective tax rate was 44.1%. This rate is greater than the federal statutory rate because of the effect of state taxes and the permanent non-deductibility of certain expenses for tax purposes.

Liquidity and Capital Resources

The Company’s primary cash requirements are for capital expenditures and operating expenses, including labor costs, fuel costs, and operating supplies. Historically, the Company’s primary sources of cash have been from operations and bank borrowings.

Accounts receivable — trade and interline increased $2,729,746 or 27.1% to $12,785,640 at June 30, 2002, from $10,055,894 at December 31, 2001. Accounts receivable represented 15% of total assets compared with 13% of total assets at December 31, 2001. The number of days of revenue in accounts receivable at June 30, 2002, was 32.5 compared with 30.9 at December 31, 2001. The increase in accounts receivable at June 30, 2002 as compared to December 31, 2001 is attributable to the increase in sales volume. Because of the open, flatbed nature of its trailers, the Company historically has experienced increased shipping volume during the warm weather months as compared to the winter months. Net cash flow provided by operating activities was $6,257,107 during the first six months of 2002, compared to $6,380,629 during the same period in 2001. Accrued liabilities increased due to the Company increasing its retention per occurrence ($500,000 per claim) for liability claims for the period from July 1, 2001 to July 1, 2002. Beginning July 1, 2002, the retention per occurrence increased to $750,000.

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The Company reserves for bad debts related to the sale-leaseback transactions with its owner-operators. Bad debt expense on such leases for the six months ended June 30, 2002 was $2,821,673 compared to $697,923 for the same period in 2001. This increase of $2,123,750 was due primarily to the increase in the number of owner-operators during 2002.

The Company’s bank debt relates largely to its revenue equipment, although a portion was incurred for the recent construction of a new terminal in Birmingham, Alabama. The construction loan was converted to a term loan in January 2001. The Company’s bank debt bears interest ranging from LIBOR (1.86 on June 28, 2002), plus 1.25% to LIBOR plus 2.75%, all payable in monthly installments and with maturities through December 2005 (January 2021 for the terminal loan). The bank debt is collateralized by revenue equipment and the real property related to the Birmingham terminal. The Company also has one line of credit totaling $2,500,000, bearing interest at the bank’s 30-day LIBOR rate plus 2.25%. As of June 30, 2002, the Company had no outstanding borrowings on this line of credit.

The Company was not in compliance with certain financial covenant ratio requirements required by its bank debt, including the term loan for the new Birmingham terminal, as of June 30, 2002. Although the Company remained out of compliance with these financial covenants as of June 30, 2002, management believes that its relationships with these lenders continues to be satisfactory, as it has in the past despite the fact that from time to time the Company has been out of compliance with certain debt covenants. The Company has not yet obtained a waiver of these financial covenant ratio requirements, but the Company does expect to obtain such a waiver from the lender. There can be no assurance that the Company will be able to comply with these covenants in the future or that the Company’s lenders will provide any additional waivers with respect to any such noncompliance. If the Company cannot obtain such additional waivers, the lenders may exercise their remedies under the applicable loan agreements, which may have a material adverse effect on the Company’s financial condition. During the third quarter of 2001, the Company and one of its major lenders consolidated all of its term notes maturing among various years into one master note. The principal payments are due equally over 60 months and the interest is LIBOR based and adjusted quarterly.

The Company believes that the availability of credit under its line of credit, together with internally generated cash, will be adequate to finance its operations through fiscal year 2002. The Company anticipates it will purchase approximately $1.6 million in both tractors and trailers during the last six months of fiscal 2002. Over the long term, the Company will continue to have significant capital needs that may require it to seek additional borrowings or equity capital. The availability of debt financing or equity capital will depend on prevailing market conditions, the market price of its common stock, and other factors over which the Company has no control, as well as the Company’s financial condition and results of operations.

Factors That May Affect Future Results

The Company’s future results may be affected by a number of factors over which the Company has little or no control. Fuel prices, insurance and claims costs, liability claims, interest rates, the availability of qualified drivers, fluctuations in the resale value of revenue equipment, economic and customer business cycles, and shipping demands are economic factors over which the Company has little or no control. Significant increases or rapid fluctuations in fuel prices, interest rates, insurance costs or liability claims, to the extent not offset by increases in freight rates, and the resale value of revenue equipment could reduce profitability. Weakness in the general economy, including a weakness in consumer demand for goods and services, could adversely affect customers and growth and revenues, if customers reduce their demand for transportation services. Weakness in customer demand for the Company’s services or in the general rate environment also may restrain the Company’s ability to increase rates or obtain fuel surcharges. It also is not possible to predict the medium or long-term effects of terrorist attacks on September 11, 2001, and subsequent events on the economy or on customer confidence in the United States, or the impact, if any, on the Company’s future results of operations.

16

The following issues and uncertainties, among other things, should be considered in evaluating the Company’s growth outlook:

Business uncertainties

The Company has experienced significant and rapid growth in revenue since the Company went public in May 1994. There can be no assurance that the Company’s business will continue to grow in a similar fashion in the future or that the Company can effectively adapt its management, administrative, and operational systems to respond to any future growth. Further, there can be no assurance that the Company’s operating margins will not be adversely affected by future changes in and expansion of the Company’s business or by changes in economic conditions.

Insurance

The Company’s future insurance and claims expenses might exceed historical levels, which could reduce earnings. The Company currently self-insures for a portion of the claims exposure resulting from cargo loss, personal injury, and property damage, combined up to $750,000 per occurrence, effective July 1, 2002. In addition, costs above the $750,000 self-insured amount, up to the Company’s coverage amount of two million dollars, will be shared by the Company at a rate of fifty percent. The workers’ compensation self-insurance level increased to a maximum of $500,000, and the health insurance self-insurance level is $175,000 per person per year. If the number or dollar amount of claims for which the Company is self-insured increases, operating results could be adversely affected.

The Company was involved in two accidents in the first quarter of 2002 that resulted in third party fatalities. During the first quarter of 2002, the self-insured amount for cargo loss, personal injury, and property damage, combined was up to $500,000 per occurrence, which would be the amount applicable to those two accidents if they result in claims. Each of these accidents, taken separately, has the potential to cause the Company to reach its total per occurrence retention amount for insurance purposes. To date, one claim has been filed against the Company with respect to one of these accidents. If the Company is ultimately found to have some liability for one or both of these accidents, the Company believes that its operating cash flows and unused line of credit would be sufficient to cover any amounts payable. Also, the Company maintains insurance coverage of up to two million dollars with licensed insurance companies above the amounts for which the Company is self-insured. As discussed above, effective July 1, 2002, the Company shares 50% of claims amounts within its two million dollars of insurance coverage. The terrorist attacks in the United States on September 11, 2001, and subsequent events, may result in additional increases in the Company’s insurance expenses. If these expenses continue to increase, and the Company is unable to offset the increase with higher freight rates, the Company’s earnings could be materially affected.

Revenue equipment

The Company’s growth has been made possible through the addition of new revenue equipment. Difficulty in financing or obtaining new revenue equipment (for example, delivery delays from manufacturers or the unavailability of independent contractors) could restrict future growth.

In the past the Company has acquired new tractors and trailers at favorable prices and has entered into agreements with the manufacturers to repurchase the tractors from the Company at agreed prices. Current developments in the secondary tractor and trailer resale market have resulted in a large supply of used tractors and trailers on the market. This has depressed the market value of used equipment to levels significantly below the prices at which the manufacturers have agreed to repurchase the equipment. Accordingly, some manufacturers may refuse or be financially unable to keep their commitments to repurchase equipment according to their repurchase agreement terms. The Company understands that some manufacturers have communicated to customers their intention to significantly increase new equipment prices and eliminate or sharply reduce the price of repurchase commitments.

Inflation

Many of the Company’s operating expenses, including fuel costs and fuel taxes, are sensitive to the effects of inflation, which could result in higher operating costs. During 2000, 2001, and the first six months of 2002, the Company experienced fluctuations in fuel costs as a result of conditions in the petroleum industry. The Company also has periodically experienced some wage increases for drivers. Increases in fuel costs and driver compensation

17

are expected to continue during 2002 and may affect operating income, unless the Company is able to pass those increased costs to customers through rate increases or fuel surcharges. The Company has initiated an aggressive program to obtain rate increases and fuel surcharges from customers in order to cover increased costs due to these increases in fuel prices, driver compensation, and other expenses and has been successful in implementing some fuel surcharges. Competitive conditions in the transportation industry, including lower demand for transportation services, could limit the Company’s ability to continue to obtain rate increases or fuel surcharges.

Fuel Price Trend

The motor carrier industry depends upon the availability of diesel fuel. Fuel shortages or increases in fuel taxes or fuel costs have adversely affected, and may in the future adversely affect, the profitability of the Company. Fuel prices have fluctuated greatly, and fuel taxes have generally increased in recent years. The Company has not experienced difficulty in maintaining necessary fuel supplies, and in the past, the Company generally has been able to partially offset significant increases in fuel costs and fuel taxes through increased freight rates and through a fuel surcharge which increases incrementally as the price of fuel increases. However, there can be no assurance that the Company will be able to recover any future increases in fuel costs and fuel taxes through increased rates. If fuel prices continue to increase or are sustained at these higher levels for a continuing period of time, the higher fuel costs may have a materially adverse effect on the financial condition and business operations of the Company. Additionally, the increased fuel costs may continue to have a materially adverse effect on the Company’s efforts to attract and retain owner-operators, expand its pool of available trucks, and diversify its operations.

Forward-looking Statements

With the exception of historical information, the matters discussed and statements made in this filing constitute forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Specifically, this filing contains forward-looking statements regarding the likely benefits from cost reductions; the programs being undertaken by the Company to increase service and reliability levels; expectations regarding the freight business and the economy; and results in future quarters and for the year. Whenever possible, the Company has identified these forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934) by words such as “anticipates”, “may”, “believes”, “estimates”, “projects”, “expects”, “intends”, and words of similar import. Forward-looking statements contained in this filing involve certain assumptions, risks, and uncertainties that could cause actual results to differ materially from those included in or contemplated by the statements. In particular, there can be no assurance that following factors will not have a negative impact on the Company’s expectations: whether the Company’s cost reductions will continue to result in an increase in the Company’s revenue; whether the Company’s long-term service assurance program will be successful; whether business conditions and the economy will improve, including the transportation and construction sectors, in particular; the Company’s ability to recruit and retain qualified drivers; the ability to control internal costs, particularly rising fuel costs that may or may not be passed on to the Company’s customers; departures and defaults by owner-operators; the cost of complying with governmental regulations that are applicable to the Company; costs associated with increased insurance and claims expense, and other risk factors. These assumptions, risks and uncertainties include, but are not limited to, those discussed or indicated in all documents filed by the Company with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2001. The Company expressly disclaims any obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

The Company is exposed to interest rate risk due to its long-term debt, which at June 30, 2002, bore interest rates ranging from 1.25% to 2.75% above the bank’s LIBOR rate. Under the provisions of Statement of Financial Accounting Standards No. 107, “Disclosures about Fair Value of Financial Instruments,” the Company has estimated the fair value of its long-term debt approximates its carrying value, using a discounted cash flow analysis based on borrowing rates available to the Company. The effect of a hypothetical 10% increase in interest rates would increase the estimated fair value of the Company’s long-term debt by approximately $250,000. Management believes that current working capital funds are sufficient to offset any adverse effects caused by changes in the interest rates.

18

PART II. OTHER INFORMATION

Item 4. Submission of Matters to a Vote of Security Holders

On May 14, 2002, the Company held its 2002 annual meeting of stockholders. A total of 2,461,863 shares, or 91%, of the Company’s outstanding shares, were represented at the meeting, either in person or by proxy.

Three directors were nominated by the Company’s Board of Directors to serve new three-year terms. These nominees, and the voting results for each, are listed below:

	Term Expires		For		Withheld
Richard C. Bailey		2005		2,446,648		15,215
Stephen J. Silverman		2005		2,447,513		14,350
J. Mark Dunning		2005		2,447,513		14,350

Incumbent directors not standing for election at the 2002 annual meeting of stockholders and whose terms continued after the meeting were:

	Term Expires
J. Larry Baxter		2003
Gail B. Cooper		2003
Boyd Whigham		2004

Item 6. Exhibits and Reports on Form 8-K

(a)  Exhibits, Financial Statements and Schedules

10.1	Master Security Agreement dated May 31, 2002 by and between the Company and General      Electric Capital Corporation.
10.2	Promissory Note dated May 31, 2002 by and between the Company and General Electric      Capital Corporation.
10.3	Consulting Agreement dated January 1, 2002 by and between the Company and Dempsey Boyd.
99.1	Chief Executive Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.2	Chief Financial Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(b)  Reports on Form 8-K

     The Company filed no reports on Form 8-K during the quarter ended June 30, 2002.

19

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Boyd Bros. Transportation Inc.
	(Registrant)
Date: August 14, 2002	/s/ Richard C. Bailey
	Richard C. Bailey, Chief Financial Officer
	(Principal Accounting Officer)

20 EX-10.1 3 g77623exv10w1.txt MASTER SECURITY AGREEMENT EXHIBIT 10.1 MASTER SECURITY AGREEMENT dated as of May 21, 2002 ("Agreement") THIS AGREEMENT is between GENERAL ELECTRIC CAPITAL CORPORATION (together with its successors and assigns, if any, "SECURED PARTY") and BOYD BROS. TRANSPORTATION INC. ("DEBTOR"). Secured Party has an office at 1000 Windward Concourse Suite 403, Alpharetta, GA 30005. Debtor is a corporation organized and existing under the laws of the state of Delaware. Debtor's mailing address and chief place of business is 3275 Highway 30, Clayton, AL 36016. 1. CREATION OF SECURITY INTEREST. Debtor grants to Secured Party, its successors and assigns, a security interest in and against all property listed on any collateral schedule now or in the future annexed to or made a part of this Agreement ("COLLATERAL SCHEDULE"), and in and against all additions, attachments, accessories and accessions to such property, all substitutions, replacements or exchanges therefor, and all insurance and/or other proceeds thereof (all such property is individually and collectively called the "COLLATERAL"). This security interest is given to secure the payment and performance of all debts, obligations and liabilities of any kind whatsoever of Debtor to Secured Party, now existing or arising in the future, including but not limited to the payment and performance of certain Promissory Notes from time to time identified on any Collateral Schedule (collectively "NOTES" and each a "NOTE"), and any renewals, extensions and modifications of such debts, obligations and liabilities (such Notes, debts, obligations and liabilities are called the "INDEBTEDNESS"). Unless otherwise provided by applicable law, notwithstanding anything to the contrary contained in this Agreement, to the extent that Secured Party asserts a purchase money security interest in any items of Collateral ("PMSI COLLATERAL"): (i) the PMSI Collateral shall secure only that portion of the Indebtedness which has been advanced by Secured Party to enable Debtor to purchase, or acquire rights in or the use of such PMSI Collateral (the "PMSI INDEBTEDNESS"), and (ii) no other Collateral shall secure the PMSI Indebtedness. 2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF DEBTOR. Debtor represents, warrants and covenants as of the date of this Agreement and as of the date of each Collateral Schedule that: (a) Debtor's exact legal name is as set forth in the preamble of this Agreement and Debtor is, and will remain, duly organized, existing and in good standing under the laws of the State set forth in the preamble of this Agreement, has its chief executive offices at the location specified in the preamble. and is, and will remain, duly qualified and licensed in every jurisdiction wherever necessary to carry on its business and operations; (b) Debtor has adequate power and capacity to enter into, and to perform its obligations under this Agreement, each Note and any other documents evidencing, or given in connection with, any of the Indebtedness (all of the foregoing are called the "DEBT DOCUMENTS"); (c) This Agreement and the other Debt Documents have been duly authorized, executed and delivered by Debtor and constitute legal, valid and binding agreements enforceable in accordance with their terms, except to the extent that the enforcement of remedies may be limited under applicable bankruptcy and insolvency laws; (d) No approval, consent or withholding of objections is required from any governmental authority or instrumentality with respect to the entry into, or performance by Debtor of any of the Debt Documents, except any already obtained; (e) The entry into, and performance by, Debtor of the Debt Documents will not (i) violate any of the organizational documents of Debtor or any judgment, order, law or regulation applicable to Debtor, or (ii) result in any breach of or constitute a default under any contract to which Debtor is a party, or result in the creation of any lien, claim or encumbrance on any of Debtor's property (except for liens in favor of Secured Party) pursuant to any indenture, mortgage, deed of trust, bank loan, credit agreement, or other agreement or instrument to which Debtor is a party; (f) There are no suits or proceedings pending in court or before any commission, board or other administrative agency against or affecting Debtor which could, in the aggregate, have a material adverse effect on Debtor, its business or operations, or its ability to perform its obligations under the Debt Documents, nor does Debtor have reason to believe that any such suits or proceedings are threatened; (g) All financial statements delivered to Secured Party in connection with the Indebtedness have been prepared in accordance with generally accepted accounting principles, and since the date of the most recent financial statement, there has been no material adverse change in Debtors financial condition; (h) The Collateral is not, and will not be, used by Debtor for personal, family or household purposes; (i) The Collateral is, and will remain, in good condition and repair and Debtor will not be negligent in its care and use; (j) Debtor is, and will remain, the sole and lawful owner, and in possession of, the Collateral, and has the sole right and lawful authority to grant the security interest described in this Agreement; and (k) The Collateral is, and will remain, free and clear of all liens, claims and encumbrances of any kind whatsoever, except for (i) liens in favor of Secured Party, (ii) liens for taxes not yet due or for taxes being contested in good faith and which do not involve, in the judgment of Secured Party, any risk of the sale, forfeiture or loss of any of the Collateral, and (iii) inchoate materialmen's, mechanic's, repairmen's and similar liens arising by operation of law in the normal course of business for amounts which are not delinquent (all of such liens are called "PERMITTED LIENS"). 3. COLLATERAL. (a) Until the declaration of any default, Debtor shall remain in possession of the Collateral; except that Secured Party shall have the right to possess (i) any chattel paper or instrument that constitutes a part of the Collateral, and (ii) any other Collateral in which Secured Party's security interest may be perfected only by possession. Secured Party may inspect any of the Collateral during normal business hours after giving Debtor reasonable prior notice. If Secured Party asks, Debtor will promptly notify Secured Party in writing of the location of any Collateral. (b) Debtor shall (i) use the Collateral only in its trade or business, (ii) maintain all of the Collateral in good operating order and repair, normal wear and tear excepted, (iii) use and maintain the Collateral only in compliance with manufacturers recommendations and all applicable laws, and (iv) keep all of the Collateral free and clear of all liens, claims and encumbrances (except for Permitted Liens). (c) Secured Party does not authorize and Debtor agrees it shall not (i) part with possession of any of the Collateral (except to Secured Party or for maintenance and repair), (ii) remove any of the Collateral from the continental United States, or (iii) sell, rent, lease, mortgage, license, grant a security interest in or otherwise transfer or encumber (except for Permitted Liens) any of the Collateral. (d) Debtor shall pay promptly when due all taxes, license fees, assessments and public and private charges levied or assessed on any of the Collateral, on its use, or on this Agreement or any of the other Debt Documents. At its option, Secured Party may discharge taxes, liens, security interests or other encumbrances at any time levied or placed on the Collateral and may pay for the maintenance, insurance and preservation of the Collateral and effect compliance with the terms of this Agreement or any of the other Debt Documents. Debtor agrees to reimburse Secured Party, on demand, all costs and expenses incurred by Secured Party in connection with such payment or performance and agrees that such reimbursement obligation shall constitute Indebtedness. (e) Debtor shall, at all times, keep accurate and complete records of the Collateral, and Secured Party shall have the right to inspect and make copies of all of Debtor's books and records relating to the Collateral during normal business hours, after giving Debtor reasonable prior notice. (f) Debtor agrees and acknowledges that any third person who may at any time possess all or any portion of the Collateral shall be deemed to hold, and shall hold, the Collateral as the agent of, and as pledge holder for, Secured Party. Secured Party may at any time give notice to any third person described in the preceding sentence that such third person is holding the Collateral as the agent of, and as pledge holder for, the Secured Party. 4. INSURANCE. (a) Debtor shall at all times bear the entire risk of any loss, theft, damage to, or destruction of, any of the Collateral from any cause whatsoever. (b) Debtor agrees to keep the Collateral insured against loss or damage by fire and extended coverage perils, theft, burglary, and for any or all Collateral which are vehicles, for risk of loss by collision, and if requested by Secured Party, against such other risks as Secured Party may reasonably require. The insurance coverage shall be in an amount no less than the full replacement value of the Collateral, and deductible amounts, insurers and policies shall be acceptable to Secured Party. Debtor shall deliver to Secured Party policies or certificates of insurance evidencing such coverage. Each policy shall name Secured Party as a loss payee, shall provide for coverage to Secured Party regardless of the breach by Debtor of any warranty or representation made therein, shall not be subject to co-insurance, and shall provide that coverage may not be canceled or altered by the insurer except upon thirty (30) days prior written notice to Secured Party. Debtor appoints Secured Party as its attorney-in-fact to make proof of loss, claim for insurance and adjustments with insurers, and to receive payment of and execute or endorse all documents, checks or drafts in connection with insurance payments. Secured Party shall not act as Debtor's attorney-in-fact unless Debtor is in default. Proceeds of insurance shall be applied, at the option of Secured Party, to repair or replace the Collateral or to reduce any of the Indebtedness. 5. REPORTS. (a) Debtor shall promptly notify Secured Party of (i) any change in the name of Debtor, (ii) any change in the state of its incorporation or registration, (iii) any relocation of its chief executive offices, (iv) any relocation of any of the Collateral, (v) any of the Collateral being lost, stolen, missing, destroyed, materially damaged or worn out, or (vi) any lien, claim or encumbrance other than Permitted Liens attaching to or being made against any of the Collateral. (b) Debtor will deliver to Secured Party Debtor's complete financial statements, certified by a recognized firm of certified public accountants, within ninety (90) days of the close of each fiscal year of Debtor. If Secured Party requests, Debtor will deliver to Secured Party copies of Debtor's quarterly financial reports certified by Debtor's chief financial officer, within ninety (90) days after the close of each of Debtor's fiscal quarter. Debtor will deliver to Secured Party copies of all Forms 10-K and 10-Q, if any, within 30 days after the dates on which they are filed with the Securities and Exchange Commission. 6. FURTHER ASSURANCES. (a) Debtor shall, upon request of Secured Party, furnish to Secured Party such further information, execute and deliver to Secured Party such documents and instruments (including, without limitation, Uniform Commercial Code financing statements) and shall do such other acts and things as Secured Party may at any time reasonably request relating to the perfection or protection of the security interest created by this Agreement or for the purpose of carrying out the intent of this Agreement. Without limiting the foregoing, Debtor shall cooperate and do all acts deemed necessary or advisable by Secured Party to continue in Secured Party a perfected first security interest in the Collateral, and shall obtain and furnish to Secured Party any subordinations, releases, landlord waivers, lessor waivers, mortgagee waivers, or control agreements, and similar documents as may be from time to time requested by, and in form and substance satisfactory to, Secured Party. (b) Debtor authorizes Secured Party to file a financing statement and amendments thereto describing the Collateral and containing any other information required by the applicable Uniform Commercial Code. Debtor irrevocably grants to Secured Party the power to sign Debtor's name and generally to act on behalf of Debtor to execute and file applications for title, transfers of title, financing statements, notices of lien and other documents pertaining to any or all of the Collateral; this power is coupled with Secured Party's interest in the Collateral. Debtor shall, if any certificate of title be required or permitted by law for any of the Collateral, obtain and promptly deliver to Secured Party such certificate showing the lien of this Agreement with respect to the Collateral. Debtor ratifies its prior authorization for Secured Party to file financing statements and amendments thereto describing the Collateral and containing any other information required by the Uniform Commercial Code if filed prior to the date hereof. (c) Debtor shall indemnify and defend the Secured Party, its successors and assigns, and their respective directors, officers and employees, from and against all claims, actions and suits (including, without limitation, related attorneys' fees) of any kind whatsoever arising, directly or indirectly, in connection with any of the Collateral. 7. DEFAULT AND REMEDIES. (a) Debtor shall be in default under this Agreement and each of the other Debt Documents if: (i) Debtor breaches its obligation to pay when due any installment or other amount due or coming due under any of the Debt Documents; (ii) Debtor, without the prior written consent of Secured Party, attempts to or does sell, rent, lease, license, mortgage, grant a security interest in, or otherwise transfer or encumber (except for Permitted Liens) any of the Collateral; (iii) Debtor breaches any of its insurance obligations under Section 4; (iv) Debtor breaches any of its other obligations under any of the Debt Documents and fails to cure that breach within thirty (30) days after written notice from Secured Party; (v) Any warranty, representation or statement made by Debtor in any of the Debt Documents or otherwise in connection with any of the Indebtedness shall be false or misleading in any material respect; (vi) Any of the Collateral is subjected to attachment, execution, levy, seizure or confiscation in any legal proceeding or otherwise, or if any legal or administrative proceeding is commenced against Debtor or any of the Collateral, which in the good faith judgment of Secured Party subjects any of the Collateral to a material risk of attachment, execution, levy, seizure or confiscation and no bond is posted or protective order obtained to negate such risk; (vii) Debtor breaches or is in default under any other agreement between Debtor and Secured Party; (viii) Debtor or any guarantor or other obligor for any of the Indebtedness (collectively "GUARANTOR") dissolves, terminates its existence, becomes insolvent or ceases to do business as a going concern; (ix) If Debtor or any Guarantor is a natural person, Debtor or any such Guarantor dies or becomes incompetent; (x) A receiver is appointed for all or of any part of the property of Debtor or any Guarantor, or Debtor or any Guarantor makes any assignment for the benefit of creditors; (xi) Debtor or any Guarantor files a petition under any bankruptcy, insolvency or similar law, or any such petition is filed against Debtor or any Guarantor and is not dismissed within forty-five (45) days; or (xii) Debtor's improper filing of an amendment or termination statement relating to a filed financing statement describing the Collateral. (b) If Debtor is in default, the Secured Party, at its option, may declare any or all of the Indebtedness to be immediately due and payable, without demand or notice to Debtor or any Guarantor. The accelerated obligations and liabilities shall bear interest (both before and after any judgment) until paid in full at the lower of eighteen percent (18%) per annum or the maximum rate not prohibited by applicable law. (c) After default, Secured Party shall have all of the rights and remedies of a Secured Party under the Uniform Commercial Code, and under any other applicable law. Without limiting the foregoing, Secured Party shall have the right to (i) notify any account debtor of Debtor or any obligor on any instrument which constitutes part of the Collateral to make payment to the Secured Party, (ii) with or without legal process, enter any premises where the Collateral may be and take possession of and remove the Collateral from the premises or store it on the premises, (iii) sell the Collateral at public or private sale, in whole or in part, and have the right to bid and purchase at said sale, or (iv) lease or otherwise dispose of all or part of the Collateral, applying proceeds from such disposition to the obligations then in default. If requested by Secured Party, Debtor shall promptly assemble the Collateral and make it available to Secured Party at a place to be designated by Secured Party which is reasonably convenient to both parties. Secured Party may also render any or all of the Collateral unusable at the Debtor's premises and may dispose of such Collateral on such premises without liability for rent or costs. Any notice that Secured Party is required to give to Debtor under the Uniform Commercial Code of the time and place of any public sale or the time after which any private sale or other intended disposition of the Collateral is to be made shall be deemed to constitute reasonable notice if such notice is given to the last known address of Debtor at least five (5) days prior to such action. (d) Proceeds from any sale or lease or other disposition shall be applied: first, to all costs of repossession, storage, and disposition including without limitation attorneys', appraisers', and auctioneers' fees; second, to discharge the obligations then in default; third, to discharge any other Indebtedness of Debtor to Secured Party, whether as obligor, endorser, guarantor, surety or indemnitor; fourth, to expenses incurred in paying or settling liens and claims against the Collateral; and lastly, to Debtor, if there exists any surplus. Debtor shall remain fully liable for any deficiency. (e) Debtor agrees to pay all reasonable attorneys' fees and other costs incurred by Secured Party in connection with the enforcement, assertion, defense or preservation of Secured Party's rights and remedies under this Agreement, or if prohibited by law, such lesser sum as may be permitted. Debtor further agrees that such fees and costs shall constitute Indebtedness. (f) Secured Party's rights and remedies under this Agreement or otherwise arising are cumulative and may be exercised singularly or concurrently. Neither the failure nor any delay on the part of the Secured Party to exercise any right, power or privilege under this Agreement shall operate as a waiver, nor shall any single or partial exercise of any right, power or privilege preclude any other or further exercise of that or any other right, power or privilege. SECURED PARTY SHALL NOT BE DEEMED TO HAVE WAIVED ANY OF ITS RIGHTS UNDER THIS AGREEMENT OR UNDER ANY OTHER AGREEMENT, INSTRUMENT OR PAPER SIGNED BY DEBTOR UNLESS SUCH WAIVER IS EXPRESSED IN WRITING AND SIGNED BY SECURED PARTY. A waiver on any one occasion shall not be construed as a bar to or waiver of any right or remedy on any future occasion. (g) DEBTOR AND SECURED PARTY UNCONDITIONALLY WAIVE THEIR RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE OTHER DEBT DOCUMENTS, ANY OF THE INDEBTEDNESS SECURED HEREBY, ANY DEALINGS BETWEEN DEBTOR AND SECURED PARTY RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN DEBTOR AND SECURED PARTY. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT. THIS WAIVER IS IRREVOCABLE. THIS WAIVER MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING. THE WAIVER ALSO SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, ANY OTHER DEBT DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED TRANSACTION. THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. 8. MISCELLANEOUS. (a) This Agreement, any Note and/or any of the other Debt Documents may be assigned, in whole or in part, by Secured Party without notice to Debtor, and Debtor agrees not to assert against any such assignee, or assignee's assigns, any defense, set-off, recoupment claim or counterclaim which Debtor has or may at any time have against Secured Party for any reason whatsoever. Debtor agrees that if Debtor receives written notice of an assignment from Secured Party, Debtor will pay all amounts payable under any assigned Debt Documents to such assignee or as instructed by Secured Party. Debtor also agrees to confirm in writing receipt of the notice of assignment as may be reasonably requested by Secured Party or assignee. (b) All notices to be given in connection with this Agreement shall be in writing, shall be addressed to the parties at their respective addresses set forth in this Agreement (unless and until a different address may be specified in a written notice to the other party), and shall be deemed given (i) on the date of receipt if delivered in hand or by facsimile transmission, (ii) on the next business day after being sent by express mail, and (iii) on the fourth business day after being sent by regular, registered or certified mail. As used herein, the term "business day" shall mean and include any day other than Saturdays, Sundays, or other days on which commercial banks in New York, New York are required or authorized to be closed. (c) Secured Party may correct patent errors and fill in all blanks in this Agreement or in any Collateral Schedule consistent with the agreement of the parties. (d) Time is of the essence of this Agreement. This Agreement shall be binding, jointly and severally, upon all parties described as the "Debtor" and their respective heirs, executors, representatives, successors and assigns, and shall inure to the benefit of Secured Party, its successors and assigns. (e) This Agreement and its Collateral Schedules constitute the entire agreement between the parties with respect to the subject matter of this Agreement and supersede all prior understandings (whether written, verbal or implied) with respect to such subject matter. THIS AGREEMENT AND ITS COLLATERAL SCHEDULES SHALL NOT BE CHANGED OR TERMINATED ORALLY OR BY COURSE OF CONDUCT, BUT ONLY BY A WRITING SIGNED BY BOTH PARTIES. Section headings contained in this Agreement have been included for convenience only, and shall not affect the construction or interpretation of this Agreement. (f) This Agreement shall continue in full force and effect until all of the Indebtedness has been indefeasibly paid in full to Secured Party or its assignee. The surrender, upon payment or otherwise, of any Note or any of the other documents evidencing any of the Indebtedness shall not affect the right of Secured Party to retain the Collateral for such other Indebtedness as may then exist or as it may be reasonably contemplated will exist in the future. This Agreement shall automatically be reinstated if Secured Party is ever required to return or restore the payment of all or any portion of the Indebtedness (all as though such payment had never been made). (g) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CONNECTICUT (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF SUCH STATE), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, REGARDLESS OF THE LOCATION OF THE EQUIPMENT. IN WITNESS WHEREOF, Debtor and Secured Party, intending to be legally bound hereby, have duly executed this Agreement in one or more counterparts, each of which shall be deemed to be an original, as of the day and year first aforesaid. SECURED PARTY: DEBTOR: GENERAL ELECTRIC CAPITAL CORPORATION BOYD BROS. TRANSPORTATION INC. By: /s/ Allen Brown By: /s/ Richard Bailey -------------------------------- -------------------------------- Name: Allen Brown Name: Richard Bailey ------------------------------ ------------------------------ Title: Sr. Risk Analyst Title: CFO ----------------------------- ----------------------------- COLLATERAL SCHEDULE NO. 001 THIS COLLATERAL SCHEDULE NO. 001 is annexed to and made a part of that certain Master Security Agreement dated as of May 21, 2002 between General Electric Capital Corporation, together with its successors and assigns, if any, as Secured Party and BOYD BROS. TRANSPORTATION INC. as Debtor and describes collateral in which Debtor has granted Secured Party a security interest in connection with the Indebtedness (as defined in the Security Agreement) including without limitation that certain Promissory Note dated May ___ 2002 in the original principal amount of $3,229,040.00.

QUANTITY MANUFACTURER SERIAL NUMBER YEAR/MODEL AND TYPE OF EQUIPMENT - -------- ------------ ------------- -------------------------------- 1 International 2HSCHASR02C037091 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR22C037092 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR42C037093 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR62C037094 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR82C037095 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASRX2C037096 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR12C037097 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR32C037098 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR52C037099 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR82C037100 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASRX2C037101 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR32C037102 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR32C037103 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR52C037104 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR72C037105 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR92C037106 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR02C037107 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR22C037108 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR42C037109 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR02C037110 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASRX2C047398 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR42C047400 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR62C047401 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR82C047402 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR12C037116 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR32C037117 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR52C037118 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR72C037119 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR32C037120 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR52C037121 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR72C037122 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR92C037123 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR02C037124 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR22C037125 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR42C037126 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR12C047399 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR02C037127 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR82C037128 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASRX2C037129 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR62C037130 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR82C037131 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASRX2C037132 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR12C037133 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR32C037134 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR52C037135 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR72C037136 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR92C037137 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR02C037138 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR22C037139 2002 9900i SFA 6x4 Tractor 1 International 2HSCHASR92C037140 2002 9900i SFA 6x4 Tractor

Equipment immediately listed above is located at: 3275 Highway 30, Clayton, Barbour County, AL 36016 SECURED PARTY: DEBTOR: GENERAL ELECTRIC CAPITAL CORPORATION BOYD BROS. TRANSPORTATION INC. By: /s/ Allen Brown By: /s/ Richard Bailey -------------------------------- -------------------------------- Name: Allen Brown Name: Richard Bailey ------------------------------ ------------------------------ Title: Sr. Risk Analyst Title: CFO ----------------------------- ----------------------------- Date: 5-24-02 Date: 5-21-02 ------------------------------ ------------------------------ EX-10.2 4 g77623exv10w2.txt PROMISSORY NOTE EXHIBIT 10.2 PROMISSORY NOTE May 31, 2002 ------------ (Date) FOR VALUE RECEIVED, BOYD BROS. TRANSPORTATION INC. a corporation located at the address stated below ("MAKER") promises, jointly and severally if more than one, to pay to the order of GENERAL ELECTRIC CAPITAL CORPORATION or any subsequent holder hereof (each, a "PAYEE") at its office located at 1000 WINDWARD CONCOURSE SUITE 403, ALPHARETTA, GA 30005 or at such other place as Payee or the holder hereof may designate, the principal sum of THREE MILLION TWO HUNDRED TWENTY NINE THOUSAND FORTY DOLLARS AND 00/100 DOLLARS ($3,229,040.00), with interest on the unpaid principal balance, from the date hereof through and including dates of payment, at a floating per annum simple interest rate ("Contract Rate") as hereinafter calculated. The Contract Rate for any given period ("Effective Period") following the first Effective Period shall be equal to the sum of (i) Two and Thirty Eight Hundredths percent (2.38%) per annum plus (ii) a variable per annum interest rate ("Current LIBOR"), which shall be equal to the rate under the column indicating the one month London Interbank Offered Rate ("LIBOR") as stated in the Federal Reserve Statistical Release H.15 (519) published on the first Business Day of the current month in which the applicable Effective Period ends. If, for any reason whatsoever, the Federal Reserve Statistical Release H.15 (519) is no longer published, the Current LIBOR shall be equal to the rate listed for LIBOR which is published in the Money Rates Column of the Wall Street Journal, Eastern Edition (or, in the event such rate is not so published, in such other nationally recognized publication as Payee may specify) on the first Business Day of the calendar month in which the applicable Effective Period ends. As used herein, the term "Business Day" shall mean and include any calendar day other than a day on which all commercial banks in the City of New York, New York are required or authorized to be closed. The first Effective Period shall begin on the date hereof, and shall continue through the earlier of (w) the date the first Periodic Installment (or part thereof) is received by Payee and (x) the date on which the first Periodic Installment is due. Each subsequent Effective Period shall begin on the day after the last day of the previous Effective Period and shall continue through the earlier of (y) the date the earliest due and unpaid Periodic Installment (or part thereof) is received by Payee and (z) the date on which the next Periodic Installment is due. The Contract Rate for the first Effective Period shall be equal to the sum of (i) Two and Thirty Eight Hundredths percent (2.38%) per annum plus (ii) a variable per annum interest rate, which shall be equal to the rate listed for LIBOR under the column indicating the such rate as stated in the Federal Reserve Statistical Release H.15 (519) published as of the first Business Day of the month in which the Effective Period ends. Subject to the other provisions hereof, the principal and interest on this Note is payable in lawful money of the United States in Sixty (60) consecutive monthly installments as follows:

Periodic Installment Amount ----------- ---------- 1-59 $59,686.51

each ("Periodic Installment") and a final installment which shall be in the amount of the total outstanding unpaid principal and interest. The first Periodic Installment shall be due and payable on June 1, 2002 and the following Periodic Installments shall be due and payable on the same day of each succeeding period (each, a "Payment Date"). All payments shall be applied first to interest and then to principal. The acceptance by Payee of any payment which is less than payment in full of all amounts due and owing at such time shall not constitute a waiver of Payee's right to receive payment in full at such time or at any prior or subsequent time. Interest shall be calculated on the basis of a 365 day year (366 day leap year) and will be charged at the Contract Rate for each calendar day on which any principal is outstanding. The amount and number of the Periodic Installments will not change with fluctuations in the Contract Rate. Any increase in the Contract Rate shall be reflected by a corresponding decrease in the portion of the Periodic Installment credited to the remaining unpaid principal balance. Any decrease in the Contract Rate shall be reflected as a corresponding increase in the portion of the Periodic Installment credited to the remaining unpaid principal balance. Notwithstanding the foregoing, at the end of each three (3) month period commencing with the first Payment Date hereof, Maker agrees to pay to Payee forthwith an additional sum ("Quarterly Payment") sufficient to amortize the unpaid principal over the balance of the original term hereof at the Contract Rate applicable for the first Periodic Installment. If, and for so long as, the amount of interest due exceeds the amount of the Periodic Installment, Maker agrees to pay forthwith, in addition to (i) any Periodic Installment then due and (ii) any Quarterly Payment, the amount by which said interest exceeds the Periodic Installment. In the event interest only is required to be paid during any period, the interest for such period shall be due and payable monthly as it accrues and shall be calculated on the unpaid principal balance existing at the commencement of such period. The Maker hereby expressly authorizes the Payee to insert the date value is actually given in the blank space on the face hereof and on all related documents pertaining hereto. This Note may be secured by a security agreement, chattel mortgage, pledge agreement or like instrument (each of which is hereinafter called a "SECURITY AGREEMENT"). Time is of the essence hereof. If any installment or any other sum due under this Note or any Security Agreement is not received within ten (10) days after its due date, the Maker agrees to pay, in addition to the amount of each such installment or other sum, a late payment charge of five percent (5%) of the amount of said installment or other sum, but not exceeding any lawful maximum. If (i) Maker fails to make payment of any amount due hereunder within ten (10) days after the same becomes due and payable; or (ii) Maker is in default under, or fails to perform under any term or condition contained in any Security Agreement, then the entire principal sum remaining unpaid, together with all accrued interest thereon and any other sum payable under this Note or any Security Agreement, at the election of Payee, shall immediately become due and payable, with interest thereon at the lesser of eighteen percent (18%) per annum or the highest rate not prohibited by applicable law from the date of such accelerated maturity until paid (both before and after any judgment). The Maker may prepay in full, but not in part, its entire indebtedness hereunder upon payment of the entire indebtedness plus an additional sum as a premium equal to the following percentages of the original principal balance for the indicated period: Prior to the first annual anniversary date of this Note: Two percent (2%) Thereafter and prior to the second annual anniversary date of this Note: One percent (1%) and zero percent (0%) thereafter, plus all other sums due hereunder or under any Security Agreement. It is the intention of the parties hereto to comply with the applicable usury laws; accordingly, it is agreed that, notwithstanding any provision to the contrary in this Note or any Security Agreement, in no event shall this Note or any Security Agreement require the payment or permit the collection of interest in excess of the maximum amount permitted by applicable law. If any such excess interest is contracted for, charged or received under this Note or any Security Agreement, or if all of the principal balance shall be prepaid, so that under any of such circumstances the amount of interest contracted for, charged or received under this Note or any Security Agreement on the principal balance shall exceed the maximum amount of interest permitted by applicable law, then in such event (a) the provisions of this paragraph shall govern and control, (b) neither Maker nor any other person or entity now or hereafter liable for the payment hereof shall be obligated to pay the amount of such interest to the extent that it is in excess of the maximum amount of interest permitted by applicable law, (c) any such excess which may have been collected shall be either applied as a credit against the then unpaid principal balance or refunded to Maker, at the option of the Payee, and (d) the effective rate of interest shall be automatically reduced to the maximum lawful contract rate allowed under applicable law as now or hereafter construed by the courts having jurisdiction thereof. It is further agreed that without limitation of the foregoing, all calculations of the rate of interest contracted for, charged or received under this Note or any Security Agreement which are made for the purpose of determining whether such rate exceeds the maximum lawful contract rate, shall be made, to the extent permitted by applicable law, by amortizing, prorating, allocating and spreading in equal parts during the period of the full stated term of the indebtedness evidenced hereby, all interest at any time contracted for, charged or received from Maker or otherwise by Payee in connection with such indebtedness; provided, however, that if any applicable state law is amended or the law of the United States of America preempts any applicable state law, so that it becomes lawful for the Payee to receive a greater interest per annum rate than is presently allowed, the Maker agrees that, on the effective date of such amendment or preemption, as the case may be, the lawful maximum hereunder shall be increased to the maximum interest per annum rate allowed by the amended state law or the law of the United States of America. The Maker and all sureties, endorsers, guarantors or any others (each such person, other than the Maker, an "OBLIGOR") who may at any time become liable for the payment hereof jointly and severally consent hereby to any and all extensions of time, renewals, waivers or modifications of, and all substitutions or releases of, security or of any party primarily or secondarily liable on this Note or any Security Agreement or any term and provision of either, which may be made, granted or consented to by Payee, and agree that suit may be brought and maintained against any one or more of them, at the election of Payee without joinder of any other as a party thereto, and that Payee shall not be required first to foreclose, proceed against, or exhaust any security hereof in order to enforce payment of this Note. The Maker and each Obligor hereby waives presentment, demand for payment, notice of nonpayment, protest, notice of protest, notice of dishonor, and all other notices in connection herewith, as well as filing of suit (if permitted by law) and diligence in collecting this Note or enforcing any of the security hereof, and agrees to pay (if permitted by law) all expenses incurred in collection, including Payee's actual attorneys' fees. Maker and each Obligor agrees that fees not in excess of twenty percent (20%) of the amount then due shall be deemed reasonable. THE MAKER HEREBY UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS NOTE, ANY OF THE RELATED DOCUMENTS, ANY DEALINGS BETWEEN MAKER AND PAYEE RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN MAKER AND PAYEE. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.) THIS WAIVER IS IRREVOCABLE MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS NOTE, ANY RELATED DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED TRANSACTION. IN THE EVENT OF LITIGATION. THIS NOTE MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. This Note and any Security Agreement constitute the entire agreement of the Maker and Payee with respect to the subject matter hereof and supercedes all prior understandings, agreements and representations, express or implied. No variation or modification of this Note, or any waiver of any of its provisions or conditions, shall be valid unless in writing and signed by an authorized representative of Maker and Payee. Any such waiver, consent, modification or change shall be effective only in the specific instance and for the specific purpose given. Any provision in this Note or any Security Agreement which is in conflict with any statute, law or applicable rule shall be deemed omitted, modified or altered to conform thereto. BOYD BROS. TRANSPORTATION INC. By: /s/ Richard Bailey ------------------------------------- Name: Richard Bailey ----------------------------------- Title: CFO ---------------------------------- Federal Tax ID #: 636006515 ----------------------- Address: 3275 Highway 30, Clayton, Barbour County, AL 36016 EX-10.3 5 g77623exv10w3.txt CONSULTING AGREEMENT EXHIBIT 10.3 CONSULTING AGREEMENT This Consulting Agreement (this "Agreement") is made and entered into as of the 1st day of January, 2002, by and between Boyd Bros. Transportation Inc., a Delaware corporation (the "Company"), and Dempsey Boyd, an individual resident of Alabama ("Consultant"). RECITALS A. Consultant has served the Company in numerous capacities since its founding, including most recently as a member of the Company's board of directors (the "Board of Directors") and as Chairman of the Board of Directors. Effective January 1, 2002, Dempsey Boyd resigned from his position as a member of the Board of Directors and from his position as Chairman of the Board of Directors. B. As a result of his extensive service to the Company as a founder, employee, officer and director, Consultant has acquired knowledge, information and experience concerning the Company's business and operations, and the industry in which the Company operates, that is of substantial value to the Company. C. The Company desires to engage Consultant as a consultant, and Consultant desires to provide services to the Company as a consultant. AGREEMENT SECTION 1. CONSULTING DUTIES AND EXTENT OF SERVICES. The Company hereby engages Consultant as a consultant, and Consultant agrees to consult with the Company on the terms and conditions set forth in this Agreement. Consultant shall provide such advice and expertise, and shall perform such duties and services from time to time, during the term of this Agreement as the Company shall reasonably request. The services to be provided by Consultant shall include, without limitation, negotiating equipment and tire agreements, reviewing equipment requirements, researching and investigating equipment, advising the Company regarding certain ongoing litigation matters, advising the Company regarding construction projects and providing the Company with an experienced perspective on the trucking industry. Consultant shall perform such services for a term of two (2) years, beginning on the date of this Agreement and ending on the second anniversary hereof. This Agreement may be extended by written consent of the parties hereto. The Company shall provide Consultant with an office and reasonable administrative assistance and shall reimburse Consultant for all reasonable business expenses incurred by Consultant at the direction or request of the Company upon receipt by the Company of documentation of such expenses. SECTION 2. CONSIDERATION. (a) As consideration for the services rendered to the Company during the term of this Agreement, Consultant shall receive from the Company monthly payments in the amount of $12,166.67, payable at the end of each month during the term of this Agreement. (b) As additional consideration for the services rendered to the Company by Consultant during the term of this Agreement, the Company shall pay for health care insurance for Consultant substantially the same as that provided to the Company's executive officers. SECTION 3. RELATIONSHIP OF PARTIES. Nothing contained in this Agreement is intended to create the relationship of employer / employee and Consultant shall be and continue to operate under this Agreement as an independent contractor. Consultant acknowledges and agrees that he is entitled to no compensation or other benefit from the Company with respect to this Agreement other than expressly provided for herein. Consultant shall be solely responsible for his own income and other tax reporting and payment with respect to the fees payable under this Agreement (including, without limitation, self-employment taxes), and the Company shall have no obligation to withhold any portion of the fees provided for under this Agreement for purposes of employee withholding taxes, or otherwise. SECTION 4. BINDING EFFECT ON SUCCESSORS, ASSIGNEES, ETC. Neither Party may assign nor may it delegate any rights or obligations hereunder without first obtaining the written consent of the other Party; provided, however, that the Company may assign this Agreement to any of its affiliates. This Agreement shall be binding on and inure to the benefit of any immediate, intermediate or ultimate successor of the business or assets of the Company by way of merger, consolidation, reorganization, dissolution, sale or transfer of assets, liquidation, or otherwise. SECTION 5. MERGER CLAUSE. This Agreement constitutes the full and complete understanding and agreement of the parties with respect to the subject matter hereof, and cannot be amended, modified or supplemented in any respect except by agreement in writing, signed by the parties hereto. SECTION 6. CHOICE OF LAW. This Agreement shall be controlled, construed and governed in all respects by the laws of the State of Alabama without regard to conflict of laws and principles. SECTION 7. SEVERABILITY. If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. [Signature Page Follows] IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer and Consultant has executed this Agreement, effective as of the date and the year first above written. BOYD BROS. TRANSPORTATION, INC. By /s/ RICHARD C. BAILEY -------------------------------------- Its CFO ------------------------------------- /s/ DEMPSEY BOYD ----------------------------------------- Dempsey Boyd EX-99.1 6 g77623exv99w1.txt SECTION 906 CERTIFICATION OF THE CEO EXHIBIT 99.1 CERTIFICATION PURSUANT TO 18 U.S.C. 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Boyd Bros. Transportation Inc. (the "Company") on Form 10-Q for the period ended June 30, 2002, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Gail B. Cooper, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d); and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. By: /s/ GAIL B. COOPER ----------------------- Gail B. Cooper Chief Executive Officer August 14, 2002 EX-99.2 7 g77623exv99w2.txt SECTION 906 CERTIFICATION OF THE CFO EXHIBIT 99.2 CERTIFICATION PURSUANT TO 18 U.S.C. 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Boyd Bros. Transportation Inc. (the "Company") on Form 10-Q for the period ended June 30, 2002, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Richard C. Bailey, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d); and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. By: /s/ RICHARD C. BAILEY ------------------------- Richard C. Bailey Chief Financial Officer August 14, 2002 -----END PRIVACY-ENHANCED MESSAGE-----

EX-10.1

                                                                    EXHIBIT 10.1


                           MASTER SECURITY AGREEMENT
                     dated as of May 21, 2002 ("Agreement")

        THIS AGREEMENT is between GENERAL ELECTRIC CAPITAL CORPORATION (together
with its successors and assigns, if any, "SECURED PARTY") and BOYD BROS.
TRANSPORTATION INC. ("DEBTOR"). Secured Party has an office at 1000 Windward
Concourse Suite 403, Alpharetta, GA 30005. Debtor is a corporation organized and
existing under the laws of the state of Delaware. Debtor's mailing address and
chief place of business is 3275 Highway 30, Clayton, AL 36016.

1.      CREATION OF SECURITY INTEREST.

        Debtor grants to Secured Party, its successors and assigns, a security
interest in and against all property listed on any collateral schedule now or in
the future annexed to or made a part of this Agreement ("COLLATERAL SCHEDULE"),
and in and against all additions, attachments, accessories and accessions to
such property, all substitutions, replacements or exchanges therefor, and all
insurance and/or other proceeds thereof (all such property is individually and
collectively called the "COLLATERAL"). This security interest is given to secure
the payment and performance of all debts, obligations and liabilities of any
kind whatsoever of Debtor to Secured Party, now existing or arising in the
future, including but not limited to the payment and performance of certain
Promissory Notes from time to time identified on any Collateral Schedule
(collectively "NOTES" and each a "NOTE"), and any renewals, extensions and
modifications of such debts, obligations and liabilities (such Notes, debts,
obligations and liabilities are called the "INDEBTEDNESS"). Unless otherwise
provided by applicable law, notwithstanding anything to the contrary contained
in this Agreement, to the extent that Secured Party asserts a purchase money
security interest in any items of Collateral ("PMSI COLLATERAL"): (i) the PMSI
Collateral shall secure only that portion of the Indebtedness which has been
advanced by Secured Party to enable Debtor to purchase, or acquire rights in or
the use of such PMSI Collateral (the "PMSI INDEBTEDNESS"), and (ii) no other
Collateral shall secure the PMSI Indebtedness.

2.      REPRESENTATIONS, WARRANTIES AND COVENANTS OF DEBTOR.

        Debtor represents, warrants and covenants as of the date of this
Agreement and as of the date of each Collateral Schedule that:

        (a) Debtor's exact legal name is as set forth in the preamble of this
Agreement and Debtor is, and will remain, duly organized, existing and in good
standing under the laws of the State set forth in the preamble of this
Agreement, has its chief executive offices at the location specified in the
preamble. and is, and will remain, duly qualified and licensed in every
jurisdiction wherever necessary to carry on its business and operations;

        (b) Debtor has adequate power and capacity to enter into, and to perform
its obligations under this Agreement, each Note and any other documents
evidencing, or given in connection with, any of the Indebtedness (all of the
foregoing are called the "DEBT DOCUMENTS");

        (c) This Agreement and the other Debt Documents have been duly
authorized, executed and delivered by Debtor and constitute legal, valid and
binding agreements enforceable in accordance with their terms, except to the
extent that the enforcement of remedies may be limited under applicable
bankruptcy and insolvency laws;

        (d) No approval, consent or withholding of objections is required from
any governmental authority or instrumentality with respect to the entry into, or
performance by Debtor of any of the Debt Documents, except any already obtained;

        (e) The entry into, and performance by, Debtor of the Debt Documents
will not (i) violate any of the organizational documents of Debtor or any
judgment, order, law or regulation applicable to Debtor, or (ii) result in any
breach of or constitute a default under any contract to which Debtor is a party,
or result in the creation of any lien, claim or encumbrance on any of Debtor's
property (except for liens in favor of Secured Party) pursuant to any indenture,
mortgage, deed of trust, bank loan, credit agreement, or other agreement or
instrument to which Debtor is a party;

        (f) There are no suits or proceedings pending in court or before any
commission, board or other administrative agency against or affecting Debtor
which could, in the aggregate, have a material adverse effect on Debtor, its
business or operations, or its ability to perform its obligations under the Debt
Documents, nor does Debtor have reason to believe that any such suits or
proceedings are threatened;

        (g) All financial statements delivered to Secured Party in connection
with the Indebtedness have been prepared in accordance with generally accepted
accounting principles, and since the date of the most recent financial
statement, there has been no material adverse change in Debtors financial
condition;

        (h) The Collateral is not, and will not be, used by Debtor for personal,
family or household purposes;

        (i) The Collateral is, and will remain, in good condition and repair and
Debtor will not be negligent in its care and use;

        (j) Debtor is, and will remain, the sole and lawful owner, and in
possession of, the Collateral, and has the sole right and lawful authority to
grant the security interest described in this Agreement; and

        (k) The Collateral is, and will remain, free and clear of all liens,
claims and encumbrances of any kind whatsoever, except for (i) liens in favor of
Secured Party, (ii) liens for taxes not yet due or for taxes being contested in
good faith and which do not involve, in the judgment of Secured Party, any risk
of the sale, forfeiture or loss of any of the Collateral, and (iii) inchoate
materialmen's, mechanic's, repairmen's and similar liens arising by operation of
law in the normal course of business for amounts which are not delinquent (all
of such liens are called "PERMITTED LIENS").

3.      COLLATERAL.

        (a) Until the declaration of any default, Debtor shall remain in
possession of the Collateral; except that Secured Party shall have the right to
possess (i) any chattel paper or instrument that constitutes a part of the
Collateral, and (ii) any other Collateral in which Secured Party's security
interest may be perfected only by possession. Secured Party may inspect any of
the Collateral during normal business hours after giving Debtor reasonable prior
notice. If Secured Party





asks, Debtor will promptly notify Secured Party in writing of the location of
any Collateral.

        (b) Debtor shall (i) use the Collateral only in its trade or business,
(ii) maintain all of the Collateral in good operating order and repair, normal
wear and tear excepted, (iii) use and maintain the Collateral only in compliance
with manufacturers recommendations and all applicable laws, and (iv) keep all
of the Collateral free and clear of all liens, claims and encumbrances (except
for Permitted Liens).

        (c) Secured Party does not authorize and Debtor agrees it shall not (i)
part with possession of any of the Collateral (except to Secured Party or for
maintenance and repair), (ii) remove any of the Collateral from the continental
United States, or (iii) sell, rent, lease, mortgage, license, grant a security
interest in or otherwise transfer or encumber (except for Permitted Liens) any
of the Collateral.

        (d) Debtor shall pay promptly when due all taxes, license fees,
assessments and public and private charges levied or assessed on any of the
Collateral, on its use, or on this Agreement or any of the other Debt Documents.
At its option, Secured Party may discharge taxes, liens, security interests or
other encumbrances at any time levied or placed on the Collateral and may pay
for the maintenance, insurance and preservation of the Collateral and effect
compliance with the terms of this Agreement or any of the other Debt Documents.
Debtor agrees to reimburse Secured Party, on demand, all costs and expenses
incurred by Secured Party in connection with such payment or performance and
agrees that such reimbursement obligation shall constitute Indebtedness.

        (e) Debtor shall, at all times, keep accurate and complete records of
the Collateral, and Secured Party shall have the right to inspect and make
copies of all of Debtor's books and records relating to the Collateral during
normal business hours, after giving Debtor reasonable prior notice.

        (f) Debtor agrees and acknowledges that any third person who may at any
time possess all or any portion of the Collateral shall be deemed to hold, and
shall hold, the Collateral as the agent of, and as pledge holder for, Secured
Party. Secured Party may at any time give notice to any third person described
in the preceding sentence that such third person is holding the Collateral as
the agent of, and as pledge holder for, the Secured Party.

4.      INSURANCE.

        (a) Debtor shall at all times bear the entire risk of any loss, theft,
damage to, or destruction of, any of the Collateral from any cause whatsoever.

        (b) Debtor agrees to keep the Collateral insured against loss or damage
by fire and extended coverage perils, theft, burglary, and for any or all
Collateral which are vehicles, for risk of loss by collision, and if requested
by Secured Party, against such other risks as Secured Party may reasonably
require. The insurance coverage shall be in an amount no less than the full
replacement value of the Collateral, and deductible amounts, insurers and
policies shall be acceptable to Secured Party. Debtor shall deliver to Secured
Party policies or certificates of insurance evidencing such coverage. Each
policy shall name Secured Party as a loss payee, shall provide for coverage to
Secured Party regardless of the breach by Debtor of any warranty or
representation made therein, shall not be subject to co-insurance, and shall
provide that coverage may not be canceled or altered by the insurer except upon
thirty (30) days prior written notice to Secured Party. Debtor appoints Secured
Party as its attorney-in-fact to make proof of loss, claim for insurance and
adjustments with insurers, and to receive payment of and execute or endorse all
documents, checks or drafts in connection with insurance payments. Secured Party
shall not act as Debtor's attorney-in-fact unless Debtor is in default. Proceeds
of insurance shall be applied, at the option of Secured Party, to repair or
replace the Collateral or to reduce any of the Indebtedness.

5.      REPORTS.

        (a) Debtor shall promptly notify Secured Party of (i) any change in the
name of Debtor, (ii) any change in the state of its incorporation or
registration, (iii) any relocation of its chief executive offices, (iv) any
relocation of any of the Collateral, (v) any of the Collateral being lost,
stolen, missing, destroyed, materially damaged or worn out, or (vi) any lien,
claim or encumbrance other than Permitted Liens attaching to or being made
against any of the Collateral.

        (b) Debtor will deliver to Secured Party Debtor's complete financial
statements, certified by a recognized firm of certified public accountants,
within ninety (90) days of the close of each fiscal year of Debtor. If Secured
Party requests, Debtor will deliver to Secured Party copies of Debtor's
quarterly financial reports certified by Debtor's chief financial officer,
within ninety (90) days after the close of each of Debtor's fiscal quarter.
Debtor will deliver to Secured Party copies of all Forms 10-K and 10-Q, if any,
within 30 days after the dates on which they are filed with the Securities and
Exchange Commission.

6.      FURTHER ASSURANCES.

        (a) Debtor shall, upon request of Secured Party, furnish to Secured
Party such further information, execute and deliver to Secured Party such
documents and instruments (including, without limitation, Uniform Commercial
Code financing statements) and shall do such other acts and things as Secured
Party may at any time reasonably request relating to the perfection or
protection of the security interest created by this Agreement or for the purpose
of carrying out the intent of this Agreement. Without limiting the foregoing,
Debtor shall cooperate and do all acts deemed necessary or advisable by Secured
Party to continue in Secured Party a perfected first security interest in the
Collateral, and shall obtain and furnish to Secured Party any subordinations,
releases, landlord waivers, lessor waivers, mortgagee waivers, or control
agreements, and similar documents as may be from time to time requested by, and
in form and substance satisfactory to, Secured Party.

        (b) Debtor authorizes Secured Party to file a financing statement and
amendments thereto describing the Collateral and containing any other
information required by the applicable Uniform Commercial Code. Debtor
irrevocably grants to Secured Party the power to sign Debtor's name and
generally to act on behalf of Debtor to execute and file applications for title,
transfers of title, financing statements, notices of lien and other documents
pertaining to any or all of the Collateral; this power is coupled with Secured
Party's interest in the Collateral. Debtor shall, if any certificate of title be
required or permitted by law for any of the Collateral, obtain and promptly
deliver to Secured Party such certificate showing the lien of this Agreement
with respect to the Collateral. Debtor ratifies its prior authorization for
Secured Party to file financing statements and amendments thereto describing the
Collateral and containing any other information required by the Uniform
Commercial Code if filed prior to the date hereof.

        (c) Debtor shall indemnify and defend the Secured Party, its successors
and assigns, and their respective directors, officers and employees, from and
against all claims, actions and suits (including, without limitation, related
attorneys' fees) of any kind whatsoever arising, directly or indirectly, in
connection with any of the Collateral.




7.      DEFAULT AND REMEDIES.


        (a) Debtor shall be in default under this Agreement and each of the
other Debt Documents if:

            (i) Debtor breaches its obligation to pay when due any installment
or other amount due or coming due under any of the Debt Documents;

            (ii) Debtor, without the prior written consent of Secured Party,
attempts to or does sell, rent, lease, license, mortgage, grant a security
interest in, or otherwise transfer or encumber (except for Permitted Liens) any
of the Collateral;

            (iii) Debtor breaches any of its insurance obligations under
Section 4;

            (iv) Debtor breaches any of its other obligations under any of the
Debt Documents and fails to cure that breach within thirty (30) days after
written notice from Secured Party;

            (v) Any warranty, representation or statement made by Debtor in any
of the Debt Documents or otherwise in connection with any of the Indebtedness
shall be false or misleading in any material respect;

            (vi) Any of the Collateral is subjected to attachment, execution,
levy, seizure or confiscation in any legal proceeding or otherwise, or if any
legal or administrative proceeding is commenced against Debtor or any of the
Collateral, which in the good faith judgment of Secured Party subjects any of
the Collateral to a material risk of attachment, execution, levy, seizure or
confiscation and no bond is posted or protective order obtained to negate such
risk;

            (vii) Debtor breaches or is in default under any other agreement
between Debtor and Secured Party;

            (viii) Debtor or any guarantor or other obligor for any of the
Indebtedness (collectively "GUARANTOR") dissolves, terminates its existence,
becomes insolvent or ceases to do business as a going concern;

            (ix) If Debtor or any Guarantor is a natural person, Debtor or any
such Guarantor dies or becomes incompetent;

            (x) A receiver is appointed for all or of any part of the property
of Debtor or any Guarantor, or Debtor or any Guarantor makes any assignment for
the benefit of creditors;

            (xi) Debtor or any Guarantor files a petition under any bankruptcy,
insolvency or similar law, or any such petition is filed against Debtor or any
Guarantor and is not dismissed within forty-five (45) days; or

            (xii) Debtor's improper filing of an amendment or termination
statement relating to a filed financing statement describing the Collateral.

        (b) If Debtor is in default, the Secured Party, at its option, may
declare any or all of the Indebtedness to be immediately due and payable,
without demand or notice to Debtor or any Guarantor. The accelerated obligations
and liabilities shall bear interest (both before and after any judgment) until
paid in full at the lower of eighteen percent (18%) per annum or the maximum
rate not prohibited by applicable law.

        (c) After default, Secured Party shall have all of the rights and
remedies of a Secured Party under the Uniform Commercial Code, and under any
other applicable law. Without limiting the foregoing, Secured Party shall have
the right to (i) notify any account debtor of Debtor or any obligor on any
instrument which constitutes part of the Collateral to make payment to the
Secured Party, (ii) with or without legal process, enter any premises where the
Collateral may be and take possession of and remove the Collateral from the
premises or store it on the premises, (iii) sell the Collateral at public or
private sale, in whole or in part, and have the right to bid and purchase at
said sale, or (iv) lease or otherwise dispose of all or part of the Collateral,
applying proceeds from such disposition to the obligations then in default. If
requested by Secured Party, Debtor shall promptly assemble the Collateral and
make it available to Secured Party at a place to be designated by Secured Party
which is reasonably convenient to both parties. Secured Party may also render
any or all of the Collateral unusable at the Debtor's premises and may dispose
of such Collateral on such premises without liability for rent or costs. Any
notice that Secured Party is required to give to Debtor under the Uniform
Commercial Code of the time and place of any public sale or the time after which
any private sale or other intended disposition of the Collateral is to be made
shall be deemed to constitute reasonable notice if such notice is given to the
last known address of Debtor at least five (5) days prior to such action.

        (d) Proceeds from any sale or lease or other disposition shall be
applied: first, to all costs of repossession, storage, and disposition including
without limitation attorneys', appraisers', and auctioneers' fees; second, to
discharge the obligations then in default; third, to discharge any other
Indebtedness of Debtor to Secured Party, whether as obligor, endorser,
guarantor, surety or indemnitor; fourth, to expenses incurred in paying or
settling liens and claims against the Collateral; and lastly, to Debtor, if
there exists any surplus. Debtor shall remain fully liable for any deficiency.

        (e) Debtor agrees to pay all reasonable attorneys' fees and other costs
incurred by Secured Party in connection with the enforcement, assertion, defense
or preservation of Secured Party's rights and remedies under this Agreement, or
if prohibited by law, such lesser sum as may be permitted. Debtor further agrees
that such fees and costs shall constitute Indebtedness.

        (f) Secured Party's rights and remedies under this Agreement or
otherwise arising are cumulative and may be exercised singularly or
concurrently. Neither the failure nor any delay on the part of the Secured Party
to exercise any right, power or privilege under this Agreement shall operate as
a waiver, nor shall any single or partial exercise of any right, power or
privilege preclude any other or further exercise of that or any other right,
power or privilege. SECURED PARTY SHALL NOT BE DEEMED TO HAVE WAIVED ANY OF ITS
RIGHTS UNDER THIS AGREEMENT OR UNDER ANY OTHER AGREEMENT, INSTRUMENT OR PAPER
SIGNED BY DEBTOR UNLESS SUCH WAIVER IS EXPRESSED IN WRITING AND SIGNED BY
SECURED PARTY. A waiver on any one occasion shall not be construed as a bar to
or waiver of any right or remedy on any future occasion.

        (g) DEBTOR AND SECURED PARTY UNCONDITIONALLY WAIVE THEIR RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT, ANY OF THE OTHER DEBT DOCUMENTS, ANY OF THE INDEBTEDNESS SECURED
HEREBY, ANY DEALINGS BETWEEN DEBTOR AND SECURED PARTY RELATING TO THE SUBJECT
MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP
THAT IS BEING ESTABLISHED BETWEEN DEBTOR AND SECURED PARTY. THE SCOPE OF THIS
WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT. THIS WAIVER IS IRREVOCABLE. THIS WAIVER MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING. THE WAIVER ALSO SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, ANY OTHER
DEBT DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS
TRANSACTION OR ANY RELATED TRANSACTION. THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.





8.      MISCELLANEOUS.

        (a) This Agreement, any Note and/or any of the other Debt Documents may
be assigned, in whole or in part, by Secured Party without notice to Debtor, and
Debtor agrees not to assert against any such assignee, or assignee's assigns,
any defense, set-off, recoupment claim or counterclaim which Debtor has or may
at any time have against Secured Party for any reason whatsoever. Debtor agrees
that if Debtor receives written notice of an assignment from Secured Party,
Debtor will pay all amounts payable under any assigned Debt Documents to such
assignee or as instructed by Secured Party. Debtor also agrees to confirm in
writing receipt of the notice of assignment as may be reasonably requested by
Secured Party or assignee.

        (b) All notices to be given in connection with this Agreement shall be
in writing, shall be addressed to the parties at their respective addresses set
forth in this Agreement (unless and until a different address may be specified
in a written notice to the other party), and shall be deemed given (i) on the
date of receipt if delivered in hand or by facsimile transmission, (ii) on the
next business day after being sent by express mail, and (iii) on the fourth
business day after being sent by regular, registered or certified mail. As used
herein, the term "business day" shall mean and include any day other than
Saturdays, Sundays, or other days on which commercial banks in New York, New
York are required or authorized to be closed.

        (c) Secured Party may correct patent errors and fill in all blanks in
this Agreement or in any Collateral Schedule consistent with the agreement of
the parties.

        (d) Time is of the essence of this Agreement. This Agreement shall be
binding, jointly and severally, upon all parties described as the "Debtor" and
their respective heirs, executors, representatives, successors and assigns, and
shall inure to the benefit of Secured Party, its successors and assigns.

        (e) This Agreement and its Collateral Schedules constitute the entire
agreement between the parties with respect to the subject matter of this
Agreement and supersede all prior understandings (whether written, verbal or
implied) with respect to such subject matter. THIS AGREEMENT AND ITS COLLATERAL
SCHEDULES SHALL NOT BE CHANGED OR TERMINATED ORALLY OR BY COURSE OF CONDUCT, BUT
ONLY BY A WRITING SIGNED BY BOTH PARTIES. Section headings contained in this
Agreement have been included for convenience only, and shall not affect the
construction or interpretation of this Agreement.

        (f) This Agreement shall continue in full force and effect until all of
the Indebtedness has been indefeasibly paid in full to Secured Party or its
assignee. The surrender, upon payment or otherwise, of any Note or any of the
other documents evidencing any of the Indebtedness shall not affect the right of
Secured Party to retain the Collateral for such other Indebtedness as may then
exist or as it may be reasonably contemplated will exist in the future. This
Agreement shall automatically be reinstated if Secured Party is ever required to
return or restore the payment of all or any portion of the Indebtedness (all as
though such payment had never been made).

        (g) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF CONNECTICUT (WITHOUT REGARD TO THE CONFLICT OF
LAWS PRINCIPLES OF SUCH STATE), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY
AND PERFORMANCE, REGARDLESS OF THE LOCATION OF THE EQUIPMENT.

        IN WITNESS WHEREOF, Debtor and Secured Party, intending to be legally
bound hereby, have duly executed this Agreement in one or more counterparts,
each of which shall be deemed to be an original, as of the day and year first
aforesaid.

SECURED PARTY:                              DEBTOR:

GENERAL ELECTRIC CAPITAL CORPORATION        BOYD BROS. TRANSPORTATION INC.


By: /s/ Allen Brown                         By: /s/ Richard Bailey
    --------------------------------            --------------------------------

Name: Allen Brown                           Name: Richard Bailey
      ------------------------------              ------------------------------

Title: Sr. Risk Analyst                     Title: CFO
       -----------------------------               -----------------------------




                           COLLATERAL SCHEDULE NO. 001

THIS COLLATERAL SCHEDULE NO. 001 is annexed to and made a part of that certain
Master Security Agreement dated as of May 21, 2002 between General Electric
Capital Corporation, together with its successors and assigns, if any, as
Secured Party and BOYD BROS. TRANSPORTATION INC. as Debtor and describes
collateral in which Debtor has granted Secured Party a security interest in
connection with the Indebtedness (as defined in the Security Agreement)
including without limitation that certain Promissory Note dated May ___ 2002 in
the original principal amount of $3,229,040.00.



QUANTITY          MANUFACTURER                SERIAL NUMBER               YEAR/MODEL AND TYPE OF EQUIPMENT
- --------          ------------                -------------               --------------------------------
                                                                 
    1             International               2HSCHASR02C037091           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR22C037092           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR42C037093           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR62C037094           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR82C037095           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASRX2C037096           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR12C037097           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR32C037098           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR52C037099           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR82C037100           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASRX2C037101           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR32C037102           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR32C037103           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR52C037104           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR72C037105           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR92C037106           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR02C037107           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR22C037108           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR42C037109           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR02C037110           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASRX2C047398           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR42C047400           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR62C047401           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR82C047402           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR12C037116           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR32C037117           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR52C037118           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR72C037119           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR32C037120           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR52C037121           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR72C037122           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR92C037123           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR02C037124           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR22C037125           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR42C037126           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR12C047399           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR02C037127           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR82C037128           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASRX2C037129           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR62C037130           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR82C037131           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASRX2C037132           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR12C037133           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR32C037134           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR52C037135           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR72C037136           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR92C037137           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR02C037138           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR22C037139           2002 9900i SFA 6x4   Tractor
    1             International               2HSCHASR92C037140           2002 9900i SFA 6x4   Tractor


Equipment immediately listed above is located at: 3275 Highway 30, Clayton,
Barbour County, AL 36016

SECURED PARTY:                              DEBTOR:





GENERAL ELECTRIC CAPITAL CORPORATION        BOYD BROS. TRANSPORTATION INC.


By: /s/ Allen Brown                         By: /s/ Richard Bailey
    --------------------------------            --------------------------------

Name: Allen Brown                           Name: Richard Bailey
      ------------------------------              ------------------------------

Title: Sr. Risk Analyst                     Title: CFO
       -----------------------------               -----------------------------

Date: 5-24-02                               Date: 5-21-02
      ------------------------------              ------------------------------

EX-10.2

                                                                    EXHIBIT 10.2


                                 PROMISSORY NOTE
                                  May 31, 2002
                                  ------------
                                     (Date)

FOR VALUE RECEIVED, BOYD BROS. TRANSPORTATION INC. a corporation located at the
address stated below ("MAKER") promises, jointly and severally if more than
one, to pay to the order of GENERAL ELECTRIC CAPITAL CORPORATION or any
subsequent holder hereof (each, a "PAYEE") at its office located at 1000
WINDWARD CONCOURSE SUITE 403, ALPHARETTA, GA 30005 or at such other place as
Payee or the holder hereof may designate, the principal sum of THREE MILLION TWO
HUNDRED TWENTY NINE THOUSAND FORTY DOLLARS AND 00/100 DOLLARS ($3,229,040.00),
with interest on the unpaid principal balance, from the date hereof through and
including dates of payment, at a floating per annum simple interest rate
("Contract Rate") as hereinafter calculated.

The Contract Rate for any given period ("Effective Period") following the first
Effective Period shall be equal to the sum of (i) Two and Thirty Eight
Hundredths percent (2.38%) per annum plus (ii) a variable per annum interest
rate ("Current LIBOR"), which shall be equal to the rate under the column
indicating the one month London Interbank Offered Rate ("LIBOR") as stated in
the Federal Reserve Statistical Release H.15 (519) published on the first
Business Day of the current month in which the applicable Effective Period ends.
If, for any reason whatsoever, the Federal Reserve Statistical Release H.15
(519) is no longer published, the Current LIBOR shall be equal to the rate
listed for LIBOR which is published in the Money Rates Column of the Wall Street
Journal, Eastern Edition (or, in the event such rate is not so published, in
such other nationally recognized publication as Payee may specify) on the first
Business Day of the calendar month in which the applicable Effective Period
ends. As used herein, the term "Business Day" shall mean and include any
calendar day other than a day on which all commercial banks in the City of New
York, New York are required or authorized to be closed.

The first Effective Period shall begin on the date hereof, and shall continue
through the earlier of (w) the date the first Periodic Installment (or part
thereof) is received by Payee and (x) the date on which the first Periodic
Installment is due. Each subsequent Effective Period shall begin on the day
after the last day of the previous Effective Period and shall continue through
the earlier of (y) the date the earliest due and unpaid Periodic Installment (or
part thereof) is received by Payee and (z) the date on which the next Periodic
Installment is due. The Contract Rate for the first Effective Period shall be
equal to the sum of (i) Two and Thirty Eight Hundredths percent (2.38%) per
annum plus (ii) a variable per annum interest rate, which shall be equal to the
rate listed for LIBOR under the column indicating the such rate as stated in
the Federal Reserve Statistical Release H.15 (519) published as of the first
Business Day of the month in which the Effective Period ends.

Subject to the other provisions hereof, the principal and interest on this Note
is payable in lawful money of the United States in Sixty (60) consecutive
monthly installments as follows:



              Periodic
             Installment                         Amount
             -----------                       ----------
                                            
                1-59                           $59,686.51


each ("Periodic Installment") and a final installment which shall be in the
amount of the total outstanding unpaid principal and interest. The first
Periodic Installment shall be due and payable on June 1, 2002 and the following
Periodic Installments shall be due and payable on the same day of each
succeeding period (each, a "Payment Date"). All payments shall be applied first
to interest and then to principal. The acceptance by Payee of any payment which
is less than payment in full of all amounts due and owing at such time shall not
constitute a waiver of Payee's right to receive payment in full at such time or
at any prior or subsequent time. Interest shall be calculated on the basis of a
365 day year (366 day leap year) and will be charged at the Contract Rate for
each calendar day on which any principal is outstanding.

The amount and number of the Periodic Installments will not change with
fluctuations in the Contract Rate. Any increase in the Contract Rate shall be
reflected by a corresponding decrease in the portion of the Periodic Installment
credited to the remaining unpaid principal balance. Any decrease in the Contract
Rate shall be reflected as a corresponding increase in the portion of the
Periodic Installment credited to the remaining unpaid principal balance.
Notwithstanding the foregoing, at the end of each three (3) month period
commencing with the first Payment Date hereof, Maker agrees to pay to Payee
forthwith an additional sum ("Quarterly Payment") sufficient to amortize the
unpaid principal over the balance of the original term hereof at the Contract
Rate applicable for the first Periodic Installment.

If, and for so long as, the amount of interest due exceeds the amount of the
Periodic Installment, Maker agrees to pay forthwith, in addition to (i) any
Periodic Installment then due and (ii) any Quarterly Payment, the amount by
which said interest exceeds the Periodic Installment. In the event interest only
is required to be paid during any period, the interest for such period shall be
due and payable monthly as it accrues and shall be calculated on the unpaid
principal balance existing at the commencement of such period.

The Maker hereby expressly authorizes the Payee to insert the date value is
actually given in the blank space on the face hereof and on all related
documents pertaining hereto.

This Note may be secured by a security agreement, chattel mortgage, pledge
agreement or like instrument (each of which is hereinafter called a "SECURITY
AGREEMENT").

Time is of the essence hereof. If any installment or any other sum due under
this Note or any Security Agreement is not received within ten (10) days after
its due date, the Maker agrees to pay, in addition to the amount of each such
installment or other sum, a late payment charge of five percent (5%) of the
amount of said installment or other sum, but not exceeding any lawful maximum.
If (i) Maker fails to make payment of any amount due hereunder within ten (10)
days after the same becomes due and payable; or (ii) Maker is in default under,
or fails to perform under any term or condition contained in any Security
Agreement, then the entire principal sum remaining unpaid, together with all
accrued interest thereon and any other sum payable under this Note or any
Security Agreement, at the election of Payee, shall immediately become due and
payable, with interest thereon at the lesser of eighteen percent (18%) per annum
or the highest rate not prohibited by applicable law from the date of such
accelerated maturity until paid (both before and after any judgment).


The Maker may prepay in full, but not in part, its entire indebtedness hereunder
upon payment of the entire indebtedness plus an additional sum as a premium
equal to the following percentages of the original principal balance for the
indicated period:

Prior to the first annual anniversary date of this Note: Two percent (2%)
Thereafter and prior to the second annual anniversary date of this Note: One
percent (1%) and zero percent (0%) thereafter, plus all other sums due
hereunder or under any Security Agreement.

It is the intention of the parties hereto to comply with the applicable usury
laws; accordingly, it is agreed that, notwithstanding any provision to the
contrary in this Note or any Security Agreement, in no event shall this Note or
any Security Agreement require the payment or permit the collection of interest
in excess of the maximum amount permitted by applicable law. If any such excess
interest is contracted for, charged or received under this Note or any Security
Agreement, or if all of the principal balance shall be prepaid, so that under
any of such circumstances the amount of interest contracted for, charged or
received under this Note or any Security Agreement on the principal balance
shall exceed the maximum amount of interest permitted by applicable law, then in
such event (a) the provisions of this paragraph shall govern and control, (b)
neither Maker nor any other person or entity now or hereafter liable for the
payment hereof shall be obligated to pay the amount of such interest to the
extent that it is in excess of the maximum amount of interest permitted by
applicable law, (c) any such excess which may have been collected shall be
either applied as a credit against the then unpaid principal balance or refunded
to Maker, at the option of the Payee, and (d) the effective rate of interest
shall be automatically reduced to the maximum lawful contract rate allowed under
applicable law as now or hereafter construed by the courts having jurisdiction
thereof. It is further agreed that without limitation of the foregoing, all
calculations of the rate of interest contracted for, charged or received under
this Note or any Security Agreement which are made for the purpose of
determining whether such rate exceeds the maximum lawful contract rate, shall be
made, to the extent permitted by applicable law, by amortizing, prorating,
allocating and spreading in equal parts during the period of the full stated
term of the indebtedness evidenced hereby, all interest at any time contracted
for, charged or received from Maker or otherwise by Payee in connection with
such indebtedness; provided, however, that if any applicable state law is
amended or the law of the United States of America preempts any applicable state
law, so that it becomes lawful for the Payee to receive a greater interest per
annum rate than is presently allowed, the Maker agrees that, on the effective
date of such amendment or preemption, as the case may be, the lawful maximum
hereunder shall be increased to the maximum interest per annum rate allowed by
the amended state law or the law of the United States of America.

The Maker and all sureties, endorsers, guarantors or any others (each such
person, other than the Maker, an "OBLIGOR") who may at any time become liable
for the payment hereof jointly and severally consent hereby to any and all
extensions of time, renewals, waivers or modifications of, and all substitutions
or releases of, security or of any party primarily or secondarily liable on this
Note or any Security Agreement or any term and provision of either, which may be
made, granted or consented to by Payee, and agree that suit may be brought and
maintained against any one or more of them, at the election of Payee without
joinder of any other as a party thereto, and that Payee shall not be required
first to foreclose, proceed against, or exhaust any security hereof in order to
enforce payment of this Note. The Maker and each Obligor hereby waives
presentment, demand for payment, notice of nonpayment, protest, notice of
protest, notice of dishonor, and all other notices in connection herewith, as
well as filing of suit (if permitted by law) and diligence in collecting this
Note or enforcing any of the security hereof, and agrees to pay (if permitted by
law) all expenses incurred in collection, including Payee's actual attorneys'
fees. Maker and each Obligor agrees that fees not in excess of twenty percent
(20%) of the amount then due shall be deemed reasonable.

THE MAKER HEREBY UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS
NOTE, ANY OF THE RELATED DOCUMENTS, ANY DEALINGS BETWEEN MAKER AND PAYEE
RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS,
AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN MAKER AND PAYEE. THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES
THAT MAY BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS,
TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY
CLAIMS.) THIS WAIVER IS IRREVOCABLE MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS NOTE, ANY RELATED DOCUMENTS, OR
TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED
TRANSACTION. IN THE EVENT OF LITIGATION. THIS NOTE MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.

This Note and any Security Agreement constitute the entire agreement of the
Maker and Payee with respect to the subject matter hereof and supercedes all
prior understandings, agreements and representations, express or implied.

No variation or modification of this Note, or any waiver of any of its
provisions or conditions, shall be valid unless in writing and signed by an
authorized representative of Maker and Payee. Any such waiver, consent,
modification or change shall be effective only in the specific instance and for
the specific purpose given.

Any provision in this Note or any Security Agreement which is in conflict with
any statute, law or applicable rule shall be deemed omitted, modified or altered
to conform thereto.

                     BOYD BROS. TRANSPORTATION INC.

                     By: /s/ Richard Bailey
                         -------------------------------------

                     Name: Richard Bailey
                           -----------------------------------

                     Title: CFO
                            ----------------------------------

                     Federal Tax ID #:        636006515
                                       -----------------------

                     Address: 3275 Highway 30, Clayton, Barbour County, AL 36016

EX-10.3

                                                                    EXHIBIT 10.3

                              CONSULTING AGREEMENT

        This Consulting Agreement (this "Agreement") is made and entered into as
of the 1st day of January, 2002, by and between Boyd Bros. Transportation Inc.,
a Delaware corporation (the "Company"), and Dempsey Boyd, an individual resident
of Alabama ("Consultant").

                                    RECITALS

        A.      Consultant has served the Company in numerous capacities since
its founding, including most recently as a member of the Company's board of
directors (the "Board of Directors") and as Chairman of the Board of Directors.
Effective January 1, 2002, Dempsey Boyd resigned from his position as a member
of the Board of Directors and from his position as Chairman of the Board of
Directors.

        B.      As a result of his extensive service to the Company as a
founder, employee, officer and director, Consultant has acquired knowledge,
information and experience concerning the Company's business and operations, and
the industry in which the Company operates, that is of substantial value to the
Company.

        C.      The Company desires to engage Consultant as a consultant, and
Consultant desires to provide services to the Company as a consultant.

                                    AGREEMENT

        SECTION 1.      CONSULTING DUTIES AND EXTENT OF SERVICES. The Company
hereby engages Consultant as a consultant, and Consultant agrees to consult with
the Company on the terms and conditions set forth in this Agreement. Consultant
shall provide such advice and expertise, and shall perform such duties and
services from time to time, during the term of this Agreement as the Company
shall reasonably request. The services to be provided by Consultant shall
include, without limitation, negotiating equipment and tire agreements,
reviewing equipment requirements, researching and investigating equipment,
advising the Company regarding certain ongoing litigation matters, advising the
Company regarding construction projects and providing the Company with an
experienced perspective on the trucking industry. Consultant shall perform such
services for a term of two (2) years, beginning on the date of this Agreement
and ending on the second anniversary hereof. This Agreement may be extended by
written consent of the parties hereto. The Company shall provide Consultant with
an office and reasonable administrative assistance and shall reimburse
Consultant for all reasonable business expenses incurred by Consultant at the
direction or request of the Company upon receipt by the Company of documentation
of such expenses.

        SECTION 2.      CONSIDERATION.

               (a)      As consideration for the services rendered to the
Company during the term of this Agreement, Consultant shall receive from the
Company monthly payments in the amount of $12,166.67, payable at the end of each
month during the term of this Agreement.



               (b)      As additional consideration for the services rendered to
the Company by Consultant during the term of this Agreement, the Company shall
pay for health care insurance for Consultant substantially the same as that
provided to the Company's executive officers.

        SECTION 3.      RELATIONSHIP OF PARTIES. Nothing contained in this
Agreement is intended to create the relationship of employer / employee and
Consultant shall be and continue to operate under this Agreement as an
independent contractor. Consultant acknowledges and agrees that he is entitled
to no compensation or other benefit from the Company with respect to this
Agreement other than expressly provided for herein. Consultant shall be solely
responsible for his own income and other tax reporting and payment with respect
to the fees payable under this Agreement (including, without limitation,
self-employment taxes), and the Company shall have no obligation to withhold any
portion of the fees provided for under this Agreement for purposes of employee
withholding taxes, or otherwise.

        SECTION 4.      BINDING EFFECT ON SUCCESSORS, ASSIGNEES, ETC. Neither
Party may assign nor may it delegate any rights or obligations hereunder without
first obtaining the written consent of the other Party; provided, however, that
the Company may assign this Agreement to any of its affiliates. This Agreement
shall be binding on and inure to the benefit of any immediate, intermediate or
ultimate successor of the business or assets of the Company by way of merger,
consolidation, reorganization, dissolution, sale or transfer of assets,
liquidation, or otherwise.

        SECTION 5.      MERGER CLAUSE. This Agreement constitutes the full and
complete understanding and agreement of the parties with respect to the subject
matter hereof, and cannot be amended, modified or supplemented in any respect
except by agreement in writing, signed by the parties hereto.

        SECTION 6.      CHOICE OF LAW. This Agreement shall be controlled,
construed and governed in all respects by the laws of the State of Alabama
without regard to conflict of laws and principles.

        SECTION 7.      SEVERABILITY.  If any provision of this Agreement shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.

                            [Signature Page Follows]



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



                                              BOYD BROS. TRANSPORTATION, INC.


                                       By     /s/ RICHARD C. BAILEY
                                          --------------------------------------
                                       Its    CFO
                                           -------------------------------------




                                              /s/ DEMPSEY BOYD
                                       -----------------------------------------
                                                      Dempsey Boyd

EX-99.1

                                                                    EXHIBIT 99.1



                            CERTIFICATION PURSUANT TO
                                 18 U.S.C. 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


        In connection with the Quarterly Report of Boyd Bros. Transportation
Inc. (the "Company") on Form 10-Q for the period ended June 30, 2002, as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Gail B. Cooper, Chief Executive Officer of the Company, certify, pursuant to
18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that:

        (1)     The Report fully complies with the requirements of Section 13(a)
                or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m
                or 78o(d); and

        (2)     The information contained in the Report fairly presents, in all
                material respects, the financial condition and results of
                operations of the Company.


By:     /s/  GAIL B. COOPER
    -----------------------

Gail B. Cooper
Chief Executive Officer
August 14, 2002

EX-99.2

                                                                    EXHIBIT 99.2



                            CERTIFICATION PURSUANT TO
                                 18 U.S.C. 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


        In connection with the Quarterly Report of Boyd Bros. Transportation
Inc. (the "Company") on Form 10-Q for the period ended June 30, 2002, as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Richard C. Bailey, Chief Financial Officer of the Company, certify, pursuant
to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002, that:

        (1)     The Report fully complies with the requirements of Section 13(a)
                or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m
                or 78o(d); and

        (2)     The information contained in the Report fairly presents, in all
                material respects, the financial condition and results of
                operations of the Company.


By:     /s/ RICHARD C. BAILEY
    -------------------------

Richard C. Bailey
Chief Financial Officer
August 14, 2002