<PAGE>
Exhibit 10.19

                                 STEPHEN RUSSELL
                              EMPLOYMENT AGREEMENT
                                 AMENDMENT NO. 3

         Amendment No. 3, dated as of July 26, 2000, to the employment agreement
dated as of January 21, 1994 between Celadon Group, Inc., a Delaware corporation
(the "Company"), and Stephen Russell ("Employee"), as amended by the amendments
dated as of February 12, 1997 and as of August 1, 1997 (the "Employment
Agreement").

         The parties wish to amend the Employment Agreement as set forth below.
Accordingly, the parties agree as follows:

          1. Section 1 of the Employment Agreement is amended in its entirety to
     read as follows:

             "The Company agrees to continue to employ Employee, and Employee
             agrees to continue to serve, on the terms and conditions of this
             Agreement for a period commencing on the date hereof and ending on
             January 21, 2004. The period during which Employee is employed
             hereunder is hereinafter referred to as the "Employment Period."
             The Employment Period shall be automatically renewed for successive
             two-year terms unless either party gives written notice to the
             other at least 90 days prior to the expiration of the then
             Employment Period, of such party's intention to terminate
             Employee's employment hereunder at the end of the then current
             Employment Period."

          2. The following language shall be added at the end of Section 9(c) of
     the Employment Agreement:

             "A notice by the Company of non-renewal of the Employment Period
             pursuant to Section 1 above shall be deemed an involuntary
             termination of Employee by the Company without Cause as of the end
             of the Employment Period, but the Executive may terminate at any
             time after the receipt of such notice and shall be treated as if he
             was terminated without Cause as of such date. Notwithstanding
             anything herein to the contrary, in the event of the termination by
             the Company of Employee's employment hereunder otherwise than
             pursuant to Section 9(a) and 9(b) during the period beginning 180
             days prior to a Change in Control (as defined in Section 10(b)) and
             ending immediately prior to the Change in Control or at any time
             during the period beginning on the date of the Change in Control
             and ending on the two-year anniversary of the Change in Control,
             Employee shall be entitled to receive from the Company the amounts
             and benefits described in Section 19(b)(iii) hereof in lieu of the
             amounts payable pursuant to the first sentence of this Section
             9(c)."

          3. The flush language following Section 19(b)(i)(E) of the Employment
     Agreement shall be deleted and the first paragraph of Section 10(b)(i) of
     the Employment Agreement is amended in its entirety to read as follows:

             "(i) Notwithstanding anything herein contained to the contrary, in
             the event Employee terminates his employment at any time during the
             period



<PAGE>

             beginning 180 days prior to a Change in Control (as hereinafter
             defined in this Section 10(b)) and ending immediately prior to the
             Change in Control or at any time during the period beginning on the
             date of the Change in Control and ending on the two-year
             anniversary of the Change in Control Employee may terminate his
             employment hereunder upon 10 days prior written notice to the
             Company as a result of the occurrence of any of the following
             events:"

          4. The following language shall be added at the end of Section
     10(b)(i) of the Employment Agreement:

             "In addition to the foregoing, Employee may terminate his
             employment with the Company for any reason during the 90-day period
             immediately following the date which is six months after any Change
             in Control and receive the amounts and benefits described in
             Section 10(b)(iii) hereof."

          5. Section 10(b)(iii) of the Employment Agreement is amended in its
     entirety to read as follows:

             "Upon termination of this Agreement under the provisions of this
             Section 10(b), Employee shall be (A) entitled to his normal salary,
             bonuses, awards, perquisites, and benefits through the date of such
             termination ("Accrued Obligations") and, in addition thereto, (B)
             paid in a lump sum, on the date of such termination three times
             Employee's base salary in effect on the date immediately preceding
             the Change in Control (or, if impermissibly reduced, prior to such
             reduction), (C) paid in a lump sum, on the date of such termination
             three times the highest annual bonus paid to Employee for the three
             calendar years prior to the calendar year in which the date of the
             Change in Control occurs, (D) paid in a lump-sum, on the date of
             such termination a pro-rata portion of Employee's bonus for the
             fiscal year in which the Change in Control occurs (determined by
             multiplying such amount by a fraction, the numerator of which is
             the number of days during the fiscal year of termination that
             Employee is employed by the Company and the denominator of which
             is, 365); (E) entitled to the continuation of medical and dental
             benefits for Employee (and eligible dependents) upon the same terms
             and conditions in effect prior to the Change in Control for the 36
             month period following the date of termination provided, to the
             extent Employee incurs tax that he would not have incurred as an
             active employee as a result of the aforementioned coverage or the
             benefits provided thereunder, Employee shall received from the
             Company an additional payment in the amount necessary so that
             Employee will have no additional cost for receiving such items or
             any additional payment, (F) outplacement services at a level
             commensurate with Employee's position, including use of an Employee
             office and secretary available through such outplacement services,
             for a period of one year commencing on Employee's date of
             termination but in no event extending beyond the date on which
             Employee commences other full time employment and (G) upon the
             occurrence of a Change in Control full and immediate vesting of all
             stock options and other equity-based awards held by Employee. In
             the event Employee obtains other full time employment that offers
             substantially similar or improved medical and dental benefits, such
             continuation coverage by the Company


                                      -68-

<PAGE>

             for such medical or dental benefits under Section 10(b)(iii)(E)
             shall immediately cease. The continuation health benefits for the
             above-referenced 36 month period shall reduce an count against
             Employee's rights under the Consolidated Omnibus Budget
             Reconciliation Act of 1985, as amended."

          6. A new Section 16 is hereby added to the Employment Agreement to
     read as follows:

             "16 Limitation of Payments.

             (a) In the event that Employee shall become entitled to the amounts
             and/or benefits provided by Section 10(b)(iii) or any other amounts
             (whether pursuant to the terms of this Agreement or any other plan,
             arrangement or agreement with the Company, any person whose actions
             results in a change of ownership covered by Section 280G(b)(2) of
             the Code or any person affiliated with the Company or such person)
             as a result of a Change in Control or other change in ownership as
             defined in Section 280G of the Code (collectively the "Company
             Payments"), and such Company Payments will be subject to the tax
             (the "Excise Tax") imposed by Section 4999 of the Code (and any
             similar tax that may hereafter be imposed) the Company shall pay to
             Employee at the time specified in subsection (d) below an
             additional amount (the "Gross-up Payment') such that the net amount
             retained by Employee, after deduction of any Excise Tax on the
             Company Payments and any federal, state, and local income or
             payroll tax upon the Gross-up Payment provided for by this
             paragraph (a), but before deduction for any federal, state, and
             local income or payroll tax on the Company Payments, shall be equal
             to the Company Payments. Notwithstanding the foregoing provisions
             of this Section 16 to the contrary, if it shall be determined that
             Employee is entitled to a Gross-up Payment, but the Company
             Payments do not exceed 110% of the greatest amount (the "Reduced
             Amount") that could be paid to Employee such that the receipt of
             Company Payments would not give rise to any Excise Tax, then no
             Gross-up Payment shall be made to Employee and the Company
             Payments, in the aggregate shall be reduced to the Reduced Amount.

             (b) For purposes of determining whether any of the Company Payments
             and Gross-up Payments (collectively the "Total Payments") will be
             subject to the Excise Tax and determining the amounts of such
             Excise Tax: (i) the Total Payments shall be treated as "parachute
             payments" within the meaning of Section 280G(b)(2) of the Code, and
             all "parachute payments" in excess of the "base amount" (as defined
             under Code Section 280G(b)(3) of the Code) shall be treated as
             subject to the Excise Tax, unless sand except to the extent that,
             in the opinion of the Company's independent certified public
             accountants appointed prior to any change in ownership (as defined
             under Code Section 280G(b)(2)) or tax counsel selected by such
             accountants (the "Accountants") such Total Payments (in whole or in
             part), (A) do not constitute "parachute payments," (B) represent
             reasonable compensation for services actually rendered within the
             meaning of section


                                      -69-


<PAGE>

             280G(b)(4) of the Code or (C) are otherwise not subject to the
             Excise Tax; and (ii) the value of any non-cash benefits or any
             deferred payment or benefit shall be determined by the Accountants
             in accordance with the principles of Section 280G of the Code.

             (c) For purposes of determining the amount of the Gross-up Payment,
             Employee shall be deemed to pay federal income taxes at the highest
             marginal rate of federal income taxation in the calendar year in
             which the Gross-up Payment is to be made and state and local income
             taxes at the highest marginal rate of taxation in the state and
             locality of Employee's residence for the calendar year in which the
             Company Payment is to be made, net of the maximum reduction in
             federal income taxes which could be obtained from deduction of such
             state and local taxes if paid in such year. In the event that the
             Excise Tax is subsequently determined by the Accountants to be less
             than the amount taken into account hereunder at the time the
             Gross-up Payment is made, Employee shall repay to the Company, at
             the time that the amount of such reduction in Excise Tax is finally
             determined, the portion of the prior Gross-up Payment attributable
             to such reduction (plus the portion of the Gross-up Payment
             attributable to the Excise Tax and federal, state and local income
             tax imposed on the portion of the Gross-up Payment being repaid by
             Employee if such repayment results in a reduction in Excise Tax or
             a federal, state and local income tax deduction), plus interest on
             the amount of such repayment at the rate provided in Section
             1274(b)(2)(B) of the Code. Notwithstanding the foregoing, in the
             event any portion of the Gross-up Payment to be refunded to the
             Company has been paid to any federal, state and local tax
             authority, repayment thereof (and related amounts) shall not be
             required until actual refund or credit of such portion has been
             made to Employee, and interest payable to the Company shall not
             exceed the interest received or credited to Employee by such tax
             authority for the period it held such portion. Employee and the
             Company shall mutually agree upon the course of action to be
             pursued (and the method of allocating the expense thereof) if
             Employee's claim for refund or credit is denied.

             In the event that the Excise Tax is later determined by the
             Accountants or the Internal Revenue Service to exceed the amount
             taken into account hereunder at the time the Gross-up Payment is
             made (including by reason of any payment the existence or amount of
             which cannot be determined at the time of the Gross-up Payment),
             the Company shall make an additional Gross-up Payment in respect of
             such excess (plus any interest or penalties payable with respect to
             such excess) at the time that the amount of such excess is finally
             determined



                                      -70-
<PAGE>

             (d) The Gross-up Payment or portion thereof provided for in
             subsection (c) above shall be paid not later than the thirtieth day
             following an event occurring which subjects Employee to the Excise
             Tax; provided, however, that if the amount of such Gross-up Payment
             or portion thereof cannot be finally determined on or before such
             day, the Company shall pay to Employee on such day an estimate, as
             determined in good faith by the Accountants, of the minimum amount
             of such payments and shall pay the remainder of such payments
             (together with interest at the rate provided in Code Section
             1274(b)(2)(B) of the Code), subject to further payments pursuant to
             subsection (c) hereof, as soon as the amount thereof can reasonably
             be determined, but in no event later than the ninetieth day after
             the occurrence of the event subjecting Employee to the Excise Tax.
             In the event that the amount of the estimated payments exceeds the
             amount subsequently determined to have been due, such excess shall
             constitute a loan by the Company to Employee, payable on the fifth
             day after demand by the Company (together with interest at the rate
             provided in Section 1274(b)(2)(B) of the Code).

             (e) In the event of any controversy with the Internal Revenue
             Service (or other taxing authority) under this Section 16, Employee
             shall permit the Company to control issues related to this Section
             16 (at its expense), provided that such issues do not potentially
             materially adversely affect Employee, but Employee shall control
             any other issues. In the event the issues are interrelated,
             Employee and the Company shall in good faith cooperate so as not to
             jeopardize resolution of either issue, but if the parties cannot
             agree, Employee shall make the final determination with regard to
             the issues. In the event of any conference with any taxing
             authority as to the Excise Tax or associated income taxes, Employee
             shall permit the representative of the Company to accompany him,
             and Employee and his representative shall cooperate with the
             Company and its representative.

             (f) The Company shall be responsible for all charges of the
             Accountants"

          7. A new Section 17 is hereby added to the Employment Agreement to
     read as follows:

             "17. Legal Fees. To the fullest extent permitted by law, the
             Company shall promptly pay upon submission of statements all legal
             and other professional fees, costs of litigation, prejudgment
             interest, and other expenses incurred in connection with any
             dispute concerning payments, benefits or any other entitlements
             under Section l0(b); provided, however, the Company shall be
             reimbursed by Employee for (i) the fees and expenses advanced in


                                      -71-
<PAGE>

             the event Employee's claim is, in a material manner, in bad faith
             or frivolous and the arbitrator or court, as applicable, determines
             that the reimbursement of such fees and expenses is appropriate, or
             (ii) to the extent that the arbitrator or court, as appropriate,
             determines that such legal and other professional fees are clearly
             and demonstrably unreasonable."

          8. A new Section 18 is hereby added to the Employment Agreement to
     read as follows:

             "18. No Mitigation/No Offset/Release

             (a) In the event of any termination of employment hereunder,
             Employee shall be under no obligation to seek other employment and
             there shall be no offset against any amounts due Employee under
             this Agreement on account of any remuneration attributable to any
             subsequent employment that Employee may obtain, except as
             specifically provided in the penultimate sentence of Section
             10(b)(iii) hereof. The amounts payable hereunder shall not be
             subject to setoff, counterclaim, recoupment, defense or other right
             which the Company may have against Employee or others, except as
             specifically set forth in this Section 18 hereof or upon obtaining
             by the Company of a final unappealable judgment against Employee.

             (b) Any amounts payable and benefits or additional rights provided
             pursuant to Section 10(b)(iii) beyond Accrued Obligations shall
             only be payable if Employee delivers to the Company a release of
             all claims that Employee has or may have against the Company and
             its affiliates (other than claims to payments, benefits or
             entitlements specifically payable or provided hereunder, claims
             under COBRA, claims to vested accrued benefits under the Company's
             employee benefit plans or any rights of indemnification under the
             Company's organizational documents) occurring up to the release
             date in such form as reasonably requested by the Company, provided,
             however, that such release shall also release Employee of all
             claims that the Company and its affiliates have or may have against
             Employee. In the event that the Company fails to deliver such
             release to Employee within 10 days from the later of (i) Employee's
             date of termination or (ii) the date of the Change in Control, such
             release shall not be required and shall not prohibit or otherwise
             delay payment of any amounts due Employee hereunder.

             (c) Upon any termination of employment, upon the request of the
             Company, Employee shall deliver to the Company a resignation from
             all offices and directorships and fiduciary positions of


                                      -72-

<PAGE>

             Employee in which Employee is serving with, or at the request of,
             the Company or its subsidiaries, affiliates or benefit plans."


          9. A new Section 19 is hereby added to the Employment Agreement to
     read as follows:

             "19. Litigation Support. Subject to Employee's other commitments,
             following the Employment Period, Employee shall be reasonably
             available to cooperate (but only truthfully) with the Company and
             provide information as to matters which Employee was personally
             involved, or has information on, during the Employment Period and
             which are or become the subject of litigation or other dispute."

          10. Agreement Otherwise Unchanged. The Employment Agreement, as so
     amended, shall remain in full force and effect.

          11. Counterparts. This amendment may be executed in counterparts, each
     of which shall be deemed an original, but both of which together shall
     constitute the same agreement.


                                          CELADON GROUP, INC.


                                          By: /s/ Paul Will
                                             -----------------------------------
                                          Name:  Paul Will
                                          Title:  Chief Financial Officer

                                          /s/ Stephen Russell
                                          --------------------------------------
                                          Stephen Russell



                                      -73-
<PAGE>



                                          CELADON GROUP, INC.


                                          By:  /s/ Michael Miller
                                             -----------------------------------
                                          Name:  Michael Miller
                                          Title: Director/Compensation Committee


                                          /s/ Stephen Russell
                                          --------------------------------------
                                          Stephen Russell


                                      -74-

<PAGE>


                                          CELADON GROUP, INC.


                                          By: /s/ John Kines
                                             -----------------------------------
                                          Name:  John Kines
                                          Title: Director/Compensation Committee

                                          /s/ Stephen Russell
                                          --------------------------------------
                                          Stephen Russell


                                      -75-