Document:

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                                                                   EXHIBIT 10.4

                              EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT is made and entered into as of the 23rd day
of February, 2000, by and between ROBERT J. RUTLAND ("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 (the "Business");

         WHEREAS, Employee has a number of years of experience in said industry
and in addition to having management skills of which Employer desires to avail
itself, Employee has established numerous contacts and relationships with
customers, potential customers and suppliers of Employer and the Affiliates,
which contacts and relationships are of great value to Employer;

         WHEREAS, Employer and Employee have made and entered into a previous
employment agreement, as well as clarifications and amendments thereto; and

         WHEREAS, Employer and Employee deem it to their respective best
interest to clarify the duties and obligations, each to the other, by executing
this new 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 that all previous employment agreements, and all
clarifications and amendments thereto, are superseded, null, void, and of no
further force and effect, and Employer and Employee further 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.

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                  (c)      "Cause" means (i) the commission by Employee of an
                           act constituting a felony and Employee's conviction
                           thereof; (ii) Employee's prolonged absence, without
                           the consent of Employer, other than as a result of
                           Employee's Disability or permitted absence or
                           vacation; (iii) conduct of Employee which amounts to
                           fraud, dishonesty, gross or willful neglect of
                           duties; or (iv) engaging in activities prohibited by
                           Paragraphs 12, 13 or 14 hereof.

                  (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 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), 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.

                  (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.

                  (f)      "Term" means the Initial Term and any Renewal Term
                           (each as defined in Paragraph 2 hereof); provided,
                           however, that, in the event Employee's employment
                           shall terminate by reason of the applicability of
                           Paragraph 8 hereof then, in such event, the "Term"
                           shall end upon the termination of Employee's
                           employment.

         2.       TERM. Subject to the provisions hereinafter set forth, the
Term of this Agreement shall commence as of the date hereof and shall end on
that date five (5) years after such date (the "Initial Term"). Upon the
expiration of the Initial Term, and on the expiration of each successive
Renewal Term (as hereinafter defined), Employee's

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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.

         3.       DUTIES.

                  (a)      Employee shall, during the Term, serve as Chairman
                           of the Board of Employer, at the direction of the
                           Board of Directors of Employer. Employee's principal
                           duties shall be such executive, managerial and
                           administrative duties as the Board of Directors of
                           Employer may, from time to time, reasonably request.

                  (b)      During the Term, Employee shall devote substantially
                           all of his 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.

         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 Four Hundred Thousand
                           Dollars ($400,000.00), adjusted as provided in
                           subparagraph (b) below, 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 January 1, 2001, and as of each
                           January 1st thereafter during the Term, the annual
                           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, 2001, the
                           difference will be between said Index as of December
                           1, 2000 compared to said Index as of December 1,
                           1999.)

         5.       BONUS COMPENSATION. Employee shall, with respect to each
calendar year of Employer ending during the Term, be entitled to participate in
the Allied Holdings, Inc. EVA Based Incentive Plan (as from time to time
amended and in effect), to the extent and on such terms and conditions as shall
from time to time be determined by the Board of Directors of Allied Holdings,
Inc.; and to receive an annual bonus, if any, calculated pursuant thereto.

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

                  (a)      Employee shall be elected to a seat on the Board of
                           Directors of Employer but shall not, however, be
                           entitled to any additional compensation for such
                           service;

                  (b)      Employee shall be entitled to participate in all
                           group medical and hospitalization benefit programs,
                           dental care, sick leave, life insurance or other
                           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;

                  (c)      Employee shall be provided with the use of
                           automobiles at least comparable to any automobile
                           currently provided to Employee, and Employer shall
                           pay for the cost of all insurance, ad valorem taxes
                           and tag charges for such automobile and all
                           operating and maintenance charges for such
                           automobile;

                  (d)      Employee shall be provided with the use of a car or
                           mobile telephone, at no cost to Employee;

                  (e)      Employer shall reimburse Employee for dues paid by
                           Employee for membership in such professional
                           organizations and eating clubs as

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                           shall, from time to time, be deemed appropriate and
                           necessary by Employee; and

                  (f)      Employee shall, at all times, have available to him
                           an expense account to defray 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, which approval shall not be
                           unreasonably withheld or delayed.

         The benefits described in subparagraph (b) 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 five (5) weeks of paid
vacation for each year during the Term. Scheduling of vacation shall be subject
to the prior approval of Employer (which approval shall not be unreasonably
withheld). Vacation time shall not accrue, and in the event any vacation time
for any year shall not be used by Employee prior to the end of such year, 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)      Employee's materially breaching this Agreement by
                           the non-performance or non-observance of any
                           material term or condition of this Agreement, which
                           breach shall not be corrected within forty-five (45)
                           days after receipt of written notice of same from
                           Employer; or

                  (d)      Employer's sending Employee written notice
                           terminating his employment hereunder prior to
                           expiration of the Term in accordance with Paragraph
                           2 hereof; or

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                  (e)      Employee's voluntarily terminating his employment
                           with Employer prior to the expiration of the Term;
                           or

                  (f)      Employee's 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 Chairman of the Board of
                                    Directors of Employer unless agreed to by
                                    Employee;

                           (ii)     any material change by Employer in
                                    Employee's function, duties,
                                    responsibility, importance, or scope from
                                    the position and attributes thereof
                                    described in Paragraph 3 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)    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 subsection (iii) and in subsection (d)
                                    below, then such termination shall be
                                    deemed to be pursuant to subsection (d)
                                    below;

                           (iv)     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;

                           (v)      Employer filing a petition for protection
                                    or relief from creditors under the federal
                                    bankruptcy law, or any petition shall be
                                    filed against Employer under the federal
                                    bankruptcy law, or Employer shall admit in
                                    writing its inability to pay its debts or
                                    shall make an assignment for the benefit of
                                    creditors, or a petition or application for
                                    the appointment of a receiver or liquidator
                                    or custodian of Employer is filed, or
                                    Employer shall seek a composition with
                                    creditors; or

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                  (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,

then Employer shall, depending upon the reason for the termination of
Employee's employment, immediately pay in cash 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

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                  (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, the benefits enumerated in Paragraphs 6(b) and
                  6(c) hereof.

         (y)      If the termination shall be other than pursuant to
                  subparagraph (d) 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, the
                  benefits enumerated in Paragraphs 6(b) and 6(c) 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

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                           (ii)     the highest of (1) the average of the EVA
                                    bonuses actually paid to Employee for the
                                    two (2) years immediately preceding the
                                    year in which termination of employment
                                    occurs; (2) the average of the EVA bonuses
                                    which would have been paid to Employee for
                                    the two (2) years immediately preceding the
                                    year in which termination of employment
                                    occurs, assuming his EVA target bonus had
                                    been achieved for each such year; or (3)
                                    the amount of the EVA target bonus for
                                    Employee for the year in which 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
                           fully vested in Employee, and all such agreements
                           pertaining thereto shall be read accordingly;
                           provided, however, that Employee shall 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.

                  (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 (i) 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 (ii) 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 EVA bonus paid to Employee
during that year, if any), but in no event shall such pro rata portion be less
than the pro rata share of the highest of (i) the average of the EVA bonuses
actually paid to Employee for the two (2) years immediately preceding the year
in which termination of employment occurs; (ii) the average of the EVA bonuses
which would have been paid to Employee for the two (2) years immediately
preceding the year in which termination of employment occurs, assuming his EVA
target bonus had been achieved for each such year; or (iii) the amount of the
EVA target bonus for Employee for the year in which

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termination of employment occurs. The amounts referred to in this Paragraph are
in addition to the benefits enumerated in Paragraphs 6(b) and 6(c) hereof.

         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 on behalf of Employer. Employer and Employee further
acknowledge that Employee has and shall, during his term of employment with
Employer, solicit business for Employer and the Affiliates from the customers
listed on EXHIBIT A attached hereto and made a part hereof (collectively, the
"Restricted Customers").

         To protect Employer from Employee's solicitation of business from such
customers during the Restricted Period, Employee agrees that, subject to
Paragraph 15 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
transportation of automobiles and light trucks from manufacturers to retailers,
solicit business from any Restricted Customer. 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

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                           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 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; and (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.

         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, hire, solicit, take away or
attempt to hire, solicit or take away an employee or other personnel of
Employer and the Affiliates. This Paragraph 14 shall, except as otherwise
provided in this Agreement, survive the termination of this Agreement.

         15.      PARAMOUNT PROVISION. Anything in this Agreement to the
contrary notwithstanding, the provisions of Paragraph 12 and Paragraphs 13(a)
and 13(c) 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.

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

         17.      SEVERABILITY. In the event any provision of this Agreement
shall be found to be void, the remaining provisions of this Agreement shall
nevertheless be binding with the same effect as though the void part were
deleted; provided, however, if Paragraphs 12, 13 and 14 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
and 14 as each are separate and distinct, so that the invalidity of any one or
more of said covenants shall not affect the enforceability and validity of the
other covenants.

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

         19.      OTHER TAX CONSIDERATIONS. Notwithstanding any other provision
of this Agreement to the contrary, in the event that any payment or benefit
received or to be received by Employee is triggered by an event described in
subparagraph (d) of Paragraph 9 of this Agreement, whether such payment or
benefit is pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with Employer or any Affiliate of Employer
(hereinafter, all such payments and benefits being sometimes referred to as
"Total Payments"), and would not be deductible, either in whole or in part, by
Employer or an Affiliate making such payment or providing such benefit as a
result of Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code"), then, to the extent necessary to make such portion of the Total
Payments deductible (and after taking into account any reduction in the Total
Payments provided by reason of Section 280G of the Code in any such other plan,
arrangement or agreement), (A) the cash portion of the Total Payments provided
in this Paragraph 19 shall first be reduced (if necessary, to zero (0)), and
(B) all other non-cash Total Payments under this Paragraph 19 shall next be
reduced (if necessary, to zero (0)); provided, however, that the Employee's
payment shall only be reduced by this Paragraph 19 if Employer determines that
reducing the Total Payments would result in greater after-tax proceeds to the
Employee than if no such reduction in Total Payments had occurred. Any
determination required by the preceding sentence shall be made by independent
certified public accountants or tax counsel (hereinafter, such party shall
sometimes be hereinafter referred to as the "Independent Adviser") selected by
Employer, the

                                      12

<PAGE>

selection of which shall be reasonably acceptable to Employee. In making
Employer's determination as to the application and effect of this Paragraph 19
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 in the opinion
of the Independent Adviser 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; (ii) those Total Payments provided under this
Paragraph 19 shall be reduced only to the extent necessary so that the Total
Payments (other than those referred to in clause (i)) in their entirety
constitute reasonable compensation for services actually rendered within the
meaning of Section 280G(b)(4)(B) of the Code or are otherwise not subject to
disallowance as deductions, in the opinion of the Independent Adviser; and
(iii) the value of any non-cash benefit or any deferred payment or benefit
included in the Total Payments shall be determined by the Company's independent
certified public accountants in accordance with the principles of Sections
280G(d)(3) and (4) of the Code.

         20.      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.

         21.      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.

         22.      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.

                  (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.

         23.      NOTICES. All notices required herein shall be in writing and
shall be deemed to have been given when delivered personally or when deposited
in the U.S. Mail, certified or registered, postage prepaid, return receipt
requested, addressed as follows, to wit:

                                      13

<PAGE>

                  If to Employer at:

                           160 Clairemont Avenue, Suite 200
                           Decatur, Georgia  30030

                  With a copy to:

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

                  If to Employee at:

                           2121 Floyd Street
                           Covington, Georgia 30014

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.

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

         25.      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.

         26.      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.

         27.      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.

                           [SIGNATURE PAGE TO FOLLOW]

                                      14

<PAGE>

         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                                ROBERT J. RUTLAND

ATTEST:                                ALLIED HOLDINGS, INC.

By:                                    By:
   ----------------------------           --------------------------------------
   Its                 Secretary          Its                  President
      -----------------                      ------------------

      [CORPORATE SEAL]

                                      15<PAGE>

                                                                   EXHIBIT 10.5

                              EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT is made and entered into as of the 22nd day
of May, 2000, by and between JACK GROSS ("Employee"), AXIS GROUP, INC., a
Georgia corporation ("Employer"), and ALLIED HOLDINGS, INC., a Georgia
corporation ("Allied").

                                   WITNESSETH

         WHEREAS, Employer, through the Affiliates (as hereinafter defined), is
engaged, within and without the United States, in inter alia, (i) the business
of transporting automobiles and light trucks from the manufacturer to retailers
and related activities (the "Transportation Business"); and (ii) the logistics
business in connection with automobiles and light trucks (the "Logistics
Business") (hereinafter the Transportation Business and the Logistics Business
are sometimes referred to, individually, as a "Business" and, collectively, as
the "Businesses"); and

         WHEREAS, Employee has a number of years of experience in the Logistics
Business and in addition to having management skills of which Employer desires
to avail itself, Employee has established numerous contacts and relationships
with customers, potential customers and suppliers of Employer and the
Affiliates, which contacts and relationships are of great value to Employer;

         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,
Employee and Allied hereby mutually agree as follows:

         1.       DEFINITIONS.

                  (a)      "Affiliate" means any corporation, partnership or
                           other entity of which Employer or Allied owns at
                           least eighty percent (80%) of the outstanding equity
                           and voting rights directly or indirectly through any
                           other corporation, partnership or other entity.

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

                  (c)      "Cause" means (i) the commission by Employee of an
                           act constituting a felony and Employee's conviction
                           thereof; (ii) Employee's prolonged absence, without
                           the consent of Employer, other than as a result of
                           Employee's Disability or permitted absence or
                           vacation; (iii) conduct of Employee which amounts to
                           fraud, dishonesty, gross or willful neglect of
                           duties; or (iv) engaging in activities prohibited by
                           Paragraphs 13, 14 or 15 hereof.

                  (d)      "Disability" shall conclusively be deemed to have
                           occurred with respect to Employee (i) if Employee
                           shall be receiving payments pursuant to a policy of
                           long-term disability income insurance; (ii) if
                           Employee shall have no long-

<PAGE>

                           term disability income coverage then in force and
                           any insurance company insuring Employee's life shall
                           agree to waive the premiums due on such policy
                           pursuant to a long-term disability waiver of premium
                           provision in the contract of life insurance; or
                           (iii) if Employee shall have no long-term disability
                           waiver of premium provision in any contract of life
                           insurance, then if Employee shall be receiving
                           long-term 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), 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.

                  (e)      "Restricted Period" means the period commencing as
                           of the date hereof and ending on that date one (1)
                           year after the termination of Employee's employment
                           with Employer for any reason, whether voluntary or
                           involuntary.

                  (f)      "Term" means the Initial Term and any Renewal Term
                           (each as defined in Paragraph 2 hereof); provided,
                           however, that, in the event Employee's employment
                           shall terminate by reason of the applicability of
                           Paragraph 8 hereof then, in such event, the "Term"
                           shall end upon the termination of Employee's
                           employment.

         2.       TERM. Subject to the provisions hereinafter set forth, the
Term of this Agreement shall commence as of the date hereof and shall end on
December 31, 2001 (the "Initial Term"). Upon the expiration of the Initial
Term, and on the expiration of each successive Renewal Term (as hereinafter
defined), Employee's employment shall be automatically renewed for an
additional term of one (1) years (the "Renewal Term(s)"), unless written
notification of termination is given by either party to the other party not
less than three (3) months prior to the expiration of the Initial Term or, as
the case may be, the then-current Renewal Term.

         3.       DUTIES.

                  (a)      Employee shall, during the Term, serve as President
                           of Employer. Employee's principal duties shall be to
                           perform such executive, managerial and
                           administrative duties as the Chairman and Board of
                           Directors of Employer may, from time to time,
                           reasonably request as are consistent with the
                           position of President.

                                       2

<PAGE>

                  (b)      Subject to the preceding subparagraph, during the
                           Term, Employee shall devote substantially all of his
                           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, with Employer's
                           consent, (1) 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 (2) serve as an officer or director
                           of, or otherwise participate in, educational,
                           welfare, social, religious, civic, trade and
                           industry-related organizations.

         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 Two Hundred Fifty
                           Thousand Dollars ($250,000.00), payable 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 and, in the sole discretion of the
                           Board of Directors, may be increased, but not
                           decreased.

         5.       BONUS COMPENSATION. Employee shall, with respect to each
calendar year of Employer ending during the Term, be entitled to participate in
the Allied Holdings, Inc. EVA Based Incentive Plan, as the same may be from
time to time amended and in effect (the "EVA Plan"). The Employee's Target
Bonus for purposes of the EVA Plan shall be such percentage of Employee's Base
Salary as shall, from time to time, be determined by Employer. Employee's
actual bonus shall be calculated in accordance with the terms of the EVA Plan.
Employee shall be provided with a copy of the EVA Plan within thirty (30) days
of execution of this Agreement.

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

                  (a)      Employee shall be entitled to participate in all
                           group medical and hospitalization benefit programs,
                           dental care, sick leave, life insurance or other
                           benefit plans for highly compensated employees of
                           Employer or any Affiliate 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.

                                       3

<PAGE>

                  (b)      Employee shall be entitled to participate in all
                           long term incentive plans, stock option plans and
                           other similar 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.

                  (c)      Employee shall be provided with the use of an
                           automobile, which shall be comparable to other
                           automobiles Allied provides to persons serving in
                           the capacity of President of an Allied subsidiary,
                           and which shall be chosen by Employee from a list of
                           automobiles Allied typically makes available to its
                           Presidents of its subsidiaries and Employer shall
                           pay for the cost of all insurance, ad valorem taxes
                           and tag charges for such automobile and all
                           operating and maintenance charges for such
                           automobile. In addition, Employee shall be entitled
                           to an automobile allowance for his spouse comparable
                           to the spousal allowance Allied provides to persons
                           serving in the capacity of President of a
                           subsidiary, as determined from time to time by the
                           Board of Directors of Allied.

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

                  (e)      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.

                  (f)      Employee shall, at all times, have available to him
                           an expense account, including the use of a corporate
                           American Express card, to defray 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, which
                           approval shall not be unreasonably withheld or
                           delayed.

         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 no fewer than three (3)
weeks of paid vacation for each year during the Term. Scheduling of vacation
shall be subject to the prior approval of Employer (which approval shall not be
unreasonably withheld). Vacation time shall not accrue, and

                                       4

<PAGE>

in the event Employee prior to the end of any year shall not use all of his
vacation time for such year, such vacation time 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;

                  (b)      Employee's death;

                  (c)      Employee's materially breaching this Agreement by
                           the non-performance or non-observance of any
                           material term or condition of this Agreement, which
                           breach shall not be corrected within forty-five (45)
                           days after receipt of written notice of same from
                           Employer;

                  (d)      Employer's sending Employee written notice
                           terminating his employment hereunder prior to the
                           expiration of the Initial Term or any Renewal Term
                           in accordance with Paragraph 2 hereof;

                  (e)      Employee's voluntarily terminating his employment
                           hereunder prior to the expiration of the Initial
                           Term or any Renewal Term; or

                  (f)      Employee's being terminated for Cause.

         9.       TERMINATION PAYMENT. Subject to the provisions of Paragraph
12 hereof, 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 of Employer unless
                                    agreed to by Employee;

                           (ii)     any material change by Employer in
                                    Employee's function, duties,
                                    responsibility, importance, or scope from
                                    the position and attributes thereof
                                    described in Paragraph 3 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);

                                       5

<PAGE>

                           (iii)    the liquidation, dissolution, consolidation
                                    or merger of Employer or Allied (other than
                                    a merger or other combination of Employer
                                    and Allied or Employer and an Affiliate);
                                    provided, however, that if there shall be a
                                    termination of employment resulting from
                                    events described in this subsection (iii)
                                    and in subsection (d) below, then such
                                    termination shall be deemed to fall within
                                    the terms of subsection (d) below which
                                    shall control and be paramount;

                           (iv)     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;

                           (v)      Employer or Allied filing a petition for
                                    protection or relief from creditors under
                                    the federal bankruptcy law, or any petition
                                    shall be filed against Employer or Allied
                                    under the federal bankruptcy law, or
                                    Employer or Allied shall admit in writing
                                    its inability to pay its debts or shall
                                    make an assignment for the benefit of
                                    creditors, or a petition or application for
                                    the appointment of a receiver or liquidator
                                    or custodian of Employer or Allied is
                                    filed, or Employer or Allied shall seek a
                                    composition with creditors; or

                  (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 or Allied undergoes any change in
                           control or ownership whereby Employer or Allied 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 Allied or any other entity
                           into which Employer or Allied 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 or
                           Allied 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 or Allied'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") of Allied cease for any reason to
                           constitute at least two-thirds (2/3) of the

                                       6

<PAGE>

                           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,

then Employer shall, depending upon the reason for the termination of
Employee's employment, immediately pay in cash 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 Employee's
                           then-effective Bonus, as hereinafter defined.

         In addition, Employer shall continue to provide to Employee (except in
         the case of Employee's death), for a period of three (3) years from
         said termination, the benefits enumerated in Paragraph 6(a) and
         Paragraph 6(c) hereof.

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

                  (1)      two hundred percent (200%) of Employee's
                           then-effective annual Base Salary; and

                  (2)      two hundred percent (200%) of Employee's
                           then-effective Bonus, as hereinafter defined.

         In addition, Employer shall continue to provide to Employee (except in
         the case of Employee's death), for a period of two (2) years from said
         termination, the benefits enumerated in Paragraph 6(a) and Paragraph
         6(c) hereof.

         10.      OPERATIVE PROVISIONS.

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

                                       7

<PAGE>

                           (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 (1) the average of the EVA
                                    bonuses actually paid to Employee for the
                                    two (2) years immediately preceding the
                                    year in which termination of employment
                                    occurs; (2) the average of the EVA bonuses
                                    which would have been paid to Employee for
                                    the two (2) years immediately preceding the
                                    year in which termination of employment
                                    occurs, assuming his EVA target bonus had
                                    been achieved for each such year; or (3)
                                    the amount of the EVA target bonus for
                                    Employee for the year in which 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
                           fully vested in Employee, and all such agreements
                           pertaining thereto shall be read accordingly;
                           provided, however, that Employee shall 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.

                  (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 (i) 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 (ii) 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 EVA bonus paid to Employee
during that

                                       8
<PAGE>

year, if any), but in no event shall such pro rata portion be less than the
pro rata share of the highest of (i) the average of the EVA bonuses actually
paid to Employee for the two (2) years immediately preceding the year in which
termination of employment occurs; (ii) the average of the EVA bonuses which
would have been paid to Employee for the two (2) years immediately preceding
the year in which termination of employment occurs, assuming his EVA target
bonus had been achieved for each such year; or (iii) the amount of the EVA
target bonus for Employee for the year in which termination of employment
occurs. The amounts referred to in this Paragraph are in addition to the
benefits enumerated in Paragraphs 6(b) and 6(c) hereof.

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

                  (a)      To receive the benefits enumerated in Paragraph 9
                           hereof, Employee shall execute and agree to be bound
                           by a release agreement substantially in the form
                           attached to this Agreement as Exhibit A and, to the
                           extent applicable, a resignation letter
                           substantially in the form attached as Exhibit B,
                           prior to, and as a condition to, receiving any
                           payments or benefits provided for in Paragraph 9
                           hereof or otherwise following termination of his
                           employment hereunder [and, if applicable, the
                           release agreement may contain provisions required by
                           federal, state or local law (e.g., the Older
                           Worker's Benefit Protection Act) to effect a general
                           release of all claims].

                  (b)      Employee's right to receive any of the benefits
                           provided for in Paragraph 9 or otherwise in this
                           Agreement following termination of his employment
                           hereunder shall immediately cease and be of no
                           further force or effect if Employee violates any of
                           the covenants contained in Paragraphs 13, 14, 15 or
                           16 hereof.

         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

                                       9

<PAGE>

                           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 Exhibit C hereof.

                  (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.

         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, hire, solicit, take away or
attempt to hire, solicit or take away any employee or other personnel of
Employer and the Affiliates. 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 of this
Agreement make any remarks disparaging the conduct or character of Employer or
the Affiliates or any of Employer's or the Affiliates' current or former
agents, employees, officers, directors, successors or assigns (collectively the
"Related Companies"). In addition, Employee agrees to cooperate with the
Related Companies, 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 expenses approved by Employer or the Affiliates incurred in
providing such assistance. This Paragraph 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, he shall, during
the course of his Employment, be instrumental in developing, and receive highly
confidential information concerning, Employer and the Affiliates, their
customers, their services, their trade secrets, their proprietary information
and other information concerning the Logistics Business, much of which will be
unavailable to those in positions 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

                                      10

<PAGE>

Employee's using or exploiting this information, Employee agrees that, if the
employment relationship between Employee and Employer terminates for any reason
whatsoever other than termination by Employer without Cause, then, in such
event, for a period of one (1) year from the date of Employee's termination of
employment, Employee shall not engage in the Logistics Business in the
Restricted Territory, and Employee shall not 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 Logistics Business in the Restricted
Territory; 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 in other than the Logistics Business and that
earning a livelihood outside the Logistics Business within or without the
Restricted Territory would not constitute a hardship or an unreasonable
restriction on the Employee or restrict him from earning comparable income.

         Employee acknowledges that the area in which the Employer engages in
the Logistics Business shall geographically increase under the leadership of
Employee and that, as such increase occurs in such new areas, it is necessary
for the interests of the Employer to be protected in them. Accordingly,
Employee acknowledges and agrees that, upon receipt of consideration from
Employer in the sum of One Hundred Dollars ($100.00), in each case, he shall,
at any time and from time to time, execute an amendment to this Agreement
amending the definition of Restricted Territory to include such new areas. This
Paragraph 16 shall survive the termination of this Agreement.

         17.      SPECIFIC ENFORCEMENT. Employer and Employee expressly agree
that a violation of the covenants not-to-disclose, not-to-induce,
not-to-disparage and not-to-compete contained in Paragraphs 13, 14, 15 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 13, 14, 15 and 16
hereof.

         18.      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 13, 14, 15 and 16 hereof 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 13, 14, 15 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.

         19.      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.

                                      11

<PAGE>

         20.      OTHER TAX CONSIDERATIONS. Notwithstanding any other provision
of this Agreement to the contrary, in the event that any payment or benefit
received or to be received by Employee is triggered by an event described in
subparagraph (d) of Paragraph 9 of this Agreement, whether such payment or
benefit is pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with Employer or any Affiliate of Employer
(hereinafter, all such payments and benefits being sometimes referred to as
"Total Payments"), and would not be deductible, either in whole or in part, by
Employer or an Affiliate making such payment or providing such benefit as a
result of Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code"), then, to the extent necessary to make such portion of the Total
Payments deductible (and after taking into account any reduction in the Total
Payments provided by reason of Section 280G of the Code in any such other plan,
arrangement or agreement), (A) the cash portion of the Total Payments provided
in this Paragraph 20 shall first be reduced (if necessary, to zero (0)), and
(B) all other non-cash Total Payments under this Paragraph 20 shall next be
reduced (if necessary, to zero (0)); provided, however, that the Employee's
payment shall only be reduced by this Paragraph 20 if Employer determines that
reducing the Total Payments would result in greater after-tax proceeds to the
Employee than if no such reduction in Total Payments had occurred. Any
determination required by the preceding sentence shall be made by independent
certified public accountants or tax counsel (hereinafter, such party shall
sometimes be hereinafter referred to as the "Independent Adviser") selected by
Employer, the selection of which shall be reasonably acceptable to Employee. In
making Employer's determination as to the application and effect of this
Paragraph 20 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 in the opinion of the Independent Adviser 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; (ii) those Total
Payments provided under this Paragraph 20 shall be reduced only to the extent
necessary so that the Total Payments (other than those referred to in clause
(i)) in their entirety constitute reasonable compensation for services actually
rendered within the meaning of Section 280G(b)(4)(B) of the Code or are
otherwise not subject to disallowance as deductions, in the opinion of the
Independent Adviser; and (iii) the value of any non-cash benefit or any
deferred payment or benefit included in the Total Payments shall be determined
by the Company's independent certified public accountants in accordance with
the principles of Sections 280G(d)(3) and (4) of the Code.

         21.      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.

         22.      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.

                                      12

<PAGE>

         23.      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.

                  (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.

         24.      NOTICES. All notices required herein shall be in writing and
shall be deemed to have been given when delivered personally or when 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 & Tanenbaum, P.C.
                           2100 RiverEdge Parkway
                           Suite 300
                           Atlanta, Georgia 30328-4656
                           Attn:  Elliott Cohen, Esquire

                  If to Employee at:

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

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

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.

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

         26.      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.

                                      13

<PAGE>

         27.      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.

         28.      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.

         29.      GUARANTY BY ALLIED. Allied hereby unconditionally guarantees
the performance and payment obligations of Employer pursuant to this Agreement
including, without limitation, the payment of base salary and bonus
compensation pursuant to Paragraphs 4 and 5 hereof, and the termination payment
pursuant to Paragraph 9 hereof.

         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                                JACK GROSS

ATTEST:                                AXIS GROUP, INC.

By:                                    By:
   ----------------------------           --------------------------------------
   Its                Secretary           Its                President
      ----------------                       ----------------

[CORPORATE SEAL]

ATTEST:                                ALLIED HOLDINGS, INC.

By:                                    By:
   ----------------------------           --------------------------------------
   Its                Secretary           Its                President
      ----------------                       ----------------

[CORPORATE SEAL]

                                       14

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