Document:

EX-10.11(A) FIRST AMENDMENT TO EMPLOYMENT AGREEMEN

 

Exhibit 10.11(a)

FIRST AMENDMENT TO

EMPLOYMENT AGREEMENT

     THIS FIRST AMENDMENT to Employment Agreement (the “Amendment”) is made and entered into as of
the 21st day of January, 2005, to be effective as of January 1, 2005, by and between Robert J.
Rutland (“Employee”) and Allied Holdings, Inc. (“Employer”).

W I T N E S S E T H:

     WHEREAS, Employer and Employee entered into that certain Employment Agreement dated as of
February 23, 2000(the “Employment Agreement”); and

     WHEREAS, the parties desire to amend the Employment Agreement as set forth herein;

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

     1. The Employment Agreement shall be amended by the deletion of the current subparagraph (ii)
of Paragraph 10(a) and the inclusion of the following new subparagraph (ii) of Section 10(a):

	 	“(ii)   	 the highest of (1) the average of the 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 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 target bonus had been
achieved for each such year; or (3) the amount of the target bonus for Employee
for the year in which termination of employment occurs.”

     2. The Employment Agreement shall be amended by the deletion of the current Paragraph 11 and
the inclusion of the following new Paragraph 11:

     “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 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 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 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
target bonus had been achieved for each such year; or (iii) the amount of the 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.”

     3. All provisions of the Employment Agreement which have not been amended by this Amendment
shall remain in full force and effect. Notwithstanding the foregoing, to the extent there is any
inconsistency between the provisions of the Employment Agreement and the provisions of this
Amendment, the provisions of this Amendment shall control.

     4. Each of the parties hereto will, from time to time, and at all times hereafter, upon every
reasonable request to do so by any other party, make, do, execute and deliver, or cause to be made
done, executed and delivered, all such further acts, deeds, assurances and things as may be
reasonably required or necessary in order to further implement and carry out the terms and purpose
of this Amendment.

     5. This Amendment may be executed in one or more counterparts, each of which shall be deemed
an original, but all of which together shall constitute the same agreement, document, or
instrument. Any signature page of any such counterpart, or any electronic facsimile thereof, may
be attached or appended to any other counterpart to complete a fully executed counterpart of such
agreement, document or instrument, and any telecopy or other facsimile transmission of any
signature shall be deemed an original and shall bind such party.

     IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be duly executed
on its behalf, all as of the day and year first written above.

	 	 	 	 	 
	 	 	“Employer”
	 
	 	 	 	 
	 	 	ALLIED HOLDINGS, INC.
	 
	 	 	 	 
	

	 	By:	 	/s/ Hugh E. Sawyer 
	

	 	 	 	

	 	 	 	 	Hugh E. Sawyer

President and Chief Executive Officer
	 
	 	 	 	 
	 	 	“Employee”
	 
	 	 	 	 
	 	 	/s/ Robert J. Rutland

	 	 	ROBERT J. RUTLAND

2EX-10.21 EMPLOYMENT AGREEMENT

 

Exhibit 10.21

EMPLOYMENT AGREEMENT

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

W I T N E S S E T H:

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

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

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

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

	1.  	DEFINITIONS.

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

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

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

     3. DUTIES.

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

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

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

     5. BONUS COMPENSATION.

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

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

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

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

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

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

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

     9. SEVERANCE BENEFITS.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     21. ASSIGNMENT.

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

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

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

If to Employer at:

160 Clairemont Avenue, Suite 200

Decatur, Georgia 30030

Attn: Thomas M. Duffy, General Counsel

If to Employee at:

1298 Waterford Green Trail

Marietta, GA 30068

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

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

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

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

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

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

[signature page follows]

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

	 	 	 	 	 
	 	 	/s/ Thomas H. King

	 	 	THOMAS H. KING
	 
	 	 	 	 
	 	 	ALLIED HOLDINGS, INC.
	 
	 	 	 	 
	

	 	By:	 	/s/ Hugh E. Sawyer 
	

	 	 	 	

	

	 	Name:	 	Hugh E. Sawyer 
	

	 	 	 	

	

	 	Title:	 	President and Chief Executive
Officer 
	

	 	 	 	

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EXHIBIT A

Release Agreement

Release

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

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

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