Exhibit 10.21

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT is made and entered into as of the 25th day of
January, 2005 (the “Effective Date”), by and between THOMAS H. KING (“Employee”)
and ALLIED HOLDINGS, INC., a Georgia corporation (“Employer”).

W I T N E S S E T H:

     WHEREAS, Employer, through the Affiliates (as hereinafter defined), is
engaged in the transportation of automobiles and light trucks from the
manufacturer to retailers and others, including nontraditional car haulers
involved in the vehicle distribution process and providing logistics and
distribution services to the new and used vehicle distribution market and other
segments of the automotive industry (the “Business”);

     WHEREAS, Employee has management skills of which Employer desires to avail
itself; and

     WHEREAS, Employer and Employee deem it to their respective best interest to
outline the duties and obligations, each to the other, by executing this
Employment Agreement,

     NOW, THEREFORE, for and in consideration of the covenants and conditions
hereinafter set forth, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Employer and Employee hereby
mutually agree as follows:

1.   DEFINITIONS.

  (a)   “Affiliate” means Axis Group, Inc., Allied Automotive Group, Inc.,
Allied Systems (Canada) Company, Allied Systems, Ltd. (L.P.), Transport Support,
Inc., F. J. Boutell Driveaway Co., Inc., Allied Freight Brokers, Inc. or QAT,
Inc.     (b)   “Base Salary” means the annual salary payable, and as adjusted,
pursuant to Paragraph 4.     (c)   “Cause” means (i) the commission by Employee
of an act of fraud, misappropriation, dishonesty, embezzlement, gross
negligence, or willful misconduct or unethical conduct in connection with
Employee’s employment hereunder; (ii) criminal conduct of Employee which results
in a felony conviction of such Employee, or the Employee’s offering a plea of
nolo contendre to a felony; (iii) Employee’s continuing and/or willful failure
to perform Employee’s duties or obligations for Employer as outlined in this
Agreement, or Employee’s breach of this Agreement; (iv) Employee’s prolonged
absence, without the consent of Employer, other than as a result of Employee’s
Disability or permitted absence or vacation, which is not cured within ten (10)
days after written notice from

1

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

 

      Employer’s Board of Directors thereof; (v) engaging in activities
prohibited by Paragraphs 11, 12, 13, 14 or 15 hereof; (vi) engaging in any
activity which could constitute grounds for termination for cause by Employer or
any of its subsidiaries or affiliates; or (vii) Employee engaging in conduct
that is materially detrimental to the reputation, character or standing of
Employer.     (d)   “Disability”, with respect to Employee, shall conclusively
be deemed to have occurred (i) if Employee shall be receiving payments pursuant
to a policy of long-term disability income insurance; or (ii) if Employee shall
have no disability income coverage then in force, then if any insurance company
insuring Employee’s life shall agree to waive the premiums due on such policy
pursuant to a disability waiver of premium provision in the contract of life
insurance; or (iii) if Employee shall have no disability waiver of premium
provision in any contract of life insurance, then if Employee shall be receiving
disability benefits from or through the Social Security Administration;
provided, however, that in the event Employee’s disability shall, otherwise and
in good faith, come into question (and, for purposes of this provision,
“disability” shall mean the permanent and continuous inability of Employee to
perform substantially all of the duties being performed immediately prior to
Employee’s disability coming into question) for a period of not less than one
hundred twenty (120) consecutive days, and a dispute shall arise with respect
thereto, then Employee (or Employee’s personal representatives) shall appoint a
medical doctor, Employer shall appoint a medical doctor, and said two
(2) doctors shall, in turn, appoint a third party medical doctor who shall
examine Employee to determine the question of disability and whose determination
shall be binding upon all parties to this Agreement. All such medical doctors
shall be duly licensed in the State of Georgia.     (e)   “Restricted Period”
means the period commencing as of the date hereof and ending on that date twelve
(12) months after the termination of Employee’s employment with Employer for any
reason, whether voluntary or involuntary.

     2. TERM. Subject to the provisions hereinafter set forth, the term of this
Agreement shall commence as of the Effective Date and shall expire one year
after the Effective Date (the “Initial Term”) and shall extend for additional
terms of one (1) year (the “Renewal Term”) unless either party gives written
notice of termination not less (90) days prior to the end of a Term. As used
herein, “Term” shall mean the then current Initial Term or Renewal Term, as the
case may be.

     3. DUTIES.

  (a)   Employee shall, during the Term, serve as Executive Vice President and
Chief Financial Officer of Employer having duties, responsibilities,

2

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

 

      powers and authority which are consistent with senior management positions
of like designation generally, but subject to the direction of the President and
Chief Executive Officer of Allied Holdings, Inc. The Employee shall perform such
executive, managerial and administrative duties as the President and Chief
Executive Officer of Allied Holdings, Inc. may, from time to time, reasonably
request. Employee shall not be required to permanently relocate outside the
metropolitan Atlanta, Georgia area.     (b)   During the Term, Employee shall
devote substantially all of Employee’s business time, energy and skill to
performing the duties of Employee’s employment (vacations as provided hereunder
and reasonable absences because of illness excepted), shall faithfully and
industriously perform such duties, and shall use Employee’s best efforts to
follow and implement all management policies and decisions of Employer which are
lawful. Employee shall not become personally involved in the management or
operations of any other company, partnership, proprietorship or other entity,
other than any Affiliate, without the prior written consent of Employer;
provided, however, that so long as it does not interfere with Employee’s
employment hereunder, Employee may (i) serve as a director, officer or partner
in a company that does not compete with the Business of Employer and the
Affiliates so long as the aggregate amount of time spent by Employee in all such
capacities shall not exceed twenty (20) hours per month, and (ii) serve as an
officer or director of, or otherwise participate in, educational, welfare,
social, religious, civic, trade and industry-related organizations.

     4. BASE SALARY. For and in consideration of the services to be rendered by
Employee pursuant to this Agreement, Employer shall pay to Employee, for each
year during the Term, an annual salary of Three Hundred Thirty Thousand Dollars
($330,000) (the “Base Salary”), in installments in accordance with Employer’s
payroll practices. Employee’s salary shall be reviewed by the Board of Directors
of Employer annually and may be increased, but not decreased, at the sole
discretion of the Board.

     5. BONUS COMPENSATION.

  (a)   Employee shall be eligible to participate in Employer’s bonus plan which
will allow an annual bonus target in an amount up to 50% of Employee’s Base
Salary.     (b)   Employee shall be entitled to participate in all long term
incentive plans, including the amended and restated long term incentive plan and
similar plans as are now or hereafter provided by Employer or its Affiliates in
accordance with the terms of such plans and consistent with persons serving in a
senior management capacity.

3

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

 

     6. OTHER BENEFITS. During the Term, Employer shall provide the following
benefits to Employee:

  (a)   Employee and Employee’s immediate family shall be entitled to
participate in all group benefit programs, including, without limitation,
medical and hospitalization benefit programs, dental care, life insurance or
other group benefit plans of Employer as are now or hereafter provided by
Employer or any Affiliate, in each case in accordance with the terms and
conditions of each such plan.     (b)   Employer shall provide Employee with the
use of an automobile, which shall be comparable to automobiles Employer provides
to persons serving in the capacity of Executive Vice President of Employer, or,
in the alternative, at the election of Employer, Employer shall provide a
monthly car allowance to Employee in the amount of $800.00 per month.     (c)  
Employee shall be reimbursed for actual, reasonable, ordinary and necessary
business expenses incurred in the performance of Employee’s duties hereunder.
Employee shall be reimbursed for such expenses upon presentation and approval of
expense statements or written vouchers or other supporting documents as may be
reasonably requested in advance by Employer and in accordance with Employer’s
practices in effect from time to time.     (d)   Employee shall be provided with
the use of a cellular telephone, at no cost to Employee.

     7. VACATION. Employee shall receive no fewer than three (3) weeks paid
vacation for each year during the Term. Scheduling of vacation shall be subject
to the prior approval of Employer (which approval shall not be unreasonably
withheld). Vacation time shall not accrue, and in the event any vacation time
for any year shall not be used by Employee prior to the end of such year or
prior to termination of employment, it shall be forfeited.

     8. TERMINATION. Anything herein to the contrary notwithstanding, Employee’s
employment hereunder shall terminate upon the first to occur of any of the
following events:

  (a)   Employee’s Disability; or     (b)   Employee’s death; or     (c)  
Employer or Employee terminating Employee’s employment without Cause hereunder
prior to expiration of the Term or ten (10) days prior written notice; or    
(d)   Employee being terminated for Cause; or

4

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

 

  (e)   Employer filing a petition for protection or relief from creditors under
the Federal Bankruptcy Law, or any petition shall be filed against Employer
under the Federal Bankruptcy Law, or Employer shall admit in writing its
inability to pay its debts or shall make an assignment for the benefit of
creditors, or a petition or application for the appointment of a receiver or
liquidator or custodian of Employer is filed, or Employer shall seek a
composition with creditors; or     (f)   Any material change by Employer in
Employee’s function, duties, and responsibility, from the position and
attributes described in Paragraph 3 hereof, unless agreed to by Employee, or any
requirement that Employee perform substantially all of his duties outside the
metropolitan Atlanta, Georgia area, provided however that Employee’s office
shall continue to be located in the metropolitan Detroit, Michigan area until
such time as he has relocated his residence to the state of Georgia.

     9. SEVERANCE BENEFITS.

  (a)   In the event Employee’s employment is terminated (1) by Employer without
Cause pursuant to Paragraph 8(c) hereunder, (2) pursuant to Paragraph 8(e),
(3) pursuant to Paragraph 8(f), (4) because Employer elects not to renew this
Agreement beyond the Initial Term or any Renewal Term, or (5) by Employer within
one (1) year following any “change of control” of Employer for any reason other
than a conviction involving a felony, Employee shall be entitled to severance
benefits in an amount equal to the greater of (i) fifty-two (52) weeks of Base
Salary, or (ii) the severance amount due to Employee in accordance with the
severance plan or guidelines of Employer in effect on the date of termination.
For purposes of this Agreement, change of control shall mean (i) any change in
control or ownership whereby Employer is reorganized, merged, or consolidated
with one or more corporations as a result of which the owners of all of the
outstanding shares of common stock immediately prior to such reorganization,
merger or consolidation own in the aggregate less than seventy percent (70%) of
the outstanding shares of common stock of the Employer or any other entity into
which Employer shall be merged or consolidated immediately following the
consummation thereof (hereinafter, “Employer’s successor-in-interest”), or
(ii) the sale, transfer or other disposition of all or substantially all of the
assets or more than thirty percent (30%) of the then outstanding shares of
common stock of Employer is effectuated, other than as a result of a merger or
other combination of Employer and an Affiliate, or (iii) the acquisition by any
“person” as used for purposes of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934 of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of twenty percent (20%) or more of the
combined voting power of

5

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

 

      Employer’s then outstanding voting securities is effectuated; or (iv) the
individuals who, as of the date of execution of this Agreement, are members of
the Board of Directors (the “Incumbent Board”) cease for any reason to
constitute at least two-thirds (2/3) of the Board; provided, however, that if
the election, or nomination for election by the shareholders of any new director
was approved by a vote of at least two-thirds (2/3) of the Incumbent Board, such
new director shall, for purposes of this Agreement, be considered as a member of
the Incumbent Board.     (b)   In the event Employee’s employment is terminated
(1) by Employer without Cause pursuant to 8(c), (2) pursuant to Paragraph 8(e),
(3) pursuant to Paragraph 8(f), (4) because Employer elects not to renew this
Agreement upon the expiration of the Initial Term or any Renewal Term, or (5) by
Employer within one (1) year following any “change of control” of Employer for
any reason other than a conviction involving a felony, Employee shall be
entitled to continue medical and dental coverage as in effect on the last day of
employment. Employer shall provide coverage until the last day severance
payments are due under this Agreement by paying Employee’s COBRA premiums for
Employee and covered dependents (if any). At the end of Employee’s Severance
Period, Employee (and Employee’s covered dependents, if any) may elect
continuation of insurance coverage for the remainder of the 18-month COBRA
period by paying the COBRA premium rate. Continuation coverage will terminate in
the event Employee becomes covered under any other group health plan (as an
employee or otherwise), unless the new group health plan contains any exclusions
or limitations with respect to any pre-existing condition Employee or covered
dependent(s) may have. Employee must notify the Employer promptly should
Employee become covered under any other plan.     (c)   If employment is
terminated for any reason other than (1) by Employer without Cause, (2) pursuant
to Paragraph 8(e), (3) pursuant to Paragraph 8(f), (4) because Employer elects
not to renew this Agreement beyond the Initial Term or any Renewal Term, or
(5) by Employer within one (1) year following any “change of control” of
Employer for any reason other than a conviction involving a felony, no severance
benefits shall be due to Employee.     (d)   Severance payments shall include
the car allowance provided for under this Agreement in addition to the benefits
listed above.     (e)   Employer will provide Employee with a six-month
individual program of professional outplacement services.     (f)  
Notwithstanding the foregoing, the severance payments due from the Employer to
the Employee pursuant to this Agreement including the

6

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

 

      benefits under Paragraph 9(a) and Paragraph 9(b) shall be mitigated and
reduced by the amount of any consideration paid to Employee by any other person
or entity for services rendered following the date of termination of employment,
regardless of how such compensation is characterized, including, but not limited
to, consulting fees or other fees for any services rendered by Employee. The
Employee must provide the Employer a copy of any employment agreement, offer
letter, or consulting agreement disclosing total compensation to be paid to the
Employee for services rendered following the termination date. Subject to the
remaining terms of this Agreement, Employer will pay Employee at least 33% of
the amount to be paid under this Paragraph 9 notwithstanding any such
mitigation. In the event Employee fails to notify Employer that he has accepted
employment or is otherwise performing services after the date of termination of
employment with any person or entity, or that he has entered into any form of
agreement or arrangement, including, but not limited to, a consulting
arrangement whereby Employee is paid for Employee’s services, then all severance
benefits provided under this Agreement will cease immediately and all
liabilities and obligations of Employer hereunder shall terminate.        
Notwithstanding anything in the Agreement to the contrary, in the event Employee
obtains a full-time position with the Employer or any of its subsidiaries or
affiliates after the execution of this Agreement but prior to the last day on
which severance payments are due under this Agreement, Employee understands and
agrees that all severance payments will cease immediately and that all
liabilities and obligations of the Employer hereunder shall terminate.

     10. CONDITIONS TO BENEFITS. Anything in this Agreement to the contrary
notwithstanding:

  (a)   To receive the benefits enumerated in Paragraph 9, Employee shall
execute and agree to be bound by a release agreement substantially in the form
attached to this Agreement as Exhibit A; and     (b)   Employee’s right to
receive any of the benefits provided for in Paragraph 9 or otherwise in this
Agreement following termination of employment shall immediately cease and be of
no further force or effect if Employee violates any of the covenants contained
in Paragraphs 11, 12, 13, 14 or 15.

     11. COVENANT NOT-TO-SOLICIT. Employer and Employee acknowledge that, during
Employee’s employment, Employer will spend considerable amounts of time, effort
and resources in providing Employee with knowledge relating to the business
affairs of Employer and the Affiliates, including Employer’s and the Affiliates’
trade secrets, proprietary information and other information concerning
Employer’s and the Affiliates’ financing sources, finances, customer lists,
customer records, prospective customers, staff, contemplated acquisitions

7

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

 

(whether of business or assets), ideas, methods, marketing investigations,
surveys, research, customers’ records and any other information relating to
Employer’s and the Affiliates’ Business.

     To protect Employer from Employee’s solicitation of business from customers
during the Restricted Period, Employee agrees that, subject to Paragraph 17
hereof, he shall not, directly or indirectly, for any person (including Employee
himself), corporation, firm, partnership, proprietorship or other entity, other
than Employer or an Affiliate, engaged in the Business, solicit transportation,
logistics or other business of the type provided by Employer for any customer
with whom the Employee had material contact during the twelve (12) month period
immediately preceding the termination of Employee’s employment. Material contact
includes personal contact with customers, the supervision of the efforts of
others who have personal contact with the customers, and the receipt of
confidential information of customers of Employer. This Paragraph 11 shall,
except as otherwise provided in this Agreement, survive the termination of this
Agreement.

     12. COVENANT NOT-TO-DISCLOSE. Employee agrees that during employment with
Employer and for a period of three (3) years following the cessation of that
employment for any reason, Employee shall not directly or indirectly divulge or
make use of any Confidential Information or Trade Secrets (so long as the
information remains a Trade Secret or remains confidential) without prior
written consent of Employer. Employee further agrees that if Employee is
questioned about information subject to this agreement by anyone not authorized
to receive such information, Employee will promptly notify Employee’s
supervisor(s) or an officer of Employer. This Agreement does not limit the
remedies available under common or statutory law, which may impose longer duties
of non-disclosure. For purposes of this Agreement, the following definition
shall apply:

“Confidential Information” means information about Employer and its Employees,
Customers and/or Suppliers which is not generally known outside of Employer,
which employee learns of in connection with employee’s employment with Employer,
and which would be useful to competitors of Employer. Confidential Information
includes, but is not limited to: (1) business and employment policies, marketing
methods and the targets of those methods, finances, business plans, promotional
materials and price lists; (2) the terms upon which Employer obtains products or
services from its vendors and sells them to customers; (3) the nature, origin,
composition and development of Employer’s products; (4) the manner in which
Employer provides products and services to its customers.

Confidential Information shall not include information which: (1) Employee can
show was in his possession on a nonconfidential basis, was known to the public,
or appeared in published literature, prior to disclosure of such Confidential
Information, (b) becomes known to the public or appears in published literature
through no act of the Employee subsequent to the time of the Employee’s receipt
of such Confidential Information, or (c) is lawfully acquired by the Employee
from a third party who is not in breach of any confidentiality agreement or
obligation with the disclosing party with respect to such Confidential
Information.

8

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

 

If the Employee is requested or becomes legally compelled (by oral questions,
interrogatories, requests for information or documents, subpoena, civil or
criminal investigative demand, or similar process) or is required by a
regulatory body to make any disclosure that is prohibited or otherwise
constrained by this Agreement, the Employee will provide the Employer with
prompt notice of such request so that the Employer may seek an appropriate
protective order or other appropriate remedy. Subject to the foregoing, the
Employee may furnish that portion (and only that portion) of the Confidential
Information which, in the written opinion of Employee’s counsel, the Employee is
legally compelled or is otherwise required to disclose or else stand liable for
contempt or suffer other material censure or material penalty; provided,
however, that the Employee must use reasonable efforts to obtain reliable
assurance that confidential treatment will be accorded any Confidential
Information so disclosed.

     13. COVENANT NOT-TO-INDUCE. Employee covenants and agrees that during the
Restricted Period, he will not, directly or indirectly, on Employee’s own behalf
or in the service or on behalf of others, solicit, induce or attempt to solicit
or induce an employee or other personnel of Employer and the Affiliates to
terminate employment with such party. This Paragraph 13 shall, except as
otherwise provided in this Agreement, survive the termination of this Agreement.

     14. COVENANT OF NON-DISPARAGEMENT AND COOPERATION. Employee agrees that he
shall not, at any time during or following the Term, make any remarks
disparaging the conduct or character of Employer or any of its current or former
Affiliates, agents, employees, officers, directors, shareholders, successors or
assigns (in the aggregate, such persons and entities are referred to herein as
the “Protected Persons”); provided, however, that during the Term, Employer
acknowledges and agrees that Employee may be required from time to time to make
such remarks about Protected Persons for legitimate business purposes and if
consistent with the discharge of Employee’s duties hereunder. In addition,
following termination of Employee’s employment hereunder, Employee agrees to
reasonably cooperate with Employer, at no extra cost, in any litigation or
administrative proceedings (e.g., EEOC charges) involving any matters with which
Employee was involved during Employee’s employment with Employer. Employer shall
reimburse Employee for travel and other related expenses approved by Employer
incurred in providing such assistance. This Paragraph 14 shall survive the
termination of this Agreement.

     15. COVENANT NOT TO COMPETE. Employer and Employee acknowledge that, by
virtue of Employee’s responsibilities and authority, he will, during the course
of Employee’s employment, be instrumental in developing, and will receive,
highly confidential information concerning Employer and the Affiliates, their
services, their trade secrets, their proprietary information, and other
information concerning the business of Employer and the Affiliates, much of
which is unavailable to persons of lesser responsibility and authority. Employee
further acknowledges that the ability of such information to benefit a
competitor or potential competitor of Employer shall cause irreparable harm,
damage and loss to Employer and the Affiliates. To protect Employer and the
Affiliates from Employee’s using or exploiting Employee’s information, Employee
agrees that he shall not, for a period of twelve (12) months from the date

9

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

 

of termination of this Agreement for any reason, perform substantially similar
job duties or functions as those performed for Employer under this Agreement for
any entity engaged in the Business in the 48 states of the continental United
States of America (the “Restricted Territory”). This Paragraph 15 shall survive
termination of this Agreement.

     16. SPECIFIC ENFORCEMENT. Employer and Employee expressly agree that a
violation of the covenants contained in Paragraphs 11, 12, 13, 14 and 15 hereof,
or any provision thereof, shall cause irreparable injury to Employer and that,
accordingly, Employer shall be entitled, in addition to any other rights and
remedies it may have at law or in equity, to an injunction enjoining and
restraining Employee from doing or continuing to do any such act and any other
violation or threatened violation of said Paragraphs 11, 12, 13, 14 and 15
hereof.

     17. SEVERABILITY. In the event any provision of this Agreement shall be
found to be void, the remaining provisions of this Agreement shall nevertheless
be binding with the same effect as though the void part were deleted; provided,
however, if Paragraphs 11, 12, 13,14 and 15 shall be declared invalid, in whole
or in part, Employee shall execute, as soon as possible, a supplemental
agreement with Employer, granting Employer, to the extent legally possible, the
protection afforded by said Paragraphs. It is expressly understood and agreed by
the parties hereto that Employer shall not be barred from enforcing the
restrictive covenants contained in each of Paragraphs 11, 12, 13, 14 and 15 as
each are separate and distinct, so that the invalidity of any one or more of
said covenants shall not affect the enforceability and validity of the other
covenants.

     18. INCOME TAX WITHHOLDING. Employer or any other payor may withhold from
any compensation or benefits payable under this Agreement such Federal, State,
City or other taxes as shall be required pursuant to any law or governmental
regulation or ruling.

     19. WAIVER. The waiver of a breach of any term of this Agreement by any of
the parties hereto shall not operate or be construed as a waiver by such party
of the breach of any other term of this Agreement or as a waiver of a subsequent
breach of the same term of this Agreement.

     20. RIGHTS AND LIABILITIES UPON NOTICE OF TERMINATION. As soon as notice of
termination of this Agreement is given, Employee shall immediately cease contact
with all customers of Employer and shall forthwith surrender to Employer all
customer lists, documents and other property of Employer then in Employee’s
possession, compliance with which shall not be deemed to be a breach of this
Agreement by Employee. Pending the surrender of all such customer lists,
documents and other property to Employer, Employer may hold in abeyance any
payments due Employee pursuant to this Agreement.

     21. ASSIGNMENT.

  (a)   Employee shall not assign, transfer or convey this Agreement, or in any
way encumber the compensation or other benefits payable to him hereunder, except
with the prior written consent of Employer or upon Employee’s death.

10

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

 

  (b)   The covenants, terms and provisions set forth herein shall be binding
upon and shall inure to the benefit of, and be enforceable by, Employer and its
successors and assigns; provided, Employer shall require any successor (whether
direct or indirect, by purchase, merger, reorganization, consolidation,
acquisition of property or stock, liquidation or otherwise) to all or a
substantial portion of its assets, by agreement in form and substance reasonably
satisfactory to Employee, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that Employer would be
required to perform this Agreement if no such succession had taken place.
Regardless of whether such an agreement is executed, this Agreement shall be
binding upon any successor of Employer in accordance with the operation of law,
and such successor shall be deemed the “Employer” for purposes of this
Agreement.

     22. NOTICES. All notices required herein shall be in writing and shall be
deemed to have been given when delivered personally or five (5) days after the
date on which such notice is deposited in the U.S. Mail, certified or
registered, postage prepaid, return receipt requested, addressed as follows, to
wit:

If to Employer at:

160 Clairemont Avenue, Suite 200
Decatur, Georgia 30030
Attn: Thomas M. Duffy, General Counsel

If to Employee at:

1298 Waterford Green Trail
Marietta, GA 30068

or at such other addresses as may, from time to time, be furnished to Employer
by Employee, or by Employer to Employee on the terms of this Paragraph.

     23. BINDING EFFECT. This Agreement shall be binding on the parties hereto
and on their respective heirs, administrators, executors, successors and
permitted assigns.

     24. ENFORCEABILITY. This Agreement contains the entire understanding of the
parties and may be altered, amended or modified only by a writing executed by
both of the parties hereto. This Agreement supersedes all prior agreements and
understandings by and between Employer and Employee relating to Employee’s
employment.

     25. APPLICABLE LAW. This Agreement and the rights and liabilities of the
parties hereto shall be governed by, and construed and interpreted in accordance
with, the laws of the State of Georgia.

11

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

 

     26. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original, but all of which
together shall constitute but a single document.

     27. D&O INSURANCE; INDEMNIFICATION. Employer shall maintain, for the
benefit of Employee, director and officer liability insurance, in form at least
as comprehensive as, and in an amount that is equal to, that maintained by
Employer on the Effective Date, provided, however, that Employer’s Board of
Directors or chief senior Executive Officer shall have the discretion to modify
such coverage so long as such modification applies to all officers and
directors. In addition, Employer shall indemnify Employee against liability as
an officer and director of Employer to the same extent as other officers and
directors of Employer in accordance with the constituent and organizational
documents of Employer and consistent with applicable law. Employee’s rights
under this Paragraph 27 shall continue so long as he may be subject to such
liability, whether or not this Agreement may have been terminated prior hereto.

[signature page follows]

12

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

 

IN WITNESS WHEREOF, Employee has hereunder set Employee’s hand, and Employer has
caused this Agreement to be executed and delivered by its duly authorized
officer, all as of the day and year first above written.

              /s/ Thomas H. King

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

    THOMAS H. KING
 
            ALLIED HOLDINGS, INC.
 
       

  By:   /s/ Hugh E. Sawyer 

     

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

  Name:   Hugh E. Sawyer 

     

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

  Title:   President and Chief Executive Officer 

     

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

13

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

 

EXHIBIT A

Release Agreement

Release

(a) Employee (including his heirs, successors and assigns) hereby releases the
Company from any and all claims, demands, actions, and causes of action, and all
liability whatsoever, whether known or unknown, suspected or unsuspected, fixed
or contingent relating to Employee’s employment or termination from employment
from AHI (including, without limitation, claims relating to Employee’s
employment letter), up to the date of the execution of this Agreement. This
includes but is not limited to claims at law or equity or sounding in contract
(express or implied) or tort arising under federal, state, or local laws,
anti-discrimination laws, and specifically includes, without limitation, the Age
Discrimination in Employment Act (“ADEA”), and the Older Workers’ Benefits
Protection Act (“OWBPA”) and any other comparable statute or law.

(b) Nothing contained in this Agreement shall affect or limit Employee’s rights
under any pension, profit-sharing, 401(k) plan or similar qualified retirement
plan currently in effect, or his rights to elect continued health insurance
coverage, at his own cost, under the Consolidated Omnibus Budget Reconciliation
Act (“COBRA”). Nothing in this Agreement shall be interpreted to release any
claims which arise under the terms of this Agreement or after the effective date
of this Agreement. Employee’s release of claims herein is in exchange for the
consideration set forth in this Agreement, which Employee agrees and
acknowledges is in addition to anything of value to which Employee is already
entitled. Any rights to indemnification which Employee may have under AHI’s
Articles of Incorporation, Bylaws, insurance policies or other applicable
agreements remain in effect notwithstanding this release.