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                                                                    EXHIBIT 10.1

                              EMPLOYMENT AGREEMENT



         THIS EMPLOYMENT AGREEMENT is made and entered into as of the _____ day
of _______________, 2001, to be effective as of the ___ day of __________, 2001
(the "Effective Date"), by and between HUGH E. SAWYER ("Employee") and ALLIED
HOLDINGS, INC., a Georgia corporation ("Employer").

                                   WITNESSETH:

         WHEREAS, Employer, through the Affiliates (as hereinafter defined), is
engaged in the transportation of automobiles and light trucks from the
manufacturer to retailers and related activities and providing logistics and
distribution services to the new and used vehicle distribution market and
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 any corporation, partnership or
                           other entity of which at least eighty percent (80%)
                           of the outstanding equity and voting rights are
                           owned, directly or indirectly through any other
                           corporation, partnership or other entity, by
                           Employer.

                  (b)      "Base Salary" means the annual salary payable
                           pursuant to Paragraph 4(a) hereof as adjusted, from
                           time to time, pursuant to Paragraph 4(b) hereof.

                  (c)      "Cause" means (i) the commission by Employee of an
                           act of fraud, misappropriation, dishonesty,
                           embezzlement, gross negligence, or willful misconduct
                           in connection with his employment hereunder which is
                           materially injurious to Employer; (ii) criminal
                           conduct of Employee which results in a felony
                           conviction of such Employee with respect to which all
                           opportunities for appeal have expired, or the
                           Employee's offering a plea of nolo contendre to a
                           felony; (iii) Employee's continuing and/or willful
                           failure to perform his duties or obligations for
                           Employer as outlined in this Agreement, or Employee's
                           material breach of this Agreement, if such failure or
                           breach is not cured within thirty (30) days after
                           written notice from Employer's Board of Directors
                           thereof; (iv) Employee's prolonged


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                           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 Employer's Board
                           of Directors thereof; or (v) engaging in activities
                           prohibited by Paragraphs 12, 13, 14 or 15 hereof
                           which is not cured within ten (10) days after written
                           notice from Employer's Board of Directors.
                           Notwithstanding the foregoing, Employer may not
                           terminate the Employee's employment for Cause unless
                           a determination that Cause exists shall be made by a
                           majority of the Employer's Board of Directors.

                  (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 proviso, "disability" shall mean
                           the permanent and continuous inability of Employee to
                           perform substantially all of the duties being
                           performed immediately prior to his 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
                           his 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 three (3)
                           years 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 end on
that date five (5) years after the Effective Date (the "Initial Term"). Upon the
expiration of the Initial Term, and upon the expiration of each successive
Renewal Term (as hereinafter defined), Employee's employment shall be
automatically renewed for an additional term of two (2) years (the "Renewal
Term(s)"), unless written notification of termination is given by either party
to the other party not less than one (1) year prior to the expiration of the
Initial Term or, as the case may be, the then-current Renewal Term. As used
herein, "Term" shall mean the then current Initial Term or Renewal Term, as the
case may be.

         3.     DUTIES.


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                  (a)      Employee shall, during the Term, serve as President
                           and CEO of Employer having duties, responsibilities,
                           powers and authority which are consistent with senior
                           management positions of like designation generally,
                           but subject to the Chairman's direction. The Employee
                           shall report directly to the Chairman and the Board
                           of Directors of Employer and shall perform such
                           executive, managerial and administrative duties as
                           the Chairman and the Board of Directors of Employer
                           may, from time to time, reasonably request.

                  (b)      During the Term, Employee shall devote substantially
                           all of his business time, energy and skill to
                           performing the duties of his employment (vacations as
                           provided hereunder and reasonable absences because of
                           illness excepted), shall faithfully and industriously
                           perform such duties, and shall use his best efforts
                           to follow and implement all management policies and
                           decisions of Employer. 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.

                  (c)      Employee shall not be required to relocate outside of
                           the metropolitan Atlanta, Georgia, area without his
                           prior written consent.

                  (d)      The Board of Directors has adopted a resolution
                           appointing Employee to serve on Employer's Board of
                           Directors by filling the vacancy created by the
                           resignation of A. Mitchell Poole. Such appointment is
                           subject to Employee's execution of this Agreement and
                           will take effect on the Effective Date. It is
                           anticipated that Employee will also be elected to
                           serve on the Board of Directors of one or more of
                           Employer's Affiliates. Employee shall serve in such
                           position(s) without additional compensation.

         4.       BASE SALARY.

                  (a)      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 not less than Five
                           Hundred Fifty Thousand Dollars ($550,000.00),
                           adjusted as provided in subparagraph (b) below (the
                           "Base Salary"), in equal semi-monthly installments in
                           accordance with Employer's payroll practices.
                           Employee's salary shall be reviewed by the Board of
                           Directors of Employer annually (on each anniversary
                           of the date hereof) and, in the sole discretion of
                           the Board of Directors, may be increased, but not
                           decreased.


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                  (b)      Commencing as of the Effective Date, and as of each
                           subsequent anniversary thereafter during the Term,
                           the Base Salary shall be increased, but not
                           decreased, by an amount equal to the greater of (i)
                           such amount as shall be determined by the
                           Compensation Committee of the Board of Directors of
                           Employer; or (ii) the amount equal to the percentage,
                           if any, by which the Consumer Price Index (All Items
                           Less Shelter), Urban Wage Earners and Clerical
                           Workers, for the Southeast Region/Population Size
                           Class B, published by the United States Government
                           Bureau of Labor Statistics for the December 1
                           preceding such January exceeds such Index for the
                           December 1 of the preceding year. (As an example, as
                           of January 1, 2002, the difference will be between
                           said Index as of December 1, 2001 compared to said
                           Index as of December 1, 2000.)

         5.       BONUS COMPENSATION.

                  (a)      Subject to subsection (b) below, in addition to
                           Employee's Base Salary, Employee shall, with respect
                           to each calendar year of Employer ending during the
                           Term, be eligible to participate in a management
                           bonus plan determined by Employer's Board of
                           Directors from time to time. Such plan shall, at a
                           minimum, provide for an opportunity for Employee to
                           earn a cash bonus on an annual basis of up to one
                           hundred percent (100%) of Employee's Base Salary
                           received for the year as to which such bonus is
                           earned (the "Target Bonus"), based on meeting the
                           performance goals (such as individual or company-wide
                           goals) and satisfying such other reasonable terms and
                           conditions as may be set from time to time by
                           Employer's Board of Directors in the good faith
                           exercise of its discretion. The foregoing shall not
                           limit the ability of Employer's Board of Directors to
                           establish management bonus plans providing for a
                           greater Target Bonus for the Employee or to provide a
                           cash bonus for Employee in any given year that is
                           greater than the Target Bonus. Such annual cash
                           bonuses will be payable within thirty (30) days of
                           the completion of the independent certified audit for
                           the applicable year (each, an "Annual Bonus"); and


                  (b)      Employer shall pay Two Hundred Seventy-Five Thousand
                           Dollars ($275,000.00) of the eligible targeted Annual
                           Bonus in 2001; provided, that Employer shall not be
                           required to pay such bonus if Employee terminates his
                           employment on or before December 31, 2001 (other than
                           a termination by Employee pursuant to Paragraph
                           9(b)). The remaining balance of the target 2001
                           Annual Bonus (in the amount of $275,000.00) or a
                           portion thereof will be paid at the discretion of the
                           Chairman and the Board of Directors (or its
                           designee). Such Annual Bonus will be payable within
                           thirty (30) days of the completion of the independent
                           certified audit for 2001. All amounts received
                           pursuant to this Paragraph shall constitute Annual
                           Bonus for 2001.

                  (c)      Employee shall be eligible to participate in
                           Employer's Long Term Incentive Plan, on a basis no
                           less favorable than those made available to other


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                           senior managers of Employer generally and shall enter
                           into required documents evidencing participation in
                           such plan, if any, contemporaneously with the
                           execution of this Agreement and from time to time
                           thereafter.

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

                  (a)      On and as of the Effective Date, 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 for highly compensated
                           employees 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 and benefit package on terms no less
                           favorable, in both scope of coverage and value of
                           coverage, than the benefits currently provided to
                           Employer's Chairman. To the extent applicable and
                           allowable by the terms and conditions of such plans
                           and programs, Employee shall be credited for the full
                           period of Employee's prior employment by Employer or
                           its Affiliates;

                  (b)      Employee shall be paid a monthly car allowance of One
                           Thousand Three Hundred Dollars ($1,300.00) to be used
                           for vehicles for the benefit of Employee in his
                           discretion;

                  (c)      Employee shall be provided with the use of a cellular
                           telephone, at no cost to Employee;

                  (d)      Employer shall reimburse Employee for dues paid by
                           Employee for membership in such professional
                           organizations and eating clubs as shall, from time to
                           time, be deemed appropriate and necessary by
                           Employer;

                  (e)      Employee shall, at all times, have available to him
                           an expense account to defray actual, reasonable,
                           ordinary and necessary business expenses incurred in
                           the performance of his 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,
                           Employer's Board of Directors, or a committee
                           thereof, which approval shall not be unreasonably
                           withheld or delayed;

                  (f)      Employer shall reimburse Employee up to Seventy-Five
                           Thousand Dollars ($75,000.00) for actual and
                           reasonable expenses incurred by Employee in
                           relocating to Atlanta, Georgia, including actual
                           moving costs, customary real estate commissions or
                           closing costs incurred in selling Employee's
                           residence in Southlake, Texas, or penalties paid by
                           Employee for failing to fulfill certain contractual
                           obligations related to the purchase of said residence
                           in Southlake, Texas. Employee shall be reimbursed for
                           such


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                           expenses upon presentation and approval of expense
                           statements or written vouchers or other supporting
                           documents as may be reasonably requested in advance
                           by Employer, Employer's Board of Directors, or a
                           committee thereof, which approval shall not be
                           unreasonably withheld or delayed; and

                  (g)      Employer shall reimburse Employee up to One Hundred
                           Twenty-Five Thousand ($125,000.00) for payments
                           actually paid by Employee related to the early
                           termination of his Employment Agreement with his
                           former employer in Irving, Texas upon Employer's
                           receipt of reasonable evidence of such payment. Such
                           payment shall not be unreasonably withheld or delayed
                           by Employer.

                  (h)      Employer shall pay to Employee an additional payment
                           (the "Gross-Up Payment") in an amount sufficient to
                           fully reimburse Employee with respect to all federal,
                           state and local taxes actually paid by Employee with
                           respect to the payments set forth in clauses (f) and
                           (g) hereof. The Gross-Up Payment shall not be
                           unreasonably withheld or delayed by Employer.

         The benefits described in subparagraph (a) of this Paragraph shall not
         be construed to require Employer to establish any such plans or
         programs or to prevent Employer from modifying or terminating any such
         plans or programs, and no such action or failure thereof shall affect
         this Agreement; provided, however, that in the event of any reduction
         in the group medical and hospitalization benefits in place as of the
         date hereof, the salary payable to Employee shall be increased, as of
         the effective date of such reduction, by that amount necessary to
         enable Employee to supplement the benefits provided by Employer to
         maintain the level of benefits currently provided to him by it.

         7.       VACATION. Employee shall receive four (4) weeks of paid
vacation and/or personal days 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, 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's sending Employee ten (10) days prior
                           written notice terminating his employment without
                           Cause hereunder prior to expiration of the Term; or

                  (d)      Employee's voluntarily terminating his employment
                           with Employer for any reason or no reason by sending
                           Employer ten (10) days prior written notice
                           terminating his employment hereunder prior to
                           expiration of the Term, and Employee shall not


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                           be liable to Employer solely as the result of
                           terminating this Agreement pursuant to this
                           subsection (d), except as may otherwise be provided
                           herein; or

                  (e)      Employee being terminated for Cause.

         9.       TERMINATION PAYMENT. In the event:

                  (a)      Employee's employment shall terminate pursuant to
                           Paragraph 8(a) (Disability) or Paragraph 8(b) (death)
                           hereof; or

                  (b)      Employee shall terminate his employment as a result
                           of:

                           (i)      any failure to elect or reelect or to
                                    appoint or reappoint Employee to the
                                    position of President and CEO of Employer
                                    unless agreed to by Employee;

                           (ii)     any material change by Employer in
                                    Employee's function, duties, title,
                                    responsibility, importance, reporting
                                    relationship or scope from the position and
                                    attributes thereof described in Paragraph 3
                                    hereof, or any change to Employee's
                                    compensation other than as contemplated by
                                    Paragraph 4 hereof, unless agreed to by
                                    Employee, or any change in location of the
                                    principal offices of Employer outside the
                                    metropolitan Atlanta, Georgia, area, or any
                                    requirement that Employee perform
                                    substantially all of his duties outside the
                                    metropolitan Atlanta, Georgia, area (and any
                                    such material change or relocation of
                                    Employer or Employee shall be deemed a
                                    continuing breach of this Agreement);

                           (iii)    any failure by Employer to comply with
                                    Paragraphs 4 or 5 of this Agreement, unless
                                    agreed to by Employee;

                           (iv)     the liquidation, dissolution, consolidation
                                    or merger of Employer (other than a merger
                                    or other combination of Employer and an
                                    Affiliate); however, if a termination of
                                    employment results from events described in
                                    this clause (iv) and subsection (d) below,
                                    then such termination shall be deemed
                                    pursuant to subsection (d) below;

                           (v)      any other material breach of this Agreement
                                    by Employer which shall not be cured within
                                    thirty (30) days after receipt of written
                                    notice of same from Employee; or

                           (vi)     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


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                           custodian of Employer is filed, or Employer shall
                           seek a composition with creditors.

                  (c)      Employee's employment shall be terminated by Employer
                           for any reason other than for Cause or because
                           Employer elects not to extend this Agreement beyond
                           the Initial or any Renewal Term; or

                  (d)      If (i) Employer undergoes 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 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, and (a) Employee's employment
                           with Employer or Employer's successor-in-interest is
                           terminated by Employer or Employer's
                           successor-in-interest (as the case may be) or
                           Employee for any reason, or (b) Employee's employment
                           under this Agreement is not extended by Employer or
                           Employer's successor-in-interest for any Renewal
                           Term, and such termination or non-renewal occurs
                           within two (2) years after the closing of the
                           transaction which resulted in the change in control;
                           or

                  (e)      Employee shall terminate his employment as a result
                           of:

                           (i)      The failure of the Board of Directors to
                                    re-nominate Employee as a candidate for
                                    election to Employer's Board of Directors,
                                    unless agreed to by Employee; or

                           (ii)     any failure to appoint, elect or reelect
                                    Employee as Chairman of the Board promptly
                                    upon Chairman Robert J. Rutland no longer


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                                    holding such office, unless agreed to by
                                    Employee,

then Employer shall, depending upon the reason for the termination of Employee's
employment, immediately pay (in accordance with the terms of this Section 9) to
Employee an amount determined as follows:

         (x)      If the termination shall be pursuant to subparagraph (d)
                  above, the amount shall be equal to the sum of

                  (1)      three hundred percent (300%) of Employee's
                           then-effective annual Base Salary; and

                  (2)      three hundred percent (300%) of the Bonus, as
                           hereinafter defined.

                  In addition, Employer shall continue to provide to Employee
                  (except in the case of Employee's death), for a period equal
                  to the greater of (i) the remainder of the Term had not said
                  termination occurred, and (ii) three (3) years from said
                  termination, benefits, in both scope of coverage and value of
                  coverage which are in effect as of the date of such
                  termination, as are provided pursuant to Employer's group
                  health and hospitalization plan, group dental plan and group
                  base life insurance plan, and the benefits enumerated in
                  Paragraph 6(b) hereof.

         (y)      If the termination shall be other than pursuant to
                  subparagraph (d) or subparagraph (e) above, the amount shall
                  be equal to the sum of

                  (1)      that percentage of Employee's then-effective annual
                           Base Salary equal to the product of the number of
                           whole or partial years remaining in the Term and one
                           hundred (100); and

                  (2)      that percentage of Employee's then-effective Bonus,
                           as hereinafter defined, equal to the product of the
                           number of whole or partial years remaining in the
                           Term and one hundred (100);

                  provided, however, in no event shall the percentage in
                  subparagraphs (1) and (2) hereof be less than three hundred
                  percent (300%).

                  In addition, Employer shall continue to provide to Employee
                  (except in the case of Employee's death), for a period of
                  years equal to the number of whole or partial years remaining
                  in the Term, but in no event fewer than three (3) years,
                  benefits, in both scope of coverage and value of coverage
                  which are in effect as of the date of such termination, as are
                  provided pursuant to Employer's group health and
                  hospitalization plan, group dental plan and group base life
                  insurance plan, and the benefits enumerated in Paragraph 6(b)
                  hereof.

         (z)      If the termination shall be pursuant to subparagraph (e)
                  above, the amount shall be equal to three hundred percent
                  (300%) of Employee's then-effective annual Base Salary.


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         In addition, Employer shall continue to provide to Employee (except in
the case of Employee's death), for a period equal to the greater of (i) the
remainder of the Term had not said termination occurred, and (ii) three (3)
years from said termination, benefits, in both scope of coverage and value of
coverage which are in effect as of the date of such termination, as are provided
pursuant to Employer's group health and hospitalization plan, group dental plan
and group base life insurance plan, and the benefits enumerated in Paragraph
6(b) hereof.

         10.      OPERATIVE PROVISIONS

                  (a)      As used in this Agreement, the term "Bonus" shall
                           mean:

                           (i)      with respect to the most recent grant or
                                    award of restricted stock, pursuant to
                                    Employer's "Long Term Incentive Plan", made
                                    prior to the date of termination of
                                    Employee's employment, the Dollar value, as
                                    of the date of such grant or award, of the
                                    Long Term Incentive Plan restricted stock
                                    plan target for Employee as approved by the
                                    Compensation Committee of Employer's Board
                                    of Directors, which Dollar value is
                                    established by the Compensation Committee
                                    notwithstanding the number of shares
                                    actually received pursuant to such grant or
                                    award and notwithstanding the value of such
                                    shares actually received; plus

                           (ii)     the highest of the (A) the Annual Bonus
                                    actually paid to Employee in the preceding
                                    year; (B) the average of the Annual Bonuses
                                    actually paid to Employee in the two (2)
                                    preceding fiscal years if Employee has been
                                    employed for two (2) years; and (C) if
                                    Employee's employment is terminated (whether
                                    by Employer, Employer's successor in
                                    interest or Employee) following an event
                                    described in Section 9(d) hereof, the target
                                    amount of Employee's Annual Bonus for the
                                    year in which the termination of employment
                                    occurs.

                  (b)      In the event of a termination of employment pursuant
                           to Paragraph 9 hereof, all restricted stock awards of
                           Employee shall become wholly unrestricted and all
                           unvested stock options of Employee shall become
                           immediately and fully vested in Employee, and all
                           such agreements pertaining thereto shall be read
                           accordingly; provided, however, that Employee shall
                           have not have any such rights with respect to any
                           stock issued under any employee stock plan of
                           Employer qualifying under Section 402(a) et seq. of
                           the Code if, and to the extent, such rights would
                           jeopardize the qualification of such plan under said
                           Section. As used in the preceding sentence, "Code"
                           means the Internal Revenue Code of 1986 as amended
                           from time to time or any provisions from time to time
                           enacted and corresponding in substance thereto.


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<PAGE>   11

                  (c)      Paragraph 9 and this Paragraph 10 shall survive the
                           termination of this Agreement, and this Agreement
                           shall be read accordingly.

         11.      INTENTION OF PARTIES. It is the express understanding and
intention of Employer and Employee that the provisions of Paragraph 5 and
Paragraph 9 hereof shall be read together and be non-exclusive so that, in the
event of a termination of Employee's employment pursuant to Paragraph 9 of this
Employment Agreement, Employee shall receive: both all of the compensation
specified in Paragraph 9 hereof (including, but not limited to, the applicable
percentage of Employee's then-effective Base Salary and the applicable
percentage of the cash portion of Employee's Bonus) and one hundred percent
(100%) of the pro rata portion of both the cash and equity parts of Employee's
Bonus based on the number of days in the fiscal year falling within the Term
(which shall include the amount of any Annual Bonus paid to Employee during that
year, if any), but such pro rata portion shall not be less than the highest of
(i) the Annual Bonus actually paid to Employee in the preceding year; (ii) the
average of the Annual Bonuses actually paid to Employee in the two (2) preceding
fiscal years if Employee has been employed for two (2) years; and (iii) if
Employee's employment is terminated (whether by Employer, Employer's successor
in interest or Employee) following an event described in Section 9(d) hereof,
the target amount of Employee's Annual Bonus for the year in which the
termination of employment occurs.

         The amounts referred to in this Paragraph are in addition to the
insurance and other benefits enumerated in Paragraphs 9(x), 9(y) and 9(z)
hereof, if applicable. In no event shall Employee be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to Employee under any of the provisions of this Agreement. Any severance
benefits payable to Employee shall not be subject to reduction for any
compensation received from other employment.

         12.      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
(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.

         Employer and Employee recognize that, during the course of Employee's
term of employment with Employer pursuant to this Agreement, Employee shall
contact, solicit or approach Employer's and the Affiliates' customers and
prospective customers (the "Customers") on behalf of Employer.

         To protect Employer from Employee's solicitation of business from
Customers during the Restricted Period, Employee agrees that, subject to
Paragraph 16 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 from any Customer with whom the Employee had contact during the twelve
(12) month period


                                       36
<PAGE>   12

immediately preceding the termination of Employee's employment. This Paragraph
12 shall, except as otherwise provided in this Agreement, survive the
termination of this Agreement.

         13.      COVENANT NOT-TO-DISCLOSE. Employer and Employee recognize
that, during the course of Employee's term of employment with Employer pursuant
to this Agreement, Employer will disclose to Employee information concerning
Employer and the Affiliates, their products, their customers, their services,
their trade secrets, their proprietary information and other information
concerning their business all of which constitute valuable assets of Employer
and the Affiliates. Employer and Employee further acknowledge that Employer has,
and will, invest considerable amounts of time, effort and corporate resources in
developing such valuable assets and that disclosure by Employee of such assets
to the public shall cause irreparable harm, damage and loss to Employer and the
Affiliates.

                  (a)      To protect these assets, Employee agrees that he
                           shall not, during the Restricted Period, advise or
                           disclose to any person, corporation, firm,
                           partnership or other entity whatsoever (except
                           Employer or an Affiliate), or any officer, director,
                           stockholder, partner or associate of any such
                           corporation, firm, partnership or entity any
                           information received from Employer by Employee during
                           the course of Employee's association with Employer
                           relating to the business affairs of Employer and the
                           Affiliates including information concerning
                           Employer's and the Affiliates' finances, services,
                           customers, customer lists, prospective customers,
                           staff, contemplated acquisitions (whether of business
                           or assets), ideas, proprietary information, methods,
                           marketing investigations, surveys, research and any
                           other information relating to the business and
                           objectives of Employer and the Affiliates, except as
                           permitted by this Paragraph 13.

                  (b)      Employee further agrees that he shall not, during the
                           term of his employment or any time thereafter, advise
                           or disclose to any person or entity any trade secret
                           which Employer or any Affiliate has disclosed to
                           Employee during the course of his employment with
                           Employer.

                  (c)      In the event Employee's employment is terminated,
                           Employee agrees that, if requested by Employer, he
                           will acknowledge in writing that he received the
                           disclosures referred to herein and is under the
                           obligations referred to in this Agreement.

                  (d)      This Paragraph 13 shall, except as otherwise provided
                           in this Agreement, survive the termination of this
                           Agreement.

         Any implication in this Paragraph 13 to the contrary notwithstanding,
this Paragraph 13 hereof shall not, and shall not be deemed to, prohibit
Employee from disclosing information regarding Employer that (i) is already
public information other than because of any breach of this Paragraph 13 by
Employee; (ii) shall be required by applicable Federal or state laws; (iii)
shall not be confidential or proprietary and shall be required in the ordinary
course of business; (iv) shall be required pursuant to the order of any court or
administrative agency having jurisdiction; provided, however, that the foregoing
shall not permit the disclosure of any trade secret of Employer; and (v) during
the course of Employee's employment with Employer disclosure of any


                                       37
<PAGE>   13

of the foregoing as reasonably required by Employee in the good faith
performance of his duties under this Agreement.

         14.      COVENANT NOT-TO-INDUCE. Employee covenants and agrees that
during the Restricted Period, he will not, directly or indirectly, on his 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 14 shall, except as
otherwise provided in this Agreement, survive the termination of this Agreement.

         15.      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 his duties hereunder. In addition, following
termination of his 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 Section 15 shall survive the termination of this
Agreement.

         16.      COVENANT NOT TO COMPETE. Employer and Employee acknowledge
that, by virtue of Employee's responsibilities and authority as President and
Chief Executive Officer of Employer, he will, during the course of his
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 this information, Employee agrees that he shall not, for a period of
twelve (12) months from the date of termination of this Agreement for any
reason, (i) perform substantially similar job duties or functions as those
performed for Employer under this Agreement for any entity engaged in the
Business in the United States of America (the "Restricted Territory"), or (ii)
directly or indirectly, own, manage, join, control, contract with, be employed
by, act in the capacity of an officer, director, trustee, shareholder or partner
or consultant, or participate in any manner in the ownership, management,
operation, or control of any business or person engaged in the Business in the
Restricted Territory wherein Employee would perform substantially similar duties
or job functions as those performed for Employer under this Agreement; provided,
however, Employee shall be permitted to own not more than five percent (5%) of
the stock of a corporation required to file reports pursuant to the Securities
Exchange Act of 1934. As to the foregoing, Employee acknowledges that he has the
ability to earn a comparable income within or without the Restricted Territory
as a manager or executive for persons or entities not engaged in the Business
and that earning a livelihood by working for persons or entities not engaged in
the Business within or without the Restricted Territory would not constitute a
hardship or an


                                       38
<PAGE>   14

unreasonable restriction on the Employee or restrict him from earning comparable
income. This Section 16 shall survive termination of this Agreement.

         17.      PARAMOUNT PROVISION. Anything in this Agreement to the
contrary notwithstanding, the provisions of Paragraph 12, Paragraph 13(a),
Paragraph 13(c), Paragraph 14 and Paragraph 16 hereof shall not apply to
Employee, and shall be absolutely null and void, in the event Employee shall
terminate his employment hereunder for any one of the reasons set forth in
Paragraph 9(b) hereof.


         18.      SPECIFIC ENFORCEMENT. Employer and Employee expressly agree
that a violation of the covenants not-to-solicit, not-to-disclose, not-to-induce
and not-to-compete contained in Paragraphs 12, 13, 14 and 16 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 12, 13, 14 and 16 hereof.

         19.      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 12, 13, 14 and 16 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 12, 13, 14
and 16 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.

         20.      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.

         21.      OTHER TAX CONSIDERATIONS. Notwithstanding any other provision
of this Agreement or any other plan, agreement or arrangement applicable to
Employee to the contrary, in the event that (1) any portion of the aggregate
payments and benefits received or to be received by Employee pursuant to the
terms of this Agreement or any other plan, arrangement or agreement with
Employer or any Affiliate of Employer which are contingent on a change of
ownership or effective control of Employer or an Affiliate or a change in the
ownership of a substantial portion of the assets of Employer or an Affiliate (in
each case, within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code")) (hereinafter, all such payments and benefits
being sometimes referred to as "Total Payments") would constitute a "parachute
payment", as defined in Code Section 280G(b)(2), and (2) the amount of such
parachute payment that Employee would receive after deduction of all excise
taxes payable by the Employee under Section 4999 of the Code with respect to any
portion of such Total Payments constituting an "excess parachute payment"
(within the meaning of Section 280(G) of the Code) would be less than 299
percent of Employee's "base amount" (as defined in Code Section


                                       39
<PAGE>   15

280G(b)(3), then, but only then, Employee's right to the portion of such Total
Payments otherwise constituting a "parachute payment" shall automatically be
reduced so that the aggregate of the applicable values thereof for purposes of
Code Section 280(G) shall be equal to 299 percent of the Employee's "base
amount" by reducing] to the extent necessary (A) first the cash portion of the
Total Payments otherwise constituting a "parachute payment" (if necessary, to
zero (0)), and (B) then] all other non-cash Total Payments otherwise
constituting a "parachute payment" (if necessary, to zero (0)); provided that,
in making any such determination as to the application and effect of this
Paragraph 21 on any payments or benefits received or to be received by Employee,
(i) no portion of the Total Payments shall be taken into account which does not
constitute a "parachute payment" within the meaning of Section 280G(b)(2) of the
Code, including by reason of Section 280G(b)(4)(A) of the Code; and (ii) the
value of any non-cash benefit or any deferred payment or benefit included in the
Total Payments otherwise constituting a "parachute payment" shall be determined
in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.

         22.      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.

         23.      D & O INSURANCE; INDEMNIFICATION. Employer shall maintain, for
the benefit of Employee, director and office liability insurance in form at east
as comprehensive as, and in an amount that is at least equal to, that maintained
by Employer on the Effective Date; provided, however, that Employer's Board of
Directors 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
and/or any Affiliate of Employer to the same extent as other officers and
directors of Employer and/or any Affiliate in accordance with the constituent
and organizational documents of such entities and consistent with applicable
law. Employee's rights under this Section 23 shall continue so long as he may be
subject to such liability, whether or not this Agreement may have been
terminated prior hereto.

         24.      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
his 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.

         25.      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.


                                       40
<PAGE>   16

                  (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.

         26.      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

                  With a copy to:

                           Cohen Pollock Merlin Axelrod & Small, P.C.
                           2100 RiverEdge Parkway, Suite 300
                           Atlanta, Georgia 30328-4656
                           Attn:  Elliott Cohen, Esquire

                  If to Employee at:

                           3800 Falls Landing Drive
                           Alpharetta, Georgia 30022

           With a copy to:

                           Smith, Gambrell & Russell, LLP
                           1230 Peachtree Street, N.E.
                           Suite 3100
                           Atlanta, Georgia 30309
                           Attn: John R. Schneider, Esquire

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.


                                       41
<PAGE>   17

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

         28.      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.

         29.      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.

         30.      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.

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


                                                      (SEAL)
-------------------------       ---------------------
WITNESS                         HUGH E. SAWYER



ATTEST:                         ALLIED HOLDINGS, INC.


By:                             By:
   ----------------------          ------------------------
   Its          Secretary          Its             Chairman
       --------                        ------------


  [CORPORATE SEAL]


                                       42