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EMPLOYMENT AND NONCOMPETITION AGREEMENT
 

THIS EMPLOYMENT AND NONCOMPETITION AGREEMENT (this "Agreement"), dated June 20,
2007 (the "Effective Date"), is between Arnold Transportation Services, Inc., a
Pennsylvania corporation (the "Company"), and Michael S. Walters, an individual
(the "Employee").
 
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth
herein, and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the Company and the Employee
hereby agree as follows:
 
ARTICLE I
 
EMPLOYMENT AND TERM
 
Section 1.1.                                Employment; Duties.  The Company
hereby agrees to employ the Employee, and the Employee hereby accepts employment
with the Company, upon the terms set forth in this Agreement.  The Employee
shall serve as the Company's Chief Executive Officer.  During the Term (as
defined in Section 1.2 hereof), the Employee shall devote substantially all of
his working time, attention, skill, and reasonable best efforts to the
performance of his duties hereunder in a manner which will faithfully and
diligently further the business and interests of the Company.  Employee shall
report directly Max Fuller, the Chief Executive Officer of U.S. Xpress
Enterprises, Inc.  The Employee agrees to abide by the rules, regulations,
instructions, personnel practices, and policies of the Company and any changes
therein which may be adopted from time to time by the Company and of which
Employee has received notice.
 
Section 1.2.                                Term.  This Agreement shall commence
on the Effective Date and shall continue until December 31, 2009 (the " Original
Term"), unless earlier terminated as provided in Article III hereof.  The
duration of this Agreement is referred to herein as the “Term.”  
 
ARTICLE II
 
COMPENSATION
 
Section 2.1.                                Salary.  Subject to Section 3.2
hereof, the Company shall pay the Employee a salary at an annual rate of
$345,000, effective April 1, 2007,  during year one of the Term of this
Agreement, subject to increase as of April 1, 2008 and at the discretion of the
Board of Directors of the Company (the "Board") in accordance with
Section 6.12(b) of the Stockholders Agreement (as defined below).  Such salary
shall be paid at such times and in such increments as are consistent with the
Company's regular payroll procedures for other comparable full-time employees of
the Company.  In addition, Employee shall participate in the Company’s bonus
plan at the executive level.

Section 2.2.                                Benefits.  Subject to the terms of
applicable benefit plan documents, during the Term of this Agreement the Company
shall provide the Employee with such health and welfare, retirement savings
plan, and other benefits as are generally provided by the Company to other
senior officers of the Company.  The Company also shall adopt a bonus plan for
the Employee with such bonus targets and opportunities as may be established
from time to time in accordance with Section 6.12(b) of the Stockholders'
Agreement.  The Company may alter, modify, add to, or delete such benefits as
they apply to its employees (including the Employee) at such times and in such
manner as the Company determines appropriate, without recourse by the Employee.
 
Section 2.3.                                Deductions.  The Company may
withhold from any salary or benefits payable or otherwise conferred by this
Agreement all federal, state, city, or other taxes as shall be required pursuant
to any federal, state, city, or other laws or regulations.
 
Section 2.4    Indemnification.  Regarding Employee’s status as an officer,
director, employee and/or representative of any of the Company or its
affiliates, the Company shall provide Employee with the same indemnification and
expense advancement rights provided to all officers and members of the Board of
Directors of the Company pursuant to the terms of the Stockholders’ Agreement.
 
Section 2.5                                Reimbursement of Expenses.  The
Company shall pay or reimburse the Employee for all reasonable travel and other
expenses incurred or paid by him during the Term in connection with the
performance of duties under this Agreement, in accordance with the Company's
reimbursement policies and upon submission of satisfactory evidence thereof.
 
ARTICLE III
 
TERMINATION OF EMPLOYMENT
 
Section 3.1.                                Employment Termination.
 
(a)  Death or Disability.  In the event the Employee dies or becomes disabled
during the Term, his employment hereunder shall automatically terminate.  For
the purpose of this Agreement, "disability" or "disabled" shall mean the good
faith determination of a medical doctor selected by the Company and the Employee
that the Employee was or will be unable or unwilling to perform his duties under
this Agreement due to physical or mental illness or disease or for other causes
beyond the Employee's control for sixty (60) consecutive days, or ninety (90)
days in any twelve (12) month period.
 
(b)  By the Company for Cause.  The Company may terminate the Employee's
employment hereunder for "Cause" immediately upon written notice to the
Employee, with any determination of "Cause" being made as set forth in
Section 6.12(b) of the Second Amended and Restated Stockholders’ Agreement dated
June 20, 2007, among ATS Acquisition Holding Co., the Investor named therein,
and the Management Stockholders named therein (as amended, the "Stockholders'
Agreement").  The following shall constitute "Cause" for termination:
 
(i)  The Employee's falsification of the accounts of the Company, embezzlement
of funds or other assets of the Company, or other similar fraud or dishonesty
with respect to the Company or any of its affiliates that causes or could
reasonably be expected to cause actual harm to the Company or any of its
affiliates;
 
(ii)  Any material breach of this Agreement (it being expressly understood that
any violation of the covenants or obligations contained in Articles IV and V
hereof shall be deemed a material breach hereof) which, if capable of cure, is
not cured within ten (10) days of receipt of written notice of such breach by
the Employee;
 
(iii)  Conviction of, or entry of a plea of guilty or nolo contendere to charges
of, any crime involving moral turpitude or dishonesty (it being understood that,
for instance, violation of a motor vehicle code does not constitute such crime);
 
(iv)  Conviction of, or entry of a plea of guilty or nolo contendere to charges
of, any felony or other crime which has or may have a materially adverse effect
on the Employee's ability to carry out his duties under this Agreement or on the
reputation or business activities of the Company or its affiliates;
 
(v)  Actions or failures to act constituting negligence by the Employee in the
performance of his duties hereunder or failure by the Employee to perform his
duties hereunder, each after the Employee has not cured such actions or failure
to act within thirty (30) days after written request by the Board to do so;
 
(vi)  The Employee's breach of a fiduciary duty owed to the Company, its
shareholders, or any of its affiliates involving duty of care, duty of loyalty,
corporate opportunity, or similar doctrines as determined in good faith by the
Board; and
 
(vii)  Any public disparagement of the Company, its affiliates, or their
officers or directors.
 
(c)  At the Election of the Company without Cause.  The Company may terminate
the Employee's employment hereunder without Cause at any time upon ten (10)
days' prior written notice to the Employee.
 
Section 3.2.                                Effect of Termination.
 
(a)  Termination for Death or Disability.  If the Employee's employment is
terminated by death or because of disability pursuant to Section 3.1(a) hereof,
the Company shall pay to the estate of the Employee or to the Employee, as the
case may be, the salary accrued under this Agreement through the date on which
termination due to death or disability occurs.
 
(b)  Termination for Cause or at the Election of the Employee.  In the event
that the Employee's employment is terminated by the Company for Cause pursuant
to Section 3.1(b) hereof or at the election of the Employee pursuant to
Section 3.1(c) of this Agreement, the Company shall pay to the Employee the
salary accrued under this Agreement through the last day of his actual
employment by the Company.
 
(c)  Termination at the Election of the Company without Cause.  In the event
that the Company terminates the Employee without Cause pursuant to
Section 3.1(c) hereof, the Company shall pay to the Employee the salary payable
to him under this Agreement through the remaining Original Term or then current
Renewal Term of this Agreement.
 
Section 3.3.                                Survival.  Notwithstanding
termination of this Agreement as provided in this Article III hereof, the rights
and obligations of the Employee and the Company under Articles IV, V, and VI, of
this Agreement shall survive termination.
 
ARTICLE IV
 
NONCOMPETITION

Section 4.1.                                Covenant Not to Compete and
Nonsolicitation Covenant.  As an inducement for the Company to enter into this
Agreement, the Employee agrees to the following covenants, whose terms (the
"Restrictive Provisions") are set forth below:

(a)            Covenant Not to Compete.  During the Noncompete Term, as defined
below, the Employee shall not, directly or indirectly, own, manage, operate,
finance, control, invest, engage, or participate in the ownership, management,
operation, financing, or control of any business providing freight
transportation services (dedicated or otherwise) by use of dry van trailer
equipment or freight containers, either over-the-road or via intermodal service,
directly or through any brokerage, logistics, leasing, or other indirect
arrangement (including the engagement of independent contractors) in the United
States of America; nor shall the Employee be employed by, associated with, or in
any manner connected with, lend his name or any similar name to, lend his credit
to, render services of any nature for, or provide advice to such business.

(b)           Nonsolicitation Covenant.  During the Noncompete Term as defined
below, the Employee shall not, directly or indirectly, (i) whether for his own
account or for the account of any other person (other than the Company and its
affiliates), solicit business of the same or similar type being carried on by
the Company or any of its affiliates from any person or entity that is or was
during the Noncompete Term a customer of the Company or any of its affiliates;
(ii) whether for his own account or the account of any other person (other than
the Company and its affiliates), solicit, employ, or otherwise engage as an
employee, independent contractor, or otherwise any person who is or was during
the Noncompete Term an employee or independent contractor of the Company or any
of its affiliates or in any manner induce or attempt to induce any employee or
independent contractor of the Company or any of its affiliates to terminate his
or her employment or contract with the Company or any such affiliate; or
(iii) publicly disparage the Company or any of its affiliates, shareholders,
directors, officers, employees, or agents.

(d)  Limited Exception.  Notwithstanding anything to the contrary above, this
Section 4.1 shall not prohibit the ownership by the Employee of up to (but not
more than) one percent (5%) of the publicly traded securities of any business
specified in Section 4.1(a) or 4.1(b) above (but without otherwise participating
in the activities of such business).
 
Section 4.2.     Duration of Covenant Not to Compete.  The restrictions
contained in Section 4.1 shall apply to Employee from the date hereof to ((a)
the first anniversary of the expiration of the Term of this Agreement, or (b)
the first anniversary of Employee’s termination pursuant to Section 3.1(b) or
3.1(c) (the “Noncompete Term”).
 
Section 4.3.                                Consideration for Covenant Not to
Compete and Nonsolicitation Covenant.  In addition to the consideration to be
received by the Employee during the Term of this Agreement and in exchange for
the continuous performance of his obligations under Sections 4.1(a) and 4.1(b),
the Employee shall continue to receive the salary he was receiving as of the
date of termination of his employment until the end of the Noncompete Term.  In
the event Employee is terminated pursuant to Section 3.1(c), Employee shall be
entitled to receive the salary he was receiving as of the date of termination of
his employment until the later of the end of the Term of this Agreement or the
end of the Noncompete Term.  The Employee acknowledges that such consideration
constitutes sufficient and adequate consideration for the Employee's agreement
to the Restrictive Provisions.  The Employee further acknowledges that, given
the nationwide character of the Company's business, the Restrictive Provisions
and their geographic area and duration are reasonable.
 
Section 4.4.                                Enforceability.  If any of the
Restrictive Provisions is found by any court of competent jurisdiction to be
unenforceable because it extends for too long a period of time, over too great a
range of activities, or in too broad a geographic area, it shall be interpreted
to extend only over the maximum period of time, range of activities, or
geographic area as to which it may be enforceable.
 
Section 4.4.                                Specific Performance.  The
Restrictive Provisions are necessary for the protection of the business and
goodwill of the Company and are considered by the Employee to be reasonable to
accomplish such purpose.  The Employee agrees and acknowledges that any breach
of the Restrictive Provisions would cause the Company substantial and
irreparable damage and therefore, in the event of any such breach, in addition
to such other remedies which may be available in law, the Company shall have the
right to seek specific performance, injunction, or any other equitable relief,
and if the Company prevails in a proceeding to remedy a breach under the
Restrictive Provisions, the Company shall be entitled to receive its reasonable
attorneys' fees, expert witness frees, and out-of-pocket costs incurred in
connection with such proceeding, in addition to any other relief they may be
granted.
 
ARTICLE V
 
CONFIDENTIAL INFORMATION

Section 5.1.                                Definition of Confidential
Information.  For purposes of this Agreement, "Confidential Information" shall
include all information (whether or not patentable and whether or not
copyrightable) owned, possessed, or used by the Company, including, without
limitation, any data, formula, know-how, vendor information, customer
information, driver information, pricing information, employee information,
trade secret, process, design, sketch, photograph, graph, drawing, sample,
invention, idea, research, report, software, software documentation, hardware
design, technology, marketing or business plan, forecast, unpublished financial
statement, budget, and other information, however documented, of a confidential
nature, including any analysis, compilation, study, summary, and other material
prepared by or for the Company containing or based, in whole or in part, upon
any information included in the foregoing, that is communicated to, learned of,
developed, or otherwise acquired by the Employee in the course of his employment
by the Company.
 
Section 5.2.                                Nondisclosure of Confidential
Information.  The Employee acknowledges and agrees that the protection of the
Confidential Information is necessary to protect and preserve the value of the
Company's business.  Therefore, the Employee agrees not to disclose to any
unauthorized persons or use for the benefit of any third party any Confidential
Information, whether or not such information is embodied in writing or other
physical form or is retained in the memory of Employee, without the Company's
prior written consent, unless (i) such Confidential Information is or becomes
generally known to and available for use by the public other than as a result of
the fault of the Employee, or the fault of any other Person known by the
Employee to be bound by a duty of confidentiality to the Company, or (ii) the
Employee is compelled by law, rule, regulation, a court of competent
jurisdiction or a governmental agency to disclose such Confidential
Information.  The Employee agrees to deliver to the Company upon termination of
this Agreement, and at any other time the Company may request, all records,
files, memoranda, notes, data, reports and other documents (and all copies or
reproductions of all of the foregoing) containing or based upon the Confidential
Information.
 
ARTICLE VI
 
MISCELLANEOUS
 
Section 6.1.                                Entire Agreement.  This Agreement
and the Stockholders Agreement contain the entire understanding of the parties
with respect to the matters contained herein and supersede all previous
commitments, agreements, and understandings between the parties with respect to
such matters.  There are no oral understandings, terms, or conditions, and no
party has relied upon any representation, express or implied, not contained in
this Agreement.
 
Section 6.2.                                Amendments.  This Agreement may not
be amended in any respect whatsoever, nor may any provision hereof be waived by
any party, except by a further agreement, in writing, fully executed by each of
the parties.
 
Section 6.3.                                Successors.  This Agreement shall be
binding upon and inure to the benefit of the parties and to their respective
heirs, personal representatives, successors and assigns, executors and/or
administrators; provided, that (a) the Employee may not assign his rights
hereunder (except by will or the laws of descent) without the prior written
consent of the Company and (b) the Company may not assign its rights hereunder
without the prior written consent of the Employee which will not be unreasonably
withheld; provided, however, that the Company may assign this Agreement without
the consent of the Employee in connection with any sale or reorganization of the
Company.
 
Section 6.4.                                Captions.  The captions of this
Agreement are for convenience and reference only and in no way define, describe,
extend, or limit the scope or intent of this Agreement or the intent of any
provision contained in this Agreement.
 
Section 6.5.                                Notice.  Any notice or communication
must be in writing and given by depositing the same in the United States mail,
addressed to the party to be notified, postage prepaid and registered or
certified with return receipt requested, or by delivering the same by hand
delivery (including by a nationally recognized overnight carrier) or by fax or
by deposit with a reputable overnight courier.  Such notice shall be deemed
received on the date on which it is delivered or faxed (with confirmation
received), three (3) business days after deposit in the United States mail as
set forth above, or the next business day after deposit with a reputable
overnight courier.  For purposes of notice, the addresses of the parties shall
be:
 
If to the
Employee:                                                              Mike
Walters                                           
Arnold Transportation Services,
Inc.                                                                           
9523 Florida Mining Road
Jacksonville, FL 32257
Fax:                                           

 
If to the Company:
Arnold Transportation Services, Inc.

 
9523 Florida Mining Road

 
Jacksonville, FL  32257

Attention:                                                       
Fax:                                           

Any party may change its address for notice by written notice given to the other
party in accordance with this Section 7.5.
 
Section 6.6.                                Counterparts.  This Agreement may be
executed simultaneously in any number of counterparts, via facsimile or
otherwise, each of which counterparts when so executed and delivered shall be
taken to be an original, but such counterparts shall together constitute but one
and the same document.
 
Section 6.7.                                Severability.  If any provision of
this Agreement is held illegal, invalid or unenforceable, such illegality,
invalidity, or unenforceability shall not affect any other provision
hereof.  Such provision and the remainder of this Agreement shall, in such
circumstances, be modified to the extent necessary to render enforceable the
remaining provisions hereof.
 
Section 6.8.                                Applicable Law.  This Agreement
shall be governed by, construed and enforced in accordance with the laws of the
State of Florida, without regard to principles of comity or conflicts of laws
provisions of any jurisdiction.
 
Section 6.9.                                Construction.  The language
contained in this Agreement shall be deemed to be approved by both parties
hereto and no rule of strict construction shall be applied against any
party.  Unless otherwise expressly provided, the words "hereof" and "hereunder"
and similar references refer to this Agreement in its entirety and not to any
specific part hereof.
 
Section 6.10.                                Genders.  Any reference to the
masculine gender shall be deemed to include feminine and neuter genders, and
vice versa, and any reference to the singular shall include the plural, and vice
versa, unless the context otherwise requires.
 
Section 6.11.                                Right to Offset.  The Company may
exercise a right of offset at any time and from time to time against any amounts
payable under this Agreement to the extent the Employee is indebted to the
Company or any of its affiliates.
 
Section 6.12.                                Waiver.  The failure of either
party to insist upon strict performance of any of the terms or conditions of
this Agreement shall not constitute a waiver of any of its rights hereunder.
 
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IN WITNESS WHEREOF, the parties hereto have caused this Employment and
Noncompetition Agreement to be duly executed as of the date first set forth
above.
 
 
 

  THE COMPANY          
Date June 21, 2007
By:
/s/ RAY M. HARLIN       Ray M. Harlin       Chief Financial Officer          

 

  THE EMPLOYEE          
 
By:
/s/ MICHAEL S. WALTERS       Michael S. Walters