USA TRUCK INC (Form: 10-K, Received: 02/27/2019 17:23:19)

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark One)

[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2018

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

1-35740

(Commission file number)

USA Truck, Inc.

(Exact name of registrant as specified in its charter)


Delaware						71-0556971
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

3200 Industrial Park Road
Van Buren, Arkansas						72956
(Address of principal executive offices)						(Zip Code)

(479) 471-2500

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Name of each exchange on which registered

Common Stock, $0.01 Par Value

The NASDAQ Stock Market LLC (NASDAQ Global Select Market)

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [ X ]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [ X ]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [ X ] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ______

Accelerated Filer ☒

Non-Accelerated Filer ______

Smaller Reporting Company ______

Emerging Growth Company ______

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [ X ]

The aggregate market value of the common equity held by non-affiliates of the Registrant (assuming for these purposes that all executive officers, directors, and affiliated holders of more than 10% of the Registrant's outstanding common stock are "affiliates" of the Registrant) as of June 29, 2018, the last business day of the Registrant's most recently completed second fiscal quarter, was approximately $185,374,908 (based on the closing sale price of the Registrant's common stock on that date as reported by Nasdaq).

As of February 15, 2019, 8,361,435 shares of the registrant's common stock, par value $0.01 per share, were outstanding.


	USA TRUCK, INC.
	TABLE OF CONTENTS
Item No.	Caption	Page
	PART I
1	Business	3
1A.	Risk Factors	10
1B.	Unresolved Staff Comments	24
2	Properties	24
3	Legal Proceedings	25
4	Mine Safety Disclosures	25
	PART II
5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	26
6	Selected Financial Data	26
7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
7A.	Quantitative and Qualitative Disclosure About Market Risk	41
8	Financial Statements and Supplementary Data	42
9	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	66
9A.	Controls and Procedures	66
9B.	Other Information	68
	PART III
10	Directors, Executive Officers and Corporate Governance	69
11	Executive Compensation	69
12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	69
13	Certain Relationships and Related Transactions, and Director Independence	69
14	Principal Accountant Fees and Services	69
	PART IV
15	Exhibits and Financial Statement Schedules	69
16	Form 10-K Summary	71
	Signatures	71

Table of Contents

Part I.

Cautionary Note Regarding Forward-Looking Statements

This Annual Report on Form 10-K for the year ended December 31, 2018 (this "Form 10-K") contains certain statements that may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, (the "Exchange Act") and such statements are subject to the safe harbor created by those sections, and the Private Securities Litigation Reform Act of 1995, as amended. All statements, other than statements of historical or current fact, are statements that could be deemed forward-looking statements, including without limitation:

•any projections of earnings, revenue, costs or other financial items;

•any statement of projected future operations or processes;

•any statement of plans, strategies, goals, and objectives of management for future operations;

•any statement concerning proposed new services or developments;

•any statement regarding future economic conditions or performance; and

•any statement of belief and any statement of assumptions underlying any of the foregoing.

In this Form 10-K, statements relating to:

•future driver market,

•future ability to grow market share,

•future driver and customer-facing employee compensation,

•future ability and cost to recruit and retain drivers and customer-facing employees,

•future asset utilization,

•the amount, timing and price of future acquisitions and dispositions of revenue equipment, size and age of the Company's fleet, mix of fleet between company-owned and independent contractors and anticipated gains or losses resulting from dispositions,

•future depreciation and amortization expense, including useful lives and salvage values of equipment and intangible assets,

•future safety performance,

•future profitability,

•future industry capacity,

•future effects of restructuring actions,

•future deployment of technology, including front and inside-facing event recorders,

•future pricing rates and freight network,

•future fuel prices and surcharges, fuel efficiency and hedging arrangements,

•future insurance and claims and litigation expense,

•future salaries, wages and employee benefits costs,

•future purchased transportation use and expense,

•future operations and maintenance costs,

•future USAT Logistics growth and profitability,

•future trends in operating expenses expected to result from growing our USAT Logistics business and increasing independent contractors,

•future asset sales of non-revenue assets,

•future impact of regulations, including enforcement of the ELD mandate,

•future use of derivative financial instruments,

•our strategy,

•our intention about the payment of dividends,

•inflation,

•future indebtedness,

•future liquidity and borrowing availability and capacity,

•the impact of pending and future litigation and claims,

•future availability and compliance with covenants under our revolving credit facility,

•expected amount and timing of capital expenditures,

•expected liquidity and sources of capital resources, including the mix of capital and operating leases,

•future size of our independent contractor fleet, and

•future income tax rates

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among others, are forward-looking statements. Such statements may be identified by their use of terms or phrases such as "expects," "estimates," "projects," "believes," "anticipates," "focus," "intends," "plans," "goals," "may," "if," "will," "should," "could," "potential," "continue," "future" and similar terms and phrases. Forward-looking statements are based on currently available operating, financial, and competitive information. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, which could cause future events and actual results to differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section entitled "Item 1A., Risk Factors." Readers should review and consider the factors discussed under the heading “Risk Factors” in Item 1A of this Form 10-K, along with various disclosures in our press releases, stockholder reports, and other filings with the Securities and Exchange Commission (the "SEC").

All such forward-looking statements speak only as of the date of this Form 10-K. You are cautioned not to place undue reliance on such forward-looking statements. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or any change in the events, conditions, or circumstances on which any such information is based, except as required by law.

All forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by this cautionary statement.

References to the "Company," "we," "us," "our," and words of similar import refer to USA Truck, Inc., and its subsidiaries.

ITEM 1. BUSINESS

General

USA Truck is one of the nation's top 30 truckload carriers when measured by operating revenue, as determined by Transport Topics' most recent annual ranking. In 2018, the Company generated $534.1 million in consolidated operating revenue. As of December 31, 2018, the Company's fleet consisted of 1,976 tractors, which included 429 independent contractor tractors, and 6,226 trailers.

The Company has two reportable segments: (i) Trucking, consisting of the Company's truckload and dedicated freight service offerings, and (ii) USAT Logistics, consisting of the Company's freight brokerage and rail intermodal service offerings. The Company's Trucking segment transports customer freight over irregular routes utilizing equipment owned or leased by either the Company or independent contractors as a medium-haul common carrier. Our dedicated freight services provide similar freight transport services, but do so pursuant to agreements whereby the Company makes equipment available to a specific customer for shipments over particular routes at specified times, typically over a multi-year period. USAT Logistics provides freight brokerage, logistics, and intermodal rail service to its customers by utilizing third party capacity.

Operations

The Company focuses marketing efforts on customers who have consistent shipping needs within the eastern half of the United States, which is the predominant operating area for our Trucking operations. USAT Logistics offers services nationwide, and the cross-marketing of service offerings permits us to strategically position available equipment while providing a full array of supply chain transportation solutions to our customers. USA Truck team members have cultivated a thorough understanding of the needs of shippers in key industries, which the Company believes helps it develop long-term, service-oriented relationships with its customers.

USA Truck has a diversified freight and customer base. During 2018, one customer, Walmart Inc., accounted for more than 10% of the consolidated operating revenues. USAT Logistics is also dependent upon a single customer for more than 10% of its operating revenue. The Company's largest 10 customers comprised approximately 49% of the Company's consolidated operating revenue. Overall, the Company provided service to more than 700 customers in 2018 across all USA Truck service offerings.

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While the Company prefers direct relationships with customers, some high volume shippers require their carriers to conduct business with a designated third party logistics provider. Obtaining shipments through other providers of transportation or logistics services is a significant opportunity that allows the Company to provide services for high-volume shippers to which it might not otherwise have access.

During 2018, receivables collection averaged approximately 38 days from the invoice date, compared to an average of approximately 46 days and 47 days during 2017 and 2016, respectively. Factors contributing to the decrease in days to collection in 2018 were the result of more thorough and expedient invoicing and collections processes by our accounts receivable team, offset by customer requests for longer payment terms.

USA Truck is headquartered in Van Buren, Arkansas, with trucking facilities concentrated in the eastern half of the United States for density and efficiency. Logistics operations provide services throughout North America by utilizing a regional office model. The Company transports commodities throughout the contiguous United States and into and out of portions of Canada. USA Truck also transports general commodities into and out of Mexico by offering through-trailer service from its terminal in Laredo, Texas. In addition to truckload and dedicated freight service offerings, the Company provides freight brokerage, logistics, and rail intermodal service offerings through its logistics segment. During 2018, 2017 and 2016, approximately 8%, 8%, and 9%, respectively, of the Company's operating revenue was generated in Mexico and Canada. All foreign revenue is collected in United States dollars, and all Company-owned tractors are domiciled in the United States. The Company does not separately track domestic and foreign long-lived assets, as substantially all of the Company's long-lived assets are, and have been for the last three fiscal years, located within the United States.

The Company's Trucking segment is supported primarily by driver managers, load planners and customer service representatives. These teams monitor the location of equipment and direct its movement in a safe, efficient and practicable manner. Each driver manager leads a team of professional drivers and is their primary company contact. Load planners assign all available units to loads in a manner intended to maximize profit and minimize costs. Customer service representatives work to fulfill shippers' needs, solicit freight, and ensure on-time delivery by monitoring load movement. The Company strives to operate a safe and productive fleet while providing superior customer service.

The USAT Logistics segment has a network of regional sales offices located throughout the continental United States. We believe that regionalization allows greater market insight and strengthens relationships with customers and carriers alike while capitalizing on the skills and local market insight of the leaders managing these centers. The specific locations of branch offices are selected for the availability of talent in those markets. USAT Logistics employed approximately 120 people as of December 31, 2018. Most of the USAT Logistics team interacts directly with customers and carriers, matching customers' freight needs with available third-party capacity in the marketplace.

Revenue Equipment

The Company operates its tractor fleet in a way that is intended to promote safe driving operations, attract drivers, and reduce operating and maintenance costs. The following table shows the number of Company-owned and leased tractors and trailers by model year as of December 31, 2018:


Model Year:	Tractors (1)(2)	Trailers (3)
2019	366	30
2018	110	399
2017	360	893
2016	393	1,534
2015	213	497
2014	91	494
2013	11	434
2012	3	355
2011	—	64
2010	—	384
2009	—	419
2008	—	488
2007 and earlier and earlier	—	235
Total	1,547	6,226

1.Excludes 429 independent contractor tractors.

2.Includes 409 tractors under operating leases and 607 tractors financed by capital leases.

3.Includes 296 trailers financed by capital leases.

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The average age of the Company's tractor fleet was approximately 34.2 months at December 31, 2018. The Company's equipment purchase and replacement decisions are based on a number of factors, including but not limited to, new equipment prices, the used equipment market, trade-in values, demand for freight services, prevailing interest rates, the attractiveness of lease terms, technological improvements, regulatory changes, cost per mile, fuel efficiency, equipment durability, equipment specifications and driver comfort. Therefore, depending on the circumstances, the Company may accelerate or delay the acquisition and disposition of its tractors or trailers from time to time, or may choose to acquire revenue equipment through operating leases or on-balance sheet financing.

To simplify driver and mechanic training, control the cost of spare parts and tire inventory, and provide for a more efficient vehicle maintenance program, the Company purchases tractors and trailers manufactured to its specifications. The Company has in place a preventive maintenance program intended to minimize equipment downtime and maintenance costs.

The Company finances the purchase of revenue equipment through its cash flows from operations, revolving credit agreement, capital lease arrangements, operating lease arrangements and proceeds from sales or trades of used equipment. Substantially all of the Company's tractors and trailers are pledged to secure its obligations under financing arrangements.

All Company and independent contractor tractors are equipped with in-cab communication technology, enabling two-way communications between the Company and its drivers, through both standardized and free-form messaging, including electronic logging. The Company also has installed automatic on board recording devices ("AOBRs") on 100% of its tractor fleet. This technology enables USA Truck to dispatch drivers efficiently in response to customers' requests, to provide real-time information to customers about the status of their shipments and to provide documentation supporting accessorial charges. Accessorial charges are charges to customers for additional services such as loading, unloading and detainment or equipment delays. In addition, the Company utilizes satellite-based equipment tracking devices and cargo sensors on the majority of its trailers. These tracking devices provide the Company with visibility on the locations and load status of its trailers. The installation of forward-facing and in-ward facing event recorders on all of the Company's tractor fleet was completed during the first quarter of 2018.

Safety and Risk Management

The Company emphasizes safe work habits as a core value throughout the entire organization, and provides proactive training and education relating to safety concepts, processes and procedures. The Company conducts pre-employment, random, reasonable suspicion and post-accident alcohol and substance abuse testing in accordance with the Department of Transportation ("DOT") regulations and the Company's own policies.

Safety training for new drivers begins in orientation, when newly hired team members are taught safe driving and work techniques that emphasize the Company's commitment to safety. Upon completion of orientation, new student drivers are required to undergo on-the-road training for four to six weeks with experienced commercial motor vehicle drivers who have been selected for their professionalism and commitment to safety and who are trained to communicate safe driving techniques to new drivers. New drivers who graduate from the program must also successfully complete post-training classroom and road testing before being assigned to their own tractor. Additionally, all Company drivers participate in on-going training that focuses on collision and injury prevention, among other safety concepts.

The primary risks for which the Company is insured are cargo loss and damage, general liability, personal injury, property damage, workers' compensation and employee medical expenses. USA Truck is also self-insured for a portion of claims exposure in each of these areas. The Company's self-insurance retention levels are $0.5 million for workers' compensation claims per occurrence, $0.05 million for cargo loss and damage claims per occurrence and $1.0 million for bodily injury and property damage claims per occurrence. For medical benefits, the Company self-insures up to $0.25 million per plan participant per year with an aggregate claim exposure limit determined by the Company's year-to-date claims experience and its number of covered team members. Davis Transfer Company is also self-insured for a portion of claims exposure in each of these areas. Davis Transfer Company's self-insurance retention levels are $0.5 million for workers' compensation claims per occurrence, $0.05 million for cargo loss and damage claims per occurrence and $0.05 million for bodily injury and property damage claims per occurrence. The Company maintains insurance above the amounts for which it self-insures, subject to certain limits, with licensed insurance carriers. The Company has excess general, auto and employer's liability coverage in amounts substantially exceeding minimum legal requirements. The Company is completely self-insured for physical damage to its own tractors and trailers, except that the Company carries catastrophic physical damage coverage to protect against natural disasters.

Although the Company believes the aggregate insurance limits should be sufficient to cover reasonably expected claims, it is possible that one or more claims could exceed the Company's aggregate coverage limits. An unexpected loss or changing conditions in the insurance market could adversely affect premium levels or result in our inability to find excess coverage in amounts we deem sufficient. As a result, the Company's insurance and claims expense could increase, or the Company could raise its self-insured retention or decrease its aggregate coverage limits when its policies are renewed or replaced. If these costs increase, if reserves are increased, if the Company becomes unable to find excess coverage in amounts it deems sufficient, if

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claims in excess of coverage limits are experienced, or if a claim is experienced where coverage is not provided, the Company's results of operations and financial condition in any one quarter or annual period could be materially and adversely affected.

Team Members

As of December 31, 2018, the Company had approximately 2,500 team members, of which approximately 73% were Company drivers. No team members are subject to union contracts or part of a collective bargaining unit. The Company believes team member relations to be good.

Recruitment, training, and retention of a professional driver workforce, the Company's most valuable asset, are essential to the Company's continued growth and fulfillment of customer needs. USA Truck hires qualified professional drivers who hold a valid commercial driver's license, satisfy applicable federal and state safety performance and measurement requirements, and meet USA Truck's hiring criteria. These guidelines relate primarily to safety history, road test evaluations, and various other evaluations, which include physical examinations and mandatory drug and alcohol testing. In order to attract and retain safe drivers who are committed to customer service and safety, the Company focuses its driver operations around a collaborative and supportive team environment. The Company provides comfortable, late model equipment, encourages direct communication with senior management, and pays competitive wages and benefits, and other incentives intended to encourage driver safety, retention, and long-term employment. Drivers are compensated on a per mile basis, based on the length of haul and a predetermined number of miles. Drivers are also compensated for accessorial services provided to customers. Drivers and other employees are encouraged to participate in the Company's 401(k) program, and Company-sponsored health, life, and dental plans. The Company believes these factors aid in attracting, recruiting, and retaining professional drivers in a competitive driver market.

Independent Contractors

In addition to Company drivers, USA Truck enters into contracts with independent contractors, who provide a tractor and a driver and are responsible for all operating expenses in exchange for an agreed upon fee structure. As of December 31, 2018, the Company had contracts with 429 independent contractors, which comprised approximately 24% of the professional driving fleet during 2018, up from approximately 16% at year end.

Competition

The trucking industry includes both private fleets and for-hire carriers. Private fleets consist of trucks owned and operated by shippers that move their own goods. For-hire carriers include both truckload and less-than-truckload ("LTL") operations. The for-hire segment is highly competitive and includes thousands of carriers, none of which controls a meaningful share of the market. This segment is characterized by many small carriers having revenues of less than $1 million per year and as few as one truck, and relatively few carriers with revenues exceeding $100 million per year.

USA Truck competes primarily with other truckload carriers, private fleets and, to a lesser extent, railroads and LTL carriers. The principal competitive factors in the truckload segment of the industry are service and price, with rate discounting becoming particularly important during economic downturns or periods of uncertainty. USA Truck's focus is to differentiate itself primarily on the basis of service rather than rates. Although an increase in the size of the market would benefit all truckload carriers, management believes that successful carriers are likely to grow market share by providing multiple service offerings, combined with superior customer service, at an equitable price.

Environmental Regulation

In August 2011, the National Highway Traffic Safety Administration ("NHTSA") and the Environmental Protection Agency ("EPA") adopted final rules that established the first-ever fuel economy and greenhouse gas standards for medium and heavy-duty vehicles, including the tractors the Company employs (the "Phase 1 Standards"). The Phase 1 Standards apply to tractor model years 2014 to 2018 and require the achievement of an approximate 20 percent reduction in fuel consumption by the 2018 model year, which equates to approximately four fewer gallons of fuel used for every 100 miles traveled. In October 2016, the EPA and NHTSA published the final rule mandating the next phase of tighter fuel efficiency and greenhouse gas standards for medium and heavy-duty tractors and trailers (the "Phase 2 Standards") that will apply to trailers beginning with model year 2018 and tractors beginning with model year 2021. The Phase 2 Standards require nine percent and twenty-five percent reductions in emissions and fuel consumption for trailers and tractors, respectively, by 2027. The Company believes these requirements could result in increased new tractor and trailer prices and additional parts and maintenance costs required to retrofit its tractors and trailers with technology to achieve compliance with such standards, which could adversely affect its operating results and profitability, particularly if such costs are not offset by potential fuel savings. The Company cannot predict, however, the extent to which its operations and productivity will be impacted. In October 2017, the EPA announced a proposal to repeal the Phase 2 Standards as they relate to gliders (which mix refurbished older components, including transmissions and pre-emission-rule engines, with a new frame, cab, steer axle, wheels, and other standard equipment). Additionally, implementation of the Phase 2 Standards as they relate to trailers has been delayed due to a provisional stay granted in October 2017 by the U.S. Court of Appeals for the District of Columbia, which is overseeing a case against the EPA

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by the Truck Trailer Manufacturers Association, Inc. regarding the Phase 2 Standards. In August 2018, the Truck Trailer Manufacturers Association filed a motion to compel the agencies to submit a detailed status report and timeline for the completion of administrative review. The EPA opposed the motion stating that it was working to develop a proposed rule while the NHTSA opposed the motion on the grounds that it is continuing to assess next steps. That federal stay continues to be reviewed every 90 days. If the trailer provisions of the Phase 2 Standards are permanently removed, the Company expects that Phase 2 Standards would have a reduced impact on its operations.

The California Air Resources Board ("CARB") also adopted emission control regulations that will apply to all heavy-duty tractors that pull 53-foot or longer box-type trailers within the State of California regardless of the state of origin. The tractors and trailers subject to these CARB regulations must be either EPA SmartWay certified or equipped with low-rolling resistance tires and retrofitted with SmartWay-approved aerodynamic technologies. The Company currently purchases SmartWay certified equipment in its new tractor and trailer acquisitions. In addition, in February 2017 CARB proposed additional phase 2 standards that generally align with the federal Phase 2 standards with respect to model year 2018 to 2021 tractors, with some minor additional requirements. As proposed, the enhanced California standards would stay in place even if the federal standards are vacated or otherwise diminished due to legislative or executive action. The CARB Board approved the proposed standards in March 2018 with direction to staff to make additional 15-day changes. Those changes and subsequent final rulemaking were expected to be delivered by the end of 2018. We will continue monitoring the developments and our compliance with the CARB regulations. Federal and state lawmakers also have proposed potential limits on carbon emissions under a variety of climate-change proposals. In December 2018, a coalition of nine Northeast and mid-Atlantic states and the District of Columbia announced an agreement to develop regional limits on carbon emissions from transportation sources. Compliance with such regulations has increased the cost of our new tractors, may increase the cost of any new trailers that we will operate, may require us to retrofit certain of our pre-2011 model year trailers that operate in California, and could impair equipment productivity and increase our operating expenses, including with respect to our Plus Power fleet. These adverse effects, combined with the uncertainty as to the reliability of the newly designed diesel engines and the residual values of these vehicles, could materially increase our costs or otherwise adversely affect our business or operations.

In order to reduce exhaust emissions, some states and municipalities have begun to restrict the locations and amount of time where diesel-powered tractors may idle. Further, the Phase 2 Standards include requirements to reduce particulate emissions caused by idling diesel engines. These restrictions could force the Company to purchase on-board power units that do not require the engine to idle or to alter our drivers' behavior, either of which could result in a decrease in productivity, or increase in driver turnover.

The Company's terminals often are located in industrial areas where groundwater or other forms of environmental contamination may have occurred or could occur. The Company's operations involve the risks of fuel spillage or seepage, environmental damage, and hazardous waste disposal, among others. Certain of the Company's facilities have waste oil or fuel storage tanks and fueling islands and one leased facility has below-ground bulk fuel storage tanks. A small percentage of the Company's freight consists of low-grade hazardous substances, which subjects it to a wide array of regulations. The Company has instituted programs to monitor and control environmental risks and promote compliance with applicable environmental laws and regulations; however, if (i) the Company is involved in a spill or other accident involving hazardous substances; (ii) there are releases of hazardous substances the Company transports; (iii) soil or groundwater contamination is found at the Company's facilities or results from its operations; or (iv) the Company is found to be in violation of, or fails to comply with, applicable environmental laws or regulations, then it could be subject to clean-up costs and liabilities, including substantial fines or penalties or civil and criminal liability, any of which could have a materially adverse effect on the Company's business and results of operations.

Other Regulation

The Company's operations are regulated and licensed by various United States federal and state, Canadian provincial, and Mexican federal agencies. Interstate motor carrier operations are subject to safety requirements prescribed by the DOT. Matters such as weight and equipment dimensions are also subject to United States federal and state regulation and Canadian provincial regulations. The Company operates in the United States pursuant to operating authority granted by the DOT, in various Canadian provinces pursuant to operating authority granted by the Ministries of Transportation and Communications in such provinces, and within Mexico pursuant to operating authority granted by Secretaria de Comunicaciones y Transportes. To the extent that the Company conducts operations outside the United States, it is subject to the Foreign Corrupt Practices Act, which prohibits United States companies and their intermediaries from bribing foreign officials for the purpose of obtaining or retaining favorable treatment.

The DOT, through the Federal Motor Carrier Safety Administration ("FMCSA"), imposes safety and fitness regulations on the Company and its drivers, including rules that restrict driver hours-of-service ("HOS"). Changes to such HOS rules can negatively impact the Company's productivity and affect its operations and profitability by reducing the number of hours per day or week its drivers may operate and/or disrupting its network. On August 23, 2018, FMCSA released proposed rulemaking for public comment in response to Congressional, industry and citizen concerns. The proposed rulemaking seeks to revise

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existing hours-of-serve rules in order to alleviate unnecessary burdens placed on drivers by extending the 14-hour on-duty limitation by up to two hours during adverse driving conditions, revising mandatory breaks after 8-hours of continuous driving, reinstating the option for splitting up the required 10-hour off-duty rest break for drivers operating trucks that are equipped with a sleeper-berth compartment and expanding short-haul exemptions from 12 hours on-duty to 14 hours on-duty in order to be consistent with the rules for long-haul drivers. The proposed rule underwent a public comment period that ended in September 2018. The FMCSA expects to deliver final rulemaking in spring 2019, and several industry groups expressed their support. While the proposed rulemaking may alleviate certain burdens on the Company's productivity and operations, any future changes to hours-of-service rules could materially and adversely affect the Company's operations and profitability.

There are two methods of evaluating the safety and fitness of carriers. The first method is the application of a safety rating that is based on an onsite investigation. The Company currently has a satisfactory DOT safety rating under this method, which is the highest available rating under the current safety rating scale. If the Company were to receive a conditional or unsatisfactory DOT safety rating, it could affect or restrict our operations as well as adversely affect the Company's business, as some of its existing customer contracts require a satisfactory DOT safety rating. In January 2016, FMCSA published a Notice of Proposed Rulemaking outlining a revised safety rating measurement system, which would replace the current methodology. Under the proposed rule, the current three safety ratings of "satisfactory," "conditional," and "unsatisfactory" would be replaced with a single safety rating of "unfit," and a carrier would be deemed fit when no rating was assigned. Moreover, the proposed rules would use roadside inspection data, in addition to investigations and onsite reviews, to determine a carrier's safety fitness on a monthly basis. Under the current rules, a safety rating can only be given upon completion of a comprehensive onsite audit or review. The proposed rule underwent a public comment period that ended in June 2016 and several industry groups and lawmakers expressed their disagreement with the proposed rule, arguing that it violates the requirements of the Fixing America's Surface Transportation Act (the "FAST Act") and that the FMCSA must first finalize its review of the CSA scoring system, described in further detail below. Based on this feedback and other concerns raised by industry stakeholders, in March 2017, FMCSA withdrew the Notice of Proposed Rulemaking related to the new safety rating system. In its notice of withdrawal, the FMCSA noted that a new rulemaking related to a similar process may be initiated in the future. Therefore, it is uncertain if, when, or under what form any such rule could be implemented.

In addition to the safety rating system, FMCSA has adopted the Compliance Safety Accountability ("CSA") program as an additional safety enforcement and compliance model that evaluates and ranks fleets on certain safety-related standards. The CSA program analyzes data from roadside inspections, moving violations, crash reports from the last two years, and investigation results. The data is organized into seven categories. Carriers are grouped by category with other carriers that have a similar number of safety events (e.g., crashes, inspections, or violations) and carriers are ranked and assigned a rating percentile to prioritize them for interventions if they are above a certain threshold. Currently, these scores do not have a direct impact on a carrier's safety rating. However, the occurrence of unfavorable scores in one or more categories may (i) impact driver recruiting and retention by causing high-quality drivers to seek employment with other carriers, (ii) cause the Company's customers to direct their business away from the Company and to carriers with higher fleet rankings (iii), subject the Company to an increase in compliance reviews and roadside inspections, or (iv) cause the Company to incur greater than expected expenses in its attempts to improve unfavorable scores, any of which could adversely affect the Company's results of operations and profitability.

Under the CSA, these scores were initially made available to the public in five of the seven categories. However, pursuant to the FAST Act, which was signed into law in December 2015, FMCSA was required to remove from public view the previously available CSA scores while it reviews the reliability of the scoring system. During this period of review by FMCSA, the Company will continue to have access to its scores and will still be subject to intervention by FMCSA when such scores are above the intervention thresholds. A congressionally mandated report by the National Academy of Sciences ("NAS") related to the CSA program was released in June 2017 which recommended: (i) reconfiguring the underlying statistical model under the CSA's Safety Measurement System (the percentile ranking categories used to target carriers for intervention) with a so-called item response theory model to more accurately target at-risk carriers, (ii) making the scoring system more transparent and easier for carriers to replicate and understand, and (iii) departing from using relative metrics as the sole means for targeting carriers. In August 2018, FMCSA delivered its report to Congress detailing the following changes it will make to the CSA program in response to the NAS report: FMCSA is developing and testing an item response theory model ("ITM"), with a testing to be completed by June 2019 to improve scoring system data sources and identify ways to make that information more accessible, including the development of a webpage whereby researchers, carriers, safety consultants and the public can obtain simplified data snapshots. Insofar as any of these changes increase the likelihood of us receiving unfavorable scores, our results of operations and profitability could be adversely affected. The Company will continue to monitor the FMCSA's ITM testing and subsequent proposed rules that may affect the scoring methodology in order to continue to promote improvement of scores in all seven categories with ongoing reviews of all safety-related policies, programs and procedures for their effectiveness.

We have on certain occasions exceeded the established intervention thresholds in a number of the seven CSA safety-related categories. Based on these unfavorable ratings, we may be prioritized for an intervention action or roadside inspection, either of which could have a materially adverse effect our results of operations. In addition, customers may be less likely to

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assign loads to us. We have put procedures in place in an attempt to address areas where we have exceeded the thresholds. However, we cannot guarantee these measures will be effective.

In 2015, FMCSA issued final rules requiring nearly all carriers, including the Company, to install and use electronic logging devices ("ELDs") in their tractors starting in December 2017, in order to electronically monitor truck miles and enforce HOS. Carriers are subject to citations, on a state-by-state basis, for non-compliance with the rule after the December 2017 compliance deadline. Prior to the December 2017 deadline, the Company installed AOBRs on 100% of its tractor fleet, which has exempted us from being 100% ELD compliant on our tractor fleet until December 2019. The Company expects to be compliant with ELDs on 100% of all required vehicles prior to the December 2019 deadline.

In the aftermath of the September 11, 2001 terrorist attacks, federal, state and municipal authorities implemented and continue to implement various security measures, including checkpoints and travel restrictions on large trucks. The Transportation Security Administration ("TSA") has adopted regulations that require determination by the TSA that each driver who applies for or renews his license for carrying hazardous materials is not a security threat.

In November 2015, FMCSA published its final rule related to driver coercion, which took effect in January 2016. Under this rule, carriers, shippers, receivers, or transportation intermediaries that are found to have coerced drivers to violate certain FMCSA regulations (including HOS rules) may be fined up to $16,000 for each offense.

In December 2016, FMCSA and DOT published the Commercial Driver's License Drug and Alcohol Clearinghouse rule as mandated by the Moving Ahead for Progress in the 21st Century Act. The rule establishes and mandates a query to the Clearinghouse by employers and prospective employers to determine if current or prospective drivers have had any drug/alcohol positives or refusals. The rule went into effect in January 2017 and mandates compliance by January 2020 to allow time for the design and implementation of the clearinghouse IT systems. When compliance becomes mandatory, it could result in a decrease in driver availability and adversely affect the Company's operations.

Other rules have been recently proposed or made final by FMCSA, including (i) a rule requiring the use of speed limiting devices on heavy duty tractors to restrict maximum speeds, which was proposed in 2016, and (ii) a rule setting forth minimum driver training standards for new drivers applying for commercial driver's licenses for the first time and to experienced drivers upgrading their licenses or seeking a hazardous materials endorsement, which was made final in December 2016, with a compliance date in February 2020. In July 2017, the DOT announced that it would no longer pursue a speed limiter rule, but left open the possibility that it could resume such a pursuit in the future. The effect of these rules, to the extent they become effective, could result in a decrease in fleet production and driver availability, either of which could adversely affect the Company's business or operations.

Tax and other regulatory authorities have in the past sought to assert that independent contractor drivers in the trucking industry are employees rather than independent contractors. Federal legislators continue to introduce legislation concerning the classification of independent contractors as employees, including legislation that proposes to increase the tax and labor penalties against employers who intentionally or unintentionally misclassify employees as independent contractors and are found to have violated employee overtime or wage requirements. Additionally, federal legislators have sought to (i) abolish the current safe harbor allowing taxpayers meeting certain criteria to treat individuals as independent contractors if they are following a long-standing, recognized practice, (ii) extend the Fair Labor Standards Act to independent contractors, and (iii) impose notice requirements based upon employment or independent contractor status and fines for failure to comply. Some states have adopted initiatives to increase their revenues from items such as unemployment, workers' compensation, and income taxes, and the Company believes a reclassification of independent contractor drivers as employees would help states with this initiative. Further, class actions and other lawsuits have been filed against certain members of our industry seeking to reclassify independent contractors as employees for a variety of purposes, including workers' compensation and health care coverage. In addition, companies that employ lease-purchase independent contractor programs, such as us, have been more susceptible to reclassification lawsuits and several recent decisions have been made in favor of those seeking to classify independent contractor truck drivers as employees. Federal and state taxing and other regulatory authorities and courts apply a variety of standards in their determination of independent contractor status. If the independent contractors the Company engages were determined to be its employees, it would incur additional exposure under federal and state tax, workers' compensation, unemployment benefits, labor, employment, and tort laws, which could potentially include prior periods, as well as potential liability for employee benefits and tax withholdings. The Company currently observes and monitors its compliance with current related and applicable laws and regulations, but it cannot predict whether laws and regulations adopted in the future regarding the classification of the independent contractor drivers it engages will adversely affect the Company's business or operations.

The regulatory environment has changed under the administration of President Trump. In January 2017, the President signed an executive order requiring federal agencies to repeal two regulations for each new one they propose and imposing a regulatory budget, which would limit the amount of new regulatory costs federal agencies can impose on individuals and businesses each year. The Company does not believe the order has had a significant impact on its industry. However, the order,

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and other anti-regulatory action by the President and/or Congress, may inhibit future new regulations and/or lead to the repeal or delayed effectiveness of existing regulations. Therefore, it is uncertain how the Company may be impacted in the future by existing, proposed, or repealed regulations.

For further discussion regarding such laws and regulations, refer to the "Risk Factors" section under Part 1, Item 1A of this Form 10-K.

Seasonality

In the trucking industry, revenue has historically followed a seasonal pattern for various commodities and customer businesses. Peak freight demand has historically occurred in the third and early fourth quarters. After the December holiday season and during the remaining winter months, freight volumes are typically lower as many customers reduce shipment levels. Operating expenses have historically been higher in the winter months due primarily to decreased fuel efficiency, increased cold weather-related maintenance costs of revenue equipment and increased insurance and claims costs attributed to adverse winter weather conditions. Revenue can also be impacted by weather, holidays and the number of business days that occur during a given period, as revenue is directly related to the available working days of shippers.

Available Information

USA Truck was incorporated in Delaware in September 1986 as a wholly owned subsidiary of ArcBest Corporation (formerly, ABF Freight System, Inc.), and was purchased by management in December 1988. The initial public offering of the Company's common stock was completed in March 1992. At December 31, 2018, our corporate structure included USA Truck, Inc., and its wholly owned subsidiaries: International Freight Services, Inc. ("IFS"), a Delaware corporation; Davis Transfer Company Inc., a Georgia corporation ("DTC"), Davis Transfer Logistics Inc., a Georgia corporation ("DTL"), and B & G Leasing, L.L.C., a Georgia limited liability company, ("B & G," and collectively with DTC and DTL, "Davis Transfer Company").

The Company's principal offices are located at 3200 Industrial Park Road, Van Buren, Arkansas 72956, and its telephone number is (479) 471-2500.

The Company maintains a website where additional information regarding USA Truck's business and operations may be found. The website address is www.usa-truck.com. The website provides certain investor information available free of charge, as soon as reasonably practicable after electronically filing such materials with the SEC. These materials include the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, stock ownership reports filed under Section 16 of the Exchange Act, and any amendments to such reports we file or furnish pursuant to Section 13(a) or 15(d) of the Exchange Act. Information provided on the Company website is not incorporated by reference into this Form 10-K, and you should not consider information on our website to be part of this Form 10-K.

ITEM 1A. RISK FACTORS

The following risks and uncertainties may cause our actual results, business, financial condition and cash flows to differ from those anticipated in the forward-looking statements included in this Form 10-K. You should not place undue reliance on forward-looking statements made herein because such statements speak only to the date they were made. We undertake no obligation or duty to revise or update any forward-looking statements contained herein to reflect subsequent events or circumstances or the occurrence of unanticipated events, except as required by law. Also refer to the Cautionary Note Regarding Forward-Looking Statements in Part I of this Form 10-K.

Our business is subject to general economic, credit, and business factors affecting the trucking industry that are largely out of our control, any of which could have a materially adverse effect on our operating results.

The truckload industry is highly cyclical, and our business is dependent on a number of factors that may have a materially adverse effect on our results of operations, many of which are beyond our control. We believe that some of the most significant of these factors include (i) excess tractor and trailer capacity in the trucking industry in comparison with shipping demand; (ii) driver shortages and increases in driver compensation; (iii) declines in the resale value of used revenue equipment; (iv) compliance with ongoing regulatory requirements; (v) strikes, work stoppages or work slowdowns at our facilities or at customer, port, border crossing or other shipping-related facilities; (vi) increases in interest rates, fuel taxes, tolls, and license and registration fees; and (vii) rising costs of healthcare.

We are affected by (i) recessionary economic cycles such as the 2017 freight environment, which was characterized by weak demand and downward pressure on rates; (ii) changes in customers' inventory levels and practices, including shrinking product/package sizes, and in the availability of funding for their working capital; and (iii) downturns in our customers' business cycles, particularly in market segments and industries, such as retail and manufacturing, where we have significant customer concentration, and regions of the country, such as the Midwest and Southeast, where we have a significant amount of

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business. Economic conditions may adversely affect our customers and their demand for and ability to pay for our services. We may be required to increase our allowance for doubtful accounts for customers encountering adverse economic conditions.

Economic conditions that decrease shipping demand or increase the supply of available tractors and trailers can exert downward pressure on rates and equipment utilization, thereby decreasing asset productivity. For our USAT Logistics segment, imbalance between capacity and demand is usually favorable to our financial performance, while market equilibrium is usually unfavorable to our financial performance as logistics services are generally of less value to either shippers or carriers in such environment. The risks associated with these factors are heightened when the United States economy is weakened. Some of the principal risks during such times, which risks we have experienced during prior recessionary periods, are as follows:

•we may experience low overall freight levels, which may reduce our asset utilization;

•freight patterns may change as supply chains are redesigned, resulting in an imbalance between our capacity and our customers' freight demand;

•customers may bid out freight or utilize competitors that offer lower rates in an attempt to lower their costs, and we might be forced to lower our rates or lose freight;

•we may be forced to accept more loads from freight brokers, where freight rates are typically lower, or may be forced to incur more non-revenue generating miles to obtain loads; and

•lack of access to current sources of capital, leading to an inability to secure financing on satisfactory terms, or at all.

We are subject to cost increases that are outside our control that could materially reduce our profitability if we are unable to increase our rates sufficiently. Such costs include, but are not limited to, increases in driver and office employee wages, fuel prices, purchased transportation costs, taxes, interest rates, tolls, license and registration fees, insurance and claims, revenue equipment and related maintenance, tires and other components and healthcare and other benefits for our employees. Further, we may not be able to appropriately adjust our costs to changing market demands. In order to maintain high efficiencies in our business model, it is necessary to adjust staffing levels to changing market demands. In periods of rapid change, it is more difficult to match our staffing level to our business levels.

Changing impacts of regulatory measures could adversely impact our operating efficiency and productivity, decrease our operating revenues and profitability, and result in higher operating costs. In addition, declines in the resale value of used revenue equipment can also affect our profitability and cash flows. From time to time, various federal, state, or local taxes could also increase, including taxes on fuel. We cannot predict whether, or in what form, any such increase will be enacted that may be applicable to us, but such an increase could adversely affect our results of operations.

In addition, we cannot predict future economic conditions, fuel price fluctuations, or how consumer confidence could be affected by actual or threatened armed conflicts or terrorist attacks, government efforts to combat terrorism, military action against a foreign state or group located in a foreign state, or heightened security requirements. Enhanced security measures in connection with such events could impair our operating efficiency and productivity and result in higher operating costs.

We operate in a highly competitive and fragmented industry, and numerous competitive factors could impair our ability to maintain or improve our results of operations.

Numerous competitive factors present in our industry could impair our ability to maintain or improve our current profitability and could have a materially adverse effect on our results of operations. These factors include the following:

•We compete with many other truckload carriers of varying sizes and, to a lesser extent, with less-than-truckload carriers, railroads, intermodal providers, freight brokers, and other transportation and logistics companies, many of which have access to more equipment and greater capital resources than we do.

•Many of our competitors periodically reduce their freight rates to gain business, especially during times of reduced growth rates in the economy or overcapacity, which may limit our ability to maintain or increase freight rates or maintain growth in our business or may require us to reduce our freight rates in order to maintain business and keep our equipment productive.

•We may increase the size of our fleet during periods of high freight demand during which our competitors also increase their capacity, and we may experience losses in greater amounts than such competitors during subsequent cycles of softened freight demand if we are required to dispose of assets at a loss to match reduced customer demand;

•Some of our customers are other transportation companies or also operate their own private trucking fleets, and they may decide to transport more of their own freight.

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•Many customers reduce the number of carriers they use by selecting so-called "core carriers" as approved service providers or by engaging dedicated providers, and in some instances we may not be selected as a core carrier.

•Many customers periodically accept bids from multiple carriers for their shipping needs, and this process may depress freight rates or result in the loss of some of our business to competitors.

•The trend toward consolidation in the trucking industry may create large carriers with greater financial resources and other competitive advantages relating to their size, and we may have difficulty competing with these larger carriers.

•The market for qualified drivers is increasingly competitive, and our inability to attract and retain drivers could reduce our equipment utilization or cause us to increase compensation, both of which would adversely affect our profitability.

•Competition from non-asset-based and other logistics and freight brokerage companies may adversely affect customer relationships.

•Economies of scale that procurement aggregation providers may pass on to smaller carriers may improve their ability to compete with us.

•Advances in technology may require us to increase investments in order to remain competitive, and our customers may not be willing to accept higher freight rates to cover the cost of these investments.

•the USA Truck brand name is a valuable asset that is subject to the risk of adverse publicity (whether or not justified), which could result in the loss of value attributable to our brand and reduced demand for our services.

•Higher fuel prices and, in turn, higher fuel surcharges to our customers may cause some of our customers to consider freight transportation alternatives, including rail transportation.

We face various risks associated with stockholder activists, which may be disruptive to our business.

Activist stockholders have in the past advocated for certain changes at USA Truck and may attempt to gain representation on or control of our board of directors, through a proxy contest or other means, the possibility of which may create uncertainty regarding our future. These perceived uncertainties may make it more difficult to attract and retain qualified personnel, raise customer concerns, or cause volatility in the price of our common stock. The presence of such activist stockholders, a potential proxy contest, or an activist stockholder lawsuit also may create a significant distraction for our management team and require us to expend significant time and resources, depending on the nature of the activists’ agendas, and could interfere with our ability to execute our strategic initiatives. Although we are not currently aware of any activist stockholders who own a substantial portion of our stock at this time, we cannot assure you that we will be able to agree to favorable terms with activist stockholders that might acquire an interest in our Company.

Our indebtedness and capital and operating lease obligations could adversely affect our ability to respond to changes in our industry or business.

Our level of indebtedness and lease obligations is significant. As a result of our current level of debt, capital leases, operating leases and encumbered assets, we believe:

•our vulnerability to adverse economic conditions and competitive pressures is heightened;

•we will continue to be required to dedicate a substantial portion of our cash flows from operations to lease and interest payments and repayment of debt, limiting the availability of cash for other purposes;

•our flexibility in planning for, or reacting to, changes in our business and industry may be limited;

•our results of operations and cash flows are sensitive to fluctuations in interest rates because some of our debt obligations are subject to variable interest rates, and future borrowings and lease financing arrangements may be affected by any such fluctuations;

•our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, or other purposes may be limited;

•we may be placed at a competitive disadvantage relative to some of our competitors that have less, or less restrictive, debt than us; and

•we may be required to issue additional equity securities to raise funds, which would dilute the ownership position of our stockholders.

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Our financing obligations could negatively impact our future operations, our ability to satisfy our capital needs, or our ability to engage in other business activities or strategic opportunities. We also cannot assure you that additional financing will be available to us when required or, if available, will be on terms satisfactory to us.

In the future, we may need to obtain additional financing that may not be available or, if it is available, may result in a reduction in the percentage ownership of our then-existing stockholders.

We may need to raise additional funds in order to:

•finance unanticipated working capital requirements, capital investments or refinance existing indebtedness;

•develop or enhance our technological infrastructure and our existing services;

•fund strategic relationships or opportunities;

•respond to competitive pressures; and

•acquire complementary businesses or services.

If the economy and/or the credit markets weaken, or we are unable to enter into capital or operating leases to acquire revenue equipment on terms favorable to us, our business, financial results and results of operations could be materially adversely affected, especially if consumer confidence declines and domestic spending decreases. If adequate funds are not available or are not available on acceptable terms, our ability to fund our strategic initiatives, take advantage of new opportunities, develop or enhance technology or services or otherwise respond to competitive pressures could be significantly limited. If we raise additional funds by issuing equity or convertible debt securities, the ownership of our then-existing stockholders may be diluted, and holders of these securities may have rights, preferences or privileges senior to those of our then-existing stockholders.

Our revolving credit agreement and other financing arrangements contain certain covenants, restrictions, and requirements that we may be unable to comply with. A default could result in the acceleration of all or part of any outstanding indebtedness, which could have an adverse effect on our financial condition, liquidity, results of operations, and the market price of our common stock.

The Credit Facility contains a single springing financial covenant, which requires us to maintain a consolidated fixed charge coverage ratio of at least 1.0 to 1.0. The financial covenant springs only in the event excess availability under the Credit Facility drops below 10% of the lenders' total commitments under the Credit Facility. In addition, in the event our excess availability under the Credit Facility drops below 20% of the lenders' total commitments under the Credit Facility, we may be subject to certain additional restrictions, such as restricting our ability to pay dividends, make certain investments, prepay certain indebtedness, execute share repurchase programs, and enter into certain acquisitions and hedging arrangements. The fixed charge coverage ratio is affected by our level of earnings and is adversely affected by operating losses and other charges such as severance costs and impairment charges. In recent years, we have incurred operating losses, severance and restructuring costs and impairment charges relating to, among others, a decline in the appraised value of our Company-owned revenue equipment fleet. Future operating losses, severance and restructuring actions and further declines in the appraised value of our Company-owned revenue equipment fleet would adversely affect our fixed charge coverage ratio and could impair our ability to make further borrowings under our Credit Facility.

The Credit Facility contains certain restrictions and covenants related to, among other things, dividends, liens, acquisitions and dispositions, affiliate transactions, and the incurrence of other indebtedness. The Credit Facility is secured by a pledge of substantially all of our assets, with the exclusion of any real estate or revenue equipment financed outside the Credit Facility. The Credit Facility includes usual and customary events of default for a facility of this nature and provides that, upon the occurrence and continuation of an event of default, payment of all amounts payable under the Credit Facility may be accelerated, and the lenders' commitments may be terminated.

If we fail to comply with any of our financing arrangement covenants, restrictions, or requirements, we would be in default under the relevant agreement. In the event of any such default, if we failed to obtain replacement financing or amendments to, or waivers under, the applicable financing arrangements, existing lenders could cease to make further advances, declare existing debt to be immediately due and payable, fail to renew letters of credit, impose significant restrictions and requirements on our operations, institute foreclosure proceedings against collateralized assets, or impose significant fees. If acceleration occurs, it may be difficult or expensive to refinance the accelerated debt and the issuance of additional equity securities could dilute stock ownership. Even if new financing can be procured, more stringent borrowing terms could mean that credit is not available to us on acceptable terms. A default under these financing arrangements could cause a materially adverse effect on the liquidity, financial condition, and results of operations.

On January 31, 2019, we entered into a five-year, $225.0 million senior secured revolving credit agreement ("Credit Facility") with a group of lenders and Bank of America, N.A., as agent, pursuant to the terms of an Amended and Restated

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Security Agreement that amends and restates the terms of the Company's senior secured revolving credit facility dated February 5, 2015 that was in effect at December 31, 2018. We also have other financing arrangements. See "Item 8. Financial Statements and Supplementary Data - Note 17 - Subsequent Events" in this Form 10-K for discussion of the Company's amended and restated $225.0 million revolving credit facility.

We have significant ongoing capital requirements that could adversely affect our profitability if we are unable to generate sufficient cash from operations, match our capital investments with customer demand, or obtain financing on favorable terms.

The truckload industry is capital intensive, and our policy of operating newer equipment requires us to expend significant amounts annually. We expect to pay for projected capital expenditures with funds provided by operations, borrowings under the Credit Facility, proceeds from the sale of used revenue equipment, and capital and operating leases. We base our equipment purchase and replacement decisions on a number of factors, including the state of the economic environment, new equipment prices, the used revenue equipment market, the attractiveness of lease terms, demand for freight services, prevailing interest rates, technological improvements, regulatory changes, cost per mile, fuel efficiency, equipment durability, equipment specifications, and driver comfort. Further, if anticipated demand for our services differs materially from actual results, we may have too many or too few revenue equipment assets. Moreover, resource requirements vary based on customer demand, which may be subject to seasonal or general economic conditions. During periods of decreased customer demand, our asset utilization may suffer, and we may decide to sell used revenue equipment on the open market or turn in used revenue equipment under certain equipment leases in order to right size our fleet. This could cause us to incur losses on such sales or require payments in connection with the return of such equipment, particularly during times of a softer used equipment market, either of which could have a materially adverse effect on our profitability.

If we are unable to generate sufficient cash from operations or obtain borrowing on favorable terms, we may be forced to further limit our growth, enter into less favorable financing arrangements, or operate revenue equipment for longer periods, any of which could have a materially adverse effect on our results of operations.

Upgrading our tractors to reduce the average age of our fleet may not increase our profitability or result in cost savings as expected or at all.

Upgrades of our tractor fleet may not result in an increase in profitability or cost savings. Expected improvements in operating ratio may lag behind new tractor deliveries, primarily because in executing a tractor fleet upgrade, we may experience costs associated with preparing our old tractors for trade, and our new tractors for integration into our fleet, and lost driving time while swapping revenue equipment. Further, tractor prices have increased and may continue to increase, due in part to government regulations applicable to newly manufactured tractors and diesel engines.

In addition, we cannot be certain that an agreement will be reached on price, equipment trade-ins, or other terms that we deem favorable. If we do enter an agreement for the purchase of new tractors, we could be exposed to the risk that the new tractor deliveries will be delayed. Accordingly, we are subject to an increased risk that upgrades of our tractor fleet will not result in the operational results, cost savings and increases in profitability that we expect.

We self-insure for a portion of our claims exposure, which could significantly increase the volatility of, and decrease the amount of, our earnings.

Our business results in claims and litigation related to personal injuries, property damage and workers' compensation. We self-insure a portion of our claims exposure, which could increase the volatility of, and decrease the amount of, our earnings, and could have a materially adverse effect on our results of operations. Our future insurance and claims expenses may exceed historical levels, which could reduce our earnings. We currently accrue amounts for liabilities based on our assessment of claims that arise and our insurance coverage for the periods in which the claims arise and we evaluate and revise these accruals from time-to-time based on additional information. However, ultimate results may differ from our estimates due to a number of uncertainties, including evaluation of severity, legal costs, and claims that have been incurred but not reported, which could result in losses greater than our reserved amounts. At certain times in the past, we have had to adjust our reserves, and future significant adjustments may occur. Further, our self-insured retention levels could change and result in more volatility than in recent years. If we are required to reserve or pay additional amounts because our estimates are revised or the claims ultimately prove to be more severe than originally assessed or if our self-insured retention levels change, our financial condition and results of operations may be materially adversely affected. For further discussion regarding our self-insured retention levels, including our self-insured retention amounts, refer to the "Safety and Risk Management" section under Part 1, Item 1 of this Form 10-K.

We maintain insurance for most risks above the amounts for which we self-insure with licensed insurance carriers. If any claim is not covered by an insurance policy, exceeds our coverage, or falls outside the aggregate coverage limit, we would bear the excess or uncovered amount, in addition to our self-insured amount. Although we believe our aggregate insurance limits are sufficient to cover reasonably expected claims, it is possible that one or more claims could exceed those limits. Insurance

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carriers have recently raised premiums for the trucking industry. Our insurance and claims expense could increase if we have a similar experience at renewal, or we could find it necessary to raise our self-insured retention or decrease our aggregate coverage limits when our policies are renewed or replaced. Additionally, with respect to our insurance carriers, the industry is experiencing a decline in the number of carriers and underwriters that offer excess insurance policies or that are willing to provide insurance for trucking companies, and the necessity to go off-shore for insurance needs has increased. This may have a material adverse effect on our insurance costs or make insurance in excess of our self-insured retention more difficult to find, as well as increase our collateral requirements for policies that require security. In the event that (i) our insurance expenses increase, (ii) we become unable to find excess coverage in amounts we deem sufficient, (iii) we experience a claim in excess of our coverage limits, (iv) we experience a claim for which we do not have coverage, or (v) we have to increase our reserves, there could be a materially adverse effect on our results of operations and financial condition.

Healthcare legislation and cost inflation also could negatively impact financial results by increasing annual employee healthcare costs. In addition, rising healthcare costs could force us to make changes to our existing benefits program, which could negatively impact our ability to attract and retain employees.

Fluctuations in the price or availability of fuel, the volume and terms of diesel fuel purchase commitments, surcharge collection, and hedging activities may increase our costs of operations.

Fuel is one of our largest operating expenses. Diesel fuel prices fluctuate greatly due to factors beyond our control, such as political events, terrorist activities, armed conflicts, commodity futures trading, devaluation of the dollar against other currencies, and hurricanes and other natural or man-made disasters, each of which may lead to an increase in the cost of fuel. Fuel prices also are affected by the rising demand for fuel in developing countries, and could be materially adversely affected by the use of crude oil and oil reserves for purposes other than fuel production and by diminished drilling activity. Such events may lead not only to increases in fuel prices, but also to fuel shortages and disruptions in the fuel supply chain. Because our operations are dependent upon diesel fuel, significant diesel fuel cost increases, shortages, rationings, or supply disruptions could materially adversely affect our business, financial condition and results of operations.

Fuel also is subject to regional pricing differences and is often more expensive in certain areas where we operate. Increases in fuel costs, to the extent not offset by rate per mile increases or fuel surcharges, have a materially adverse effect on our results of operations. While we have fuel surcharge programs in place with a majority of our customers, which historically have helped us offset the majority of the negative impact of rising fuel prices associated with loaded or billed miles, we also incur fuel costs that cannot be recovered, such as those associated with non-revenue generating miles or time when our engines are idling. Moreover, the terms of each customer's fuel surcharge program vary, and certain customers have sought to modify the terms of their fuel surcharge programs to lower our recoverability for fuel price increases. During periods of low freight volumes, customers may use their negotiating leverage to impose fuel surcharge policies that provide a lower reimbursement of our fuel costs. There is no assurance that our fuel surcharge programs can be maintained indefinitely or will be sufficiently effective. In addition, because our fuel surcharge recovery lags behind changes in fuel prices, our fuel surcharge recovery may not capture the increased costs we pay for fuel, especially when prices are rising. This could lead to fluctuations in our levels of reimbursement, which have occurred in the past. There can be no assurance that such fuel surcharges can be maintained indefinitely or will be sufficiently effective.

From time to time, we have used hedging contracts and volume purchase arrangements to attempt to limit the effect of price fluctuations. Hedging arrangements effectively allow us to pay a fixed rate for fuel on gallons hedged that is determined based on the market rate at the time we enter into the hedge. In times of falling diesel fuel prices, our costs will not be reduced to the same extent they would have reduced if we had not entered into the hedging contracts and we may incur significant expense in connection with our obligation to make cash payments under such contracts. Accordingly, in times of falling diesel fuel prices, our results of operations and cash flows could also be materially adversely affected.

Volatility in the used revenue equipment market could have a materially adverse effect on our business, financial condition, results of operations.

Decreased demand for used revenue equipment could adversely affect our operating results. As we continually replace our revenue equipment, we rely on the used revenue equipment market to extract remaining value out of our used equipment. The market for used revenue equipment is impacted by several factors, including the demand for freight, the supply of used equipment, the availability of financing, the presence of buyers for export to foreign countries, and, to a lesser extent, commodity prices for scrap metal. A depressed market for used revenue equipment could require us to dispose of our revenue equipment at depressed values or to record losses on disposal or impairments of the carrying values of our revenue equipment that is not protected by residual value arrangements. If there is a deterioration of resale prices, it could have a materially adverse effect on our business, financial condition, and results of operations. A deterioration of demand for used revenue equipment could make it more difficult to dispose of and replace older equipment and may reduce our ability to refresh our fleet, both of which could negatively impact our results of operations.

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Increased prices for new revenue equipment, design changes of new engines, decreased availability of new revenue equipment, and the failure of manufacturers to meet their sale or trade-back obligations to us could have a materially adverse effect on our business, financial condition, and/or results of operations.

We are subject to risk with respect to higher prices for new tractors and trailers. We have experienced an increase in prices for new tractors over the past few years, and the resale value of the used tractors has not increased to the same extent. Prices have increased and may continue to increase, due, in part, to government regulations applicable to newly manufactured tractors, trailers and diesel engines, higher commodity prices, and the pricing power of equipment manufacturers. In addition, we have recently equipped our tractors with safety, aerodynamic, and other options that increase the price of new equipment. More restrictive EPA and state emissions standards have required manufacturers to introduce new engines. These regulations have increased the cost of our new tractors and could impair equipment productivity, result in lower fuel mileage, and increase our operating expenses. Our business could be harmed if we are unable to continue to obtain an adequate supply of new tractors and trailers for these or other reasons. As a result, we expect to continue to pay increased prices for revenue equipment and incur additional expenses and related financing costs for the foreseeable future. Furthermore, reduced equipment efficiency and lower fuel mileage may result from new engines designed to reduce emissions at the sacrifice of fuel efficiency, thereby increasing our operating expenses.

Tractor and trailer vendors may reduce their manufacturing output in response to lower demand for their products in economic downturns or shortages of component parts. A decrease in vendor output may have a materially adverse effect on our ability to purchase a quantity of new revenue equipment that is sufficient to sustain our desired growth rate and to maintain a late-model fleet. Moreover, an inability to obtain an adequate supply of new tractors or trailers could have a materially adverse effect on our business, financial condition, and results of operations.

We may not be successful in maintaining and improving profitability.

We reported a net loss in 2016 and in 2017 we reported a profit due primarily to an approximately $12.0 million reduction of income tax expense arising from the Tax Cuts and Jobs Act of 2017 (the "Tax Cuts and Jobs Act"). Although we reported a profit in 2018, our operations still need to show improvement to achieve consistent profitability. Maintaining and improving profitability depends upon numerous factors, including the ability to increase average base revenue per tractor, increase utilization, improve driver retention, and control operating expenses. We may not be able to maintain or improve profitability in the future, which could negatively impact our liquidity and financial position.

We may not be successful in implementing our realigned management team’s operating procedures, and cost savings initiatives.

We have implemented changes to our management team and structure, as well as operating procedures. These changes may not be successful or may not achieve the desired results. Additional training or different personnel may be required, which may result in additional expense, delays in obtaining results, or disruptions to operations. Some of these implemented changes include customer service and driver management changes and cost savings initiatives. These changes and initiatives may not improve our results of operations, including asset productivity, tractor utilization, driver retention and base revenue per tractor. In addition, we may not be successful in achieving the expected savings in our cost structure, including the areas of equipment maintenance, equipment operating costs, insurance and claims and fuel economy. In such event, our revenue, financial results, and ability to operate profitably could be negatively impacted. Further, our operating results could be negatively affected by a failure to further penetrate our existing customer base, cross-sell our services, pursue new customer opportunities, and manage the operations and expenses of our USAT Logistics segment. There is no assurance we will achieve our goals. If we are unsuccessful, our financial condition, results of operations, and cash flows could be adversely affected.

Management and key employee turnover or failure to attract and retain qualified management and other key personnel, could have a materially adverse effect on our business, financial condition, and results of operations.

We depend on the leadership and expertise of our executive management team and other key personnel to design and execute our strategic and operating plans, including our current efforts to improve the profitability of our Trucking segment and grow our USAT Logistics segment. Our management team experienced significant changes in recent prior years and may continue to experience change. While we have employment agreements in place with certain members of our management team, there can be no assurance we will continue to retain their services and we may become subject to significant severance payments if our relationship with such members is terminated under certain circumstances. Further, turnover, planned or otherwise, in key leadership positions could adversely impact our ability to manage our business efficiently and effectively, and such turnover can be disruptive and distracting to management and employees, may lead to additional departures of existing personnel, and could have a materially adverse effect on our results of operations. We must recruit, develop and retain a core group of leaders to realize our goal of expanding our operations, improving our earnings consistency, and positioning ourselves for long-term operating revenue growth.

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Increases in driver compensation or difficulties attracting and retaining qualified drivers could have a materially adverse effect on our profitability and the ability to maintain or grow our fleet.

Like many truckload carriers, we experience substantial difficulty in attracting and retaining sufficient numbers of qualified drivers, which includes the engagement of independent contractors. The truckload industry is subject to a shortage of qualified drivers. Such shortage is exacerbated during periods of economic expansion, in which alternative employment opportunities, such as those in the construction and manufacturing industries, are more plentiful and freight demand increases, or during periods of economic downturns, in which unemployment benefits might be extended and financing is limited for independent contractors who seek to purchase equipment or for students who seek financial aid for driving school. Regulatory requirements, including those related to safety ratings, ELDs and HOS changes, and an improved economy could further reduce the number of eligible drivers or force us to increase driver compensation to attract and retain drivers. We have seen evidence that stricter HOS regulations adopted by the DOT in the past have tightened and, to the extent new regulations are enacted, may continue to tighten, the market for eligible drivers. We believe the required implementation and enforcement of ELDs may further, tighten such market. The lack of adequate tractor parking along some highways and congestion caused by inadequate highway funding may make it more difficult for drivers to comply with HOS regulations and cause added stress for drivers, further reducing the pool of eligible drivers. We believe the shortage of qualified drivers and intense competition for drivers from other trucking companies will create difficulties in maintaining or increasing the number of our drivers and may restrain our ability to engage a sufficient number of drivers and independent contractors, and our inability to do so could negatively impact our operations. Further, the compensation we offer our drivers and independent contractor expenses is subject to market conditions, and we may find it necessary to increase driver compensation and/or independent contractor rates in future periods.

In addition, we and many other truckload carriers suffer from a high turnover rate of drivers and independent contractors. This high turnover rate requires us to continually recruit a substantial number of drivers and independent contractors and to focus on alternative recruitment methods in order to operate existing revenue equipment. If we are unable to continue to attract and retain a sufficient number of drivers and independent contractors, we could be forced to, among other things, adjust our compensation packages, operate with fewer tractors, or increase the number of tractors without drivers and face difficulty meeting shipper demands, any of which could have a materially adverse effect on our results of operations.

Our engagement of independent contractors to provide a portion of our capacity exposes us to different risks than we face with our tractors driven by company drivers.

Pursuant to our fuel surcharge program with independent contractors, we pay independent contractors a fuel surcharge that increases with the increase in fuel prices. A significant increase or rapid fluctuation in fuel prices could cause our costs under this program to be higher than the revenue we receive under our customer fuel surcharge programs.

Our independent contractor agreements are governed by the federal leasing regulations, which impose specific requirements on us and the independent contractors. If more stringent federal leasing regulations are adopted, independent contractors could be deterred from becoming independent contractor drivers, which could materially adversely affect our goal of growing our number of independent contractors.

Independent contractors are third-party service providers, as compared with company drivers, who are our employees. As independent business owners, they may make business or personal decisions that may conflict with our best interests. For example, if a load is unprofitable, route distance is too far from home, personal scheduling conflicts arise, or for other reasons, independent contractors may deny loads of freight from time to time. Additionally, independent contractors may be unable to obtain or retain equipment financing, which could affect their ability to continue to act as a third-party service provider for the Company. In these circumstances, we must be able to deliver the freight timely in order to maintain relationships with customers, and if we fail to meet certain customer needs or incur increased expenses to do so, this could materially adversely affect our results of operations.

If the independent contractors we contract with are deemed by regulators or judicial process to be employees, there could be a materially adverse effect on our results of operations.

Tax and regulatory authorities, as well as independent contractors themselves, have increasingly asserted that independent contractor drivers in the trucking industry are employees, rather than independent contractors, for a variety of purposes, including income tax withholding, workers' compensation, wage and hour compensation, unemployment, and other issues. Federal legislation has been introduced in the past that would make it easier for tax and other authorities to reclassify independent contractors as employees, including legislation to increase the recordkeeping requirements for those that engage independent contractor drivers and to increase the penalties for companies who misclassify their employees and are found to have violated employee overtime and/or wage requirements. Additionally, federal legislators have sought to (i) abolish the current safe harbor allowing taxpayers meeting certain criteria to treat individuals as independent contractors if they are following a long-standing, recognized practice, (ii) extend the Fair Labor Standards Act to independent contractors, and (iii) impose notice requirements based on employment or independent contractor status and fines for failure to comply. Some states have put initiatives in place to increase their revenue from items such as unemployment, workers' compensation, and income

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taxes, and the Company believes a reclassification of independent contractors as employees would help states with these initiatives. Additionally, courts in certain states have issued recent decisions that could result in a greater likelihood that independent contractors would be judicially classified as employees in such states. Further, class actions and other lawsuits have been filed against certain members of our industry seeking to reclassify independent contractors as employees for a variety of purposes, including workers' compensation and healthcare coverage. In addition, companies that use lease-purchase independent contractor programs, such as us, have been more susceptible to reclassification lawsuits and several recent decisions have been made in favor of those seeking to classify independent contractor truck drivers as employees. Taxing and other regulatory authorities and courts apply a variety of standards in their determination of independent contractor status. If independent contractors we contract with or have contracted with are determined to be employees, we would incur additional exposure under federal and state tax, workers' compensation, unemployment benefits, labor, employment, and tort laws, including for prior periods, as well as potential liability for employee benefits and tax withholdings.

Developments in labor and employment law and any unionizing efforts by employees could have a materially adverse effect on our results of operations.

We face the risk that Congress, federal agencies, or one or more states could approve legislation or regulations significantly affecting our businesses and our relationship with our employees, such as the previously proposed federal legislation referred to as the Employee Free Choice Act, which would have substantially liberalized the procedures for union organization. None of our domestic employees are currently covered by a collective bargaining agreement, but any attempt by our employees to organize a labor union could result in increased legal and other associated costs. Additionally, given the National Labor Relations Board's "speedy election" rule, our ability to timely and effectively address any unionizing efforts would be difficult. If we entered into a collective bargaining agreement with our domestic employees, the terms could materially adversely affect our costs, efficiency, and ability to generate acceptable returns on the affected operations.

The growth of our asset-light service offering poses unique risks.

We are continuing to implement our plan to increase the proportion of our revenue obtained from our "asset-light operations," which primarily represents our USAT Logistics segment and the independent contractors we engage. Our goal is that our asset-light operations will result in higher margins, lower capital commitments, and less risk during times of weakened economic conditions. Execution of this plan involves the risk of customer loss or deterioration if either our Trucking and USAT Logistics operations creates a customer issue that impacts the other where we have customer overlap, decreased utilization of Company equipment if loads with desirable profitability and lanes are allocated to third parties, growth impediments given our need to rely on third-party providers and an independent contractor market that is contracting and subject to litigation and regulatory risks, and competitive pressures from other asset-light companies with greater financial, personnel, and technological resources. If we are unsuccessful in achieving this, it may have a materially adverse effect on our future results of operations.

Our USAT Logistics segment and our engagement of independent contractors are dependent upon the services of third-party capacity providers, including other truckload carriers. For these operations, we do not own or control the transportation assets that deliver our customers' freight, and do not employ the people directly involved in delivering the freight. These third-party providers may seek other freight opportunities or may require increased compensation in times of improved freight demand or tight trucking capacity. Our inability to secure the services of these third parties could significantly limit our ability to serve our customers on competitive terms. Additionally, if we are unable to secure sufficient equipment or other transportation services to meet our commitments to our customers or provide services on competitive terms, our operating results could be materially and adversely affected. Our ability to secure sufficient equipment or other transportation services is affected by many risks beyond our control, including equipment shortages in the transportation industry, particularly among contracted truckload carriers, interruptions in service due to labor disputes, changes in regulations impacting transportation, and changes in transportation rates. Further, we believe that the recently effective ELD mandate may cause a decrease in third party transportation capacity and make securing such capacity more difficult and/or expensive.

We derive a significant portion of our revenues from our major customers, the loss of one or more of which could have a materially adverse effect on our business.

We generate a significant portion of our operating revenue from our major customers. A substantial portion of our freight is from customers in the retail industry. As such, our volumes are largely dependent on consumer spending and retail sales, and our results may be more susceptible to trends in unemployment and retail sales than carriers that do not have this concentration. In addition, our major customers engage in bid processes and other activities periodically (including currently) in an attempt to lower their costs of transportation. We may not choose to participate in these bids or, if we participate, may not be awarded the freight, either of which circumstances could result in a loss of some or all of our freight volumes with these customers. In this event, we could be required to replace the volumes elsewhere at uncertain rates and volumes, suffer reduced equipment utilization, or reduce the size of our fleet. Additionally, USAT Logistics is dependent upon a single customer for more than 10% of its operating revenue. Failure to retain our existing customers, or enter into relationships with new customers, each on

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acceptable terms, could materially impact our business, financial condition, results of operations, and ability to meet our current and long-term financial forecasts.

Economic conditions and capital markets may materially adversely affect our customers and their ability to remain solvent. Our customers' financial difficulties can negatively impact our results of operations and financial condition and our ability to comply with the covenants under our debt agreements, especially if they were to delay or default on payments owed to us. Generally, we do not have contractual relationships that guarantee any minimum volumes with our customers, and we cannot assure you that our customer relationships will continue as presently in effect. Our dedicated service offering is typically subject to longer term written contracts than our over-the-road service offering. However, certain of these contracts contain cancellation clauses, including our "evergreen" contracts, which automatically renew for one-year terms but that can be terminated more easily. There is no assurance that any of our customers, including our dedicated customers, will continue to utilize our services, renew our existing contracts, or continue at the same volume levels. Despite the existence of contractual arrangements with our customers, certain of our customers may nonetheless engage in competitive bidding processes that could negatively impact our contractual relationship. In addition, certain of our major customers may increasingly use their own truckload and delivery fleets, which would reduce our freight volumes. A reduction in or termination of our services by one or more of our major customers, including our dedicated customers, could have a materially adverse effect on our business, financial condition and results of operations.

We operate in a highly regulated industry, and changes in existing regulations or violations of existing or future regulations could have a materially adverse effect on our results of operations.

We operate in the United States pursuant to operating authority granted by the DOT, in various Canadian provinces pursuant to operating authority granted by the Ministries of Transportation and Communications, and our Mexican business activities are subject to operating authority granted by Secretaria de Comunicaciones y Transportes. Company drivers and independent contractors also must comply with the safety and fitness regulations of the DOT, including those relating to drug and alcohol testing, driver safety performance, and HOS. Matters such as weight, electronic on-board reporting, equipment dimensions, exhaust emissions, and fuel efficiency are also subject to government regulations. We also may become subject to new or more restrictive regulations relating to fuel efficiency, exhaust emissions, HOS, ergonomics, drug and alcohol testing, electronic on-board reporting of operations, collective bargaining, security at ports, speed limiters, driver training, and other matters affecting safety or operating methods. Future laws and regulations may be more stringent, require changes in our operating practices, influence the demand for transportation services, or require us to incur significant additional costs. Higher costs we incur, or higher costs incurred by suppliers who pass the costs on to us, could have a materially adverse effect our results of operations. Changes in regulations, such as those related to trailer size and gross vehicle weight limits, HOS, drug and alcohol testing, and ELDs, could increase capacity in the industry or improve the position of certain competitors, either of which could negatively impact pricing and volumes, or require additional investments by us. The short and long term impacts of changes in legislation or regulations are difficult to predict and could materially adversely affect our operations. The Environmental and Other Regulation sections in Item 1 of Part I of this Annual Report on Form 10-K discusses several proposed, pending, suspended, and final regulations that could materially impact our business and operations and is incorporated by reference herein.

The CSA program adopted by the FMCSA could adversely affect our results of operations, our ability to maintain or grow our fleet, and our customer relationships.

Under the CSA, fleets are evaluated and ranked against their peers based on certain safety-related standards. As a result, our fleet could be ranked poorly as compared to peer carriers. We recruit and retain first-time drivers to be part of our driver team, and these drivers may have a higher likelihood of creating adverse safety events under the CSA. The occurrence of future deficiencies could affect driver recruitment by causing high-quality drivers to seek employment with other carriers or limit the pool of drivers we are comfortable hiring or could cause our customers to direct their business away from us and to carriers with higher fleet safety rankings, either of which would adversely affect our results of operations. Additionally, competition for drivers with favorable safety backgrounds may increase, which could necessitate increases in driver-related compensation costs. Further, we may incur greater than expected expenses in our attempts to improve unfavorable scores.

In December 2015, Congress passed the FAST Act, which calls for significant CSA reform. The FAST Act directs the FMCSA to conduct studies of the scoring system used to generate CSA rankings to determine if it is effective in identifying high-risk carriers and predicting future crash risk. This study was conducted and delivered to the FMCSA in June 2017 with several recommendations to make the CSA program more fair, accurate, and reliable. In August 2018, FMCSA reported to Congress the proposed changes it intends to make to the CSA program. These proposed changes are discussed in this Form 10-K under the heading "Business - Other Regulation" and are incorporated by reference herein. Insofar as any of these changes increase the likelihood of us receiving unfavorable scores, it could adversely affect our results of operations and profitability.

We are compliant with the currently established intervention thresholds in a number of the seven CSA safety-related categories. Based on any category that exceed the established threshold, we may be prioritized for an intervention action or

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roadside inspection, either of which could have a materially adverse effect on our results of operations. In addition, customers may be less likely to assign loads to us. We have put procedures in place in an attempt to address areas where we exceed thresholds, and have experienced improvement in these measures. However, we cannot assure you these measures will be effective.

Receipt of an unfavorable DOT safety rating could have a materially adverse effect on our results of operations.

We currently have a satisfactory DOT rating, which is the highest available rating under the current safety rating scale. If we were to receive a conditional or unsatisfactory DOT safety rating, or similar rating under any future DOT rating system, it could materially adversely affect our business, financial condition, and results of operations as our customers may require a satisfactory DOT safety rating, and a conditional or unsatisfactory rating could materially adversely affect or restrict our operations. The Other Regulation section in Item 1 of Part I of this Annual Report on Form 10-K discusses several proposed, pending, suspended, and final regulations that could materially impact our business and operations and is incorporated by reference herein.

Compliance with various environmental laws and regulations that our operations are subject may increase our costs of operations and non-compliance with such laws and regulations could result in substantial fines or penalties.

In addition to direct regulation under the DOT and related agencies, we are subject to various environmental laws and regulations dealing with the hauling and handling of hazardous materials, fuel storage tanks, fuel spills, exhaust emissions from our vehicles and facilities, and discharge and retention of storm water. Our truck terminals often are located in industrial areas where groundwater or other forms of environmental contamination may have occurred or could occur. Our operations involve the risks of fuel spillage or seepage, environmental damage, and hazardous waste disposal, among others. One of our Trucking facilities has above-ground bulk fuel storage tanks on the premises. A small percentage of our freight consists of low-grade hazardous substances, which subjects us to a wide array of regulations. Although we have instituted programs to monitor and control environmental risks and promote compliance with applicable environmental laws and regulations, if we are involved in a spill or other accident involving hazardous substances, if there are releases of hazardous substances we transport, if soil or groundwater contamination is found at our facilities or results from our operations, or if we are found to be in violation of applicable laws or regulations, we could be subject to cleanup costs and liabilities, including substantial fines or penalties or civil and criminal liability, any of which could have a materially adverse effect on our business and operating results. The Environmental Regulations section in Item 1 of Part I of this Annual Report on Form 10-K discusses several regulations that could materially impact our business and operations and is incorporated by reference herein.

If we cannot effectively manage the challenges associated with doing business internationally, our operating revenue and results of operations may suffer.

A component of our operations is the business we conduct in Mexico, and to a lesser extent Canada, and we are subject to risks of doing business internationally, including fluctuations in foreign currencies, changes in the economic strength of Mexico and Canada, difficulties in enforcing contractual obligations and intellectual property rights, burdens of complying with a wide variety of international and United States export and import laws, and social, political, and economic instability. We must also comply with applicable anti-corruption and anti-bribery laws such as the U.S. Foreign Corrupt Practices Act and local laws prohibiting corrupt payments to government officials. We cannot guarantee compliance with all applicable laws, and violations could result in substantial fines, sanctions, civil or criminal penalties, competitive or reputational harm, litigation, or regulatory action and other consequences that might adversely affect our results of operations and our consolidated performance.

In addition, if we are unable to maintain our Free and Secure Trade ("FAST"), Business Alliance for Secure Commerce ("BASC"), and Customs-Trade Partnership Against Terrorism ("C-TPAT") status, we may have significant border delays. This could cause our Mexican and Canadian operations to be less efficient than those of competing capacity providers that operate in Mexico or Canada and have FAST, BASC, and C-TPAT status. We also face additional risks associated with our foreign operations, including restrictive trade policies and duties, taxes, or government royalties imposed by the Mexican or Canadian governments, to the extent not preempted by the terms of the North American Free Trade Agreement ("NAFTA"), or its proposed replacement, the United-States-Mexico-Canada Agreement ("USMCA"), which is waiting for Congressional approval. In addition, changes to NAFTA, USMCA (if enacted), or other treaties governing our business could materially adversely affect our international business. It is also uncertain how the USMCA, if enacted, will impact foreign trade and our Mexican operations.

Litigation may adversely affect our business, financial condition, and results of operations.

Our business is subject to the risk of litigation by employees, independent contractors, customers, vendors, government agencies, stockholders, and other parties through private actions, class actions, administrative proceedings, regulatory actions, and other processes. Recently, trucking companies have been subject to lawsuits, including class action lawsuits, alleging violations of various federal and state wage and hour laws regarding, among other things, employee meal breaks, rest periods, overtime eligibility, worker misclassification, and failure to pay for all hours worked. A number of these lawsuits have resulted

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in the payment of substantial settlements or damages by the defendants.

The outcome of litigation, particularly class action lawsuits and regulatory actions, is difficult to assess or quantify, and the magnitude of the potential loss relating to such lawsuits may remain unknown for substantial periods of time. The cost to defend litigation may also be significant. All claims may not be covered by our insurance, and for covered claims there can be no assurance that our coverage limits will be adequate to cover all amounts in dispute. To the extent we experience claims that are uninsured, exceed our coverage limits, involve significant aggregate use of our self-insured retention amounts, or cause increases in future premiums, the resulting expenses could have a materially adverse effect on our business, results of operations, financial condition, or cash flows.

In addition, we may be subject, and have been subject in the past, to litigation resulting from trucking accidents. The number and severity of litigation claims may be worsened by distracted driving by both truck drivers and other motorists. These lawsuits have resulted, and may result in the future, in the payment of substantial settlements or damages and increases of our insurance costs.

We may not make acquisitions in the future, or if we do, we may not be successful in our acquisition strategy.

While acquisitions have not in the past provided a substantial portion of our growth, in October 2018, we completed the acquisition of Davis Transfer Company and related entities (the "Davis Acquisition"). Refer to Note 4 of the accompanying consolidated financial statements for further information about the Davis Acquisition. We may not have the financial capacity or be successful in identifying, negotiating, or consummating any future acquisitions. If we fail to make any future acquisitions, our growth could be materially and adversely affected. Any future acquisitions we undertake could involve the dilutive issuance of equity securities and/or incurring indebtedness or large one-time expenses. In addition, the Davis Acquisition and any future acquisitions we may consummate involve numerous risks, any of which could have a materially adverse effect on our business, financial condition, and results of operations, including:

•the acquired businesses may not achieve anticipated revenue, earnings, or cash flows;

•we may assume liabilities that were not disclosed to us or otherwise exceed our estimates;

•we may be unable to integrate acquired businesses successfully, or at all, and may fail to realize anticipated economic, operational and other benefits in a timely manner or at all, which could result in substantial costs and delays or other operational, technical, or financial problems;

•transaction costs and acquisition-related integration costs could adversely affect our results of operations in the period in which such charges are recorded;

•we may incur possible future impairment charges, write-offs, write-downs, or restructuring charges that could adversely impact our results of operations;

•acquisitions could disrupt our ongoing business, distract our management, and divert our resources;

•we may experience difficulties operating in markets in which we have had no or only limited direct experience;

•we could lose customers, employees, and drivers of an acquired company; and

•we may incur additional indebtedness.

We depend on the proper functioning, availability, and security of our information and communication systems (and the data contained therein), and a systems failure or unavailability, including those caused by cybersecurity breaches, could cause a significant disruption to and adversely affect our business.

We depend heavily on the proper functioning, availability, and security of our information and communication systems, including financial reporting and operating systems, in operating our business. These systems are protected through physical and software safeguards, but are still vulnerable to fire, storm, flood, power loss, telecommunications failures, physical or electronic break-ins, terrorist attacks, internet failures, computer viruses, and similar events beyond our control. More sophisticated and frequent cyberattacks in recent years have also increased security risks associated with information technology systems. We also maintain information security policies to protect our systems, networks, and other information technology assets (and the data contained therein) from cybersecurity breaches and threats, such as hackers, malware, and viruses; however, such policies cannot ensure the protection of our systems, networks, and other information technology assets (and the data contained therein). If our information or communication systems fail, otherwise become unavailable, or experience a cybersecurity breach or threat, manually performing functions could temporarily impact our ability to manage our fleet efficiently, to respond to customers' requests effectively, to maintain billing and other records reliably, to bill for services accurately or in a timely manner, to communicate internally and with drivers, customers, and vendors, and to prepare financial statements accurately or in a timely manner. Business interruption insurance may be inadequate to protect us in the event of a catastrophe. Any system failure, upgrade complication, cybersecurity breach, or other system disruption could interrupt or

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delay operations, damage our reputation, impact our ability to manage our operations and report financial performance, and cause the loss of customers, any of which could have a materially adverse effect on existing and future business.

Our production systems are supported utilizing a hybrid hosting model that includes virtualized on premise servers and cloud service providers. Production data is replicated to a secondary data center in a separate geographic region, which protects our information in the event of a significant disaster. This redundant data center allows the data related to our systems to be recovered following an incident. However, recovery of such data may not immediately restore our ability to utilize our information systems. In the event such systems are significantly damaged, it could take several days before our systems are returned to full functionality. Our communication services are provided through a mixture of on premise, hosted data center, and cloud services. Recovery time is dependent upon the nature of the event and the affected communication service.

We receive and transmit confidential data with our customers, drivers, vendors, employees, and service providers in the normal course of business. Despite our implementation of secure transmission techniques, internal data security measures, training, and monitoring tools, our information and communication systems are vulnerable to cybersecurity threats and breach attempts from both external and internal sources. Any such breach could result in disruption of communications with our customers, drivers, vendors, employees, and service providers and improper access to, misappropriation of, altering, or deleting information in our systems, including customer, driver, vendor, employee, and service provider information and our proprietary business information. A cybersecurity incident (including a breach) could damage our business operations and reputation and could cause us to incur costs associated with repairing our systems, increased security, customer notifications, lost operating revenue, litigation, regulatory action, fines and penalties and reputational damage.

Seasonality and the impact of weather and other catastrophic events affect our operations and profitability.

Our tractor productivity decreases during the winter season because inclement weather impedes operations, and some shippers reduce their shipments after the winter holiday season. Revenue can also be adversely affected by inclement weather and holidays, since revenue is directly related to available working days of shippers. At the same time, operating expenses increase and fuel efficiency declines because of engine idling and harsh weather creating higher accident frequency, increased claims, and more equipment repairs. We may also suffer from weather-related or other unforeseen events such as tornadoes, hurricanes, blizzards, ice storms, floods, fires, earthquakes, and explosions. These events may disrupt fuel supplies, increase fuel costs, disrupt freight shipments or routes, affect regional economies, damage or destroy our assets, or adversely affect the business or financial condition of our customers, any of which could have a materially adverse effect on our results of operations or make our results of operations more volatile.

The market price of our common stock may be volatile.

The price of our common stock may fluctuate widely, depending upon a number of factors, many of which are beyond our control. These factors include, among other items: the perceived prospects of our business and our industry as a whole; differences between our actual financial and operating results and those expected by investors and analysts; changes in analysts' recommendations or projections, including such analysts' outlook on our industry as a whole; actions or announcements by our competitors; changes in the regulatory environment in which we operate; significant sales or hedging of shares by a principal stockholder; actions taken by stockholders that may be contrary to the board of director's recommendations; and changes in general economic or market conditions. In addition, stock markets generally experience significant price and volume volatility from time to time which may adversely affect the market price of our common stock for reasons unrelated to our performance.

We could determine that our goodwill and other intangible assets are impaired, thus recognizing a related loss.

As of December 31, 2018, we had goodwill of $4.9 million and other intangible assets of $17.8 million. We evaluate our goodwill and other intangible assets for impairment. We could recognize impairments in the future, and we may never realize the full value of our intangible assets. If these events occur, our profitability and financial condition will suffer.

Uncertainty relating to piece rate legislation could result in litigation and/or have a materially adverse effect on our operating results.

The trucking industry has been confronted with a continuous patchwork of laws at the state and local levels, related to, among other things, employee rest and meal breaks. Further, driver piece rate compensation, which is an industry standard, has been attacked as not being compliant with state minimum wage laws. Both of these issues are adversely impacting the Company and motor carrier industry as a whole, with respect to the practical application of the laws; thereby resulting in additional cost.

In March 2014, the Ninth Circuit Court of Appeals held that California state wage and hour laws are not preempted by federal law. The case was appealed to the Supreme Court of the United States, which in May 2015 refused to review the case, and accordingly, the Ninth Circuit Court of Appeals decision stood. However, in December 2018, the FMCSA granted a petition filed by the America Trucking Associations and in doing so determined that federal law does preempt California's wage and hour laws, and interstate truck drivers are not subject to such laws. The FMCSA's decision has been appealed by labor

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groups and multiple lawsuits have been filed in federal courts seeking to overturn the decision, and thus it's uncertain whether it will stand. Other current and future state and local laws, including laws related to employee meal breaks and rest periods, may also vary significantly from federal law. As a result, we, along with other companies in the industry, could become subject to an uneven patchwork of laws throughout the U.S. Federal legislation has been proposed in the past to preempt certain state and local laws; however, passage of such legislation is uncertain. If federal legislation is not passed, we will either need to comply with the most restrictive state and local laws across our entire network, or overhaul our management systems to comply with varying state and local laws. Either solution could result in increased compliance and labor costs, increased driver turnover, increased legal exposure, and decreased operational efficiency.

The transportation industry is subject to security requirements that could increase our costs of operation.

Because transportation assets continue to be a target of terrorist activities, federal, state and municipal governments have adopted, and in the future may adopt, security requirements that could increase operating costs and potentially slow service for businesses, including those in the transportation industry. For example, in the aftermath of the September 11, 2001, terrorist attacks, federal, state and municipal authorities implemented and continue to implement various security measures, including checkpoints and travel restrictions on large trucks. In addition, the TSA has adopted regulations that require determination by the TSA that each driver who applies for or renews his license for carrying hazardous materials is not a security threat. These regulations could reduce the pool of qualified drivers, which could require us to increase driver compensation, limit fleet growth, or allow trucks to sit idle. These regulations also could complicate the successful pairing of available equipment with hazardous material shipments, thereby increasing the Company's response time and deadhead miles on customer shipments. These requirements are not static, but change periodically as the result of regulatory and legislative requirements, imposing additional security costs and creating a level of uncertainty for our operations. Thus, it is possible that these rules or other future security requirements could impose material costs on us or slow our service to our customers. Moreover, a terrorist attack directed at the Company or other aspects of the transportation infrastructure could disrupt our operations and adversely impact demand for our services.

Certain provisions of our charter documents and Delaware law could deter acquisition proposals and make it difficult for a third party to acquire control of the Company.

Provisions in our Restated and Amended Certificate of Incorporation ("Certificate of Incorporation") may discourage, delay, or prevent a change of control or changes in our board of directors or management that our stockholders may consider favorable. For example, our Certificate of Incorporation authorizes the board of directors to issue up to 1,000,000 shares of "blank check" preferred stock. Without stockholder approval, our board of directors has the authority to attach special rights, including voting and dividend rights, to this preferred stock, which could make it more difficult for a third party to acquire the Company. Our Certificate of Incorporation also provides:

•for a classified board of directors, whereby directors serve for staggered three-year terms, making it more difficult for a third party to obtain control of the board of directors through a single election;

•that vacancies on the board of directors may be filled only by the remaining directors in office, even if only one director remains in office;

•that directors may only be removed for "cause" and only by the affirmative vote of the holders of at least a majority of our outstanding common stock;

•that the affirmative vote of the holders of at least 66 2/3% of the voting power of our outstanding common stock is required to approve any merger or consolidation with any other business entity that requires approval of the stockholders;

•that stockholders can only act by written consent if such consent is signed by the holders of at least 66 2/3% of our outstanding common stock; and

•that each of the provisions set forth above may only be amended by the holders of at least 66 2/3% of our outstanding common stock.

Our Bylaws also require advance notice of all stockholder proposals, including nominations for election as director, and provide that a special meeting of stockholders may be called only by the Chairman of the Board, the Chief Executive Officer, the President, or by a majority of the entire board of directors. We have in the past adopted a stockholder rights plan, which was voluntarily terminated by the board of directors in April 2014, and may in the future adopt new stockholder rights plans. We are also subject to the anti-takeover provisions of Section 203 of the Delaware General Corporation Law. Under these provisions, unless prior to the time that anyone becomes an "interested stockholder" our board of directors approves either the "business combination" or transaction which resulted in a stockholder becoming an interested stockholder, we may not enter into a "business combination" with that person for three years without special approval, which could discourage a third party from making a takeover offer and could delay or prevent a change of control. For purposes of Section 203, "interested

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stockholder" means, generally, someone owning 15% or more of our outstanding voting stock during the prior three years, subject to certain exceptions as described in Section 203. These provisions will apply even if the change may be considered beneficial by some of our stockholders, and thereby negatively affect the price that investors might be willing to pay in the future for our common stock. In addition, to the extent that these provisions discourage an acquisition of our Company or other change of control transaction, they could deprive stockholders of opportunities to realize takeover premiums for their shares of our common stock.

We could become subject to unsolicited takeover proposals, which may be disruptive to our business.

We have in the past been subject to unsolicited takeover proposals and could become subject to such proposals in the future. Responding to such proposals, exploring the availability of alternative transactions that reflect our full intrinsic value and instituting legal action in connection therewith has in the past created a significant distraction for our management team and required us to expend significant time and resources, and we believe any future unsolicited proposals would cause similar disruptions to our business. Such proposals may disrupt our business by causing uncertainty among current and potential employees, suppliers, and customers, which could negatively impact our financial condition, results of operations and strategic initiatives and cause volatility in our stock price. These consequences, alone or in combination, may have a materially adverse effect on our business. Although, we have entered into a change of control/severance plan with certain of our officers and members of our management team, the change of control arrangements may not be adequate to allow us to retain critical employees during a time when a change of control is being proposed or is imminent.

Item 1B. UNRESOLVED STAFF COMMENTS

None.

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Item 2. PROPERTIES

USA Truck's executive offices and headquarters are located on approximately 104 acres in Van Buren, Arkansas. This facility consists of approximately 117,000 square feet of office space, training and driver facilities, and approximately 30,000 square feet of maintenance space. The headquarters also has approximately 11,000 square feet of warehouse space and two other structures with approximately 22,000 square feet of office and warehouse space which are currently leased to a third party. The expense for building and office rent is recorded in the operations and maintenance line item in the accompanying consolidated statement of operations and comprehensive income (loss).

The Company's network consists of 16 facilities, including USAT Logistics offices. As of December 31, 2018, the Company's active facilities were located in or near the following cities:

Trucking facilities:

Shop

Driver Facilities

Fuel

Dispatch Office

Own or

Lease

Van Buren, Arkansas (1)

Yes

Own

West Memphis, Arkansas

Yes

Own/Lease (2)

Lakeland, Florida

Yes

Lease

Carnesville, Georgia

Yes

Lease

Morrow, Georgia

Yes

Lease

Valdosta, Georgia

Yes

Lease

South Holland, Illinois

Yes

Lease

Vandalia, Ohio

Yes

Own

Laredo, Texas

Yes

Own/Lease (3)

USAT Logistics facilities:

Springdale, Arkansas

Yes

Lease

Van Buren, Arkansas (1)

Yes

Own

Roseville, California

Yes

Lease

Atlanta, Georgia

Yes

Lease

Oak Brook, Illinois

Yes

Lease

Plano, Texas

Yes

Lease

Seattle, Washington

Yes

Lease

Administrative facilities:

Athens, Georgia

Yes

Lease

Lebanon, Indiana

Yes

Lease

1.Trucking and USAT Logistics facilities located on the same property.

2.USA Truck owns the terminal facility and holds a lease easement relating to less than one acre.

3.USA Truck owns the terminal facility and leases an adjacent six acres for tractor and trailer parking.

Item 3. LEGAL PROCEEDINGS

USA Truck is a party to routine litigation incidental to its business, primarily involving claims for personal injury and property damage incurred in the transportation of freight. The Company believes these claims to be routine and immaterial to its long-term financial position, however, adverse results of one or more of these claims could have a material adverse effect on its financial position, results of operations or cash flow in a quarter or annual reporting period.

Item 4. MINE SAFETY DISCLOSURES

None.

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PART II

Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

USA Truck's common stock is quoted on the NASDAQ Global Select Market under the symbol "USAK". As of February 15, 2019, there were 691 holders of record (including brokerage firms and other nominees) of USA Truck common stock.

Repurchase of Equity Securities

As of December 31, 2018, there were 463,013 shares remaining available for repurchase from a repurchase authorization that was authorized in 2016. This repurchase authorization expired on February 9, 2019.

Item 6. SELECTED FINANCIAL DATA

The following selected financial data should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations," under Part II, Item 7 of this Form 10-K and the consolidated financial statements and accompanying footnotes under Part II, Item 8 of this Form 10-K (dollar amounts in thousands, except per share data).


	December 31,
Consolidated statement of operations data:	2018			2017			2016			2015			2014
Operating revenue	$	534,060		$	446,533		$	429,099		$	507,934		$	602,477
Operating income (loss)	21,219			(2,068)			(7,516)			23,071			17,653
Net income (loss)	12,204			7,497			(7,699)			11,069			6,285
Diluted earnings (loss) per share	1.49			0.93			(0.90)			1.06			0.60
Consolidated balance sheet data:
Cash and cash equivalents	$	989		$	71		$	122		$	87		$	205
Total assets	321,804			253,855			294,968			286,456			303,944
Long-term debt, capital leases and insurance premium financing, including current portion	160,487			107,485			152,418			101,435			117,512
Stockholders’ equity	80,470			66,488			58,588			93,777			99,068
Total debt, less cash, to total capitalization ratio	66.5		%	61.7		%	72.2		%	51.9		%	54.2		%
Other financial data:
Operating ratio	96.0		%	100.5		%	101.8		%	95.5		%	97.1		%
Adjusted operating ratio (1) (unaudited)	95.4		%	100.3		%	100.4		%	94.3		%	96.4		%

1.See "Consolidated Reconciliations" below.

The Company reports adjusted operating ratio, which is a financial measure that is not prescribed or authorized by U.S. generally accepted accounting principles ("GAAP").

Adjusted operating ratio, as defined here, is a non-GAAP financial measure, as defined by the SEC. Management uses adjusted operating ratio as a supplement to the Company's GAAP results in evaluating certain aspects of its business, as described below. Adjusted operating ratio is not a substitute for operating margin or any other measure derived solely from GAAP measures. There are limitations to using non-GAAP measures such as adjusted operating ratio. Although management believes that adjusted operating ratio can make an evaluation of the Company's operating performance more consistent because it removes items that, in management's opinion, do not reflect its core operating performance, other companies in the transportation industry may define adjusted operating ratio differently. As a result, it may be difficult to use adjusted operating ratio or similarly named non-GAAP measures that other companies may use to compare the performance of those companies to USA Truck's performance.

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Adjusted operating ratio is calculated as operating expenses less restructuring, impairment and other costs, severance costs included in salaries, wages and employee benefits, and amortization of acquisition related intangibles, net of fuel surcharge revenue, as a percentage of operating revenue excluding fuel surcharge revenue.

USA Truck's board of directors and chief operating decision-makers also focus on adjusted operating ratio as an indicator of the Company's performance from period to period. Management believes fuel surcharge can be volatile and eliminating the impact of this source of revenue (by netting fuel surcharge revenue against fuel expense) affords a more consistent basis for comparing results of operations.

Management believes its presentation of adjusted operating ratio is useful because it provides investors and securities analysts the same information that the Company uses internally for purposes of assessing its core operating performance.

Consolidated Reconciliations

Pursuant to the requirements of Regulation S-K, Item 10(e) and Regulation G, reconciliations of non-GAAP financial measures to GAAP financial measures have been provided in the table below for operating ratio (in thousands):

Adjusted Operating Ratio


	December 31,
	2018			2017			2016			2015			2014
Operating revenue	$	534,060		$	446,533		$	429,099		$	507,934		$	602,477
Less:
Fuel surcharge revenue	63,805			48,216			40,929			58,981			108,133
Base revenue	470,255			398,317			388,170			448,953			494,344
Operating expense	512,841			448,601			436,615			484,863			584,824
Adjusted for:
Restructuring, impairment and other costs (reversal) (1)	639			—			(5,264)			(2,742)			—
Severance costs included in salaries, wages and employee benefits (2)	(711)			(930)			(839)			—			—
Amortization of acquisition related intangibles (3)	(203)			—			—			—			—
Fuel surcharge revenue	(63,805)			(48,216)			(40,929)			(58,981)			(108,133)
Adjusted operating expense	$	448,761		$	399,455		$	389,583		$	423,140		$	476,691
Operating ratio	96.0		%	100.5		%	101.8		%	95.5		%	97.1		%
Adjusted operating ratio	95.4		%	100.3		%	100.4		%	94.3		%	96.4		%

Segment Reconciliations:


Trucking Segment	December 31,
	2018			2017			2016
Revenue	$	351,222		$	302,943		$	295,807
Less: intersegment eliminations	3,493			891			1,281
Operating revenue	347,729			302,052			294,526
Less: fuel surcharge revenue	47,770			38,173			32,090
Base revenue	$	299,959		$	263,879		$	262,436
Operating expense	336,019			311,719			309,315
Adjusted for:
Restructuring, impairment and other costs (reversal) (1)	587			—			(4,848)
Severance costs included in salaries, wages and employee benefits (2)	(484)			(665)			(839)
Amortization of acquisition related intangibles (3)	(203)			—			—
Fuel surcharge revenue	(47,770)			(38,173)			(32,090)
Adjusted operating expense	$	288,149		$	272,881		$	271,538
Operating ratio	96.6		%	103.2		%	105.0		%
Adjusted operating ratio	96.1		%	103.4		%	103.5		%

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USAT Logistics Segment	December 31,
	2018			2017			2016
Revenue	$	190,992		$	152,137		$	140,847
Less: intersegment eliminations	4,661			7,656			6,274
Operating revenue	186,331			144,481			134,573
Less: fuel surcharge revenue	16,035			10,043			8,839
Base revenue	$	170,296		$	134,438		$	125,734
Operating expense	176,822			136,882			127,300
Adjusted for:
Restructuring, impairment and other costs (reversal) (1)	52			—			(416)
Severance costs included in salaries, wages and employee benefits (2)	(227)			(265)			—
Fuel surcharge revenue	(16,035)			(10,043)			(8,839)
Adjusted operating expense	$	160,612		$	126,574		$	118,045
Operating ratio	94.9		%	94.7		%	94.6		%
Adjusted operating ratio	94.3		%	94.2		%	93.9		%

1.During 2018, the Company reversed $0.6 million in restructuring, impairment and other costs relating to the closure of the South Holland, Illinois maintenance facility that was reopened during first quarter 2018. During 2016 and 2015, the Company recognized $5.3 million and $2.7 million, respectively, in restructuring, impairment and other costs relating to the termination of employment of certain executives and the closure of maintenance facilities. See "Item 8. Financial Statements and Supplementary Data – Note 16: Restructuring, impairment and other costs" in this Form 10-K for further discussion.

2.During 2018, 2017 and 2016, the Company recognized $0.7 million, $0.9 million and $0.8 million, respectively, in severance costs included in the "Salaries, wages and employee benefits" line item. See "Item 8. Financial Statements and Supplementary Data – Note 16: Restructuring, impairment and other costs" in this Form 10-K for further discussion.

3.During 2018, the Company recognized $0.2 million in amortization of acquisition related intangibles. See "Item 8. Financial Statements and Supplementary Data – Note 5: Intangible assets and goodwill" in this Form 10-K for further discussion.

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") should be read together with the Business section in Part 1, Item 1, as well as the consolidated financial statements and accompanying footnotes in Part II, Item 8, of this Form 10-K. This discussion contains forward-looking statements as a result of many factors, including those set forth under Part I, Item 1A "Risk Factors," Part I "Cautionary Note Regarding Forward-Looking Statements," and elsewhere in this report. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially from those discussed herein. MD&A summarizes the financial statements from management's perspective with respect to the Company's financial condition, results of operations, liquidity and other factors that may affect actual results.

The MD&A is organized in the following sections:

•Business Overview

•Results of Operations

•Liquidity and Capital Resources

•Contractual Obligations and Commitments

•Off-Balance Sheet Arrangements

•Critical Accounting Policies and Estimates

Business Overview

USA Truck offers a broad range of truckload motor carrier and freight brokerage and logistics services to a diversified customer base that spans a variety of industries. On October 18, 2018, USA Truck, Inc. acquired 100% of the outstanding equity of Davis Transfer Company Inc., a Georgia corporation ("DTC"), Davis Transfer Logistics Inc. and B & G Leasing, L.L.C. ("B & G," and collectively with DTC and DTL, "Davis Transfer Company"). As of December 31, 2018, our corporate structure included USA Truck, Inc., and its wholly owned subsidiaries: International Freight Services, Inc. ("IFS"), a Delaware corporation; Davis Transfer Company Inc., a Georgia corporation ("DTC"), Davis Transfer Logistics Inc., a Georgia corporation ("DTL"), and B & G Leasing, L.L.C., a Georgia limited liability company, ("B & G," and collectively with DTC and DTL, "Davis Transfer Company").

The Company has two reportable segments: (i) Trucking, consisting of one-way truckload motor carrier services, in which volumes typically are not contractually committed, and dedicated contract motor carrier services, in which a combination of equipment and drivers is contractually committed to a particular customer, typically for a duration of at least one year, subject to certain cancellation rights, and (ii) USAT Logistics, consisting of freight brokerage, logistics, and rail intermodal service offerings.

The Trucking segment provides one-way truckload transportation, including dedicated services, of various products, goods and materials. The Trucking segment primarily uses its own purchased or leased tractors and trailers or capacity provided by independent contractors to provide services to customers and is commonly referred to as "asset-based" trucking. The Company's USAT Logistics services match customer shipments with available equipment of authorized third-party motor carriers and other service providers. USAT Logistics provides these services to many existing Trucking customers, many of whom prefer to rely on a single service provider, or a small group of service providers, to provide all their transportation solutions.

Revenue for the Company's Trucking segment is substantially generated by transporting freight for customers, and is predominantly affected by rates per mile, the number of tractors in operation, and the number of revenue-generating miles per tractor. The Company also generates revenue through fuel surcharge and ancillary services such as stop-off pay, loading and unloading activities, tractor and trailer detention, expediting charges, repositioning charges and other similar services.

Operating expenses fall into two categories: variable and fixed. Variable expenses, or mostly variable expenses, constitute the majority of the expenses associated with transporting freight for customers, and include driver wages and benefits, fuel and fuel taxes, payments to independent contractors, operating and maintenance expense and insurance and claims expense. These expenses vary primarily according to miles operated, but also have controllable components based on percentage of compensated miles, shop and dispatch efficiency, and safety and claims experience.

Fixed expenses, or mostly fixed expenses, include the capital costs of our assets (depreciation, amortization, rent and interest), compensation of non-driving employees and portions of insurance and maintenance expenses. These expenses are partially controllable through management of fleet size and facilities infrastructure, headcount efficiency, and safety.

Fuel and fuel tax expense can fluctuate significantly with diesel fuel prices. To mitigate the Company's exposure to fuel price increases, it recovers from its customers fuel surcharges that historically have recouped a majority of the increased fuel costs; however, the Company cannot assure the recovery levels experienced in the past will continue in future periods. Although the Company's fuel surcharge program mitigates some exposure to rising fuel costs, the Company continues to have exposure to increasing fuel costs related to deadhead miles, out of route miles, fuel inefficiency due to engine idle time and other factors, including the extent to which the surcharges paid by customers are insufficient to compensate for higher fuel costs, particularly in times of rapidly increasing fuel prices. The main factors that affect fuel surcharge revenue are the price of diesel fuel and the number of loaded miles. The fuel surcharge is billed on a lagging basis, meaning the Company typically bills customers in the current week based on the previous week's applicable United States Department of Energy, or DOE, Diesel Fuel index. Therefore, in times of increasing fuel prices, the Company does not recover as much in fuel surcharge revenue as it pays for fuel. In periods of declining prices, the opposite is experienced.

The key statistics used to evaluate Trucking segment performance, in each case net of fuel surcharge revenue, include (i) base Trucking revenue per available tractor per week, (ii) average base revenue per loaded mile, (iii) loaded miles per available tractor per week, (iv) deadhead percentage, (v) average loaded miles per trip, (vi) average number of available tractors and (vii) adjusted operating ratio. In general, the Company's average miles per available tractor per week, rate per mile and deadhead percentages are affected by industry-wide freight volumes and industry-wide trucking capacity, which are mostly beyond the Company's control. Factors over which the Company has significant control are its sales and marketing efforts, service levels and operational efficiency.

Unlike the Trucking segment, the USAT Logistics segment is non-asset based and is dependent upon skilled employees, information systems and qualified third-party capacity providers. The largest expense related to the USAT Logistics segment is purchased transportation expense. Other operating expenses consist primarily of salaries, wages and employee benefits. The Company evaluates the financial performance of the USAT Logistics segment by reviewing gross margin (USAT Logistics operating revenue less purchased transportation expense) and the gross margin percentage (USAT Logistics operating revenue less purchased transportation expense expressed as a percentage of USAT Logistics operating revenue). Gross margin can be impacted by the rates charged to customers and the costs of securing third-party capacity. USAT Logistics often achieves better gross margins during periods of imbalance between supply and demand than times of balanced supply and demand, although periods of transition to tight capacity also can compress margins.

We plan to continue our focus on improving results through ongoing network engineering initiatives, pricing discipline, enhanced partnerships with customers, and improved execution in our day-to-day operations, as well as our ongoing safety initiatives. By focusing on these key objectives, management believes it will make progress on its goals of improving the Company's operating performance and increasing stockholder value.

Results of Operations

The following tables summarize the consolidated statements of operations (in thousands) and percentage of consolidated operating revenue and the percentage increase or decrease in the dollar amounts of those items compared to prior years.


	2018										2017
	$		% Operating Revenue		Adjusted Operating Ratio (1)		$		% Operating Revenue		Adjusted Operating Ratio (1)		% Change in Dollar Amounts
Base revenue	470,255		88.1	%			$	398,317	89.2	%			18.1	%
Fuel surcharge revenue	63,805		11.9	%			48,216		10.8	%			32.3	%
Operating revenue	$	534,060	100.0	%			$	446,533	100.0	%			19.6	%

Operating expenses	512,841		96.0	%	95.4	%	448,601		100.5	%	100.3	%	14.3	%
Operating income (loss)	21,219		4.0	%	4.6	%	(2,068)		(0.5)	%	(0.3)	%	1,126.1	%

Other expenses:
Interest expense	3,649		0.7	%			3,808		0.9	%			(4.2)	%
Other, net	992		0.2	%			387		0.0	%			156.3	%
Total other expenses, net	4,641		0.9	%			4,195		0.9	%			10.6	%
Income (loss) before income taxes	16,578		3.1	%			(6,263)		(1.4)	%			(364.7)	%
Income tax expense (benefit)	4,374		0.8	%			(13,760)		(3.1)	%			(131.8)	%

Consolidated net income	$	12,204	2.3	%			$	7,497	1.7	%			62.8	%


	2017										2016
	$		% Operating Revenue		Adjusted Operating Ratio (1)		$		% Operating Revenue		Adjusted Operating Ratio (1)		% Change in Dollar Amounts
Base revenue	$	398,317	89.2	%			$	388,170	90.5	%			2.6	%
Fuel surcharge revenue	48,216		10.8	%			40,929		9.5	%			17.8	%
Operating revenue	$	446,533	100.0	%			$	429,099	100.0	%			4.1	%

Operating expenses	448,601		100.5	%	100.3	%	436,615		101.8	%	100.4	%	2.7	%
Operating loss	(2,068)		(0.5)	%	(0.3)	%	(7,516)		(1.8)	%	(0.4)	%	72.5	%

Other expenses:
Interest expense	3,808		0.9	%			3,178		0.7	%			19.8	%
Other, net	387		0.0	%			524		0.1	%			(26.1)	%
Total other expenses, net	4,195		0.9	%			3,702		0.9	%			13.3	%
Loss before income taxes	(6,263)		(1.4)	%			(11,218)		(2.6)	%			44.2	%
Income tax benefit	(13,760)		(3.1)	%			(3,519)		(0.8)	%			291.0	%

Net income (loss)	$	7,497	1.7	%			$	(7,699)	(1.8)	%			197.4	%

4.The adjusted operating ratio calculation for operating expenses is calculated as operating expenses, net of fuel surcharge revenue and other items, as a percentage of operating revenue excluding fuel surcharge revenue. Other items in this presentation are the restructuring, impairment and other costs, severance costs included in salaries, wages and employee benefits, and amortization of acquisition related intangibles. See Note 16 to the Company's consolidated financial statements included in Part II, Item 8, in this Form 10-K. Adjusted operating ratio is a non-GAAP financial measure. See Selected Financial Statement Data in Part I, Item 6 for the uses and limitations associated with adjusted operating ratio.

Key Operating Statistics by Segment


	December 31,
Trucking:	2018			2017			2016
Operating revenue (in thousands)	$	347,729		$	302,052		$	294,526
Operating income (loss) (in thousands) (1)	$	11,710		$	(9,667)		$	(14,789)

Operating ratio (2)	96.6		%	103.2		%	105.0		%
Adjusted operating ratio (3)	96.1		%	103.4		%	103.5		%
Total miles (in thousands) (4)	158,982			162,599			172,591
Deadhead percentage (5)	13.9		%	13.0		%	12.9		%
Base revenue per loaded mile	$	2.191		$	1.865		$	1.746
Average number of available tractors (6)	1,695			1,662			1,735
Average number of in-service tractors (7)	1,726			1,713			1,774
Loaded miles per available tractor per week	1,549			1,633			1,657
Base revenue per available tractor per week	$	3,394		$	3,045		$	2,893
Average loaded miles per trip	513			557			583

USAT Logistics:
Operating revenue (in thousands)	$	186,331		$	144,481		$	134,573
Operating income (in thousands) (1)	$	9,509		$	7,599		$	7,273

Gross margin (in thousands) (8)	$	30,234		$	26,686		$	25,645
Gross margin percentage (9)	16.2		%	18.5		%	19.1		%
Load count (in thousands)	113			106			108

1.Operating income (loss) is calculated by deducting operating expenses from operating revenue.

2.Operating ratio is calculated as operating expenses as a percentage of operating revenue.

3.Adjusted operating ratio is calculated as operating expenses less restructuring, impairment and other costs, severance costs included in salaries, wages and employee benefits and amortization of acquisition related intangibles, net of fuel surcharge revenue, as a percentage of operating revenue excluding fuel surcharge revenue. See GAAP to non-GAAP reconciliations above.

4.Total miles include both loaded and empty miles.

5.Deadhead mile percentage is calculated by dividing empty miles into total miles.

6.Available tractors are all those Company tractors that are available to be dispatched, including available unseated tractors, and our independent contractor fleet.

7.In-service tractors include all of the tractors in the Company fleet, including Company-operated tractors and independent contractors.

8.Gross margin is calculated by deducting purchased transportation expense from USAT Logistics operating revenue.

9.Gross margin percentage is calculated as gross margin divided by USAT Logistics operating revenue.

Trucking operating revenue

During the year ended 2018, Trucking operating revenue increased 15.1% to $347.7 million, compared to $302.1 million for the same period of 2017. Trucking base revenue increased 13.7% to $300.0 million, from $263.9 million for the same period in 2017. The positive changes in operating revenue and base revenue were primarily attributable to an 17.5% increase in base revenue per loaded mile and a 2.0% increase in average available tractors, offset by an increase in deadhead percentage of 90 basis points. The Company is continuing to refine the network to increase utilization and driver operational efficiency by transforming to a regional operations structure. Throughout 2018, the Company was focused on developing strategic partnerships with core customers by providing exceptional service at competitive rates. At December 31, 2018, the base revenue per available per tractor had increased 11.5% over the 2017 period due the above mentioned factors.

During 2017, the increase in Trucking operating revenue was the result of a 6.8% increase in base revenue per loaded mile, offset by the 21% increase in our unseated tractor count, the 5.9% decrease in loaded miles and a 1.5% decrease in trucking shipments. While the freight market was challenging throughout the first half of 2017, improvements were seen later in the year. The Company was able to capture a higher rate per mile in the spot market and on long term contracts as a result of extreme weather leading to increased economic activity in the third and fourth quarters of 2017, regulatory changes late in the year that impacted driving hours and created capacity constraints in the market, offset by unfavorable effects of weather on asset utilization. For the first time, due to the aforementioned strategic network engineering initiatives, the Company was positioned to meaningfully participate in the fourth quarter 2017 retail surge. This, in conjunction with the significant improvement in the Company's core network performance, led to significant year over year improvements in our rate per loaded mile, revenue per tractor per week, and operating income in the fourth quarter of 2017.

Trucking operating income (loss)

For the year ended 2018, operating income was $11.7 million compared to a loss of ($9.7) million for the corresponding period in 2017, primarily resulting from the 15.1% increase in operating revenue driven by the increased base revenue per available tractor per week mentioned above and offset by a 7.8% increase in operating expenses.

The reduction in the operating loss for the Trucking segment for 2017, as compared to 2016, was largely due to the 6.8% increase in base revenue per loaded mile, partially offset by a 5.9% decrease in loaded miles, the 21% increase in our unseated tractor count, and a 1.5% decrease in number of Trucking shipments. Also, during the first quarter of 2017, a significant increase in insurance and claims expense, resulting from a $4.4 million reserve adjustment stemming from adverse development in prior year claims layers, contributed to the increased loss.

USAT Logistics operating revenue

During the year ended 2018, USAT Logistics operating revenue increased 29.0% to $186.3 million, compared to $144.5 million for the same period of 2017, resulting from a 21.1% increase in revenue per load combined with a 6.5% increase in load count. This increase can be attributed to a tightened capacity market through 2018. The Company continues to focus on increasing volume through deepening strategic customer relationships and expanding our customer base.

During 2017, the increase in USAT Logistics operating revenue primarily resulted from approximately 10% higher revenue per load offset by a 2.0% decrease in load count. Increasing industry demand relative to capacity produced 7.4% higher operating revenue for 2017, as compared to the same period in 2016.

USAT Logistics operating income

USAT Logistics generated operating income of $9.5 million for the year ended 2018, an increase of $1.9 million, or 25.1%, compared to $7.6 million in the comparable period in 2017. This change was the result of the 29.0% increase in operating revenue mentioned above, driven by the increased revenue per load and load volumes, offset by a 28.7% increase in purchased transportation costs.

During 2017, the increase in operating income was primarily the result of a 7.4% increase in operating revenue stemming from increased spot market freight.

Consolidated Operating Expenses

The following table summarizes the consolidated operating expenses (in thousands) and percentage of consolidated operating revenue, consolidated base revenue and the percentage increase or decrease in the dollar amounts of those items compared to the prior year.


	2018											2017					% Change
Operating Expenses:	$		% Operating Revenue		Adjusted Operating Ratio (1)			$		% Operating Revenue		Adjusted Operating Ratio (1)			2018 to 2017
Salaries, wages and employee benefits	$	130,407	24.4	%	27.6	%	(1)	$	122,297	27.4	%	30.5	%	(1)	6.6	%
Fuel and fuel taxes	55,158		10.3		(1.8)	%	(2)	45,853		10.3	%	(0.6)	%	(2)	20.3	%
Depreciation and amortization	28,324		5.3		6.0	%	(1)	28,463		6.4	%	7.1	%		(0.5)	%
Insurance and claims	23,240		4.4		4.9	%		25,628		5.8	%	6.4	%		(9.3)	%
Equipment rent	10,840		2.0		2.3	%		10,173		2.3	%	2.6	%		6.6	%
Operations and maintenance	33,356		6.2		7.1	%		31,001		6.9	%	7.8	%		7.6	%
Purchased transportation	211,132		39.5		44.9	%		164,012		36.7	%	41.2	%		28.7	%
Operating taxes and licenses	3,814		0.7		0.8	%		4,068		0.9	%	1.0	%		(6.2)	%
Communications and utilities	2,849		0.5		0.6	%		2,713		0.6	%	0.7	%		5.0	%
Gain on disposal of assets, net	(2,361)		(0.4)		(0.5)	%		(773)		(0.2)	%	(0.2)	%		205.4	%
Restructuring, impairment and other costs (reversal)	(639)		(0.1)		(0.1)	%		—		—	%	—	%		N/A

Other	16,721		3.1		3.6	%		15,166		3.4	%	3.8	%		10.3	%
Total operating expenses	$	512,841	96.0	%	95.4	%		$	448,601	100.5	%	100.3	%		14.3	%


	2017											2016					% Change
Operating Expenses:	$		% Operating Revenue		Adjusted Operating Ratio (1)			$		% Operating Revenue		Adjusted Operating Ratio (1)			2017 to 2016
Salaries, wages and employee benefits	$	122,297	27.4	%	30.5	%	(1)	$	122,408	28.5	%	31.3	%		(0.1)	%
Fuel and fuel taxes	45,853		10.3		(0.6)		(2)	43,179		10.1	%	0.6	%	(2)	6.2	%
Depreciation and amortization	28,463		6.4		7.1			29,954		7.0	%	7.7	%		(5.0)	%
Insurance and claims	25,628		5.8		6.4			21,154		4.9	%	5.5	%		21.1	%
Equipment rent	10,173		2.3		2.6			7,443		1.7	%	1.9	%		36.7	%
Operations and maintenance	31,001		6.9		7.8			34,252		8.0	%	8.8	%		(9.5)	%
Purchased transportation	164,012		36.7		41.2			148,972		34.7	%	38.4	%		10.1	%
Operating taxes and licenses	4,068		0.9		1.0			4,695		1.1	%	1.2	%		(13.4)	%
Communications and utilities	2,713		0.6		0.7			3,239		0.8	%	0.9	%		(16.2)	%
Gain on disposal of assets, net	(773)		(0.2)		(0.2)			(1,116)		(0.3)	%	(0.3)	%		(30.7)	%
Restructuring, impairment and other costs	—		—		—			5,264		1.2	%	N/A			(100.0)	%
Impairment on assets held for sale	—		—		—			2,839		0.7	%	0.7	%		(100.0)	%
Other	15,166		3.4		3.8			14,332		3.3	%	3.7	%		5.8	%
Total operating expenses	$	448,601	100.5	%	100.3	%		$	436,615	101.8	%	100.5	%		2.7	%

1.Adjusted operating ratio is calculated as the applicable operating expense less restructuring, impairment and other costs, severance costs included in salaries, wages and employee benefits and amortization of acquisition related intangibles, net of fuel surcharge revenue, as a percentage of operating revenue excluding fuel surcharge revenue. See Note 16 to the Company's consolidated financial statements included in Part II, Item 8, in this Form 10-K for additional information regarding these costs and GAAP to non-GAAP reconciliations above.

2.Calculated as fuel and fuel taxes, net of fuel surcharge revenue.

Salaries, wages and employee benefits

Salaries, wages and employee benefits consist primarily of compensation for all employees. Salaries, wages and employee benefits are primarily affected by the total number of miles driven by Company drivers, the rate per mile paid to its Company drivers, employee benefits (including, but not limited to, healthcare and workers' compensation), and compensation and benefits paid to non-driver employees. For the year ended 2018, salaries, wages and employee benefits expense decreased 300 basis points as a percentage of operating revenue while increasing in terms of dollars spent. This change was primarily the result of a driver pay increase, increased cost of employee healthcare costs, and the institution of a performance-based incentive plan for employees.

The decrease in salaries, wages and employee benefits expenses during 2017 was primarily due to a 4.7% reduction in the Company-owned tractor fleet, an increase of 3.1% in the independent contractor fleet, and our 2017 reduction in force, partially offset by a $1.5 million cost recorded by the Company in the first quarter of 2017 associated with an adverse development in prior year layers of workers' compensation claims. As part of a reduction in force, headcount in both Trucking and USAT Logistics were reduced during the second quarter of 2017 as the Company continued to better align the non-driving support staff with the number of seated tractors, which also contributed to the decrease in salaries, wages and employee benefits expense. The Company incurred $0.1 million, net-of-tax, in implementing the reduction in force during the second quarter of 2017.

Management believes that the market for drivers will remain tight, and as such, expects driver wages and hiring expenses to continue to increase in order to attract and retain sufficient numbers of qualified drivers to operate the Company's fleet. This expense item will also be affected by the percentage of Trucking miles operated by independent contractors instead of Company employed drivers and the percentage of revenue generated by USAT Logistics, for which payments are reflected in purchased transportation.

Fuel and fuel taxes

Fuel and fuel taxes consist primarily of diesel fuel expense for Company-owned tractors and fuel taxes. The primary factors affecting the Company's fuel expense are the cost of diesel fuel, the fuel economy of Company equipment, and the number of miles driven by company drivers. The increases in fuel and fuel taxes for the year ended 2018 resulted from a 19.7% increase in average diesel fuel prices per gallon year over year, as reported by the DOE, combined with a 5.0% decrease in total revenue miles for year to date when compared to the same period in 2017. The Company continues to pursue fuel efficiency initiatives, purchasing newer, more fuel-efficient revenue equipment and implementing focused driver training programs, which have contributed to improvements in our fuel expense on a cost per Company tractor mile basis.

During 2017, the increases in fuel and fuel taxes resulted from a 14.3% increase in average diesel fuel prices per gallon, as reported by the DOE, offset by a 5.8% decrease in total revenue miles, compared to 2016. Fuel expense, net of fuel surcharge, improved by $4.6 million in 2017 when compared to 2016. Fuel efficiency initiatives undertaken during 2017, such as idle-control, more fuel-efficient engines, and driver training programs, contributed to the increased controlling of our fuel expense on a cost per company tractor operated mile basis.

The Company expects to continue managing its idle time and truck speeds and partnering with customers to align fuel surcharge programs to recover a fair portion of rising fuel costs. Looking ahead, the Company's net fuel expense is expected to fluctuate as a percentage of revenue based on factors such as diesel fuel prices, percentage recovered from fuel surcharge programs, empty mile percentage, the percentage of revenue generated from independent contractors and the success of fuel efficiency initiatives.

Depreciation and amortization and equipment rent

Depreciation and amortization of property and equipment consists primarily of depreciation for Company-owned tractors and trailers, amortization of revenue equipment financed with capital leases, and amortization of intangible assets. The primary factors affecting this expense include the number and age of Company tractors and trailers, the acquisition cost of new equipment and the salvage values and useful lives assigned to the equipment. Equipment rent expenses are those related to revenue equipment under operating leases. These largely fixed costs fluctuate as a percentage of base revenue primarily with increases and decreases in average base revenue per tractor and the percentage of base revenue contributed by Trucking versus USAT Logistics.

In addition, the mix of capital and operating leases will cause fluctuations on a line item basis between equipment rent expense and depreciation and amortization expense. Depreciation and amortization expense decreased as a percentage of both operating and base revenue for the year ended 2018, compared to the same period in 2017, due to the increased use of operating leases on trailers and increased operating efficiency of existing equipment.The decrease in depreciation and amortization expense in 2017, as compared to 2016, is primarily attributable to the approximately 5.0% smaller Company fleet and more equipment being acquired through lease arrangements instead of debt financing. The increase in equipment rent expense during 2017 was the result of the Company entering into a sale leaseback transaction in March 2017 for 90 tractors and the increased

use of operating leases for the acquisition of trailers.

The Company reviews the estimated useful lives and salvage values of its fixed assets on an ongoing basis, based upon, among other things, our experience with similar assets, conditions in the used revenue equipment market, and prevailing industry practice. During the third quarter of 2017, the Company reevaluated the estimated useful lives of its trailers, increasing such lives from 10 to 14 years. Additionally, given the soft used equipment market, the Company lowered the salvage values of its tractor fleet in 2017 to reflect current estimates of the value of such equipment upon its retirement. These changes were accounted for as a change in estimate.

The Company intends to continue its focus on improving asset utilization, matching customer demand, growing the independent contractor fleet and strengthening load profitability initiatives. Further, the acquisition costs of new revenue equipment could increase due to the continued implementation of emissions requirements and the inclusion of improved safety and fuel efficiency features.

Insurance and claims

Insurance and claims expense consists of insurance premiums and the accruals the Company makes for estimated payments and expenses for claims for bodily injury, property damage, cargo damage, and other casualty events. The primary factors affecting the Company's insurance and claims expense are the number of miles driven by its Company drivers and independent contractors, the frequency and severity of accidents, trends in the development factors used in the Company's actuarial accruals, developments in prior-year claims, and insurance premiums and self-insured amounts. The decrease in insurance and claims expense during the year ended 2018 was the result of having a more normal insurance expense during 2018 when compared to 2017, in which a $3.0 million actuarial adjustment was recorded stemming from adverse development in our prior year claim layers.

During 2017, insurance and claims expense increased significantly primarily due to a $3.0 million actuarial analysis adjustment in the first quarter stemming from adverse development in our prior year claim layers. The Company expects insurance and claims expense to continue to be volatile over the long-term. In addition, insurance carriers have generally raised premiums for many businesses, including those in the trucking industry, the industry is experiencing a decline in the number of carriers and underwriters that offer excess insurance policies or that are willing to provide insurance for trucking companies, and the necessity to go off-shore for insurance needs has increased. These factors may cause the Company's insurance and claims expense to increase if it has a similar experience at renewal or replacement, or the Company could find it necessary to raise its self-insured retention levels or decrease its aggregate coverage limits.

Operations and maintenance

Operations and maintenance expense consists primarily of vehicle repairs and maintenance, general and administrative expenses, and other costs. Operating and maintenance expenses are primarily affected by the age of the Company-owned fleet of tractors and trailers, the number of miles driven in a period and, to a lesser extent, by efficiency measures in the Company's maintenance facilities. For the year ended 2018, the increase in operations and maintenance expense was primarily the result of increased repair costs on the Company fleet, which is currently comprised of older, revenue equipment that tends to have higher maintenance costs. Delays in OEM tractor deliveries have contributed to the increase in this line item.

Operations and maintenance expense decreased during 2017, as compared to 2016, primarily as a result of the smaller size of the revenue generating Company tractor fleet, which decreased approximately 5% when compared to the same period in 2016. Additionally, fewer outside repairs contributed to the 5.2% reduction on a cost per mile basis in operations and maintenance spend. We expect maintenance costs to decrease in the near term as we refresh our Company fleet.

Purchased transportation

Purchased transportation consists of the payments the Company makes to independent contractors, railroads, and third-party carriers that haul loads brokered to them, including fuel surcharge reimbursement paid to such parties.

For the year ended 2018, the increase in purchased transportation expense was primarily due to increased freight volumes in USAT Logistics. In future periods, the Company is endeavoring to grow its independent contractor fleet as a percentage of its total fleet and growing USAT Logistics, which, if successful, could further increase purchased transportation expense, particularly if the Company needs to pay independent contractors more to stay with the Company in light of expected regulatory changes. Increasing independent contractor capacity has shifted (and assuming all other factors remain equal, is expected to continue to shift), expenses to the "Purchased transportation" line item with offsetting reductions in employee driver wages and related expenses, net fuel expense (as independent contractors generate fuel surcharge revenue, while the related cost of their fuel is included with their compensation in purchased transportation), maintenance and capital expenditures.

During 2017, the increase in purchased transportation expense was primarily due to the 3.1% growth in the size of the independent contractor fleet compared to the 2016 period and increased freight volumes in USAT Logistics.

Gain on disposal of assets, net

During the year ended 2018, gain on disposal of assets, net, increased when compared to the same periods in 2017. Management believes the used equipment market may continue to show volatility in 2019 and beyond.

The decrease in gain on disposal of assets, net, in 2017 reflects fewer asset disposals compared to 2016, when the Company reduced its fleet through the accelerated disposal of older, less efficient tractors and trailers.

Restructuring, impairment and other costs

See Note 16 to the Company's consolidated financial statements included in Part II, Item 8, in this Form 10-K for information regarding the restructuring, impairment and other costs incurred during 2018, 2017 and 2016, which is incorporated herein by reference.

Impairment on assets held for sale

As a result of significantly lower prices received for disposals of our owned used revenue equipment during the fourth quarter of 2016, the Company recorded a $2.8 million asset impairment charge to write-down the carrying values of tractors held for sale at December 31, 2016.

Other expenses

During 2018, the increase in other expenses was primarily the result of increased recruiting and training costs resulting from the tight driver market currently being experienced.

The increase in other expenses for 2017 was primarily due to increased recruiting and training expenses partially offset by lower professional service fees. During 2017, the Company incurred approximately $1.3 million in expenses relating to new management hires. To preserve shares under the Incentive Plan for incentive compensation to key employees, especially in light of the Company's stock price at the time that required the issuance of more shares when granting equity awards to achieve the same intended dollar value of the awards, the board of directors elected to receive their customary annual equity award in cash and each director then used the net-of-tax proceeds to purchase shares in the open market.

Consolidated Non-Operating Expenses

Interest expense, net

For the year ended December 31, 2018, the decrease in interest expense was primarily the result of decreased borrowing throughout the first nine months of the year. At year end 2018, the Company had increased its debt outstanding on the Credit Facility by approximately $39.3 million over the quarter ended September 30, 2018, and approximately $24.1 million compared to December 31, 2017. This increase was the result of the Company's acquisition of Davis Transfer Company in October 2018. See Note 4 to the condensed consolidated financial statements for further discussion of the acquisition of Davis Transfer Company, and Note 8 to the condensed consolidated financial statements for further discussion of the Company's Credit Facility.

Interest expense, net, in 2017 increased primarily due to the average debt balance carried throughout 2017 as compared to 2016 and increased interest rates on outstanding borrowings.

Income tax expense (benefit)

The Company's effective tax rate for the years ended December 31, 2018, 2017 and 2016, were 26.4%, 219.9%, and 31.4%, respectively. In 2017, our effective tax rate was primarily impacted by the benefit recognized resulting from the enactment of the Tax Cuts and Jobs Act which, among other things, reduced the federal corporate income tax rate to 21% effective January 1, 2018. As a result of the Tax Cuts and Jobs Act, the Company adjusted the measurement of its net deferred tax liabilities at the new corporate income tax rate as of the date the Tax Cuts and Jobs Act was signed into law, which resulted in the recognition of a tax benefit of $12.0 million. Generally, the Company's effective tax rate, when compared to the federal statutory rate of 35% effective through tax year 2017 and 21% for 2018, is primarily affected by state income taxes, net of federal income tax effect, and permanent differences, the most significant of which is the effect of the partially non-deductible per diem pay structure for our drivers. The recurring impact of this permanent non-deductible difference incurred in operating our business causes our tax rate to increase as our pretax earnings or loss approaches zero. Generally, as pretax income or loss increases, the impact of the driver per diem program on our effective tax rate decreases, because aggregate per diem pay becomes smaller in relation to pretax income or loss, while in periods where earnings are at or near breakeven the impact of the per diem program on our effective tax rate is significant.

Liquidity and Capital Resources

USA Truck's business has required, and will continue to require, significant capital investments. In the Company's Trucking segment, where capital investments are the most substantial, the primary investments are in new revenue equipment and to a lesser extent, in technology and working capital. In the Company's USAT Logistics segment, where capital investments are generally more modest, the primary investments are in technology and working capital. USA Truck's primary sources of liquidity have been funds provided by operations, borrowings under the Company's Credit Facility, sales of used revenue equipment, and capital and operating leases. Based on expected financial conditions, net capital expenditures, results of operations and related net cash flows and other sources of financing, management believes the Company's sources of liquidity to be adequate to meet current and projected needs.

The Credit Facility contains a single financial covenant, which requires a consolidated fixed charge coverage ratio of at least 1.0 to 1.0 that springs in the event excess availability under the Credit Facility falls below 10% of the lenders' total commitments. Also, certain restrictions regarding the Company's ability to pay dividends, make certain investments, prepay certain indebtedness, execute share repurchase programs and enter into certain acquisitions and hedging arrangements are triggered in the event excess availability under the Credit Facility falls below 20% of the lenders' total commitments. Management believes the Company's excess availability will not fall below 20% and expects the Company to remain in compliance with all debt covenants during the next twelve months.

As of December 31, 2018, the Company had outstanding $5.4 million in letters of credit and had approximately $50.8 million available to borrow under the Credit Facility. Net of cash, debt represented 66.5% of total capitalization. Fluctuations in the outstanding balance and related availability under the Credit Facility are driven primarily by cash flows from operations and the timing and nature of property and equipment additions that are not funded through other sources of financing, as well as the nature and timing of receipt of proceeds from disposals of property and equipment.

Cash flows

Operating Activities – Net cash provided by operating activities was $41.3 million for 2018, up $5.8 million when compared to the same period in 2017. This increase was primarily the result of an approximate $4.7 million increase in net income and an approximate $19.0 million change in deferred income tax liability, net, offset in part by a decrease in trade payables and accrued expenses.

Cash flow from operations for 2017 was $35.5 million, compared to $22.2 million in 2016. Although the Company reported net income of $7.5 million in 2017 versus a net loss of ($7.7) million in 2016, the Company's net income was significantly and favorably impacted by the revaluation of its deferred tax liabilities. This revaluation did not impact cash flows in 2017. During 2017, the Company's trade accounts payable and accrued expenses and insurance and claims accruals decreased by an aggregate amount of $14.1 million, which was a positive impact on cash flow, whereas in 2016 these items decreased by an aggregate amount of $5.4 million, which had a negative impact on cash flows.

Investing Activities – Net cash used by investing activities was $50.8 million, compared to $10.9 million provided by investing activities during 2017. The $61.7 million decrease in cash provided by investing activities was primarily the result of the $51.4 million used for the acquisition of Davis Transfer Company during the third quarter of 2018, proceeds of $5.3 million from a sale leaseback in the first quarter of 2018, an $1.0 million increase in capital expenditures for the 2018 period, paired with a decrease of $3.5 million in the proceeds from the sale of property and equipment in the 2018 period compared to the 2017 period.

Net cash provided by investing activities was $10.9 million in 2017, compared to $33.9 million used by investing activities during 2016. The $44.8 million increase in cash provided by investing activities primarily reflects $45.7 million decrease in capital expenditures, and $11.0 million in proceeds from a sale leaseback transaction that was completed in March 2017 for 90 tractors, offset by a $12.0 million decrease in proceeds from the sale of property and equipment.

Financing Activities – Cash provided by financing activities was $10.4 million for the year ended December 31, 2018, compared to $46.4 million used by financing activities during the same period in 2017. This $56.8 million change was primarily attributable to increased borrowings of long-term debt of $54.3 million used primarily for the acquisition of Davis Transfer Company, offset by a decrease of $11.0 million in payments made to long-term debt and capital lease obligations. At December 31, 2018, the Company had borrowings of long-term debt, financing notes and capital leases of $160.5 million, up $53.0 million from $107.5 million at December 31, 2017.

Cash used in financing activities was $46.4 million for the year ended 2017, compared to $11.8 million provided by financing activities during the same period in 2016. The $58.1 million increase in cash used in financing activities was primarily attributable to $43.0 million reduced borrowing under the Company's Credit Facility, $24.6 million increase in

payments on long-term debt and capital lease obligations, $1.6 million decrease in bank drafts payable and $17.4 million less in proceeds from sale leasebacks, offset by $24.4 million less cash used for the purchase of common stock in 2017 than in 2016.

Debt and capitalized lease obligations

See "Item 8. Financial Statements and Supplementary Data – Note 8: Long-term Debt" and "Item 8. Financial Statements and Supplementary Data – Note 9: Leases and Commitments" in this Form 10-K for a discussion of the Company's revolving Credit Facility and capital lease obligations, which is incorporated by reference herein.

The following table represents USA Truck's contractual obligations and commercial commitments as of December 31, 2018.


	Payments Due By Period
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Debt (1)	$	88,741	$	3,122	$	85,619	$	—	$	—
Insurance Premium Financing (2)	4,435		4,435		—		—		—
Capital lease obligations (3)	78,022		19,319		30,161		25,976		2,566
Purchase obligations (4)	32,800		32,800		—		—		—
Operating leases – buildings & equipment (5)	18,752		$	9,088	6,678		1,628		1,358
Total	$	222,750	$	68,764	$	122,458	$	27,604	$	3,924

3.Represents revolving line of credit of $85.3 million outstanding plus interest of approximately $3.4 million using a combined interest rate of 3.66% through the termination date of February 5, 2020. See both "Item 8. Financial Statements and Supplementary Data – Note 8: Long-term Debt" and "Item 8. Financial Statements and Supplementary Data – Note 17: Subsequent Events" and in this Form 10-K for further discussion.

4.Represents future obligations under an unsecured note payable with a third-party financing company for a portion of the Company's annual insurance premiums. See "Item 8. Financial Statements and Supplementary Data – Note 7: Insurance Premium Financing" in this Form 10-K for further discussion.

5.Represents remaining payments on capital lease obligations as of December 31, 2018, which includes $7.3 million in interest. The borrowings consist of capital leases with financing companies, with fixed borrowing amounts and fixed interest rates, as set forth on each applicable lease schedule. Accordingly, interest on each lease varies between lease schedules.

6.Represents purchase obligations for tractor and trailer orders at December 31, 2018.

7.Represents future monthly rental obligations under operating leases for tractors, facilities and computer equipment. Substantially all lease agreements for revenue equipment have fixed payment terms based on the passage of time.

Off-Balance Sheet Arrangements

Operating leases have been an important source of financing for equipment used by operations, office equipment, and certain facilities. As of December 31, 2018, the Company leased certain revenue equipment and facilities under operating leases. At December 31, 2018, revenue equipment held under operating leases are not carried on the consolidated balance sheets, and lease payments, with regard to such revenue equipment, are reflected in the consolidated statements of operations and comprehensive income (loss) in the "Equipment rent" expense line item. Management anticipates the adoption of ASU No. 2016-02, Leases, will increase assets and liabilities on the consolidated balance sheets by approximately $16.0 million to $18.0 million as of January 1, 2019.

Equipment rent expense related to the Company's revenue equipment and facility operating leases is set forth in the table below for the periods indicated (in thousands):


	December 31,
	2018		2017		2016
Equipment rent	$	10,840	$	10,173	$	7,443
Building and office rent (1)	1,586		1,619		2,001
Total rent expense	$	12,426	$	11,792	$	9,444

1.The expense for building and office rent is recorded in the operations and maintenance line item in the accompanying consolidated statement of operations and comprehensive income (loss).

The total amount of remaining payments under operating leases as of December 31, 2018, was approximately $18.8 million. Other than such operating leases, no other off-balance sheet arrangements have or are reasonably likely to have a material effect on the Company's consolidated financial statements.

Inflation

Most of the Company's operating expenses are inflation sensitive, and as such, are not always able to be offset through increases in revenue per mile and cost control efforts. The effect of inflation-driven cost increases on overall operating costs is not expected to be greater for USA Truck than for its competitors, and has been minor over the past three years.

Fuel Availability and Cost

The trucking industry is dependent upon the availability of fuel. In the past, fuel shortages or increases in fuel taxes or fuel costs have adversely affected profitability and may continue to do so. USA Truck has not experienced difficulty in maintaining necessary fuel supplies, and in the past has generally been able to partially offset increases in fuel costs and fuel taxes through increased freight rates and through a fuel surcharge that increases incrementally as the average price of fuel increases above an agreed upon baseline price per gallon. Typically, the Company is not able to fully recover increases in fuel prices through freight rate increases and fuel surcharges, primarily because those items are not available with respect to empty and out-of-route miles and idling time, for which the Company generally does not receive compensation from customers. Additionally, most fuel surcharges are based on the average fuel price as published by the DOE for the week prior to the shipment, meaning the Company typically bills customers in the current week based on the previous week's applicable index. Accordingly, in times of increasing fuel prices, the Company does not recover as much as it is currently paying for fuel. In periods of declining prices, for a short period of time the inverse is true. Overall, the U.S. National Average Diesel Fuel price increased by 19.7% compared to 2017.

As of December 31, 2018, the Company did not have any long-term fuel purchase contracts, and has not entered into any fuel hedging arrangements.

Equity

As of December 31, 2018, USA Truck had total stockholders' equity of $80.5 million and total debt including current maturities and insurance premium financing, of $160.5 million, resulting in a total debt, less cash, to total capitalization ratio of 66.5% compared to 61.7% as of December 31, 2017.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. USA Truck bases its assumptions, estimates and judgments on historical experience, current trends and other factors that management believes to be relevant at the time its consolidated financial statements are prepared. Actual results could differ from those estimates, and such differences could be material.

A summary of the significant accounting policies followed in preparation of the Company's financial statements is contained in "Item 8. Financial Statements and Supplementary Data – Note 1: Description of the Business and Summary of Significant Accounting Policies" of this Form 10-K. The most critical accounting policies and estimates that affect the Company's financial statements include the following:

Estimated useful lives and salvage values for purposes of depreciating tractors and trailers. USA Truck operates a significant number of tractors and trailers in connection with its business. The Company may purchase this equipment or acquire it under leases. Purchased equipment is depreciated on the straight-line method over the estimated useful life down to an estimated salvage or trade-in value. Equipment acquired under capital leases is recorded at the net present value of the minimum lease payments and is amortized on the straight-line method over the lease term. Depreciable lives of tractors and trailers range from five years to fourteen years. Salvage value is estimated at the expected date of trade-in or sale based on the expected market values of equipment at the time of disposal.

Goodwill and other intangibles. Goodwill is not subject to amortization and is tested for impairment annually and whenever events or changes in circumstances indicate that impairment may have occurred. The Company performs its annual impairment test as of October 1. The Company first assesses qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50%) that the fair value of our reporting unit is less than its carrying amount, including goodwill. If, after assessing qualitative factors, the Company determines that it is more likely than not that the fair value of our reporting unit is less than its carrying amount, then a two-step impairment test is performed to identify potential goodwill

impairment and measure the amount of goodwill impairment loss to be recognized, if any.

We periodically evaluate other intangibles that are amortizable for impairment when the occurrence of events or changes in circumstances that indicate the carrying amount of assets may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of an asset group to future net undiscounted cash flows expected to be generated by the group. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount over which the carrying amount of the assets exceeds the fair value of the assets. There were no impairment charges related to goodwill or other intangibles recognized during the year ended December 31, 2018.

Estimate of impairment of long lived assets. We review property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We evaluate recoverability of assets to be held and used by comparing the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. We believe that the accounting estimate related to asset impairment is a critical accounting estimate because: (1) it requires our management to make assumptions about future revenues over the life of the asset, and (2) the impact that recognizing an impairment would have on our financial position, as well as our results of operations, could be material. Management's assumptions about future revenues require significant judgment because actual revenues have fluctuated in the past and may continue to do so. In estimating future revenues, we use our internal business forecasts. We develop our forecasts based on recent revenue data for existing services and other industry and economic factors.

Estimates of accrued liabilities for claims involving bodily injury, physical damage losses, employee health benefits and workers' compensation. The primary claims arising against the Company consist of cargo, liability, personal injury, property damage, workers' compensation, and employee medical expenses. The Company's insurance programs typically involve self-insurance with high risk-retention levels. Due to its significant self-insured retention amounts, the Company has exposure to fluctuations in the number and severity of claims and to variations between its estimated and actual ultimate payouts. The Company accrues the estimated cost of the uninsured portion of pending claims and an estimate for allocated loss adjustment expenses including legal and other direct costs associated with a claim. Estimates require judgments concerning the nature and severity of the claim, historical trends, advice from third-party administrators and insurers, the size of any potential damage award based on factors such as the specific facts of individual cases, the jurisdictions involved, the prospect of punitive damages, future medical costs, and inflation estimates of future claims development, and the legal and other costs to settle or defend the claims. USA Truck records both current and long-term claims accruals at the estimated ultimate payment amounts based on information such as individual case estimates, historical claims experience and an estimate of claims incurred but not reported. The current portion of the accrual reflects the anticipated claims amounts expected to be paid in the next twelve months.

Accounting for income taxes. The Company's deferred tax assets and liabilities represent items that will result in taxable income or tax deductions in future years for which we have already recorded the related tax expense or benefit in our consolidated income statements. Deferred tax accounts arise as a result of timing differences between when items are recognized in our consolidated financial statements compared to when they are recognized in our tax returns. Significant management judgment is required in determining our provision for income taxes and in determining whether deferred tax assets will be realized in full or in part. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. We periodically assess the likelihood that all or some portion of deferred tax assets will be recovered from future taxable income. To the extent we believe the likelihood of recovery is not sufficient, a valuation allowance is established for the amount determined not to be realizable.

We believe that we have adequately provided for our future tax consequences based upon current facts and circumstances and current tax law. However, should our tax positions be challenged, different outcomes could result and have a significant impact on the amounts reported through our consolidated income statements.

New Accounting Pronouncements

See "Item 8. Financial Statements and Supplementary Data – Note 1: Description of the Business and Summary of Significant Accounting Policies".

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

USA Truck experiences various market risks, including changes in interest rates and commodity prices. The Company does not enter into derivatives or other financial instruments for hedging or speculative purposes. Because USA Truck's operations are largely confined to the U.S., the Company is not subject to a material amount of foreign currency risk.

Interest Rate Risk. The Company is exposed to interest rate risk primarily from its Credit Facility. The Company's Credit Facility bears variable interest based on the type of borrowing and on the Agent's prime rate or the London Interbank Offered Rate ("LIBOR") plus a certain percentage determined based on a pricing grid dependent upon certain financial ratios. As of December 31, 2018, the Company had $85.3 million outstanding pursuant to its Credit Facility, excluding letters of credit of $5.4 million. Assuming the outstanding balance as of December 31, 2018 remained constant, a hypothetical one-percentage point increase in interest rates applicable to its Credit Facility would increase the Company's interest expense over a one-year period by approximately $0.9 million.

Commodity Price Risk. The Company is subject to commodity price risk with respect to purchases of fuel. In recent years, fuel prices have fluctuated greatly and have generally increased, although recently the Company experienced a significant decrease in 2016. In some periods, the Company's operating performance was adversely affected because it was not able to fully offset the impact of higher diesel fuel prices through increased freight rates and fuel surcharge revenue recoveries. Management cannot predict how fuel price levels will continue to fluctuate in the future or the extent to which fuel surcharge revenue recoveries could be collected to offset any increases. As of December 31, 2018, the Company did not have any derivative financial instruments to reduce its exposure to fuel price fluctuations, but may use such instruments in the future. Accordingly, volatile fuel prices may continue to impact the Company significantly. A significant increase in fuel costs, or a shortage of diesel fuel, could materially and adversely affect the Company's results of operations. Further, higher fuel costs could contribute to driver shortages in the trucking industry generally by forcing independent contractors to cease operations. Based on the Company's fuel consumption for 2018, a 10% increase in the average price per gallon would result in an approximately $5.5 million increase in fuel expense before taking into account application of the Company's fuel surcharge program.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Consolidated Financial Statements of the Company as of December 31, 2018 and 2017, and for the years ended December 31, 2018, 2017, and 2016, together with related notes and the report of Grant Thornton LLP, independent registered public accountants, are set forth on the following pages.

Index to Consolidated Financial Statements


			Page
Audited Financial Statements of USA Truck, Inc.
Report of independent registered public accounting firm			43
Consolidated balance sheets as of December 31, 201 8 and 2 017			44
Consolidated statements of operations and comprehensive income (loss) for the years ended December 31, 201 8 , 201 7 and 2 016			45
Consolidated statements of stockholders’ equity for the years ended December 31, 201 8 , 201 7 and 20 16			46
Consolidated statements of cash flows for the years ended December 31, 201 8 , 201 7 and 2 016			47
Notes to Consolidated Financial Statements			48

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

USA Truck, Inc.

Opinion on the financial statements

We have audited the accompanying consolidated balance sheets of USA Truck Inc. (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2018 and 2017, the related consolidated statements of operations and comprehensive income (loss), changes in stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2018, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2018, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2018, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 27, 2019 expressed an unqualified opinion.

Basis for opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ GRANT THORNTON LLP

We have served as the Company's auditor since 2006.

Tulsa, Oklahoma

February 27, 2019

USA Truck, Inc.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)


	As of December 31,
Assets	2018		2017
Current assets:
Cash	$	989	$	71
Accounts receivable, net of allowance for doubtful accounts of $575 and $639, respectively	56,003		55,138
Other receivables	5,104		2,787
Inventories	722		458
Assets held for sale	2,611		112
Prepaid expenses and other current assets	7,224		6,025
Total current assets	72,653		64,591
Property and equipment:
Land and structures	32,434		31,452
Revenue equipment	280,623		252,484
Service, office and other equipment	28,094		26,209
Property and equipment, at cost	341,151		310,145
Accumulated depreciation and amortization	(115,766)		(122,329)
Property and equipment, net	225,385		187,816
Goodwill	4,926		—
Other intangibles, net	17,837		—
Other assets	1,003		1,448
Total assets	$	321,804	$	253,855
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	22,453	$	24,332
Current portion of insurance and claims accruals	15,852		13,552
Accrued expenses	8,977		9,108
Current maturities of capital leases	17,292		12,929
Insurance premium financing	4,435		4,115
Total current liabilities	69,009		64,036
Deferred gain	84		480
Long-term debt	85,300		61,225
Capital leases, less current maturities	53,460		29,216
Deferred income taxes	23,518		21,136
Insurance and claims accruals, less current portion	9,963		11,274
Total liabilities	241,334		187,367
Stockholders’ equity:
Preferred Stock, $0.01 par value; 1,000,000 shares authorized; none issued	—		—
Common Stock, $0.01 par value; 30,000,000 shares authorized; issued 12,011,495 shares, and 12,142,391 shares, respectively	120		121
Additional paid-in capital	66,433		68,667
Retained earnings	77,664		65,460
Less treasury stock, at cost (3,650,060 shares, and 3,853,064 shares, respectively)	(63,747)		(67,760)
Total stockholders’ equity	80,470		66,488
Total liabilities and stockholders’ equity	$	321,804	$	253,855

See accompanying notes to consolidated financial statements.

USA Truck, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(in thousands, except per share amounts)


	For the Years Ended December 31,
	2018		2017		2016
Operating revenue	$	534,060	$	446,533	$	429,099

Salaries, wages and employee benefits	130,407		122,297		122,408
Fuel and fuel taxes	55,158		45,853		43,179
Depreciation and amortization	28,324		28,463		29,954
Insurance and claims	23,240		25,628		21,154
Equipment rent	10,840		10,173		7,443
Operations and maintenance	33,356		31,001		34,252
Purchased transportation	211,132		164,012		148,972
Operating taxes and licenses	3,814		4,068		4,695
Communications and utilities	2,849		2,713		3,239
Gain on disposal of assets, net	(2,361)		(773)		(1,116)
Restructuring, impairment and other costs (reversal)	(639)		—		5,264
Impairment on assets held for sale	—		—		2,839
Other	16,721		15,166		14,332
Total operating expenses	512,841		448,601		436,615
Operating income (loss)	21,219		(2,068)		(7,516)

Other expenses
Interest expense, net	3,649		3,808		3,178
Other, net	992		387		524
Total other expenses, net	4,641		4,195		3,702
Income (loss) before income taxes	16,578		(6,263)		(11,218)
Income tax expense (benefit)	4,374		(13,760)		(3,519)

Consolidated net income (loss) and comprehensive income (loss)	$	12,204	$	7,497	$	(7,699)

Net earnings (loss) per share
Average shares outstanding (basic)	8,194		8,029		8,550
Basic earnings (loss) per share	$	1.49	$	0.93	$	(0.90)

Average shares outstanding (diluted)	8,218		8,056		8,550
Diluted earnings (loss) per share	$	1.49	$	0.93	$	(0.90)

See accompanying notes to consolidated financial statements.

USA Truck, Inc.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in thousands)


	Common Stock					Additional Paid-in Capital		Retained Earnings		Treasury Stock		Total
	Shares	Par Value

Balance at December 31, 2015	11,946	$	119	$	67,370	$	65,871	$	(39,583)	$	93,777
Exercise of stock options	2	—		3		—		—		3
Excess tax benefit on exercise of stock options	—	—		(135)		—		—		(135)
Transfer of stock into (out of) treasury stock	—	—		(40)		—		(28,372)		(28,412)
Stock-based compensation	—	—		976		—		—		976
Restricted stock award grant	319	4		(4)		—		—		—
Forfeited restricted stock	(102)	(1)		1		—		—		—
Net share settlement related to restricted stock vesting	(9)	—		(104)		—		—		(104)
Net loss	—	—		—		(7,699)		—		(7,699)
Balance at Balance at December 31, 2016	12,156	122		68,041		58,172		(67,872)		58,463
Effect of adoption of share-based payment pronouncement ASU 2016-09 (see note 1)	—	—		334		(209)		—		125
Balance at Balance at December 31, 2016, as recast, as recast	12,156	122		68,375		57,963		(67,872)		58,588
Issuance of treasury stock	—	—		(170)		—		112		(58)
Stock-based compensation	—	—		459		—		—		459
Restricted stock award grant	199	1		(1)		—		—		—
Forfeited restricted stock	(213)	(2)		2		—		—		—
Net share settlement related to restricted stock vesting	—	—		2		—		—		2
Net income	—	—		—		7,497		—		7,497
Balance at Balance at December 31, 2017	12,142	121		68,667		65,460		(67,760)		66,488
Issuance of treasury stock	—	—		(4,013)		—		4,013		—
Stock-based compensation	—	—		1,164		—		—		1,164
Issuance of shares for acquisition	—	—		750		—		—		750
Forfeited restricted stock	(128)	(1)		1		—		—		—
Net share settlement related to restricted stock vesting	(2)	—		(136)		—		—		(136)
Net income	—	—		—		12,204		—		12,204
Balance at Balance at December 31, 2018	12,012	$	120	$	66,433	$	77,664	$	(63,747)	$	80,470

See accompanying notes to consolidated financial statements.

USA Truck, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)


	For the Years Ended December 31,
Operating activities	2018		2017		2016
Net income (loss)	$	12,204	$	7,497	$	(7,699)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	28,324		28,463		29,954
Provision for doubtful accounts	480		311		515
Deferred income tax provision (benefit)	2,382		(16,639)		(55)
Share-based compensation	1,164		459		976
Reversal of previously recorded restructuring, impairment and other costs	(639)		—		—
Gain on disposal of assets, net	(2,361)		(773)		(1,116)
Asset impairments	—		—		3,909
Other	(205)		(171)		(47)
Changes in operating assets and liabilities:
Accounts receivable	2,771		2,323		1,949
Inventories, prepaid expenses and other current assets	(426)		117		(979)
Accounts payable and accrued expenses	(3,447)		8,526		(5,945)
Insurance and claims accruals	571		5,603		509
Other long-term assets and liabilities	445		(259)		216
Net cash provided by operating activities	41,263		35,457		22,187
Investing activities
Cash paid for acquisition	(51,440)		—		—
Purchases of property and equipment	(15,019)		(13,976)		(59,751)
Proceeds from sale of property and equipment	10,349		13,875		25,849
Proceeds from operating sale leaseback	5,323		10,980		—
Net cash (used in) provided by investing activities	(50,787)		10,879		(33,902)
Financing activities
Borrowings under long-term debt	84,254		29,991		73,009
Principal payments on long-term debt	(59,859)		(65,633)		(42,866)
Principal payments on capitalized lease obligations	(14,180)		(11,811)		(9,969)
Net change in bank drafts payable	363		(1,398)		240
Excess tax benefit from exercise of stock options	—		—		(135)
Proceeds from capital sale leaseback	—		2,520		19,927
Purchase of common stock	—		—		(28,412)
Issuance of treasury stock	—		(58)		57
Net proceeds or (payments) from stock based awards	(136)		2		(101)
Net cash provided by (used in) financing activities	10,442		(46,387)		11,750
Increase (decrease) in cash and cash equivalents	918		(51)		35
Cash and cash equivalents:
Beginning of year	71		122		87
End of year	$	989	$	71	$	122
Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest	$	3,719	$	3,862	$	3,382
Income taxes	3,651		175		716
Supplemental schedule of non-cash investing and financing activities
Sales of revenue equipment included in accounts receivable	1,851		—		—
Liability incurred for capitalized leases on revenue equipment	42,788		2,565		29,642

See accompanying notes to consolidated financial statements.

USA Truck, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of business

USA Truck, Inc., a Delaware corporation and subsidiaries (together, the "Company"), is headquartered in Van Buren, Arkansas. The Company transports commodities throughout the contiguous United States and into and out of portions of Canada, as well as transports general commodities into and out of Mexico by offering through-trailer service from its terminal in Laredo, Texas. The Company has two reportable segments: (i) Trucking, consisting of the Company's truckload and dedicated freight service offerings, and (ii) USAT Logistics, consisting of the Company's freight brokerage, logistics, and rail intermodal service offerings.

Basis of presentation

The accompanying consolidated financial statements include USA Truck, Inc., and its wholly owned subsidiaries: International Freight Services, Inc. ("IFS"), a Delaware corporation; Davis Transfer Company Inc., a Georgia corporation ("DTC"), Davis Transfer Logistics Inc., a Georgia corporation ("DTL"), and B & G Leasing, L.L.C., a Georgia limited liability company, ("B & G," and collectively with DTC and DTL, "Davis Transfer Company"). References in this report to "it," "we," "us," "our," the "Company," and similar expressions refer to USA Truck, Inc. and its subsidiaries. All significant intercompany balances and transactions have been eliminated in preparing the consolidated financial statements. Certain amounts reported in prior periods have been reclassified to conform to the current year presentation.

The accompanying financial statements have been prepared in accordance with United States generally accepted accounting principles ("GAAP"), and include all adjustments necessary for the fair presentation of the periods presented.

Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors which management believes to be reasonable under the circumstances. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates.

Cash equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The carrying amount reported in the balance sheets for cash and cash equivalents approximates its fair value.

Allowance for doubtful accounts

The allowance for doubtful accounts is management's estimate of the amount of probable credit losses in the Company's existing accounts receivable. Management reviews the financial condition of customers for granting credit and determines the allowance based on analysis of individual customers' financial condition, historical write-off experience and national economic conditions. The Company evaluates the adequacy of its allowance for doubtful accounts quarterly. The Company does not have any off-balance-sheet credit exposure related to its customers.

The following table provides a summary of the activity in the allowance for doubtful accounts for the years ended 2018, 2017, and 2016 (in thousands):


	Year Ended December 31,
	2018		2017		2016
Balance at beginning of year	$	639	$	608	$	608
Provision for doubtful accounts	480		311		515
Uncollectible accounts written off, net of recovery	(544)		(280)		(515)
Balance at end of year	$	575	$	639	$	608

Assets held for sale

When we plan to dispose of property by sale, the asset is carried in the financial statements at the lower of the carrying amount or estimated fair value, less cost to sell, and is reclassified to assets held for sale. Additionally, after such reclassification, there is no further depreciation taken on the asset. In order for an asset to be classified as held for sale, management must approve and commit to a formal plan of disposition, the sale must be anticipated during the ensuing year, the asset must be actively marketed, the asset must be available for immediate sale, and meet certain other specified criteria. The Company recorded a charge of $2.8 million for the year ended December 31, 2016 to reduce assets held for sale to estimated fair value, less cost to sell. This charge is included in "Impairment on assets held for sale", in the accompanying statements of operations and comprehensive income (loss).

Valuation of long-lived assets

We review property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We evaluate recoverability of assets to be held and used by comparing the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets, less cost to sell. The Company performed the impairment analysis of the carrying value of its fleet, which is the lowest level of identifiable cash flows. Our analysis of undiscounted cash flows indicated no impairment existed for long-lived assets at December 31, 2018 or 2017.

Goodwill and other intangible assets

The Company classifies intangible assets into two categories: (i) intangible assets with definite lives subject to amortization and (ii) goodwill. Goodwill represents the excess of the purchase price paid over the fair value of the net assets of acquired businesses. The Company reviews its goodwill balance for impairment on October 1 each year, unless circumstances dictate more frequent assessments, and in accordance with Accounting Standards Update ("ASU") 2011-08, Testing Goodwill for Impairment. ASU 2011-08 permits an initial assessment, commonly referred to as "step zero", of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount and also provides a basis for determining whether it is necessary to perform the two-step goodwill impairment test required by Accounting Standards Codification ("ASC") Topic 350. In the fourth quarter of 2018, the Company performed the qualitative assessment of goodwill and determined it was more likely than not that the fair value of each of its reporting units would be greater than its carrying amount. Therefore, the Company determined it was not necessary to perform the two-step goodwill impairment test.

Intangible assets are tested for impairment if conditions exist that indicate the carrying value may not be recoverable. Such conditions may include an economic downturn in a geographic market or a change in the assessment of future operations. We record an impairment charge when the carrying value of the definite lived intangible asset is not recoverable by the cash flows generated from the use of the asset. We determine the useful lives of our identifiable intangible assets after considering the specific facts and circumstances related to each intangible asset. Factors we consider when determining useful lives include the contractual term of any agreement, the history of the asset, our long-term strategy for the use of the asset, any laws or other local regulations which could impact the useful life of the asset, and other economic factors, including competition and specific market conditions. Intangible assets that are deemed to have definite lives are amortized, generally on a straight-line basis, over their useful lives, ranging from 2 to 10 years.

Other intangibles, net consists primarily of a trademarks, covenants not to compete, and customer relationships. All intangible assets determined to have finite lives are amortized over their estimated useful lives. The useful life of an intangible asset is the period over which the asset is expected to contribute directly or indirectly to future cash flows. We periodically evaluate amortizable intangible assets for impairment upon occurrence of events or changes in circumstances that indicate the carrying amount of intangible assets may not be recoverable. Management determined that no impairment charge was required for the year ended December 31, 2018. See Note 5 for additional information regarding intangible assets.

Treasury stock

The Company uses the cost method to record treasury stock purchases whereby the entire cost of the acquired shares of our common stock is recorded as treasury stock (at cost). When the Company subsequently reissues these shares, proceeds in excess of cost upon the issuance of treasury shares are credited to additional paid in capital, while any deficiency is charged to additional paid in capital. The Company recorded charges to additional paid in capital of $4.0 million, $0.1 million and $0.1 million for each of the years ended December 31, 2018, 2017 and 2016, respectively. During 2018, these charges were for the issuing of shares awarded as equity grants and for approximately $0.75 million used in our acquisition of Davis Transfer Company (as defined in Note 4). During 2017 and 2016, these charges related to the expensing of an inducement grant made to certain executives of the Company.

Earnings per share data

The Company calculates basic earnings per share based on the weighted average number of its common shares outstanding for the applicable period. The Company calculates diluted earnings per share based on the weighted average number of its common shares outstanding for the period plus all potentially dilutive securities using the treasury stock method, whereby the Company assumes that all such shares are converted into common shares at the beginning of the period, if deemed to be dilutive. If the Company incurs a loss from continuing operations, the effect of potentially dilutive common stock equivalents are excluded from the calculation of diluted earnings per share because the effect would be anti-dilutive. Performance shares are excluded from contingent shares for purposes of calculating diluted weighted average shares until the performance measure criteria is probable and shares are likely to be issued.

Dividend policy

The Company has not paid any dividends on its common stock to date, and does not anticipate paying any dividends at the present time. The Company currently intends to retain all of its earnings, if any, for use in the expansion and development of its business and reduction of debt. In the event the financial covenant is sprung on the Company's Credit Facility, restrictions may be placed on our ability to pay dividends. Future payments of dividends will depend upon the Company's financial condition, results of operations, capital commitments, restrictions under then-existing agreements, legal requirements, and other factors the Company deems relevant.

Inventories

Inventories consist of tires and parts, and are stated at the lower of cost or market. These items are expensed as used on a first in first out basis.

Property and equipment

Property and equipment is capitalized in accordance with the Company's asset capitalization policy. The capitalized property is depreciated by the straight-line method using the following estimated useful lives: structures – 15 years to 39.5 years; revenue equipment – 5 to 14 years; and service, office and other equipment – 3 to 10 years. We capitalize tires placed in service on new revenue equipment as part of the equipment cost. Replacement tires and recapping costs are expensed as incurred.

Depreciable lives and salvage value of assets

We review the appropriateness of depreciable lives and salvage values for each category of property and equipment. These studies utilize models, which take into account actual usage, physical wear and tear, and replacement history to calculate remaining life of our asset base. We also make assumptions regarding future conditions in determining potential salvage values. These assumptions impact the amount of depreciation expense recognized in the period and any gain or loss once the asset is disposed. During the third quarter of 2017, the Company reevaluated the estimated useful lives of its trailers and increased such lives from 10 to 14 years, and, given the soft used equipment market, opted to lower the salvage values of its tractor fleet to reflect current estimates of the value of such equipment upon its retirement. These changes were accounted for as a change in estimate, and the net effect did not materially impact either the 2017 or future financial statements. Actual disposition values may be greater or less than expected due to the length of time before disposition.

Income taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax basis of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company has analyzed filing positions in its federal and applicable state tax returns in all open tax years. The Company's policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as operating expenses. The Company analyzes its tax positions on the basis of a two-step process in which (1) it determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, it recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company believes that its income tax filing positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material change to its consolidated financial position, results of operations and cash flows. Therefore, no reserves for uncertain income tax positions or associated interest or penalties on uncertain tax positions have been recorded.

In December 2017, the SEC staff issued Staff Accounting Bulletin 118 ("SAB 118"), which provides guidance on accounting for the tax effects of the Tax Cuts and Jobs Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, for the year ended December 31, 2017, the Company was able to determine a reasonable estimate, and,

accordingly, recorded a provisional estimate in the financial statements for the fourth quarter of 2017. In 2018, we completed our analysis of the impacts of the Tax Cuts and Jobs Act.

Claims accruals

The primary claims arising against the Company consist of cargo loss and damage, liability, personal injury, property damage, workers' compensation, and employee medical expenses. The Company has exposure to fluctuations in the frequency and severity of claims and to variations between its estimated and actual ultimate payouts up to the Company's self-insured retention level. Estimates require judgments concerning the nature and severity of the claim, as well as other factors. Actual settlement of the self-insured claim liabilities could differ from management's initial assessment due to uncertainties and fact development.

Restricted stock

Restricted stock cannot be sold by the recipient until its restrictions have lapsed. The Company recognizes compensation expense related to these awards over the vesting periods based on the closing prices of the Company's common stock on the grant dates. If these awards contain performance criteria the grant date fair value is set assuming performance at target, and management periodically reviews actual performance against the criteria and adjusts compensation expense accordingly. These shares are considered issued and outstanding under the terms on the restricted stock agreement.

Revenue recognition

Revenue is measured based upon consideration specified in a contract with a customer. The Company recognizes revenue when contractual performance obligations are satisfied by transferring the benefit of the service to our customer. The benefit is transferred to the customer as the service is being provided and revenue is recognized accordingly via time based metrics. A corresponding contract asset of $1.1 million was recorded in the December 31, 2018 balance sheet in the "Accounts receivable" line item. The Company is entitled to receive payment as it satisfies performance obligations with customers. Our business consists of two reportable segments, Trucking and USAT Logistics. For more detailed information about our reportable segments, see Note 2.

Disaggregation of revenue

The Company's revenue types are line haul, fuel surcharge and accessorial. Line haul revenue represents the majority of our revenue and consists of fees earned for freight transportation, excluding fuel surcharge. Fuel surcharge revenue consists of additional fees earned by the Company in connection with the performance of line haul services to partially or completely offset the cost of fuel. Accessorial revenue consists of ancillary services provided by the Company, including but not limited to, stop-off charges, loading and unloading charges, tractor or trailer detention charges, expedited charges, repositioning charges, etc. These accessorial charges are recognized as revenue throughout the service provided. The following tables set forth revenue disaggregated by revenue type (in thousands):


	Year Ended December 31,
Revenue type:	2018
	Trucking		USAT Logistics		Total
Freight	$	295,585	$	165,398	$	460,983
Fuel surcharge	47,770		16,035		63,805
Accessorial	4,374		4,898		9,272
Total operating revenue	$	347,729	$	186,331	$	534,060


	Year Ended December 31,
	2017
	Trucking		USAT Logistics		Total
Freight	$	259,550	$	130,313	$	389,863
Fuel surcharge	38,173		10,043		48,216
Accessorial	4,329		4,125		8,454
Total operating revenue	$	302,052	$	144,481	$	446,533


	Year Ended December 31,
	2016
	Trucking		USAT Logistics		Total
Freight	$	256,457	$	122,867	$	379,324
Fuel surcharge	32,090		8,839		40,929
Accessorial	5,979		2,867		8,846
Total operating revenue	$	294,526	$	134,573	$	429,099

New accounting pronouncements

In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"), which supersedes nearly all existing revenue recognition guidance under GAAP. The core principle of ASU 2014-9 is to recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-9 defines a five-step process to implement this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under previous GAAP. Transportation revenue within our USAT Logistics segment under the new standard changed from recognition of revenue at completion of delivery to recognizing revenue proportionately as the transportation services are performed. This change did not materially impact our operations or IT infrastructure. In our Trucking segment, where revenue is recognized as services are provided, revenue recognition remained the same. The Company adopted ASU 2014-9 effective January 1, 2018 using the modified retrospective method. The effect of adoption was immaterial to retained earnings at January 1, 2018 and to net income for the year ended December 31, 2018.

In February 2016, the FASB issued ASU No. 2016-02, Leases, which requires lessees to recognize a right-to-use asset and a lease obligation for all leases. Lessees are permitted to make an accounting policy election to not recognize an asset and liability for leases with a term of twelve months or less. Lessor accounting under the new standard is substantially unchanged. Additional qualitative and quantitative disclosures, including significant judgments made by management, will be required. The new standard, which will become effective for the Company beginning with the first quarter 2019, requires a modified retrospective transition approach and includes a number of practical expedients. The adoption of this standard will have a material impact on our consolidated balance sheets, but not our statement of operations. Management anticipates the adoption of this standard will increase assets and liabilities on the consolidated balance sheets by approximately $16.0 million to $18.0 million as of January 1, 2019. The Company has elected to use the transition relief practical expedient described under ASU 2018-11, and will not recast comparative periods in the transition to ASC 842. See Note 9 for further discussion of our lease types and positions.

NOTE 2. SEGMENT REPORTING

The Company's two reportable segments are Trucking and USAT Logistics. In determining its reportable segments, the Company's management focuses on financial information, such as operating revenue, operating expense categories, operating ratios and operating income, as well as on key operating statistics, to make operating decisions.

Trucking. Trucking is comprised of one-way truckload and dedicated freight motor carrier services. Truckload provides motor carrier services as a medium-haul common and contract carrier. USA Truck has provided truckload motor carrier services since its inception, and continues to derive the largest portion of its gross revenue from these services. Dedicated freight provides truckload motor carrier services to specific customers for movement of freight over particular routes at specified times.

USAT Logistics. USAT Logistics' service offerings consist of freight brokerage, logistics, and rail intermodal services. Each of these service offerings match customer shipments with available equipment of authorized third-party motor carriers and other service providers. The Company provides these services to many existing Trucking customers, many of whom prefer to rely on a single service provider, or a small group of service providers, to provide all their transportation solutions.

Revenue equipment assets are not allocated to USAT Logistics as freight services for customers are brokered through arrangements with third party motor carriers who utilize their own equipment. To the extent rail intermodal operations require the use of Company-owned assets, they are obtained from the Company's Trucking segment on an as-needed basis. Depreciation and amortization expense is allocated to USAT Logistics based on the Company-owned assets specifically utilized to generate USAT Logistics revenue. All intercompany transactions between segments reflect rates similar to those that would be negotiated with independent third parties. All other expenses for USAT Logistics are specifically identifiable direct costs or are allocated to USAT Logistics based on relevant cost drivers, as determined by management.

Customer Concentration

Services provided to the Company's largest customer, Walmart Inc., generated approximately 14.0%, 14.0% and 12.0% of consolidated operating revenue for the years ended 2018, 2017, and 2016, respectively. Operating revenue generated by Walmart Inc. is reported in both the Trucking and USAT Logistics operating segments. No other customer accounted for 10% or more of operating revenue in the stated reporting periods.

A summary of operating revenue by segment is as follows (in thousands):


	Year Ended December 31,
Operating revenue:	2018		2017		2016
Trucking revenue (1)	$	351,222	$	302,943	$	295,807
Trucking intersegment eliminations	(3,493)		(891)		(1,281)
Trucking operating revenue	347,729		302,052		294,526
USAT Logistics revenue (2)	190,992		152,137		140,847
USAT Logistics intersegment eliminations	(4,661)		(7,656)		(6,274)
USAT Logistics operating revenue	186,331		144,481		134,573
Total operating revenue	$	534,060	$	446,533	$	429,099

1.Includes foreign revenue of $41.5 million, $35.5 million, and $36.9 million for the years ended December 31, 2018, 2017 and 2016, respectively. All foreign revenue is collected in U.S. dollars.

2.USAT Logistics de Mexico was established on March 4, 2017, and operations were closed during the first quarter of 2018. Foreign revenue from USAT Logistics de Mexico was $0.8 million and $2.1 million for the years ended December 31, 2018 and 2017, respectively. All foreign revenue is collected in U.S. dollars.

A summary of operating income (loss) by segment is as follows (in thousands):


	Year Ended December 31,
Operating income (loss)	2018		2017		2016
Trucking	$	11,710	$	(9,667)	$	(14,789)
USAT Logistics	9,509		7,599		7,273
Total operating income (loss)	$	21,219	$	(2,068)	$	(7,516)

A summary of depreciation and amortization by segment is as follows (in thousands):


	Year Ended December 31,
Depreciation and amortization:	2018		2017		2016
Trucking	$	27,632	$	28,002	$	29,467
USAT Logistics	692		461		487
Total depreciation and amortization	$	28,324	$	28,463	$	29,954

NOTE 3. PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consist of the following (in thousands):


	Year Ended December 31,
	2018		2017
Prepaid licenses, permits and tolls	$	1,521	$	1,398
Prepaid insurance	4,628		3,574
Other (1)	1,075		1,053
Total prepaid expenses and other current assets	$	7,224	$	6,025

1.As of December 31, 2018 and December 31, 2017, no single item included within other prepaid expenses and other current assets exceeded 5.0% of our total current assets.

NOTE 4. ACQUISITION OF DAVIS TRANSFER COMPANY

On October 18, 2018, USA Truck, Inc. acquired 100% of the outstanding equity of Davis Transfer Company Inc., a Georgia corporation ("DTC"), Davis Transfer Logistics Inc. and B & G Leasing, L.L.C. ("B & G," and collectively with DTC and DTL, "Davis Transfer Company"), for $52.25 million in cash and $0.75 million in Company stock. We believe the acquisition of Davis Transfer Company allowed us to grow our base of drivers, expand and diversify our customer base, and improve our operating network of terminal facilities. The purchase price is subject to a customary working capital adjustment post-closing. The equity purchase agreement includes an agreement to execute an Internal Revenue Code Section 338(h)(10) election. As a result, the acquisition of Davis will be treated as an asset acquisition for income tax purposes and the $4.9 million in goodwill acquired is deductible for tax purposes. Acquisition related expenses of $0.6 million are included in "Other non-operating" expenses line item in the accompanying consolidated statements of operations and comprehensive income (loss) for the year ended December 31, 2018.

The following unaudited pro forma financial information for the years ended December 31, 2018 and December 31, 2017, assume that the Davis Transfer Company acquisition occurred as of January 1, 2017. Pro forma adjustments reflected in the financial information below relate to accounting policy changes such as changes in depreciation expense of revenue equipment, amortization of intangible assets, and accounting for certain operations and maintenance costs, along with other adjustments for terminal rent expense to align Davis Transfer Company results with those of the Company and income tax effects for the periods presented.



(in thousands)	Year Ended December 31,
	2018		2017
Operating revenue	$	575,226	$	492,145
Net income	15,709		7,893

These unaudited pro forma amounts do not purport to be indicative of the results that would have actually been obtained if the acquisition had occurred at the beginning of the periods presented or that may be obtained in the future.

The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the closing date of the Davis Transfer Company acquisition (in thousands):


Cash	$	810
Accounts receivable	4,582
Other current assets	1,036
Property and equipment	25,604
Intangible assets	18,040
Goodwill	4,926
Total Assets	54,998
Accounts payable and Accrued expenses	(1,581)
Insurance accruals	(417)
Total consideration transferred			$	53,000

Total Purchase Price Consideration
Cash paid			52,250
Stock granted	750
Total consideration	$	53,000

Net cash paid	$	51,440

NOTE 5. INTANGIBLE ASSETS AND GOODWILL

The following tables summarizes the intangible assets and amortization expense for the year ended December 31, 2018 (in thousands):


	2018
	Amortization period (years)	Gross Amount		Accumulated Amortization		Net intangible assets
Trade name	Indefinite	$	5,000	$	—	$	5,000
Non-compete agreement	2	140		10		130
Customer relationships	10	12,900		193		12,707
Total intangible assets		$	18,040	$	203	$	17,837

Changes in carrying amount of goodwill by reportable segment is as follows (in thousands):


	Trucking		USAT Logistics
Balance at December 31, 2017	$	—	$	—
Acquisition goodwill	4,926		—
Balance at December 31, 2018	$	4,926	$	—

The above intangible assets have a weighted average life of 119 months. The expected amortization of these assets for the next five successive years and thereafter is as follows (in thousands):


2019	$	1,360
2020	1,346
2021	1,288
2022	1,288
2023	1,288
Thereafter	6,267
Total	$	12,837

NOTE 6. ACCRUED EXPENSES

Accrued expenses consist of the following (in thousands):


	Year Ended December 31,
	2018		2017
Salaries, wages and employee benefits	$	5,775	$	3,604
Federal and state tax accruals	1,509		3,587
Restructuring, impairment and other costs (1)	—		770
Other (2)	1,693		1,147
Total accrued expenses	$	8,977	$	9,108

2.Refer to Note 16 below for additional information regarding the restructuring, impairment and other costs.

3.As of December 31, 2018 and December 31, 2017, no single item included within other accrued expenses exceeded 5.0% of our total current liabilities.

NOTE 7. INSURANCE PREMIUM FINANCING

In October 2017, the Company executed an unsecured note payable for $4.1 million to a third-party financing company for a portion of the Company's annual insurance premiums. The note, which is payable in installments of principal and interest of approximately $1.4 million, bears interest at 3.0% and matured in October 2018.

During October 2018, the Company entered into agreements to pay approximately $4.7 million to third-party financing companies for the Company's annual insurance premiums. The balance of the note payable as of December 31, 2018 was $4.4 million.

NOTE 8. LONG-TERM DEBT

Long-term debt consisted of the following (in thousands):


	Year Ended December 31,
	2018		2017
Revolving credit facility	$	85,300	$	61,225

Credit facility

In February 2015, the Company entered into a senior secured revolving credit facility (the "Credit Facility") with a group of lenders and Bank of America, N.A., as agent ("Agent"). Contemporaneously with the funding of the Credit Facility, the Company paid off the obligations under and terminated its prior credit facility.

The Credit Facility is structured as a $170.0 million revolving credit facility, with an accordion feature that, so long as no event of default exists, allows the Company to request an increase in the revolving credit facility of up to $80.0 million, exercisable in increments of $20.0 million. The Credit Facility is a five-year facility scheduled to terminate on February 5, 2020. Borrowings under the Credit Facility are classified as either "base rate loans" or "LIBOR loans". Base rate loans accrue interest at a base rate equal to the Agent's prime rate plus an applicable margin between 0.25% and 1.00% that is adjusted quarterly based on the Company's consolidated fixed charge coverage ratio. LIBOR loans accrue interest at the London Interbank Offered Rate ("LIBOR") plus an applicable margin between 1.25% and 2.00% that is adjusted two days prior to each 30-day interest period for a term equivalent to such period based on the Company's consolidated fixed charge coverage ratio. The Credit Facility includes, within its $170.0 million revolving credit facility, a letter of credit sub-facility in an aggregate amount of $15.0 million and a swingline sub-facility (the "Swingline") in an aggregate amount of $20.0 million. An unused line fee of 0.25% is applied to the average daily amount by which the lenders' aggregate revolving commitments exceed the outstanding principal amount of revolver loans and the aggregate undrawn amount of all outstanding letters of credit issued under the Credit Facility. The Credit Facility is secured by a pledge of substantially all of the Company's assets, except for any real estate or revenue equipment financed outside the Credit Facility.

Borrowings under the Credit Facility are subject to a borrowing base limited to the lesser of (A) $170.0 million; or (B) the sum of (i) 90% of eligible investment grade accounts receivable (reduced to 85% in certain situations), plus (ii) 85% of eligible non-investment grade accounts receivable, plus (iii) the lesser of (a) 85% of eligible unbilled accounts receivable and (b) $10.0 million, plus (iv) the product of 85% multiplied by the net orderly liquidation value percentage applied to the net book value of eligible revenue equipment, plus (v) 85% multiplied by the net book value of otherwise eligible newly acquired revenue equipment that has not yet been subject to an appraisal. The borrowing base is reduced by an availability reserve, including reserves based on dilution and certain other customary reserves.

The Credit Facility contains a single financial covenant, which requires a consolidated fixed charge coverage ratio of at least 1.0 to 1.0 that springs in the event excess availability under the Credit Facility falls below 10% of the lenders' total commitments. Also, certain restrictions regarding the Company's ability to pay dividends, make certain investments, prepay certain indebtedness, execute share repurchase programs and enter into certain acquisitions and hedging arrangements are triggered in the event excess availability under the Credit Facility falls below 20% of the lenders' total commitments. Management believes the Company's excess availability will not fall below 20%, or $34.0 million, and expects the Company to remain in compliance with all debt covenants during the next twelve months.

The Credit Facility includes usual and customary events of default for a facility of this nature and provides that, upon the occurrence and continuation of an event of default, payment of all amounts payable under the Credit Facility may be accelerated, and the lenders' commitments may be terminated. The Credit Facility contains certain restrictions and covenants relating to, among other things, dividends, liens, acquisitions and dispositions, affiliate transactions and other indebtedness.

The Company had no overnight borrowings under the Swingline as of December 31, 2018. The average interest rate for all borrowings made under the Credit Facility as of December 31, 2018, was 3.66%. As debt is repriced on a monthly basis, the borrowings under the Credit Facility approximate fair value. As of December 31, 2018, the Company had outstanding $5.4 million in letters of credit and had approximately $50.8 million available to borrow under the Credit Facility.

The Credit Facility was amended and restated on January 31, 2019. See Note 17 below for discussion of the Company's amended and restated $225.0 million revolving credit facility.

NOTE 9. LEASES AND COMMITMENTS

Capital leases

The Company leases certain equipment under capital leases with terms ranging from 36 to 84 months. Balances related to these capitalized leases are included in "Property and equipment" line items in the accompanying consolidated balance sheets and are set forth in the table below for the periods indicated (in thousands).


	Capitalized Costs		Accumulated Amortization		Net Book Value
December 31, 2018	$	87,910	$	16,415	$	71,495
December 31, 2017	66,785		23,254		43,531

The Company has capitalized lease obligations relating to revenue equipment of $70.8 million, of which $17.3 million represents the current portion. These leases have various termination dates extending through November 2025 and contain renewal or fixed price purchase options. The effective interest rates on the leases range from nil to 4.08% as of December 31, 2018. The lease agreements require payment of property taxes, maintenance and operating expenses. Amortization of assets under capital leases was $5.8 million, $7.4 million, and $6.2 million for the years ended December 31, 2018, 2017 and 2016, respectively. The Company entered into $42.8 million, $2.6 million, and $29.6 million in non-cash capitalized lease obligations for the years ended December 31, 2018, 2017 and 2016, respectively.

During 2017, the Company completed a capital sale-leaseback transactions under which certain Company-owned tractors were sold to an unrelated party for net proceeds of $2.5 million with a term of 48 months. No deferred gain was recognized on the transaction.

Operating leases

Rent expense is set forth in the table below for the periods indicated (in thousands):


	Year Ended December 31,
	2018		2017		2016
Equipment rent (1)	$	10,840	$	10,173	$	7,443
Building and office rent (2)	1,586		1,619		2,001
Total rent expense	$	12,426	$	11,792	$	9,444

1.Expense relating to tractors, trailers and other operating equipment is recorded in the "Equipment rent" line item in the accompanying consolidated statement of operations and comprehensive income (loss).

2.Expense relating to buildings and office equipment is recorded in the "Operations and maintenance" line item in the accompanying consolidated statement of operations and comprehensive income (loss).

During the second quarter of 2018, the Company completed an operating sale-leaseback transaction under which it sold certain owned trailers to an unrelated party for net proceeds of $5.3 million and entered into an operating lease with the buyer for a term of 6 months. The $5.3 million in proceeds was received from the purchaser in early July 2018. The Company recorded a liability of approximately $1.3 million representing the deferred gain on the sale and amortized such amount to earnings ratably over the lease term.

During the first quarter of 2017, the Company completed an operating sale-leaseback transaction under which it sold certain owned tractors to an unrelated party for net proceeds of $11.0 million and entered into an operating lease with the buyer for a term of 41 months. The Company recorded a deferred gain of approximately $0.03 million on the sale, which is amortized to earnings ratably over the lease term. The deferred gain is included in the “Deferred gain” line item in the accompanying condensed consolidated balance sheets.

As of December 31, 2018, the future minimum payments including interest under capitalized leases with initial terms of one year or more and future rentals under operating leases for certain facilities, office equipment and revenue equipment with initial terms of one year or more were as follows for the years indicated (in thousands).


	2019		2020		2021		2022		2023		Thereafter
Future minimum payments	$	19,319	$	22,833	$	7,328	$	7,328	$	18,648	$	2,566
Future rentals under operating leases	9,088		5,370		1,308		920		708		1,358

Other commitments

As of December 31, 2018, the Company had commitments for purchases of revenue and non-revenue equipment in the amount of $32.8 million. The Company typically has the option to cancel revenue equipment orders within a 60 to 90 day period prior to scheduled production.

Related party transactions

In the normal course of business, the Company leases office and shop space from a related party under a monthly operating lease. Rent expense for this space was approximately $0.1 million for the year ended December 31, 2018, and is included in the "Operations and maintenance" line item in the accompanying consolidated statement of operations and comprehensive income (loss).

NOTE 10. FEDERAL AND STATE INCOME TAXES

Our income tax expense, deferred tax assets and liabilities, and liabilities for unrecognized tax benefits reflect management's best estimate of current and future taxes to be paid. We are subject to income taxes in the United States and numerous state jurisdictions. Significant judgments and estimates are required in the determination of the consolidated income tax expense.

Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, which will result in taxable or deductible amounts in the future.

Significant components of the Company's deferred tax assets and liabilities are as follows (in thousands):


	Year Ended December 31,
Deferred tax assets:	2018		2017
Accrued expenses not deductible until paid	$	7,017	$	6,062
Goodwill and intangible assets	1,353		—
Equity incentive plan	286		178
Net operating loss carry forwards	245		496
Allowance for doubtful accounts	207		246
Revenue recognition	118		110
Other	11		124
Total deferred tax assets	$	9,237	7,216

Deferred tax liabilities:
Tax over book depreciation	$	(31,009)	$	(26,806)
Prepaid expenses deductible when paid	(1,654)		(1,514)
Capital leases	(92)		(32)
Total deferred tax liabilities	(32,755)		(28,352)
Net deferred tax liabilities	$	(23,518)	$	(21,136)

The Company has certain state net operating loss carryovers that expire in varying years through 2036. The Company expects to fully utilize its tax attributes in future years before they expire.

Significant components of the provision (benefit) for income taxes are as follows (in thousands):


	Year Ended December 31,
Current:	2018		2017		2016
Federal	$	1,263	$	2,689	$	(3,420)
State	729		190		(44)
Total current	1,992		2,879		(3,464)
Deferred:
Federal	2,375		(16,812)		439
State	7		173		(494)
Total deferred	2,382		(16,639)		(55)
Total income tax expense (benefit)	$	4,374	$	(13,760)	$	(3,519)

A reconciliation between the effective income tax rate and the statutory federal income tax rate of 21% for 2018 and 35% for 2016 and 2017 is as follows (in thousands):


	Year Ended December 31,
	2018			2017			2016
Income tax expense (benefit) at statutory federal rate	$	3,481		$	(2,190)		$	(3,926)
Federal income tax effects of:
State income tax (benefit) expense	(155)			76			188
Per diem and other nondeductible meals and entertainment	329			578			614
Impact of Tax Cuts and Jobs Act	—			(12,010)			—
Other	(19)			—			143
Federal income tax expense (benefit)	3,636			(13,546)			(2,981)
State income tax expense (benefit)	738			(214)			(538)
Total income tax expense (benefit)	$	4,374		$	(13,760)		$	(3,519)

Effective tax rate	26.4		%	219.9		%	31.4		%

On December 22, 2017, the U.S. Government enacted the Tax Cuts and Jobs Act of 2017, which, among other things, reduces the federal corporate income tax rate from 35% to 21% effective January 1, 2018. As the result of our initial analysis in 2017 of the impact of the Tax Cuts and Jobs Act under SAB 118, we recorded a provisional amount of net tax benefit of $12.0 million primarily related to the remeasurement of our deferred tax balances. We completed our accounting for the income tax effects of the Tax Cuts and Jobs Act in 2018, and no material adjustments were required to the provisional amounts initially recorded.

In 2017, our effective rate varied from the federal statutory rate primarily due to the Tax Cuts and Jobs Act being signed into law resulting in the recognition of an estimated $12.0 million tax benefit from the adjustment in measurement of our net deferred tax liability. In 2018 and prior to 2017, the effective rates varied from the statutory federal tax rate primarily due to state income taxes and certain non-deductible expenses including a per diem pay structure for our drivers. Due to the partially nondeductible effect of per diem pay, the Company's tax rate will change based on fluctuations in earnings (losses) and in the number of drivers who elect to receive this pay structure. Generally, as pretax income or loss increases, the impact of the driver per diem program on our effective tax rate decreases, because aggregate per diem pay becomes smaller in relation to pretax income or loss, while in periods where earnings are at or near breakeven the impact of the per diem program on our effective tax rate can be significant.

NOTE 11. EQUITY COMPENSATION AND EMPLOYEE BENEFIT PLANS

The Company adopted the 2014 Omnibus Incentive Plan (the "Incentive Plan") in May 2014. The Incentive Plan replaced the 2004 Equity Incentive Plan and provided for the granting of up to 500,000 shares of common stock through equity-based awards to directors, officers and other key employees and consultants. The First Amendment to the Incentive Plan was adopted in May 2017, which, among other things, increased the number of shares of common stock available for issuance under the Incentive Plan by an additional 500,000 shares. As of December 31, 2018, 525,601 shares remain available under the Incentive Plan for the issuance of future equity-based compensation awards.

The components of compensation expense recognized, net of forfeiture recoveries, related to equity-based compensation is reflected in the table below for the years indicated (in thousands):


	Year Ended December 31,
	2018		2017		2016
Stock options	$	—	$	—	$	—
Restricted stock awards	1,164		459		976
Equity compensation expense	$	1,164	$	459	$	976

Compensation expense related to all equity-based compensation awards granted under the Incentive Plan is included in salaries, wages and employee benefits in the accompanying consolidated statements of operations and comprehensive income (loss).

Stock options

Stock options are the contingent right of award holders to purchase shares of the Company's common stock at a stated price for a limited time. The fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton option-pricing formula, and is recognized over the vesting period of the award. Historically, the vesting period of option awards has been 3 or 4 years and awards have been exercised over a three to ten year term. The Company did not grant any new stock options during 2018, 2017 or 2016, and there were no stock options outstanding under the Incentive Plan for the years ended December 31, 2018 or 2017.

The following table summarizes the stock option activity under the Incentive Plan for the year ended 2016:


	Number of Shares	Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value (in thousands) (1)
Options outstanding at December 31, 2015	15,610	$	5.40	—	$	—
Granted (2)	—	—		—	—
Exercised	(2,709)	7.51		—	25
Cancelled/forfeited	(10,729)	4.83		—	—
Expired	(2,172)	5.61		—	—
Outstanding at December 31, 2016	—	$	—	—	$	—
Exercisable at December 31, 2016	—	$	—	—	$	—

1.The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the option. The per share market value of the Company's common stock, as determined by the closing price on December 30, 2016 was $8.71.

2.The weighted-average grant date fair value of options granted was nil for the year ended December 31, 2016.

Restricted stock awards

Restricted stock awards are shares of the Company's common stock that are granted subject to defined restrictions. The estimated fair value of restricted stock awards is based upon the closing price of the Company's common stock on the date of grant. The vesting period of restricted stock awards is ratably over a determined number of years, which has historically been three or four years.

Information related to the restricted stock awarded for the years ended December 31, 2018, 2017 and 2016 is as follows:


	Number of Shares	Weighted-Average Grant Date Fair Value (1)
Nonvested shares – December 31, 2015	115,317	$	21.55
Granted	372,454	14.64
Forfeited	(150,048)	16.25
Vested	(52,527)	18.18
Nonvested shares – December 31, 2016	285,196	$	15.93
Granted	217,583	7.55
Forfeited	(212,834)	14.62
Vested	(51,008)	15.02
Nonvested shares – December 31, 2017	238,937	$	9.71
Granted	175,563	24.79
Forfeited	(139,000)	12.31
Vested	(23,631)	18.23
Nonvested shares – December 31, 2018	251,869	$	17.99

1.The shares were valued at the closing price of the Company's common stock on the date(s) specified by the award agreements.

The fair value of restricted stock that vested during the year is as follows for the periods indicated (in thousands):


	Year Ended December 31,
	2018		2017		2016
Stock options	$	—	$	—	$	—
Restricted stock	$	548	$	398	$	746

As of December 31, 2018, approximately $3.1 million of unrecognized compensation cost related to unvested restricted stock awards is expected to be recognized over a weighted-average period of 2.3 years.

Employee benefit plans

The Company sponsors the USA Truck, Inc. Employees' Investment Plan, a tax deferred savings plan under section 401(k) of the Internal Revenue Code that covers substantially all team members. Employees can contribute up to any percentage of their compensation, subject to statutory limits, with the Company matching 50% of the first 4% of compensation contributed by each employee. Employees' rights to employer contributions vest after two years from their date of employment. Effective July 1, 2016, the Company reinstated its contribution match, after having suspended it in April 2009. The Company's matching contributions to the plan were approximately $0.8 million as of December 31, 2018.

NOTE 12. EARNINGS (LOSS) PER SHARE

The following table sets forth the computation of basic and diluted earnings (loss) per share (in thousands, except per share amounts):


	Year Ended December 31,
Numerator:	2018		2017		2016
Net income (loss)	$	12,204	$	7,497	$	(7,699)
Denominator:
Denominator for basic earnings (loss) per share – weighted-average shares	8,194		8,029		8,550
Effect of dilutive securities:
Employee restricted stock	24		27		—
Denominator for diluted earnings (loss) per share – adjusted weighted-average shares and assumed conversions	8,218		8,056		8,550
Basic earnings (loss) per share	$	1.49	$	0.93	$	(0.90)
Diluted earnings (loss) per share	$	1.49	$	0.93	$	(0.90)
Weighted-average anti-dilutive employee restricted stock	77		1		11

NOTE 13. REPURCHASE OF EQUITY SECURITIES

As of December 31, 2018, there were $463,013 shares remaining available for repurchase from a repurchase authorization that was authorized in 2016. This repurchase authorization expired on February 9, 2019.

NOTE 14. LITIGATION

USA Truck is party to routine litigation incidental to its business, primarily involving claims for personal injury and property damage incurred in the transportation of freight. The Company maintains insurance to cover liabilities in excess of certain self-insured retention levels. Though it is the opinion of management that these claims are immaterial to the Company's long-term financial position, adverse results of one or more of these claims could have a material adverse effect on the Company's consolidated financial statements in any given reporting period.

NOTE 15. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

The tables below present quarterly financial information for 2018 and 2017 (in thousands, except per share amounts):


	2018
	March 31,		June 30,		September 30,		December 31,
Operating revenue	$	125,013	$	135,381	$	132,583	$	141,083
Operating expenses	122,621		131,070		126,780		132,370
Operating income	2,392		4,311		5,803		8,713
Other, net	938		946		1,231		1,526
Income before income taxes	1,454		3,365		4,572		7,187
Income tax expense	419		821		1,272		1,862
Net income	$	1,035	$	2,544	3,300		$	5,325

Average shares outstanding (basic)	8,035		8,205		8,223		8,268
Basic earnings per share	$	0.13	$	0.31	$	0.40	$	0.65

Average shares outstanding (diluted)	8,040		8,227		8,240		8,288
Diluted earnings per share	$	0.13	$	0.31	$	0.40	$	0.65


	2017
	March 31,		June 30,		September 30,		December 31,
Operating revenue	$	101,670	$	107,358	$	114,235	$	123,270
Operating expenses	108,069		110,324		112,431		117,777
Operating (loss) income	(6,399)		(2,966)		1,804		5,493
Other, net	1,101		1,078		1,056		960
(Loss) income before income taxes	(7,500)		(4,044)		748		4,533
Income tax (benefit) expense	(2,610)		(1,198)		339		(10,291)
Net (loss) income	$	(4,890)	$	(2,846)	$	409	$	14,824

Average shares outstanding (basic)	7,998		8,028		8,027		8,027
Basic (loss) earnings per share	$	(0.61)	$	(0.35)	$	0.05	$	1.85

Average shares outstanding (diluted)	7,998		8,028		8,039		8,036
Diluted (loss) earnings per share	$	(0.61)	$	(0.35)	$	0.05	$	1.84

The amounts reported above have been previously reported in the Company's quarterly reports on Form 10-Q. Certain line items in those quarterly reports may not total the corresponding amount reported in this Form 10-K due to rounding.

NOTE 16. RESTRUCTURING, IMPAIRMENT AND OTHER COSTS

Restructuring, impairment and other costs

2018

During first quarter of 2018, the Company's Trucking maintenance facility in South Holland, Illinois was reopened, after having been closed in the first quarter of 2016. Accrued restructuring, impairment and other costs relating to the closure in the amount of $0.6 million were reversed during the first quarter of 2018.

2017

As part of a reduction in force, headcount was reduced during the second quarter of 2017, with the intent of aligning the non-driving support staff with the number of seated tractors.

2016

In the Company's Trucking segment, maintenance facilities were closed in Forest Park, Georgia and South Holland, Illinois, and in the Company's USAT Logistics segment, branch offices were closed in Olathe, Kansas and Salt Lake City, Utah. Headcount was reduced by 47 team members across multiple departments, including two contractors. Employees separated from the Company were paid severance benefits, and the agreements with the contractors were canceled and cancellation penalties were paid, where required. Expenses recorded during the year ended December 31, 2016, included costs related to terminations; facility lease termination costs; costs associated with the development, communication and administration of these initiatives; and asset write-offs.

The following tables summarize the Company's liabilities, charges, and cash payments related to the restructuring plan made during the years ended December 31, 2018, 2017 and 2016 (in thousands):


	Accrued Balance December 31, 2017		Costs Incurred/(reversal)		Payments		Expenses/ Charges		Accrued Balance December 31, 2018

Facility closing expenses	770		(639)		(131)		—		—
Total	$	770	$	(639)	$	(131)	$	—	$	—


	Accrued Balance December 31, 2016		Costs Incurred		Payments		Expenses/ Charges		Accrued Balance December 31, 2017
Compensation and benefits	$	81	$	—	$	(81)	$	—	$	—
Facility closing expenses	1,323		—		(553)		—		770
Total	$	1,404	$	—	$	(634)	$	—	$	770


	Accrued Balance December 31, 2015		Costs Incurred		Payments		Expenses/ Charges		Accrued Balance December 31, 2016
Compensation and benefits (1)	$	753	$	768	$	(1,437)	$	(3)	$	81
Facility closing expenses (1)	20		2,779		(1,190)		(286)		1,323
Spartanburg impairment (2)	—		546		—		(546)		—
Fuel tank write-off (2)	—		524		—		(524)		—
Out of period adjustment (3)	—		647		—		(647)		—
Total	$	773	$	5,264	$	(2,627)	$	(2,006)	$	1,404

1.The Company incurred total pretax expenses of approximately $3.5 million related to these streamlining initiatives during the first quarter of 2016.

2.During 2016, the Company recorded $1.1 million for the impairment of non-operating assets. Of the total expense recorded, approximately $0.5 million related to the impairment of the Company's bulk fuel assets at all locations, as diesel fuel will no longer be stored or dispensed at any of the Company's locations, and $0.6 million related to the fair market value impairment of the Company's Spartanburg terminal.

3.During the 2016, the Company identified an item requiring an adjustment of an accounts payable liability during 2013. The Company has recorded an adjustment of $0.6 million for this item in the quarter ended March 31, 2016.

A summary of the Company's restructuring, impairment and other costs (reversal) by segment for the years ended December 31, 2018, 2017 and 2016 is below (in thousands):


Costs incurred (reversal) by segment	Year Ended December 31,
	2018		2017		2016
Trucking	$	(587)	$	—	$	4,848
USAT Logistics	(52)		—		416
Total	$	(639)	$	—	$	5,264

Severance costs included in salaries, wages, employee benefits

2018

On March 26, 2018, the Company announced the retirement of James A. Craig, the Company's Executive Vice President, Chief Commercial Officer, and President – USAT Logistics. Effective March 23, 2018, per the separation agreement, Mr. Craig' received: (i) salary continuation through May 31, 2018, (ii) non-compete payments equal to his current salary ($350,000) for a period of one year subject to ongoing compliance with certain non-competition, non-solicitation, non-disparagement, and confidentiality covenants in favor of the Company, (iii) a prorated cash payment, if and to the extent earned, under the short-term cash incentive compensation program adopted by the Committee for 2018, and (iv) accelerated vesting of 5,488 shares of time-vested restricted stock of the Company scheduled to vest on July 30, 2018 and 5,488 shares of performance-vested restricted stock of the Company scheduled to vest on July 30, 2018 depending on performance relative to USAT Logistics

performance goals. Total costs associated with Mr. Craig's retirement were approximately $0.7 million and were recorded in the "Salaries, wages and employee benefits" line item in the accompanying condensed consolidated statements of operations and comprehensive income (loss). At December 31, 2018, the Company had accrued severance costs associated with the Mr. Craig's retirement of approximately $0.2 million.

2017

In January 2017, the Company's board of directors unanimously approved separation agreements for John R. Rogers (the "Rogers Separation Agreement"), the Company's former President and Chief Executive Officer, and Christian C. Rhodes (the "Rhodes Separation Agreement"), the Company's former Chief Information Officer. Per the material terms of the Rogers Separation Agreement, Mr. Rogers received (i) severance pay in the form of salary continuation payments equal to his base salary at the time his employment ended ($425,000) for a period of one year, (ii) a lump sum separation payment of $120,000 and (iii) moving and transition expenses of $30,000. Per the material terms of the Rhodes Separation Agreement, Mr. Rhodes received a lump sum payment of $171,125. The Company recognized severance costs associated with the departures of Messrs. Rogers and Rhodes of approximately $0.6 million and $0.2 million, respectively, which were recorded in the "Salaries, wages and employee benefits" line item in the accompanying consolidated statements of operations and comprehensive income (loss).

2016

In May 2016, the Company's board of directors unanimously approved a separation agreement between Michael K. Borrows and the Company and accepted Mr. Borrows' resignation as Executive Vice President and Chief Financial Officer. The Company recognized severance costs associated with Mr. Borrows' departure of approximately $0.7 million, which were recorded in the "Salaries, wages and employee benefits" line item in the consolidated statements of operations and comprehensive income (loss).

The following tables summarize the Company's liabilities, charges, and cash payments related to executive severance agreements made during the years ended December 31, 2018, 2017 and 2016 (in thousands):


	Accrued Balance December 31, 2017		Costs Incurred		Payments		Expenses/Charges		Accrued Balance December 31, 2018
Severance costs included in salaries, wages and employee benefits	$	35	$	711	$	(499)	$	—	$	247


	Accrued Balance December 31, 2016		Costs Incurred		Payments		Expenses/Charges		Accrued Balance December 31, 2017
Severance costs included in salaries, wages and employee benefits	$	277	$	930	$	(1,172)	$	—	$	35

A summary of the Company's severance costs included in salaries, wages and employee benefits by segment for the years ended December 31, 2018, 2017 and 2016 is below (in thousands):


Costs incurred by segment	Year Ended December 31,
	2018		2017		2016
Trucking	$	484	$	665	$	—
USAT Logistics	227		265		—
Total	$	711	$	930	$	—

NOTE 17. SUBSEQUENT EVENTS

On January 31, 2019, USA Truck, Inc., a Delaware corporation (the "Company"), entered into a five year, $225.0 million senior secured revolving credit facility (the "New Credit Facility") with a group of lenders and the Agent pursuant to the terms of an Amended and Restated Loan and Security Agreement that amends and restates the terms of the Company's existing five year, $170.0 million senior secured revolving credit facility dated February 5, 2015.

The New Credit Facility is structured as a $225.0 million revolving credit facility, with an accordion feature that, so long as no event of default exists, allows the Company to request an increase in the revolving credit facility of up to $75.0 million million, exercisable in increments of $20.0 million. The New Credit Facility is a five year facility scheduled to terminate on January 31, 2024. Borrowings under the New Credit Facility are classified as either "base rate loans" or "LIBOR loans". Base rate loans accrue interest at a base rate equal to the Agent's prime rate plus an applicable margin that is set at 0.25% through June 30, 2019 and adjusted quarterly thereafter between 0.25% and 0.75% based on the Company's consolidated fixed charge coverage ratio. LIBOR loans accrue interest at LIBOR plus an applicable margin that is set at 1.25% through June 30, 2019 and adjusted quarterly thereafter between 1.25% and 1.75% based on the Company's consolidated fixed charge coverage ratio. The New Credit Facility includes, within its $225.0 million revolving credit facility, a letter of credit sub-facility in an aggregate amount of $15.0 million and a swing line sub-facility in an aggregate amount of $25.0 million. An unused line fee of 0.25% is applied to the average daily amount by which the lenders' aggregate revolving commitments exceed the outstanding principal amount of revolver loans and the aggregate undrawn amount of all outstanding letters of credit issued under the New Credit Facility. The New Credit Facility is secured by a continuing pledge of substantially all of the Company's assets, with the notable exclusion of any real estate or revenue equipment financed outside the New Credit Facility.

The New Credit Facility contains a single springing financial covenant, which requires a consolidated fixed charge coverage ratio of at least 1.0 to 1.0. The financial covenant springs only in the event excess availability under the New Credit Facility drops below 10.0% of the lenders' total commitments under the New Credit Facility. The New Credit Facility includes usual and customary events of default, restrictions, and covenants for a facility of this nature.

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

Item 9A. CONTROLS AND PROCEDURES

In accordance with the requirements of the Exchange Act and SEC rules and regulations promulgated thereunder, the Company has established and maintains disclosure controls and procedures and internal control over financial reporting. Management, including the Company's principal executive officer and principal financial officer, does not expect that the Company's disclosure controls and procedures and internal control over financial reporting will prevent all errors, misstatements, or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company will be detected.

Evaluation of Disclosure Controls and Procedures

The Company has established disclosure controls and procedures that are designed to ensure that relevant material information, including information pertaining to any consolidated subsidiaries, is made known to the officers who certify the financial reports and to other members of senior management and the board of directors. Management, with the participation of the Principal Executive Officer (the "PEO") and the Principal Financial Officer (the "PFO") conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, as of December 31, 2018 the PEO and PFO have concluded that the Company's disclosure controls and procedures were effective at a reasonable assurance level to ensure that the information required to be disclosed in the reports filed or submitted by the Company under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and (ii) accumulated and communicated to management, including the PEO and PFO, as appropriate to allow timely decisions regarding required disclosure.

Management's Report on Internal Control Over Financial Reporting

The management of USA Truck is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in the Exchange Act Rule 13a-15(f) and 15d-(f) as a process designed by, or under the supervision of, the principal executive officer and principal financial officer and effected by the board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

1.Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;

2.Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the Company; and

3.Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.

Under the supervision and with the participation of the Company's management, including its principal executive officer and principal financial officer, an evaluation of the effectiveness of its internal controls over financial reporting was conducted based on the criteria set forth in the Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on management's evaluation under the criteria set forth in Internal Control - Integrated Framework (2013), management concluded that the Company's internal control over financial reporting is effective at the reasonable assurance level as of December 31, 2018. We acquired Davis Transfer Company ("Davis") on October 18, 2018. We excluded Davis from the scope of management's assessment of the effectiveness of our internal control over financial reporting as of December 31, 2018. Davis constituted less than 2% of our total revenues for 2018 and approximately 16% of our total assets as of December 31, 2018.

The Company's internal control over financial reporting as of December 31, 2018, has been audited by Grant Thornton LLP, independent registered public accountants, as attested to in their report included herein.

Change in Internal Control over Financial Reporting

No change occurred in the Company's internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended December 31, 2018, that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders

USA Truck, Inc.

Opinion on internal control over financial reporting

We have audited the internal control over financial reporting of USA Truck, Inc. (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2018, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2018, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2018, and our report dated February 27, 2019 expressed an unqualified opinion on those financial statements.

Basis for opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting (“Management’s Report”). Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Our audit of, and opinion on, the Company’s internal control over financial reporting does not include the internal control over financial reporting of Davis Transfer Company, a wholly-owned subsidiary, whose financial statements reflect total assets and revenues constituting sixteen and two percent, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2018. As indicated in Management’s Report, Davis Transfer Company was acquired during 2018. Management’s assertion on the effectiveness of the Company’s internal control over financial reporting excluded internal control over financial reporting of Davis Transfer Company.

Definition and limitations of internal control over financial reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ GRANT THORNTON LLP

Tulsa, Oklahoma

February 27, 2019

Item 9B. OTHER INFORMATION

None

PART III

Item 13. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required in this Item 10 is hereby incorporated by reference to the information set forth under the sections entitled "Proposal One: Election of Directors," "Continuing Directors," "Executive Officers," "Corporate Governance – The Board of Directors and Its Committees – Other Board and Corporate Governance Matters," and "Corporate Governance – The Board of Directors and Its Committees – Committees of the Board of Directors – Audit Committee" contained in the Company's definitive proxy statement for its 2019 Annual Meeting of Stockholders to be filed with the SEC (the "2019 Proxy").

Item 11. EXECUTIVE COMPENSATION

The information required in this Item 11 is hereby incorporated by reference to the information set forth under the sections entitled "Executive Compensation" and "Corporate Governance – The Board of Directors and Its Committees – Committees of the Board of Directors – Executive Compensation Committee" contained in the 2019 Proxy.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required in this Item 12 is hereby incorporated by reference to the information set forth under the sections entitled "Security Ownership of Certain Beneficial Owners, Directors and Executive Officers" and "Securities Authorized for Issuance under Equity Compensation Plans" contained in the 2019 Proxy.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required in this Item 13 is hereby incorporated by reference to the information set forth under the sections entitled "Certain Transactions" and "Corporate Governance – The Board of Directors and Its Committees – Board of Directors – Director Independence" contained in the 2019 Proxy.

Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required in this Item 14 is hereby incorporated by reference to the information set forth under the section entitled "Independent Registered Public Accounting Firm" contained in the 2019 Proxy.

PART IV

Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES


(a) The following documents are filed as a part of this report:			Page
1.	Financial statements. Included in Part II, Item 8 of this report.	42
2.	Schedules have been omitted since the required information is not applicable or not present in amounts sufficient to require submission of the schedule, or because the information required is included in the financial statements or the notes thereto.
3.	Listing of exhibits.
	The exhibits required to be filed by Item 601 of Regulation S-K are listed under paragraph (b) below and on the Exhibit Index appearing at the end of this report.

(b) Exhibits

Exhibit

Number

Exhibit

Equity Purchase Agreement by and among the Company and the equity holders of Davis Transfer Company Inc., Davis Transfer Logistics Inc., and B & G Leasing, L.L.C.

3.01

Restated and Amended Certificate of Incorporation of the Company as currently in effect, including all Certificates of Amendment thereto (incorporated by reference to Exhibit 3.1 to the Company's quarterly report on Form 10-Q for the quarter ended March 31, 2013)

3.02

Bylaws of USA Truck, Inc. (incorporated by reference to Exhibit 3.1 to the Company's Form 8-K filed on March 24, 2017)

4.01

Specimen stock certificate representing shares of common stock, $.01 par value, of USA Truck, Inc. (incorporated by reference to Exhibit 4.1 of the Company's quarterly report on Form 10-Q for the quarter ended September 30, 2017)

10.01*

Form of Incentive Stock Option Agreement (incorporated by reference to Exhibit 10.10 to the Company's annual report on Form 10-K for the year ended December 31, 2011)

10.02*

Form of Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.3 to the Company's quarterly report on Form 10-Q for the quarter ended March 31, 2013)

10.03*

USA Truck, Inc. 2014 Omnibus Incentive Plan (incorporated by reference to Appendix A to the Company 's Schedule 14A, filed with the Securities and Exchange Commission April 25, 2014)

10.04

Loan and Security Agreement, dated February 5, 2015, among the Company, Bank of America, N.A., as Agent, Bank of America, N.A. and SunTrust Robinson Humphrey, Inc., as Joint Lead Arrangers and Joint Bookrunners, and SunTrust Bank, as Syndication Agent (incorporated by reference to Exhibit 10.1 to the Company 's quarterly report on Form 10-Q for the quarter ended March 31, 2015)

10.05*

Form of Restricted Stock Award Notice (incorporated by reference to Exhibit 10.16 to the Company's annual report on Form l0-K for the year ended December 31, 2015)

10.06*

Form of Executive Severance and Change in Control Agreement (incorporated by reference to Exhibit 10.19 to the Company 's annual report on Form 10-K for the year ended December 31, 2015)

10.07*

Employment Letter between the Company and James Craig (incorporated by reference to Exhibit 10.3 to the Company 's quarterly report on Form 10-Q for the quarter ended March 31, 2016)

10.08*

Executive Severance and Change of Control Agreement between the Company and James Craig (incorporated by reference to Exhibit 10.4 to the Company 's quarterly report on Form l0-Q for the quarter ended March 31, 2016)

10.09*

Form of Restricted Stock Award Notice (incorporated by reference to Exhibit 10.2 to the Company's quarterly report on Form 10-Q for the quarter ended September 30, 2016)

10.10*

Employment Letter between the Company and James D. Reed (incorporated by reference to Exhibit 10.22 to the Company's annual report on Form 10-K for the year ended December 31, 2016)

10.11*

Executive Severance and Change of Control Agreement between the Company and James D. Reed (incorporated by reference to Exhibit 10.23 to the Company's annual report on Form 10-K for the year ended December 31, 2016)

10.12*

First Amendment to the USA Truck, Inc. 2014 Omnibus Incentive Plan (incorporated by reference to Appendix A to the Company's Schedule 14A, filed with the Securities and Exchange Commission April 7, 2017)

10.13*

First Amendment to Executive Severance and Change in Control Agreement, between the Company and James Reed (incorporated by reference to Exhibit 10.3 to the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2017)

10.14*

First Amendment to Executive Severance and Change in Control Agreement, between the Company and James Craig (incorporated by reference to Exhibit 10.4 to the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2017)

10.15*

Letter Agreement, dated April 18, 2017, between the Company and Jason Bates (incorporated by reference to Exhibit 10.2 to the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2017)

10.16*

Executive Severance and Change in Control Agreement, dated April 18, 2017, between the Company and Jason Bates (incorporated by reference to Exhibit 10.3 to the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2017)

10.17*

Letter Agreement, dated May 1, 2017, between the Company and Werner Hugo (incorporated by reference to Exhibit 10.4 to the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2017)

10.18*

Executive Severance and Change in Control Agreement, dated May 2, 2017, between the Company and Werner Hugo (incorporated by reference to Exhibit 10.5 to the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2017)

10.19*

Separation Agreement between the Company and James A. Craig (incorporated by reference to Exhibit 10.1 to the Company's quarterly report on Form 10-Q for the quarter ended March 31, 2018)

10.20*

Employment Letter between the Company and Timothy W. Guin (incorporated by reference to Exhibit 10.1 to the Company's quarterly report on Form lO-Q for the quarter ended June 30, 2018)

10.21*

Executive Severance and Change in Control Agreement between the Company and Timothy W. Guin, dated April 23,2018 incorporated by reference to Exhibit 10.2 to the Company's quarterly report on Form l0-Q for the quarter ended June 30, 2018)

10.22

Letter Agreement, dated March 23, 2018, between the Company and George T. Henry

10.23

Executive Severance and Change in Control Agreement between the Company and George T. Henry, dated March 23, 2018

The Company's wholly owned subsidiary is omitted as it does not constitute a significant subsidiary as of the end of the fiscal year ended December 31, 2017

23.01

Consent of Grant Thornton LLP, Independent Registered Public Accounting Firm

31.01

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.02

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.01

Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.02

Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS

XBRL Instance Document

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

* Management contract or compensatory plan, contract or arrangement.

# Filed herewith.

## Furnished herewith.

Item 16. FORM 10-K SUMMARY

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

USA TRUCK, INC.

(Registrant)


By:			/s/ James D. Reed
			James D. Reed
			President and Chief Executive Officer

Date:			February 27, 2019

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature

Title

Date

/s/ Robert A. Peiser

Robert A. Peiser

Chairman of the Board and Director

February 27, 2019

/s/ James D. Reed

James D. Reed

President, Chief Executive Officer and Director

(Principal Executive Officer)

February 27, 2019

/s/ Jason R. Bates

Jason R. Bates

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

February 27, 2019

/s/ Zachary B. King

Zachary B. King

Vice President and Corporate Controller

(Principal Accounting Officer)

February 27, 2019

/s/ Thomas M. Glaser

Thomas M. Glaser

Director

February 27, 2019

/s/ Robert E. Creager

Robert E. Creager

Director

February 27, 2019

/s/ Alexander D. Greene

Alexander D. Greene

Director

February 27, 2019

/s/ Gary R. Enzor

Gary R. Enzor

Director

February 27, 2019

/s/ Barbara J. Faulkenberry

Barbara J. Faulkenberry

Director

February 27, 2019

/s/ M. Susan Chambers

M. Susan Chambers

Director

February 27, 2019

EQUITY PURCHASE AGREEMENT

by and among

USA TRUCK, INC.

as Buyer,

DAVIS TRANSFER COMPANY INC.,

DAVIS TRANSFER LOGISTICS INC., and

B & G Leasing L.L.C.,

as the Companies,

THE EQUITYHOLDERS OF THE COMPANIES,

as the Sellers, and

JOHN CARPENTIER,

as Sellers’ Representative

Dated as of October 18, 2018

Schedules

Schedule 1.04(c) Required Consents of Companies and Sellers

Schedule 1.04(f) Payoff Letters

Schedule 1.04(k) Terminating Contracts

Schedule 1.04(n) Employment Letters

Schedule 1.04(q) Seller Property

Schedule 2.01(b) Foreign Qualifications

Schedule 2.02 No Conflicts – Sellers and Companies

Schedule 2.03 Subsidiaries

Schedule 2.04 Equity Securities

Schedule 2.05(a) Financial Statements

Schedule 2.05(b) Undisclosed Liabilities

Schedule 2.07 Absence of Certain Developments

Schedule 2.07(e) Capital Expenditures

Schedule 2.08(a) Owned Real Property

Schedule 2.08(b) Real Property Leases

Schedule 2.08(c) Personal Property Leases

Schedule 2.08(d) Real and Personal Properties

Schedule 2.09(a)(i) Operational Tractors and Trailers

Schedule 2.09(a)(ii) Out of Service Tractors and Trailers

Schedule 2.09(c) Non-Public Scores

Schedule 2.09(d)(i) Leased Tractors and Trailers

Schedule 2.09(d)(ii) Warranties

Schedule 2.09(e) Non-Operational Tractors and Trailers

Schedule 2.10(a) Tax Returns

Schedule 2.10(c) Tax Matters

Schedule 2.11(a) Contracts and Commitments

Schedule 2.11(c) Customer Contracts

Schedule 2.11(d) Vendor Contracts

Schedule 2.12(a)(i) Registered Intellectual Property

Schedule 2.12(a)(ii) Licenses and Sublicenses

Schedule 2.12(a)(iii) Affiliate Intellectual Property

Schedule 2.12(b) Intellectual Property Rights

Schedule 2.12(c) Intellectual Property Ownership

Schedule 2.12(e) Material Technology

Schedule 2.12(f) Software

Schedule 2.13(a) Litigation

Schedule 2.13(b) Judgments

Schedule 2.14(a) Employee Benefit Plans

Schedule 2.14(d) Employee Benefits Matters

Schedule 2.14(h) Employee Benefit Plans Securities

Schedule 2.14(i) 280G Payments

Schedule 2.14(k) COBRA Liability

Schedule 2.15 Insurance

Schedule 2.16 Compliance with Laws

Schedule 2.17 Environmental Matters

Schedule 2.18 Affiliated Transactions

Schedule 2.19 Brokerage and Expenses

Schedule 2.20 Liens

Schedule 2.21 Employee Relations

Schedule 2.23(c) Escrowed Funds

Schedule 2.23(d) Independent Contractor Financing

Schedule 2.24 Permits

Schedule 2.25 Bank Accounts

Schedule 2.26 Loans to Officers and Directors

Schedule 2.28(a) Tractor and Trailer Capital Expenditures

Schedule 2.28(b) Tractor and Trailer Dispositions

Schedule 2.28(c) Planned Tractor and Trailer Capital Expenditures

Schedule 3.04 No Conflicts – Buyer

Schedule 4.03(g) Specific Indemnities

Schedule 5.01(h) Consideration Allocation

Schedule 6.01(rrr) Permitted Liens

Exhibits

Exhibit A Form of Escrow Agreement

Exhibit B Transfer Agent Instruction Letter

Exhibit C Seller Consideration Allocation

Exhibit D Form of Assignment

Exhibit E Form of Lease

Exhibit F Form of Restrictive Covenant Agreement

EQUITY PURCHASE AGREEMENT

This Equity Purchase Agreement (this “Agreement”) is executed and delivered as of October 18, 2018, by and among (i) USA Truck, Inc., a Delaware corporation (“Buyer”); (ii) Davis Transfer Company Inc., a Georgia corporation (“DTC”), (iii) Davis Transfer Logistics Inc., a Georgia corporation (“DTL”), (iv) B & G Leasing, L.L.C., a Georgia limited liability company (“B & G” and, collectively with DTC, DTL, and, unless context otherwise requires, any Subsidiary of any of them, the “Companies” and individually, a “Company”), (v) William H. Davis, a resident of the state of Florida (“Bill Davis”), (vi) George Gary Davis, a resident of the state of Georgia (“Gary Davis”), (vii) Todd Gary Davis, a resident of the state of Georgia (“Todd Davis,” and collectively with Bill Davis and Gary Davis, “Sellers,” and individually, a “Seller”), and (viii) John Carpentier, as Sellers’ Representative. Capitalized terms used herein have the meanings set forth in Article 6 below or elsewhere in this Agreement.

WHEREAS, Sellers own all of the issued and outstanding shares of the capital equity or membership interest (as applicable) of (i) DTC, $10.00 par value per share, (ii) DTL, $.01 par value per share and (iii) B & G ((i), (ii) and (iii), collectively, the “Company Equity”); and

WHEREAS, subject to the terms and conditions in this Agreement, Buyer desires to purchase from Sellers, and Sellers desire to sell, assign, transfer and convey to Buyer, all of the Company Equity for the consideration described herein.

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows.

PURCHASE AND SALE

1.10 Purchase and Sale. Subject to the terms and conditions in this Agreement, at the Closing, Buyer shall purchase and acquire from Sellers, and Sellers shall sell, assign, transfer and convey to Buyer, all of the Company Equity free and clear of all Liens, in exchange for the Final Aggregate Closing Consideration. In furtherance thereof,

(a) (i) at the Closing, Buyer will make payment of an amount equal to the Estimated Aggregate Closing Consideration, as follows: (A) by wire transfer of $5,300,000 of immediately available funds (the “Escrow Amount”) to the Escrow Agent under the escrow agreement, the form of which is attached hereto as Exhibit A (the “Escrow Agreement”) to be held in an escrow account (the “Escrow Account”) and released in accordance with such Escrow Agreement; (B) by irrevocable instruction to the transfer agent of Buyer’s common stock, $0.01 par value (the “Buyer Common Stock”) in the form of the letter attached as Exhibit B (the “Transfer Agent Instruction Letter”), to deliver shares issued in the name of Todd Davis with a value equal to $750,000, valuing each share at $17.95, which represents the average closing price of Buyer’s common stock on Nasdaq for the ten (10) trading days ending on the trading day prior to the date hereof (and with any fractional shares being settled in cash); and (C) the balance of the Estimated Aggregate Closing Consideration by wire transfer of immediately available funds to the account or accounts specified by Sellers in accordance with the allocation set forth in Exhibit C, and (ii) after the Closing, Buyer and Sellers will make the payments, if any, required by Section 1.02, and otherwise under this Agreement; and

(b) at the Closing, Sellers will deliver, or cause to be delivered, to Buyer 100% of the Company Equity together with duly executed letters of transmittal.

1.11 Calculation of Estimated and Final Aggregate Closing Consideration.

(a) For purposes of this Agreement, the “Aggregate Closing Consideration” means an amount equal to the result of: (i) $53,000,000 (the “Purchase Price”), plus (ii) the actual amount of any Cash on Hand, if any, of the Companies outstanding effective as of the Closing and not reflected as a current asset in Net Working Capital, minus (iii) the Escrow Amount, minus (iv) the actual amount of Indebtedness, if any, of the Companies outstanding effective as of the Closing, minus (v) the actual amount of Transaction Expenses, if any, of the Companies outstanding effective as of the Closing and not reflected as a current liability in Net Working Capital, plus or minus, as applicable (vi) (A) plus the amount, if any, by which actual Net Working Capital exceeds the Net Working Capital Target, or (B) minus the amount, if any, by which actual Net Working Capital is less than the Net Working Capital Target.

(b) Within sixty (60) days after the Closing Date, Buyer will deliver to Sellers’ Representative a statement setting forth Buyer’s proposed calculation of the Final Aggregate Closing Consideration with a comparison to the Estimated Aggregate Closing Consideration, including Buyer’s calculation of each of the components thereof in sufficient detail to identify each item of difference between the Estimated Aggregate Closing Consideration and the Final Aggregate Closing Consideration, including details regarding each component of Indebtedness, Net Working Capital, Cash on Hand and Transaction Expenses (the “Closing Statement”).

(c) Following receipt by Sellers’ Representative of Buyer’s proposed Closing Statement and until the Final Aggregate Closing Consideration is finally determined pursuant to this Section 1.02, Sellers’ Representative will be permitted (upon reasonable advance written notice and during normal business hours) to review the Companies’ books and records and working papers related to Buyer’s draft of the proposed Closing Statement and determination of the Aggregate Closing Consideration (and the components thereof), and Buyer will provide Sellers’ Representative with reasonable access to the Companies’ personnel, books and records and facilities in connection with such review. The proposed Closing Statement delivered by Buyer to Sellers’ Representative will become final and binding on the parties thirty (30) days following Buyer’s delivery thereof to Sellers’ Representative except to the extent (and only to the extent) Sellers’ Representative delivers written notice of its disagreement (the “Closing Consideration Notice of Disagreement”) to Buyer on or prior to such date. The Closing Consideration Notice of Disagreement must identify with specificity each item in the Closing Statement that Sellers’ Representative disagrees with and, for each disputed item, contain a statement describing in reasonable detail the basis of such objection and the amount in dispute. If Sellers’ Representative timely delivers a Closing Consideration Notice of Disagreement, then the Closing Statement will become final and binding on the parties to this Agreement on the earlier of (i) the date Buyer and Sellers’ Representative resolve in writing any differences they have with respect to the matters in dispute, and (ii) the date all matters in dispute are finally resolved in writing by the Independent Accountants.

(d) During the thirty (30) days following delivery of a Closing Consideration Notice of Disagreement, Buyer and Sellers’ Representative will seek in good faith to resolve in writing any differences that they may have with respect to the Closing Statement. At the end of such thirty (30) day period, Buyer and Sellers’ Representative will submit to the Independent Accountants for resolution all matters that remain in dispute (and will take all actions reasonably requested by the Independent Accountants in connection with such resolution, including submitting written information to the Independent Accountants if so requested), and the Independent Accountants, acting as experts and not as arbitrators, will make a final determination of the Aggregate Closing Consideration in accordance with the terms of this Agreement (with it being understood that Buyer and Sellers’ Representative will request that the Independent Accountants deliver to Buyer and Sellers’ Representative its resolution in writing not

more than thirty (30) days after its engagement). The Independent Accountants will make a determination only with respect to the matters still in dispute and, with respect to each such matter, their determination will be within the range of the dispute between Buyer and Sellers’ Representative. The Independent Accountants’ determination will be based solely on written materials submitted by Buyer and Sellers’ Representative (i.e., not on independent review) and on the definitions of “Aggregate Closing Consideration,” “Indebtedness,” “Cash on Hand,” “Transaction Expenses,” and “Net Working Capital” (and related definitions) included herein and the provisions of this Agreement.

(e) The costs and expenses of the Independent Accountants will be allocated between Buyer and Sellers’ Representative based upon the percentage of the portion of the contested amount not awarded to Buyer or Sellers bears to the amount actually contested by such party. For example, if Sellers’ Representative claims the actual Aggregate Closing Consideration is $1,000 greater than the amount claimed by Buyer, and Buyer contests only $500 of the amount claimed by Sellers’ Representative, and if the Independent Accountants ultimately resolves the dispute by awarding Sellers $300 of the $500 contested, then the costs and expenses of the Independent Accountants will be allocated 60% (i.e., 300 ÷ 500) to Buyer and 40% (i.e., 200 ÷ 500) to Sellers’ Representative.

(f) If the Aggregate Closing Consideration as finally determined pursuant to this Section 1.02 (the “Final Aggregate Closing Consideration”) is greater than the Estimated Aggregate Closing Consideration (the amount of such difference being the “Underpayment”), then, within three (3) Business Days after the date on which the Final Aggregate Closing Consideration is determined, Buyer will pay to Sellers’ Representative, on behalf of Sellers, by wire transfer of immediately available funds to the account specified by Sellers’ Representative, an amount equal to the Underpayment.

(g) If the Final Aggregate Closing Consideration is less than the Estimated Aggregate Closing Consideration (the amount of such difference being the “Overpayment”), then, within three (3) Business Days after the date on which the Final Aggregate Closing Consideration is determined, Sellers, jointly and severally, will pay to Buyer by wire transfer of immediately available funds to the account specified by Buyer, an amount equal to the Overpayment.

(h) The dispute resolution provisions provided in this Section 1.02 will be the exclusive remedies for the matters addressed or that could be addressed therein.

(i) All payments required pursuant to Sections 1.02(f) and 1.02(g) will be deemed to be adjustments for Tax purposes to the aggregate purchase price paid by Buyer for the Company Equity.

(j) The provisions of this Section 1.02 will apply in such a manner so as not to give the components and calculations duplicative effect to any item of adjustment and no amount will be (or is intended to be) included in whole or in part (either as an increase or reduction) more than once in calculation of (including any component of) Aggregate Closing Consideration or any other calculated amount pursuant to this Agreement if the effect of such additional inclusion (either as an increase or reduction) would be to cause such amount to be overstated or understated for purposes of such calculation.

1.12 The Closing. The closing of the purchase and sale of the Company Equity and the transactions contemplated by this Agreement (the “Closing”) will occur simultaneously with the execution and delivery of this Agreement by the parties (the date on which the Closing occurs, the “Closing Date”). The Closing will be deemed completed as of 12:00:01 a.m., Eastern Time, on the Closing Date.

1.13 Closing Deliveries by the Companies and Sellers. At or prior to the Closing, Sellers will deliver or cause to be delivered to Buyer the following documents, each of which will be in form and substance satisfactory to Buyer, the delivery of which is a condition to the obligation of Buyer to consummate the Closing:

(a) (i) A copy of the articles of incorporation (or equivalent governing document) of each of the Companies, certified by the Secretary of State of each entity’s respective state of incorporation or organization, as applicable, and dated not earlier than ten (10) days prior to the Closing Date; (ii) a certificate of good standing (or a certificate of existence/authorization if the concept of good standing is not recognized in the jurisdiction) of each of the Companies from the Secretary of State of each entity’s respective state of incorporation or organization dated not earlier than ten (10) days prior to the Closing Date; and (iii) a certificate from the Secretary of State of each state where each of the Companies is qualified to do business, dated not earlier than ten (10) days prior to the Closing Date, that such entity is in good standing in each such state;

(b) A certificate of the secretary or members, as applicable, of each of the Companies, certifying as to the following: (i) a copy of the bylaws, operating agreement, or other similar governing document, of such Company, (ii) a copy of the resolutions of the board of directors and members or equityholders of such Company, as applicable, approving and authorizing the execution, delivery and performance of this Agreement and all other Transaction Documents to which such Company is a party and the consummation of the transactions contemplated hereby and thereby, and that such resolutions are in full force and effect without modification or amendment, (iii) no action has been taken or is pending to dissolve such Company, and (iv) incumbency and signatures of each of such Company’s officers who are authorized to execute and deliver this Agreement and any of the other Transaction Documents to which such Company is a party;

(c) Copies of all notice filings given to, and consents and approvals of, third parties and Governmental Authorities listed on Schedule 1.04(c);

(d) The Escrow Agreement, duly executed by the Escrow Agent and Sellers’ Representative on behalf of Sellers;

(e) Certificates, together with assignments in the form of the attached Exhibit D, representing 100% of the outstanding capital equity of each Company, and assignment of membership interests in the form of the attached Exhibit D;

(f) Payoff or similar letters from the lenders or other entities set forth on Schedule 1.04(f) indicating that, upon payment of the amount specified in such letters (which in the aggregate will cover all Indebtedness as of the Closing and all Transaction Expenses as of the Closing, other than those Transaction Expenses that are accrued in the determination of Net Working Capital and that Indebtedness associated with Permitted Liens), all Liens against the Company Equity and the property and assets of the Companies held by such Persons will be released and all obligations of the Companies (other than contractual contingent indemnity obligations) to such Persons will be satisfied;

(g) Leases for each of the headquarters facility located in Carnesville, Georgia and the terminal facility located in Valdosta, Georgia and the office located in Athens, Georgia (together, the “Leases” and individually, each a “Lease”) in substantially the form attached hereto as Exhibit E, duly executed by the applicable landlord, DTC, as tenant, and Buyer, as guarantor;

(h) Duly executed resignations, effective as of the Closing, of each director and each officer that is not a full time employee of each Company requested by Buyer;

(i) A certificate duly executed by each Company that meets the requirements of Treasury Regulation Section 1.1445-2(c)(3) to the effect that such Company is not, and has not been during the applicable time period set forth in Section 897(c)(1)(A)(ii) of the Code, a United States real property holding corporation and, accordingly, the shares or units of such Company are not United States real property interests;

(j) A certificate of each Seller, certifying pursuant to Treasury Regulations Section 1.1445-2(b) that such Seller is not a foreign person within the meaning of Section 1445 of the Code;

(k) Evidence of termination or amendment of the contracts specified on Schedule 1.04(k), which termination documents will provide that all obligations of the Companies are terminated as of the Closing and no future payment by any Company is required under any such contract;

(l) The releases and other documentation, if any, required under Section 5.05(b);

(m) Releases of claims duly executed by each Seller, in form and substance reasonably satisfactory to Buyer (the “Seller Releases”);

(n) Restrictive Covenant Agreements with each Restricted Person in the form of Exhibit F;

(o) Section 338(h)(10) Election on Internal Revenue Service Form 8023, duly executed by each Seller;

(p) Consent duly executed by Windham Brannon, the Companies’ independent registered public accountants, consenting to the inclusion of the Companies’ Year-end Financial Statements in Buyer’s filings with the SEC;

(q) Evidence of full distribution of the equity interests of STB Leasing LLC, a Georgia limited liability company (“STB Leasing”), the Saratoga II aircraft, Serial Number 3246172, and the personal property of Sellers identified on Schedule 1.04(q);

(r) Sellers’ good-faith calculation of the Estimated Aggregate Closing Consideration pursuant to Section 1.01(a); and

(s) All other documents, instruments, agreements and certificates, if any, required by any other provision of this Agreement or the other Transaction Documents or reasonably requested by Buyer in connection with consummation of the transactions contemplated by this Agreement.

1.14 Closing Deliveries by Buyer. At or prior to the Closing, in addition to the payments and deliveries by Buyer at the Closing described in Section 1.01 of this Agreement, Buyer will deliver to Sellers’ Representative the following documents, each of which will be in form and substance satisfactory to Sellers’ Representative, the delivery of which is a condition to the obligation of Sellers to consummate the Closing:

(a) A copy of the certificate of incorporation of Buyer, certified by the Delaware Division of Corporations and dated not earlier than ten (10) days prior to the Closing Date, and a certificate of good standing of Buyer from the Delaware Division of Corporations, dated not earlier than ten (10) days prior to the Closing Date;

(b) A certificate of the secretary or assistant secretary of Buyer, certifying as to (i) a copy of the resolutions of the board of directors of Buyer, approving and authorizing the execution, delivery and performance of this Agreement and the other Transaction Documents to which it is a party and the consummation of the transactions contemplated hereby, and that such resolutions are in full force and effect without modification or amendment, and (ii) incumbency and signatures of each of Buyer’s officers who is authorized to execute and deliver this Agreement and such other Transaction Documents;

(d) The Transfer Agent Instruction Letter, duly executed by Buyer;

(e) The Guaranty of Lease attached to the Leases, duly executed by Buyer as guarantor;

(f) Section 338(h)(10) Election on Internal Revenue Service Form 8023, duly executed by Buyer; and

(g) All other documents, instruments, agreements and certificates, if any, required by any other provision of this Agreement or the other Transaction Documents or reasonably requested by Sellers in connection with the consummation of the transactions contemplated by this Agreement.

ARTICLE 2

REPRESENTATIONS AND WARRANTIES

Except as otherwise set forth in the disclosure schedules attached to this Agreement (the “Schedules”), provided, that disclosure of an item on one Schedule will be deemed disclosure on another Schedule if (a) a cross reference to such other Schedule is made or (b) it is readily apparent that the disclosed contract, event, fact, circumstance, or other matter relates to the representations or warranties covered by such other Schedule, Sellers jointly and severally represent and warrant to Buyer (except for the representations and warranties contained in Section 2.29, with respect to which Sellers receiving shares of Buyer Common Stock as consideration pursuant to Section 1.01(a) severally and not jointly represent to Buyer) as of the date hereof:

2.10 Organization; Power and Authority; Enforceability.

(a) With respect to each Seller, such Seller has all requisite power, competence and authority to execute and deliver this Agreement and the other Transaction Documents to which it is a party and to perform its obligations hereunder and thereunder. The execution, delivery and performance of this Agreement and the other Transaction Documents to which any Seller is a party by such Seller and the consummation of the transactions contemplated hereby and thereby by such Seller have been duly authorized by all requisite action on the part of such Seller.

(b) Each of DTC and DTL is a corporation, and B & G is a limited liability company, duly organized, validly existing and in good standing under the laws of the State of Georgia. Each Company is qualified or licensed to transact business as a foreign corporation and is in good standing in each of those jurisdictions set forth opposite its name on Schedule 2.01(b), which constitute all of the jurisdictions in which the ownership or leasing of its assets or property or the conduct of business as presently conducted requires it to qualify, except where the failure to be so qualified, individually or in the aggregate, would not result in a Material Adverse Effect. Each Company has all requisite corporate power and authority to execute and deliver this Agreement and the other Transaction Documents to which it is a party and to perform its obligations hereunder and thereunder and to own and operate its properties and to carry on its businesses as presently conducted.

(c) This Agreement has been duly executed and delivered by each Seller and each Company, and assuming that this Agreement is the valid and binding agreement of Buyer, this Agreement constitutes the valid and binding obligation of each Seller and each Company, enforceable against each Seller and each Company in accordance with its terms, except as enforceability may be limited by bankruptcy laws, other similar laws affecting creditors’ rights and general principles of equity affecting the availability of equitable remedies. Each other Transaction Document to which any Seller or any Company is a party, when executed and delivered by such Seller or such Company, will be duly executed and delivered by such Seller or such Company, and assuming that such other Transaction Documents are valid and binding obligations of the other parties thereto, each such Transaction Document to which any Seller or any Company is a party will constitute a valid and binding obligation of such Seller or such Company, enforceable against such Seller or such Company in accordance with its terms, except as enforceability may be limited by bankruptcy laws, other similar laws affecting creditors’ rights and general principles of equity affecting the availability of equitable remedies.

2.11 Authorization; No Conflicts.

(a) The execution, delivery and performance of this Agreement and the other Transaction Documents to which it is a party by each Seller and each Company and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized by all requisite corporate action on the part of each Seller and each Company, and no other corporate proceedings on any Seller’s or any Company’s part are necessary to authorize the execution, delivery or performance of this Agreement and the other Transaction Documents to which it is a party.

(b) Except as set forth on Schedule 2.02, the execution, delivery and performance by each Seller and each Company of this Agreement and the other Transaction Documents to which it is a party and the consummation of the transactions contemplated hereby and thereby do not conflict with or result in any breach of, constitute a default under, result in a violation of, result in the creation of any Lien upon any material assets of any Seller or any Company, result in any breach of, constitute a default under, trigger any penalty or change in control payment under or require any authorization, consent, approval, filing, exemption or other action by or notice to any Governmental Authority or other third party, under the provisions of any Seller’s or any Company’s certificate of incorporation (or equivalent governing document) or any agreement set forth on Schedule 2.11(a), or any material law, statute, rule or regulation or order, judgment or decree to which any Seller, any Company or any of their respective properties or assets is subject.

2.12 Subsidiaries. Except as set forth on Schedule 2.03, no Company has any Subsidiaries and does not control, directly or indirectly, or have any direct or indirect equity participation in, any other Person. No Company, directly or indirectly, owns or holds the right or has an obligation to acquire any stock, partnership interest, joint venture interest or other equity ownership interest in any other Person. Sellers understand and agree that Buyer is not acquiring the equity interests of any entity other than the Companies, and, for the avoidance of doubt, Buyer will not purchase the equity interests of Georgia Carolina, STB Leasing (the equity of which shall be distributed to the Sellers as Seller Property prior to the Closing), or any other Affiliate of any of the Companies.

2.13 Equity Securities; Title. The authorized capital equity of DTC consists solely of 2,000 shares of common stock, par value $10.00 per share, issued and outstanding, and no shares of DTC are issued and held by DTC in treasury. The authorized capital equity of DTL consists solely of 1,000 shares of common stock, par value $.01 per share, issued and outstanding, and no shares of DTL are issued and held by DTL in treasury. The authorized capital equity of B & G consists solely of all the membership interests issued and outstanding to Sellers, and no membership interests of B & G are issued and held by

B & G in treasury. Each share of Company Equity has been duly authorized and validly issued, and is fully paid and nonassessable. None of the Company Equity has been issued in violation of any preemptive or similar rights of any past or present equityholder of the applicable Company. Except as set forth on Schedule 2.04(a) or Schedule 2.04(b), none of the Companies has any outstanding equity securities, or securities convertible into equity securities, and there are no agreements, Options or other rights or arrangements existing or outstanding which provide for the sale or issuance of any of the foregoing by any of the Companies. Each Seller is the record and beneficial owner of all of the outstanding Company Equity set forth opposite such Seller’s name on Schedule 2.04(b), free and clear of any Liens. Except as set forth on Schedule 2.04(c), no Seller is a party to any Option, voting agreement, proxy or other agreement, contract or commitment (other than this Agreement) that could require such Seller or, after the Closing, Buyer, to vote, sell, transfer or otherwise dispose of, or affect the voting of, any capital equity or other ownership interest of any of the Companies. Except for the shares of Company Equity owned by each Seller, no Seller owns any shares of capital equity or other securities of any of the Companies or any Options. At the Closing, each Seller is transferring to Buyer, and Buyer is acquiring from such Seller, good title to the Company Equity owned by such Seller free and clear of all Liens.

2.14 Financial Statements; Undisclosed Liabilities; Internal Controls.

(a) Schedule 2.05(a) consists of: (i) the unaudited consolidated internal balance sheets of the Companies, Georgia Carolina Salvage, LLC, a Georgia limited liability company (“Georgia Carolina”) and STB Leasing as of August 31, 2018 (the “Latest Balance Sheet”) and the related internal statements of income for the respective eight (8) month period then ended, (the “Unaudited Interim Financial Statements”), and (ii) the reviewed consolidated balance sheets of the Companies, Georgia Carolina and STB Leasing as of December 31, 2017, December 31, 2016, and December 31, 2015, together with the statements of income and cash flows for the three (3) fiscal years then ended (the “Year-end Financial Statements”) (the statements described in clauses (i) and (ii) of this Section 2.05(a), collectively, the “Financial Statements”). Except as set forth on Schedule 2.05(a), the Year-end Financial Statements present fairly, in all material respects, the consolidated financial position, cash flows and results of operations of the Companies, Georgia Carolina and STB Leasing, as of the times and for the periods referred to therein, in conformity with GAAP consistently applied throughout the periods covered thereby. The Unaudited Interim Financial Statements present fairly, in all material respects, the consolidated financial position and results of operations of the Companies, Georgia Carolina, and STB Leasing, as of the times and for the periods referred to therein, in material conformity with GAAP consistently applied throughout the periods covered thereby, except for (I) the absence of statement of cash flows and footnote disclosures, (II) changes resulting from normal, recurring year-end adjustments and (III) the lack of consolidation of variable interest entities.

(b) Except as set forth on Schedule 2.05(b), the Companies have no liability or obligation other than (i) liabilities or obligations shown on the Latest Balance Sheet, (ii) liabilities incurred in the ordinary course of business consistent with past practice since the date of the Latest Balance Sheet, (iii) liabilities or obligations arising under contracts entered into in the ordinary course of business and that do not arise out of a breach of any contract, and (iv) liabilities taken into account in calculating Net Working Capital or any other component of Final Aggregate Closing Consideration.

(c) To Sellers’ Knowledge, the Companies maintain in all material respects an adequate system of internal controls and procedures of the accounting practices, procedures and policies employed by the Companies. Since January 1, 2015, to Sellers’ Knowledge, there have not been any significant deficiencies or material weaknesses in the financial reporting of the Companies that are or were reasonably likely to materially and adversely affect the ability to record, process, summarize and report

financial information, or any fraud (whether or not material) that involved management or other employees who have or had a significant role in financial reporting.

2.15 Accounts Receivable. All accounts receivable of the Companies (the “Accounts Receivable”), whether or not reflected on the Latest Balance Sheet, (a) have arisen from bona fide transactions entered into by the Companies involving the sale of goods or the rendering of services or in the operation of the business in the ordinary course of business, (b) constitute only valid, undisputed claims of the Companies, not subject to claims of set-off or other defenses or counterclaims, other than loss claims, normal cash discounts accrued in the ordinary course of business, and immaterial and routine billing disputes with customers in the ordinary course of business, and (c) are current and collectible net of the reserves shown on the Latest Balance Sheet (which reserves have been established in accordance with GAAP and calculated consistent with past practice in the preparation of the Financial Statements). The allowance for bad debts shown on the Latest Balance Sheet or, with respect to Accounts Receivable arising after the date of the Latest Balance Sheet, on the accounting records of the Companies have been, in all material respects, determined in accordance with GAAP, consistently applied.

2.16 Absence of Certain Developments. Since December 31, 2017, there has not occurred any event, occurrence, fact, circumstance or change that has had, or reasonably would be expected to have, a Material Adverse Effect. Except as set forth on Schedule 2.07 or as contemplated by this Agreement, since December 31, 2017, the Companies have operated their businesses in the ordinary course of business consistent with past practice in all material respects, and none of the Companies has:

(a) sold, leased, assigned or transferred any material portion of its assets or property, or suffered the imposition of any mortgage, pledge or other Lien upon any material portion of its assets or property outside the ordinary course of business, or entered into any contract or letter of intent with respect thereto;

(b) effected any recapitalization, reclassification, equity or other dividend, equity split, adjustment, combination, subdivision or like change in its capitalization, or declared, set aside or paid any other distribution of any kind (whether in cash, stock or property) to any equityholder, except for distributions of Seller Property, or made any direct or indirect redemption, retirement, purchase or other acquisition of any shares of capital stock or other equity interests;

(d) merged or consolidated with or made any equity investment in, or any loan or advance to, or any acquisition of the securities or assets of, any other Person (other than advancement of reimbursable ordinary and necessary business expenses made to directors, officers, employees, Independent Contractors and third-party transportation providers of any of the Companies in the ordinary course of business, including but not limited to advances made to Independent Contractors with respect to vehicle repairs);

(e) made commitments for capital expenditures in excess of $25,000 in the aggregate other than as contemplated by the Companies’ list of year to date and planned capital expenditures set forth in Schedule 2.07(e);

(f) granted any license or sublicense of, assigned or transferred any material rights under or with respect to any Intellectual Property other than in the ordinary course of business;

(g) suffered any event of damage, destruction, casualty loss or claim exceeding $25,000 individually or in the aggregate, in excess of amounts covered by applicable insurance;

(h) failed to maintain their respective material assets in substantially their current physical condition in accordance with past practice, normal wear and tear excepted, and in accordance with the manufacturer’s specifications and warranties;

(i) made any changes to policies or timing of repairs, maintenance and purchasing, and installation of tires, fuel and other replaceable operating supplies;

(j) granted any increase in the amount of cash compensation, benefits, retention or severance pay payable or potentially payable to any of its directors, officers or other senior executives or adopted, amended or terminated any Plan or Benefit Program;

(k) made any payment or commitment to pay any pension, retirement allowance, retiree medical or other employee benefit, any amount relating to unused vacation days or other paid time off, retention, severance or termination pay to any director, officer or employee other than in the ordinary course of business consistent with past practice and which payments or commitments to pay do not exceed $25,000 in the aggregate;

(l) made any material change in accounting, auditing or tax reporting methods, policies or practices;

(m) made or revoked any election with respect to Taxes of any Company thereof or changed its tax year;

(n) accelerated or changed any of its practices, policies, procedures or timing of the billing of customers or the collection of their accounts receivable, pricing and payment terms, cash collections, cash payments or terms with vendors other than in the ordinary course of business in accordance with reasonable commercial practices;

(o) delayed or postponed the payment of accounts payable or accrued expenses or the deferment of expenses other than in the ordinary course of business in accordance with reasonable commercial practices;

(p) made any payment or incurred any obligation in excess of $100,000, other than in the ordinary course of business consistent with past practices;

(q) received a complaint or notice that an investigation against any Company has been commenced by any Governmental Authority or, to Sellers’ Knowledge, that any other event has occurred which calls into question any permit necessary for any Company to conduct its business and to own and operate such Company’s material assets;

(r) received any notice from any customer, supplier, Governmental Authority or any other Person, the result of which could reasonably be expected to materially impact the business of any Company;

(s) discharged or satisfied any Lien, or subjected any Company or any of such Company’s material assets to any Lien; or

(t) committed to do any of the foregoing.

2.17 Real and Personal Properties.

(a) Schedule 2.08(a) contains a complete and accurate list of all real property owned since January 1, 2012, by the Companies (the “Owned Real Property”), in each case setting forth the name of the record owner of such property, the street address and legal description of each property covered thereby and, if applicable, the date of disposition of such real property.

(b) Schedule 2.08(b) contains a complete and accurate list of all leases (the “Real Property Leases”) of real property by the Companies (the “Leased Real Property”), in each case setting forth (i) the lessor and lessee thereof, the date thereof and the dates of all amendments thereto and (ii) the street address of each property covered thereby. The Companies have made available to Buyer true and correct copies of the Real Property Leases, including all amendments, supplements and modifications thereto.

(c) Schedule 2.08(c) contains a complete and accurate list of all leases pertaining to Personal Property, pursuant to which any of the Companies makes payment in excess of $25,000 annually.

(d) Except as set forth on Schedule 2.08(d):

(i) a Company has good, marketable and insurable fee simple interest in the Owned Real Property, if any owned as of the Closing Date, and all Personal Property that is owned and/or valid and binding leaseholds in the Leased Real Property and all Personal Property that is leased, free and clear of all Liens except Permitted Liens;

(ii) a Company enjoys peaceful and undisturbed possession of the Leased Real Property and Personal Property that is leased sufficient for the intended operations and use by the Companies of such Leased Real Property and Personal Property that is leased;

(iii) each Real Property Lease and each lease in respect of Personal Property is in full force and effect in all material respects;

(iv) none of the Companies nor, to Sellers’ Knowledge, any other party is in material breach or material default under any of the Real Property Leases or any lease in respect of Personal Property, nor has any event occurred which, with the passage of time or notice, or both, would constitute a material default thereunder or a violation of the terms (or permit the termination) thereof, and none of the transactions contemplated hereby will constitute or create a default, event of default or right of termination thereunder, nor is the consent of the lessor or landlord or any other third party required pursuant to the terms of any of the Real Property Leases in connection with the transactions contemplated by this Agreement; and

(v) none of the Companies has subleased, and no other Person is in possession of, or has the right of use or occupancy of any portion of, any of the Leased Real Property, and no part of any of the Owned Real Property or the Leased Real Property has been condemned or otherwise taken by any Governmental Authority and, to Sellers’ Knowledge, no such condemnation or taking is threatened or contemplated.

2.18 Tractors and Trailers.

(a) Each of the tractors and trailers identified on Schedule 2.09(a)(i) (the “Operational Tractors and Trailers”) (i) is roadworthy and adequate for use in the ordinary course of business, (ii) has been adequately maintained in the ordinary course of business consistent with past practice, (iii) meets all applicable operating condition requirements of the DOT, and (iv) has all major mechanical, electrical and

other systems functioning properly, in each case, ordinary wear and tear excepted. Any tractors and trailers out of service for repair as of the Closing Date is identified on Schedule 2.09(a)(ii), with wrecked tractors and trailers separately noted (the “Out of Service Tractors and Trailers”).

(b) Intentionally Deleted.

(c) Each of the Operational Tractors and Trailers of the Companies and each of the Out of Service Tractors and Trailers is properly licensed and registered with applicable authorities in accordance with applicable laws. Such licenses and registrations are current. All current license plates and stickers are properly affixed to the Operational Tractors and Trailers and the Out of Service Tractors and Trailers, and all related fees have been paid. No Company has received an unsatisfactory or conditional safety and fitness rating from the Federal Motor Carrier Safety Commission (the “FMCSA”), or its predecessor, the Federal Highway Administration (the “FHWA”), as a result of a compliance review for any of the factors that are considered by the FMCSA or FHWA, and there is no pending judicial or administrative proceeding that reasonably would be expected to result in an unsatisfactory or conditional safety and fitness rating. Schedule 2.09(c) sets forth true, correct and complete copies of all Behavior Analysis and Safety Improvement Category (“BASIC”) rating percentiles of the Companies for each of the twelve (12) months immediately preceding the Closing Date in all seven (7) categories under the FMCSA’s Compliance Safety Accountability (“CSA”) program, including the underlying data related to such BASIC rating percentiles as provided by the FMCSA. During the twelve (12) months immediately preceding the Closing Date, all information provided to the FMCSA by the Companies in connection with CSA has been true, accurate and complete in all material respects.

(d) Since December 31, 2016, all Operational Tractors and Trailers and all Out of Service Tractors and Trailers have been operated at all times in material compliance with applicable secured notes and other financing documents. No tractors or trailers are leased by any of the Companies from a third party. There are no late fees, penalties or other amounts owing under any tractor or trailer secured note or other financing document, other than any current monthly payment that is not yet due. Schedule 2.09(d)(ii) describes in reasonable detail the warranties, repurchase or trade-back credit and other material arrangements regarding the Operational Tractors and Trailers and the Out of Service Tractors and Trailers and any restrictions on transferability on change in control in agreements regarding all tractors and trailers of the Companies.

(e) Schedule 2.09(e) sets forth a true and correct list of all non-operational tractors and trailers owned or leased by the Companies at Closing, other than the Operational Tractors and Trailers, which are identified on Schedule 2.09(a)(i) and the Out of Service Tractors and Trailers, which are identified on Schedule 2.09(a)(ii).

2.19 Taxes.

(a) Except as set forth on Schedule 2.10(a): (i) the Companies have duly and timely filed or caused to be duly and timely filed all federal, state and other Tax Returns that are required to be filed by or with respect to the Companies (taking into consideration all extended filing deadlines); (ii) all Tax Returns filed by the Companies are true, correct and complete in all material respects; (iii) the Companies have paid, or made provision for the payment of, all Taxes that are or have become due for all periods covered by the Tax Returns or otherwise, or pursuant to any assessment received by the Companies, except such Taxes, if any, as are being contested in good faith and as to which adequate reserves (determined in accordance with GAAP, consistently applied) have been provided in the Financial Statements; (iv) all Taxes that the Companies are obligated to withhold from amounts owing to any employee, creditor or third party have been paid or properly accrued; and (v) each Company has filed all

state income tax returns for state jurisdictions in which such Company believes that it has nexus resulting in material Tax liability.

(b) DTC is, and has been since October 1, 1999 and DTL is, and has been since December 23, 2015, an S-corporation as defined in Section 1361(a)(1) of the Code for federal and applicable state income Tax purposes and is eligible for such treatment. Each of DTC and DTL’s S-corporation election was timely filed and has not been superseded by any subsequent filing. None of the Companies nor any Seller has taken any steps or actions, or failed to take any steps or actions, including agreements, distributions or other facts that resulted or could have resulted in the failure of any Company to be treated (in accordance with each Company’s relevant classification) as an S-corporation or an entity disregarded as separate from its owner for Tax purposes. No agreement, arrangement or understanding, oral or written, exists among Sellers to circumvent the single class of stock requirement of Section 1361(b)(1)(D) of the Code and the Treasury Regulations thereunder. No Company has received any correspondence from the Internal Revenue Service questioning its status as an S-corporation or an entity disregarded as separate from its owner for Tax purposes. Each Seller is a “United States person” within the meaning of Section 7701(a)(30) of the Code.

(i) there is no dispute or claim concerning any Tax liability of any Company raised by any taxing authority in writing;

(ii) no Company has waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency that is currently in force;

(iii) no Company has requested or been granted an extension of time for filing any Tax Return, which has not yet been filed;

(iv) no deficiency or proposed adjustment, which has not been finally settled or resolved for any amount of Tax has been proposed, asserted or assessed by any taxing authority in writing against any Company;

(v) there is no action, suit, taxing authority proceeding or audit now in progress or pending, or to Sellers’ Knowledge, threatened against or with respect to any Company relating to Taxes;

(vi) no written claim has been made in the past five (5) years by a taxing authority in a jurisdiction where any Company currently files Tax Returns that such Company owes or may owe additional Tax to that jurisdiction;

(vii) no power of attorney that is currently in force has been granted with respect to any matter related to Taxes that would reasonably be expected to affect any Company;

(viii) there are no Liens (other than the Liens for Taxes not yet due and payable) on any of the assets of any Company that arose in connection with any failure (or alleged failure) to pay any Tax;

(ix) none of the property of any Company is held in an arrangement that is a partnership for United States federal Tax purposes. No asset of any Company is a debt obligation that (i) was issued with “original issue discount,” as defined in Section 1273 of the Code; (ii) is an “applicable high yield discount obligation,” as defined in Section 163(i) of the Code;

(iii) provides for the payment of interest that is “disqualified interest,” within the meaning of Section 163(j)(3) of the Code; (iv) constitutes “corporation acquisition indebtedness” within the meaning of Section 279(b) of the Code; or (v) is a “disqualified debt instrument,” as defined in Section 163(l)(2) of the Code;

(x) none of the Companies will be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any: (i) change in method of accounting made prior to the Closing for a taxable period ending on or prior to the Closing Date; (ii) “closing agreement” as described in Code Section 7121 (or any corresponding or similar provision of applicable state, local or foreign income Tax law) executed prior to the Closing; (iii) intercompany transaction or any excess loss account described in Treasury Regulations under Code Section 1502 (or any corresponding or similar provision of applicable state, local or foreign income Tax law) entered into or created prior to the Closing; (iv) installment sale or open transaction disposition made prior to the Closing; (v) cash method of accounting or long-term contract method of accounting utilized prior to the Closing; or (vi) prepaid amount received prior to the Closing;

(xi) none of the Companies is a party to or bound by any Tax allocation, sharing or indemnity agreements or arrangements (other than customary Tax indemnification provisions in commercial contracts, agreements or arrangements not primarily related to Taxes). None of the Companies has any liability for the Taxes of any Person under Treasury Regulation Section 1.1502-6 (or any corresponding provisions of applicable state, local or foreign Tax law), or as a transferee or successor, or by contract or otherwise (other than pursuant to customary Tax indemnification provisions in commercial contracts, agreements or arrangements not primarily related to Taxes). In the past four (4) years, none of the Companies has been a member of an affiliated, consolidated, combined or unitary group filing for federal or applicable state income Tax purposes;

(xii) none of the Companies has constituted either a “distributing corporation” or a “controlled corporation” in a distribution of stock intended to qualify for tax-free treatment under Section 355 of the Code in the two (2) years prior to the date of this Agreement or in a distribution which could otherwise constitute part of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of the Code) in conjunction with the transactions contemplated by this Agreement;

(xiii) none of the Companies has (1) participated (within the meaning of Treasury Regulation Section 1.6011-4(c)(3)) in any “reportable transaction” within the meaning of Treasury Regulation Section 1.6011-4(b) (and all predecessor regulations), (2) claimed any deduction, credit or other tax benefit by reason of any “tax shelter” within the meaning of former Section 6111(c) of the Code and the Treasury Regulations thereunder or any “confidential corporate tax shelter” within the meaning of former Section 6111(c) of the Code and the Treasury Regulations thereunder, or (3) purchased or otherwise acquired an interest in any “potentially abusive tax shelter” within the meaning of Treasury Regulation Section 301.6112-1. The Companies have disclosed on their Tax Returns all positions taken therein that would reasonably be expected to give rise to a substantial understatement of Tax within the meaning of Section 6662 of the Code (or any similar provision of applicable state, local or foreign law);

(xiv) none of the Companies has made any payments, is obligated to make any payments or is a party to any plan or agreement that would obligate it to make any payments in connection with this transaction that would not be deductible under Section 280G (determined

without regard to the exceptions contained in Sections 280G(b)(4) and 280G(b)(5)) of the Code; and

(xv) all like-kind exchange transactions between any Company and any Affiliate thereof (A) were timely and accurately reported in summary form on Internal Revenue Service Form 8824, (B) complied with Section 1031 of the Code and the Treasury Regulations thereunder (and all state counterparts), and (C) did not result in any Tax liability (or any such Tax liability is fully accrued on the Financial Statements).

(d) No Company will be liable for any Tax under Section 1374 of the Code or any other applicable state or local law as a result of the transactions contemplated by this Agreement, including the election made under Section 338(h)(10) of the Code and any similar provision of state or local law (the “Section 338(h)(10) Election”). No Company has, since its inception, acquired assets from another corporation in a transaction in which the Company’s Tax basis for the acquired assets was determined, in whole or in part, by reference to the Tax basis of the acquired assets (or any other property) in the hands of the transferor or acquired the stock of any corporation which is or became a “qualified subchapter S subsidiary” within the meaning of Section 1361(b)(3)(B) of the Code.

2.20 Contracts and Commitments.

(a) Except as set forth on Schedule 2.11(a) or Schedule 2.14(a), none of the Companies is party, or subject, to any:

(i) agreement relating to any completed or pending business acquisition or divestiture since January 1, 2015;

(ii) bonus, pension, profit sharing, retirement or other form of deferred compensation plan;

(iii) stock option or similar plan;

(iv) contract (I) for the employment of any officer, individual employee or other Person, (II) providing for the payment of any cash or other compensation or benefits upon the consummation of the transactions contemplated hereby, or (III) that provides severance or other benefits for any Person;

(v) agreement under which any of the Companies created, incurred or assumed any Indebtedness (including any conditional sales agreement, sale-leaseback or capitalized lease) or mortgaging, pledging or otherwise granting or placing a Lien on any portion of any of the Companies’ assets, other than as identified in Schedule 2.20;

(vi) any contract involving unpaid amounts in excess of $25,000 with a “change in control” clause;

(vii) guaranty of any Indebtedness;

(viii) lease or agreement under which it is lessee of or holds or operates any personal property owned by any other Person, for which the annual rental exceeds $25,000;

(ix) lease or agreement under which it is lessor of or permits any third party to hold or operate any property, real or personal, for which the annual rental exceeds $25,000;

(x) contract or group of related contracts with the same party for the purchase by any of the Companies of products or services, under which the undelivered balance of such products and services has a purchase price in excess of $25,000 in the aggregate (other than purchase orders and transportation contracts entered into in the ordinary course of business);

(xi) contract or group of related contracts with the same party for the sale by any of the Companies of products or services under which the undelivered balance of such products or services has a sales price in excess of $25,000 in the aggregate (other than sales orders and transportation contracts entered into in the ordinary course of business);

(xii) any other contract, lease or agreement that cannot be canceled by a Company without penalty or further payment or obligation and without more than thirty (30) days’ notice and with remaining fixed payments in excess of $25,000 under any such contract;

(xiii) agreement containing covenants that in any way purport to restrict the right of any Company to engage in its current line of business, engage in any line of business, compete with any Person or solicit customers;

(xiv) hedging arrangement or forward, swap, derivatives or futures contract;

(xv) fuel purchasing contract;

(xvi) joint venture, partnership, franchise, joint marketing agreement or any other similar contract or agreement (including sharing of profits, losses, costs or liabilities by any Company with any other Person);

(xvii) material licensing agreement or other material contract or agreement with respect to Intellectual Property, including material contracts or agreements with current or former employees, consultants or contractors regarding the appropriation or non-disclosure of any Intellectual Property;

(xviii) agreement under which any Company has made loans or advances to any other Person, and such advances or loans remain outstanding in an amount of greater than $10,000, except advancement of reimbursable ordinary and necessary business expenses made to directors, officers, employees and Independent Contractors (including but not limited to advances to Independent Contractors for vehicle repairs) of any Company in the ordinary course of business;

(xix) written contract or agreement with any consultant or employee or any current or former officer, director, equityholder or Affiliate of any Company (true, correct and complete copies of which have been made available to Buyer);

(xx) settlement, conciliation or similar agreement, the performance of which will involve payment after the date of this Agreement of consideration in excess of $25,000 or governmental monitoring, consent decree or reporting responsibilities;

(xxi) any contract or agreement, not otherwise covered by the foregoing, that is otherwise material to the Companies, taken as a whole; or

(xxii) any amendment, supplement and modification (whether oral or written) in respect of any of the foregoing.

(b) The Companies have made available to Buyer a true, correct and complete copy of each written agreement set forth on Schedule 2.11(a) or Schedule 2.14(a), including all modifications and amendments thereto. With respect to each agreement set forth on Schedule 2.11(a) or Schedule 2.14(a), such agreement: (i) is valid, binding and in full force and effect in all material respects; (ii) will remain unmodified and in full force and effect immediately after the Closing without any right on the part of any counterparty, including with the passage of time or notice, or both, to terminate, modify or impose any penalty as a result of the transactions contemplated hereby; (iii) is and will remain, including with the passage of time or notice, or both, immediately after the Closing enforceable by the applicable Company in accordance with its respective terms; and (iv) none of the Companies, nor, to Sellers’ Knowledge, any other party, is in material breach or default under such agreement. No Company has received any written notice (or to Sellers’ Knowledge, any other notice) of the intention of any party to terminate any agreement listed on Schedule 2.11(a). There are no oral agreements with respect to the subject matter of Schedule 2.11(a) or Schedule 2.14(a) that, individually or in the aggregate, are material to the Company.

(c) Schedule 2.11(c) sets forth a list of the transportation contracts with the Companies’ ten (10) largest customers (by consolidated revenue) for the first eight (8) months of 2018, true, correct and complete copies of which, including all modifications and amendments thereto, have been made available to Buyer (collectively, “Customer Contracts”). None of the Companies, nor, to Sellers’ Knowledge, any other party, is in material breach or default under such contract. Other than customary notice to the applicable Company that such Company must bid to continue to provide services to a customer as part of the customer’s normal bid cycles, no Company has received written notice (or, to Sellers’ Knowledge, any other notice) from any customer that such customer intends to terminate, substantially modify, fail to renew or reduce volumes substantially under, any such Customer Contract.

(d) Schedule 2.11(d) sets forth a list of the contracts with the Companies’ ten (10) largest vendors or suppliers (by consolidated expenses) for the first eight (8) months of 2018, true, correct and complete copies of which, including all modifications and amendments thereto, have been made available to Buyer (collectively, “Vendor Contracts”). None of the Companies, nor, to Sellers’ Knowledge, any other party, is in material breach or default under such contract. No Company has received written notice (or, to Sellers’ Knowledge, any other notice) from any vendor that such vendor intends to terminate, substantially modify, fail to renew or reduce volumes substantially under any such Vendor Contract.

2.21 Intellectual Property.

(a) All of the patents, internet domain names, registered trademarks, registered service marks, registered copyrights and applications for any of the foregoing Intellectual Property, owned by the Companies (collectively, the “Registered Intellectual Property”), as well as all social media accounts of the Companies (for example, and not by means of limitation, Facebook, Twitter, LinkedIn, Snapchat, etc.) and related log-in information are set forth on Schedule 2.12(a)(i). All currently due maintenance fees or renewal fees for the Registered Intellectual Property have been paid and all currently due documents and certificates for such Registered Intellectual Property have been filed with the relevant patent, copyright, trademarks, Internet registrar or other authorities in the United States or foreign jurisdictions, as the case may be, for the purposes of maintaining such Registered Intellectual Property. The Intellectual Property owned by the Companies and the Intellectual Property licensed by the Companies from third parties is all of the Intellectual Property that is used by the Companies in the conduct of their businesses as currently conducted and as conducted during the twelve (12) month period preceding the date hereof. Schedule 2.12(a)(ii) sets forth each material license or sublicense that the Companies have granted to any third party with respect to any Intellectual Property. Except as set forth on Schedule 2.12(a)(iii), no Seller nor any Affiliate of any Seller (other than the Companies) has any rights in any Intellectual Property.

(b) Except as set forth on Schedule 2.12(b), the Companies own and possess all right, title and interest in and to, or possesses the valid right to use, all Intellectual Property used by them. Except as set forth on Schedule 2.12(b), (i) to Sellers’ Knowledge, the conduct of their businesses by the Companies as currently conducted and as it has been conducted in the past three (3) years has not and does not infringe, misappropriate, dilute or otherwise violate the Intellectual Property of any Person; (ii) there are no pending actions alleging that the Companies are infringing, misappropriating, diluting or otherwise violating any Intellectual Property of any Person or that seek to limit or challenge the validity, enforceability, ownership or use of the Intellectual Property owned by the Companies and used in their businesses; and (iii) none of the Companies has received in the past three (3) years any written claim from any Person alleging any Intellectual Property infringement, misappropriation, dilution or other such violations. There are no outstanding judicial or administrative orders to which any Company is a party or by which it is bound, which restricts the rights to use any of the Intellectual Property owned by the Companies or used in their businesses.

(c) The Companies have provided Buyer with a true, correct and complete copy of the Companies’ company handbooks, which contain a description of steps taken to protect, and, where applicable, maintain in confidence, trade secrets of the Companies and third parties. Except as set forth in Schedule 2.12(c), no present or former officer, director, employee or contractor of any Company, has any ownership interest, in whole or in part, in any Intellectual Property owned or used by the Companies, or the right to receive royalty or other payments for Intellectual Property used by the Companies.

(d) The Companies own or lease all Computer Systems that are necessary for the operation of their businesses. In the twelve (12) month period preceding the Closing Date, there has been no failure of or other material substandard performance of any Computer Systems, which have caused any material disruptions to the businesses of the Companies. The Companies have taken commercially reasonable steps to provide for the back-up and recovery of data and information and commercially reasonable disaster recovery plans, procedures and facilities, and as applicable, have taken commercially reasonable steps to implement such plans and procedures. The Companies have taken commercially reasonable actions to protect the integrity and security of the Computer Systems and software information stored thereon from unauthorized use, access or modification by third parties. The Companies have pursuant to software licenses the number of users or seats used in the businesses of the Companies as currently conducted.

(e) Except as set forth on Schedule 2.12(e), the Companies have possession of a copy of all material Technology related to the operation of the businesses of the Companies as conducted as of the date hereof and during the twelve (12) month period preceding the Closing Date.

(f) Except as set forth on Schedule 2.12(f), none of the Software owned and/or currently under development by any of the Companies is subject to the provisions of any Open Source Code license or other contract which would reasonably be expected to: (i) require or condition the use or distribution of such Software; (ii) require the license of such Software or any portion thereof for the purpose of making modifications or derivative works; (iii) require the distribution of such Software or any portion thereof without charge; (iv) require or condition the disclosure, licensing or distribution of any source code or any portion of Software; or (v) otherwise impose a limitation, restriction or condition on the right of any of the Companies to use or distribute any Software or any portion thereof.

(g) The execution, delivery and performance by the Companies of this Agreement and the consummation of the transactions contemplated hereby do not result in any Person having the right to:

(i) encumber or adversely affect the right to use any Intellectual Property presently owned or used by the Companies in the conduct of their businesses, as conducted as of the date hereof; or

(ii) cause any of the Companies to be contractually obligated to pay any royalties or other amounts to any third party in excess of the amounts that such party would have been obligated to pay if this Agreement had not been executed, delivered and performed or the transactions contemplated hereby consummated.

2.22 Litigation. Except as set forth on Schedule 2.13(a), (a) there are no actions, suits or proceedings pending or, to Sellers’ Knowledge, threatened, against or affecting any of the Companies, or any of their respective assets, officers, directors, agents, employees, predecessors or indemnified persons in their capacities as such, at law or in equity, before or by any Governmental Authority or arbitration or mediation authority in each case in which a reserve in excess of $25,000 has been established or any Company’s maximum estimated liability is in excess of $25,000 and (b) none of the Companies is a party to or subject to or in default under any outstanding judgment, order or decree of any Governmental Authority or arbitration or mediation authority or otherwise in existence, nor, to Sellers’ Knowledge, is there any reasonable and valid basis for such proceeding based on acts or omissions of any Seller or any Company. Except as set forth on Schedule 2.13(b), since January 1, 2017, no Company has settled or received a final judgment concerning any outstanding action, suit or proceeding for an amount in excess of $25,000. No Seller is a party to any litigation, claims, actions or other proceeding, or any outstanding judgment, order or decree of any Governmental Authority or arbitration or mediation authority, that reasonably could be expected to affect or delay the ability of such Seller to consummate the transactions contemplated hereby, and to Sellers’ Knowledge, no such litigation, claim, action or other proceeding is threatened against such Seller.

2.23 Employee Benefit Plans.

(a) Schedule 2.14(a) lists each of the following that is sponsored, maintained or contributed to by any Company for the benefit of employees, former employees, Independent Contractors, “leased employees” (as defined in Section 414(n) of the Code), former “leased employees” (as defined in Section 414(n) of the Code), directors, former directors or any agents, consultants or similar representatives providing services to or for any Company, or with respect to any Company has any liability:

(i) each “employee benefit plan,” as such term is defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) (each, a “Plan”); and

(ii) each personnel policy, stock option plan, stock purchase plan, stock appreciation rights, phantom stock plan, or any other equity-based plan, program, agreement or arrangement, profit-sharing plan, agreement or arrangement, collective bargaining agreement, bonus plan or arrangement, incentive award plan or arrangement, paid time off policy, vacation policy, severance or retention, or change-in-control pay plan, policy or agreement, deferred compensation agreement or arrangement, executive compensation or supplemental income arrangement, consulting agreement, employment agreement and each other employee benefit plan, agreement, arrangement, program, practice or understanding that is not described in Section 2.14(a)(i), whether written or unwritten (each, a “Benefit Program”).

(b) With respect to each Plan and each Benefit Program, the Companies have made available to Buyer copies (as applicable) of (i) the Plan or Benefit Program document currently in effect, and any related trusts, insurance, investment management and investment advisor contracts, group annuity

contracts and each other funding or financing arrangement related thereto, including any amendments (or, in the case of any unwritten arrangement, a written description of the terms thereof), (ii) the most recent summary plan description, (iii) copies of any written communication, including employee handbooks, related to any Plan or Benefit Program (iv) the most recent determination letter, advisory opinion or opinion letter received from the Internal Revenue Service, (v) the latest financial statements and (vi) the three most recent Internal Revenue Service Form 5500 annual reports or other report filed with any Governmental Authority.

(c) No Plan is subject to Title IV of ERISA nor, after giving effect to the waivers contained in this Section 2.14(c), does any Plan provide for medical or life insurance benefits to retired or former employees of any Company (other than (i) as required by law, including, without limitation, Code Section 4980B, (ii) benefits through the end of the month of termination of employment, (iii) death benefits attributable to deaths occurring at or prior to termination of employment, (iv) disability benefits attributable to disabilities occurring at or prior to termination of employment, and (v) conversion rights). No Company or any ERISA Affiliate of any Company sponsors, maintains, contributes to or has sponsored, maintained, or contributed to (nor is any Company or ERISA Affiliate of any Company obligated to contribute to), or has any current or potential obligation or liability under or with respect to (I) any “multiemployer plan” (as defined in Section 3(37) of ERISA), (II) any “defined benefit plan” (as defined in Section 3(35) of ERISA), (III) any “multiple employer plan” (as defined in Section 210 of ERISA or Section 413(c) of the Code), (IV) any “multiple employer welfare arrangement” (as defined in Section 3(40) of ERISA), or (V) any plan which is subject to Section 302 of ERISA or Section 412 of the Code. No Company nor any ERISA Affiliate of any Company is a “contributing sponsor” of any single-employer plan within the meaning of Section 4001(a)(13) of ERISA. By his or her signature below, any Seller that is a natural person and his spouse hereby freely and voluntarily waives his or her right to post-retirement medical or life insurance benefits under any Plan.

(d) Except as set forth on Schedule 2.14(d):

(i) Each Plan, Benefit Program and Agreement complies in form and operation in all material respects with its terms and the requirements of the Code, ERISA, COBRA, and all other applicable laws;

(ii) Each Plan that is intended to be qualified under Section 401(a) of the Code (A) is the subject of an unrevoked favorable determination letter from the Internal Revenue Service with respect to such Plan’s qualified status under the Code, (B) has a timely filed request for such a letter pending with the Internal Revenue Service or has remaining a period of time under the Code or applicable Treasury Regulations or Internal Revenue Service pronouncements in which to request, and make any amendments necessary to obtain, such a letter from the Internal Revenue Service, or (C) is a prototype or volume submitter plan entitled, under applicable Internal Revenue Service guidance, to rely on the favorable opinion or advisory letter issued by the Internal Revenue Service to the sponsor of such prototype or volume submitter plan, and no amendments have been made to any such Plan following the receipt of the most recent determination, opinion or advisory letter applicable to such Plan that would jeopardize such Plan’s qualified status;

(iii) There are no actions, suits or claims (other than claims in the ordinary course of business that do not involve any action or suit) for benefits under such plans pending or, to Sellers’ Knowledge, threatened against any of the Plans, Benefit Programs or Agreements or their assets;

(iv) As to any Plan intended to be qualified under Section 401 of the Code, there has been no termination or partial termination of the Plan within the meaning of Section 411(d)(3) of the Code;

(v) No Company, nor, to Sellers’ Knowledge, any other Person has acted or failed to act in a manner that would result in imposition on any Company of (A) material damages for breach of fiduciary duty under Section 409 of ERISA, (B) a material civil penalty assessed pursuant to subsections (c), (i) or (l) of Section 502 of ERISA or (C) a material Tax imposed pursuant to Chapter 43 of Subtitle D of the Code;

(vi) There is no matter pending or, to Sellers’ Knowledge, threatened (other than routine qualification determination filings) with respect to any of the Plans or Benefit Programs before the Internal Revenue Service, the Department of Labor, the Pension Guaranty Benefit Corporation or any other Governmental Authority; and

(vii) No trust funding a Plan is intended to be exempt from federal income taxation pursuant to Section 501(c)(9) of the Code.

(e) All contributions (including all employer contributions and employee salary reduction contributions) that are due and owing have been paid to each Plan that is an “employee pension benefit plan” (or related trust or held in the general assets of any Company, as appropriate), and all contributions for any period ending on or before the Closing Date that are not yet due have been paid to each such Plan or fully accrued on the Financial Statements to the extent required by GAAP. All premiums or other payments that are due and owing for all periods ending on or before the Closing Date have been paid or accrued on the Financial Statements with respect to each Plan that is an “employee welfare benefit plan” (as defined in Section 3(l) of ERISA) to the extent required by GAAP.

(f) The Companies are in compliance with the provisions of the Patient Protection and Affordable Care Act and applicable regulations and other regulatory guidance issued under such act, and the Companies have not received written notice of, and to Sellers’ Knowledge there is no reason to expect, any Tax or liability to be incurred as a result of the application of the Patient Protection and Affordable Care Act, other than has been paid or accrued.

(g) Each Plan that is an “employee welfare benefit plan” (as defined in Section 3(l) of ERISA) may be unilaterally amended or terminated in its entirety in accordance with its terms without material liability to any Company, except as to benefits accrued thereunder prior to such amendment or termination.

(h) Except as otherwise set forth on Schedule 2.14(h), (i) all amounts that are or are reasonably expected to be due and owing in respect of each Benefit Program for any period ended on or before the Closing Date have been paid to the recipients or fully accrued on the Financial Statements, except that for amounts that will not be due and owing until after the Closing Date with respect to 2018 year-end obligations, nine-twelfths (9/12) of which shall be accrued as of the Closing Date, and (ii) no Plan or Benefit Program provides that payments pursuant to such Plan, Benefit Program may be made in securities of any Company, or any ERISA Affiliate of any Company, nor does any trust maintained pursuant to any Plan or Benefit Program hold any securities of any Company or any ERISA Affiliate of any Company.

(i) Schedule 2.14(i) lists any Plans or Benefit Programs that, considered individually or considered collectively with any other such Plans or Benefit Programs, will, or could reasonably be

expected to give rise directly or indirectly to the payment of any amount that would be characterized as a “parachute payment” within the meaning of Section 280G of the Code (a “Section 280G Payment”) as a result of the transactions contemplated by this Agreement, along with the name of the individual(s) to whom such Section 280G Payment is owed and the amount of such Section 280G Payment. There is no contract, agreement, plan or arrangement to which any Company is a party to or by which it is bound to compensate any individual for excise taxes paid pursuant to Section 4999 of the Code due to a Section 280G Payment.

(j) Each Plan, Benefit Program that is a nonqualified deferred compensation plan subject to Section 409A of the Code is identified as such in Schedule 2.14(a) has been maintained (both in form and operation) in accordance with Section 409A of the Code.

(k) Schedule 2.14(k) contains a true and correct list of the name and address of each individual (including a covered employee, covered spouse or covered dependent-child) who is currently receiving or entitled to elect to receive COBRA continuation coverage under any of the Companies’ Plans or Benefit Programs, and a copy of any COBRA notice and election forms related to such individuals. The following information is included for each person identified on Schedule 2.14(k): (i) indication as to whether the individual is currently receiving COBRA coverage or instead has the right to elect (but has not yet elected) COBRA coverage (in which case, identify the last day of the sixty (60)-day election period); (ii) the legal name and a description of the type (e.g., medical, dental, vision, etc.) of Plan or Benefit Program involved; (iii) a description of the qualifying event (and any second qualifying event) (as defined under Treasury Regulation Section 54.4980B-4 and 54.4980B-7); and (iv) the date on which such qualifying event (and any second qualifying event) occurred; provided, however, that such information must be provided in compliance with the Health Insurance Portability and Accountability Act of 1996, as amended.

(l) No Company nor any ERISA Affiliate of any Company has used the services or workers provided by third party contract labor suppliers, temporary employees, “leased employees” (as defined in Section 414(n) of the Code), or individuals who have provided services as

Independent Contractors, to an extent that would reasonably be expected to result in the disqualification of Plans or the imposition of penalties or excise Taxes with respect to any of the Plans by the Internal Revenue Service or the Department of Labor.

(m) The execution and delivery of this Agreement and the consummation of the transactions in connection therewith (either alone or in combination with any other event) will not (i) require any Company, Buyer or any of their Affiliates to make a larger contribution to, or pay greater compensation, payments or benefits under any Plan or Benefit Program, (ii) create or give rise to any additional vested rights or service credits under any Plan or Benefit Program or (iii) accelerate the time of vesting, payment or funding of any amount or benefit due pursuant to any Plan or Benefit Program.

2.24 Insurance. Schedule 2.15 lists each insurance policy maintained by or otherwise covering any Company and the insurer, coverage, policy limits and self-insurance or co-insurance arrangements by or affecting any Company, but excluding any insurance policy maintained by any of the Companies’ Independent Contractors pursuant to the requirements of the Companies (collectively, the “Insurance Policies”). All such Insurance Policies are in full force and effect, and no notice or, to Sellers’ Knowledge, threat of a premium increase, requirement to increase self-insured retention, non-renewal, cancellation or termination has been received by the applicable Company with respect to any such Insurance Policy. No Company has failed to give any notice or present any material claim under any

Insurance Policy in due and timely fashion or as required by any Insurance Policy. Prior to Closing, the Companies have renewed all Insurance Policies which, per the terms of such Insurance Policies, are required to be renewed prior to Closing.

2.25 Compliance with Laws. Except as otherwise set forth on Schedule 2.16, (a) since January 1, 2017, each Company has complied in all material respects, with all applicable laws of Governmental Authorities; (b) no investigation or review by any Governmental Authority with respect to any Company is pending or, to Sellers’ Knowledge, threatened; and (c) no written notices have been received by any Company since January 1, 2017, alleging (i) a violation of any such laws or any proposed laws or (ii) any obligation on the part of any Company to bear all or any part of the cost of any remedial action of any nature.

2.26 Environmental Matters.

(a) Except as set forth on Schedule 2.17, since January 1, 2012, each Company and its predecessors and Affiliates, has complied in all material respects, with all federal, state and local laws of Governmental Authorities concerning pollution, protection of the environment, health and safety, or the emission, discharge, release or threatened release of any chemicals, petroleum, pollutants, contaminants or hazardous or toxic materials, substances or wastes into ambient air, surface water, groundwater or lands or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of any chemicals, petroleum, pollutants, contaminants or hazardous or toxic materials, substances or waste (collectively, the “Environmental Laws”).

(b) Except as set forth on Schedule 2.17, the Companies have obtained and are in compliance in all material respects with all permits, licenses and other authorizations required under Environmental Laws to carry on their respective businesses as conducted on the date hereof.

(c) Except as set forth on Schedule 2.17, since January 1, 2012, no Company, nor any Affiliate of any Company, has received any written notice (or, to Sellers’ Knowledge, any other notice) of material violations or material liabilities arising under Environmental Laws relating to such Company or its facilities that remains pending or unresolved.

(d) Except as set forth on Schedule 2.17, there are no material actions, suits or proceedings pending or, to Sellers’ Knowledge, threatened against any Company, at law or in equity, or before or by any Governmental Authority under any Environmental Law, and no Company is subject to any outstanding material judgment, order or decree of any Governmental Authority pursuant to any Environmental Law.

2.27 Affiliated Transactions. Except as set forth on Schedule 2.18 no director, officer, equityholder or Affiliate of any Company, nor any individual in such director’s, officer’s or equityholder’s immediate family or any entity controlled by any such director, officer, equityholder or Affiliate of any Company, (i) is a party to any contract, agreement, commitment or transaction with or (except under terms of employment, as applicable) provides any services to any Company, (ii) has any interest in any tangible or intangible property used by any Company, or (iii) owns, directly or indirectly, any material interest in any Person that competes with any Company in any material respect (it being agreed that the ownership of no more than one percent (1%) of any class of outstanding stock of any publicly traded corporation will not be deemed material for purposes of this Section 2.18).

2.28 Brokerage and Expenses. Except as set forth on Schedule 2.19, there are no claims for, and no Company has any liability to pay any, brokerage commissions, finders’ fees or similar

compensation in connection with the transactions contemplated by this Agreement based on any arrangement or agreement made by or on behalf of any Seller or any Company.

2.29 Sufficiency of and Title to Assets. The assets owned, leased or licensed by the Companies (including, without limitation, the buildings and structures located on the Owned Real Property and the Leased Real Property) constitute all material assets used in connection with the businesses of the Companies, and such assets constitute all the assets necessary for the Companies to conduct their businesses in the same manner as they are being conducted on the Closing Date. The owned assets of the Companies are not subject to any Lien, except for Liens disclosed on Schedule 2.20 and Liens that are immaterial individually and in the aggregate.

2.30 Employee Relations. Except as set forth on Schedule 2.21, since January 1, 2016:

(a) none of the Companies has (i) been a party to any collective bargaining agreement; (ii) agreed to recognize a collective bargaining agent or received any application or petition for an election or for certification of a collective bargaining agent; or (iii) negotiated toward or agreed to negotiate toward any such agreement;

(b) there has not been any strike, slowdown, picketing, work stoppage, lockout, employee grievance process, organizational activity or other labor dispute involving any Company;

(c) there has not been any proceeding relating to the alleged violation of any law pertaining to labor relations, including any charge or complaint filed with the National Labor Relations Board, or any comparable Governmental Authority and there has not been any material proceeding relating to any alleged violation of any law pertaining to employment relations, including any charge or complaint filed with the Equal Employment Opportunity Commission or any comparable Governmental Authority;

(d) the Companies have operated in compliance, in all material respects, with all applicable foreign, federal, state and local laws relating to employment, employment standards, immigration including I-9 requirements, employment of minors, employment discrimination, leaves of absence, health and safety, labor relations, withholding, wages and hours, workplace safety and insurance and/or pay equity;

(e) each Company is and has been in compliance with all laws pertaining to the classification of employees exempt from the Fair Labor Standards Act and state and local wage and hour laws and all employees are and have been properly classified as exempt and non-exempt during all periods of engagement for minimum wage, overtime, and all other purposes;

(f) to Sellers’ Knowledge, each Company is and has been in compliance with all laws pertaining to the classification of Independent Contractors and all Independent Contractors are and have been properly classified as independent contractors during all periods of engagement for Tax, wage and hour, benefits and all other purposes; and

(g) there are no current or threatened investigations relating to the classification of Independent Contractors engaged by any Company, and no Company has received written notice from any Governmental Authority or other third party that such authority or other third party is seeking to reclassify all or any material portion of such Company’s Independent Contractors as employees for any purpose.

2.31 Drivers.

(a) No Company:

(i) is required pursuant to contract or otherwise with any driver to segregate from its general funds monies collected for such driver or is otherwise restricted by any driver from use of those funds, except with respect to tax levies, garnishments and other amounts incurred in the ordinary course of business, including but not limited to advances to drivers and Independent Contractors and maintenance escrows;

(ii) holds or is required to hold any portion of its accounts collected from any Person who is obligated on an account in respect of a driver’s services in trust for such driver; or

(iii) has any fiduciary relationship or duty to any driver arising out of or in connection with any contract with any driver or the transactions contemplated thereby.

(b) No driver, whether pursuant to contract or otherwise, at any time controls the method of collection of any Company’s accounts or restricts the use of proceeds thereof after receipt by such Company.

(c) No driver, whether pursuant to contract or otherwise, at any time has the right to seek payment from, or otherwise has recourse to, any Person obligated on an account for payables by any Company to such driver.

(d) All payments by each Company in respect of payables to drivers, whether pursuant to contract or otherwise, are made from such Company’s general funds in the ordinary course of business.

2.32 Independent Contractors.

(a) Each of the Companies’ current and former contracts with their respective Independent Contractors have at all times complied in all material respects with the federal truth-in-leasing regulations set forth in 49 C.F.R. Part 376, and all payments, deductions, chargebacks and other actions of the Companies with regard to their respective Independent Contractors have at all times complied in all material respects with the terms and conditions of such contracts and regulations. No action, suit, or proceeding has been brought, is pending, or, to Sellers’ Knowledge, is threatened against any Company by or on behalf of any Independent Contractor, whether individually or on a class or collective basis, including by the Owner-Operator Independent Drivers Association or any similar association.

(b) Each of the Companies’ contracts with their respective Independent Contractors (i) complies in all material respects with all applicable laws, (ii) has been duly and validly executed and delivered by the applicable Company and, to Sellers’ Knowledge, the respective Independent Contractor, (iii) is in full force and effect and is valid and enforceable in accordance with its terms, and (iv) does not require the consent of any Person in connection with the transactions contemplated by this Agreement. No event has occurred or circumstance exists that (with or without notice or lapse of time or both) would be reasonably expected to contravene, conflict with or result in a breach of, or give any Company or any other Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or payment under, or to cancel, terminate or modify any contract between any Company and an Independent Contractor.

(c) Schedule 2.23(c) includes a true, correct, and complete listing of all escrowed funds held by each Company for each Independent Contractor, all of which are reflected on the Latest Balance Sheet, and a listing of any amounts owed to any Company by any Independent Contractor.

(d) Schedule 2.23(d) is a correct and complete listing of all Independent Contractors for whom any Company provides financing (each, an “Independent Contractor Financing Agreement”). Each Independent Contractor Financing Agreement complies in all material respects with all applicable laws, remains in full force and effect and has not been terminated or amended. Each Independent Contractor Financing Agreement has been duly and validly executed by the Company providing financing and, to Sellers’ Knowledge, by the respective Independent Contractor. The Company providing financing is not in breach under any Independent Contractor Financing Agreement and has complied in all material respects with all applicable laws and procedures applicable to the relationships governed by Independent Contractor Financing Agreements.

(e) Each Company maintains accurate and up-to-date files and records for all current Independent Contractors, and all files and records contain all information and materials required under all applicable laws.

2.33 Permits. The Companies possess all permits required to operate their businesses as presently conducted, such permits are in full force and effect and no proceeding is pending or, to Sellers’ Knowledge, threatened, which would reasonably be expected to result in the revocation or limitation of any permit, except where such noncompliance, revocation or limitation would not result in a material liability to or material limitation on any of the Companies. Except as set forth on Schedule 2.24, none of the permits held by any Company will be terminated or impaired or become terminable as a result of the transactions contemplated by this Agreement.

2.34 Bank Accounts. Schedule 2.25 sets forth (a) the names and locations of all banks, trusts, companies, savings and loan associations and other financial institutions at which any Company maintains safe deposit boxes, an account, lock box or other accounts of any nature with respect to its business and (b) the names of all persons authorized to draw thereon, make withdrawals therefrom or have access thereto.

2.35 Loans to Officers and Directors. Except as set forth on Schedule 2.26, no Company is party to any outstanding loans or advances, or provided any guaranty or other form of credit support, directly or indirectly, to or for the benefit of any officer or director of any Company, or to or for the benefit of any family member or Affiliate of such Persons.

2.36 Fair Competition. No Company has offered anything of material value to employees of customers or suppliers, and to Sellers’ Knowledge, has not violated, attempted, planned, promised to or otherwise acted in contradiction to any commercial bribery, unfair competition or similar statute or regulation promulgated by any Governmental Authority. No Company has received written notice from any Governmental Authority of, or to Sellers’ Knowledge been investigated by any Governmental Authority with respect to, any such violation by any Company, no such investigation is pending and, to Sellers’ Knowledge, no such investigation has been threatened.

2.37 Capital Expenditures; Dispositions. The capital expenditures of the Companies for tractors and trailers (including a description and amount for each unit) for the period January 1, 2018 through the Closing Date are set forth on Schedule 2.28(a), and all amounts due with respect to such capital expenditures have been paid or have been accrued and reflected in the calculation of the Closing Statement. The disposition of tractors and trailers (including a description and amount for each unit) by

the Companies for the period January 1, 2018 through the Closing Date are set forth on Schedule 2.28(b), and all amounts due in respect of such dispositions have either been received or recorded as Accounts Receivable. The Companies’ capital expenditures and dispositions plan for the period from and after the Closing Date through December 31, 2018, is set forth on Schedule 2.28(c) and, except as set forth on Schedule 2.28(c), the Companies do not have any contracts or commitments for the acquisition or disposition of any tractors, trailers or other material assets.

2.38 Investment Intent. Todd Davis, who is receiving shares of Buyer Common Stock as consideration pursuant to Section 1.01(a), represents and warrants to Buyer that such Seller has such knowledge, sophistication and experience in financial and business matters that such Seller is capable of evaluating the merits and risks of receipt of Buyer Common Stock. Todd Davis has the ability to bear the economic risk of this investment, including complete loss of the investment. Todd Davis represents and warrants to Buyer that such Seller is acquiring Buyer Common Stock for investment for his own account, not as nominee or agent, and not with a view to, or for resale in connection with, any distribution thereof, and has no present intent of selling, granting any participating in or otherwise distributing the same. Todd Davis understands that Buyer Common Stock received pursuant to Section 1.01(a) has not been registered under the Securities Act, by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of such Seller’s representations contained in this Section 2.29. Todd Davis acknowledges that, as of the date hereof, he has been afforded (i) the opportunity to ask such questions as he has deemed necessary of, and to receive answers from, representatives of Buyer concerning the terms and conditions of the transactions contemplated by this Agreement and Buyer Common Stock, and the merits and risks of investing Buyer Common Stock, and any such questions have been answered to such Seller’s reasonable satisfaction, (ii) access to information about Buyer and its financial condition, results of operations, business, properties, management and prospects sufficient to enable such Seller’s evaluation of his investment, (iii) the opportunity to obtain such additional information that Buyer possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment and any such additional information has been provided to such Seller’s reasonable satisfaction, and (iv) the opportunity to ask questions of management of Buyer and any such questions have been answered to such Seller’s reasonable satisfaction. Todd Davis has sought accounting, legal and tax advice as he has considered necessary to make an informed decision with respect to his acquisition of Buyer Common Stock. Todd Davis acknowledges that no Affiliate or representative of Buyer has made any representations, expressed or implied, with respect to the accuracy, completeness or adequacy of any available information except or to the extent such information is covered by the representations and warranties contained in Article 3. Subject to the accuracy of Buyer’s representations and warranties contained in Article 3, Todd Davis agrees that neither Buyer nor any of its Affiliates will have any indemnification obligation hereunder to any Seller or any other Person resulting from the issuance and sale of Buyer Common Stock to such Seller. Todd Davis represents and warrants to Buyer that he is an “accredited investor” within the meaning of Regulation D, Rule 501(a), promulgated by the SEC. Todd Davis represents and warrants to Buyer that he understands that the Buyer Common Stock is characterized as “restricted securities” under United States federal securities laws inasmuch as such Buyer Common Stock is being acquired from Buyer in a transaction not involving a public offering and that under such laws and applicable regulations, the Buyer Common Stock may be resold without registration under the Securities Act only in limited circumstances. Todd Davis acknowledges that the Buyer Common Stock must be held indefinitely unless a sale of such Buyer Common Stock is subsequently registered under the Securities Act or an exemption from such registration is available. Todd Davis is aware of the provisions of Rule 144 promulgated under the Securities Act which permit limited resale of shares purchased in a private placement or shares owned by certain Persons associated with Buyer, subject to satisfaction of certain conditions. Todd Davis understands and agrees that any certificate representing

Buyer Common Stock, and securities issued in respect thereof or exchange therefor, will bear a legend in the following form (in addition to any other legend required under applicable state securities laws) (and a comparable notation or other arrangement will be made with respect to any uncertificated Buyer Common Stock):

THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE ISSUER RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT. THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO HOLDING PERIODS AND CERTAIN RESTRICTIONS ON SALE CONTAINED IN THAT CERTAIN EQUITY PURCHASE AGREEMENT DATED OCTOBER 18, 2018, AND MAY NOT BE SOLD IN VIOLATION OF SUCH RESTRICTIONS.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Sellers as of the date hereof:

3.10 Good Standing. Buyer is a corporation duly incorporated and validly existing under the laws of the State of Delaware.

3.11 Power and Authority; Authorization. Buyer has all requisite corporate power and authority to execute and deliver the Transaction Documents to which Buyer is a party and to perform its obligations thereunder. The execution, delivery and performance of the Transaction Documents to which it is a party by Buyer and the consummation of the transactions contemplated thereby have been duly authorized by all requisite corporate action on the part of Buyer, and no other corporate proceedings on Buyer’s part are necessary to authorize the execution, delivery or performance of the such Transaction Documents.

3.12 Enforceability. This Agreement has been duly executed and delivered by Buyer, and assuming that this Agreement is a valid and binding obligation of Sellers and the Companies, this Agreement constitutes a valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, except as enforceability may be limited by bankruptcy laws, other similar laws affecting creditors’ rights and general principles of equity affecting the availability of equitable remedies. Each Transaction Document to which Buyer is a party, when executed and delivered by Buyer, will be duly executed and delivered by Buyer, and assuming that such Transaction Documents are valid and binding obligations of the other parties thereto, each such Transaction Document will constitute a valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, except as enforceability may be limited by bankruptcy laws, other similar laws affecting creditors’ rights and general principles of equity affecting the availability of equitable remedies.

3.13 No Conflicts. Except as set forth on Schedule 3.04, the execution, delivery and performance of the Transaction Documents to which it is a party by Buyer and the consummation of the transactions contemplated thereby do not conflict with or result in any breach of, constitute a default under, result in a violation of, result in the creation of any Lien upon any assets of Buyer, or require any authorization, consent, approval or other action by or notice to any Governmental Authority or other third

party that has not been obtained, under the provisions of Buyer’s certificate of incorporation or bylaws, or any agreement or instrument to which Buyer is bound, or any law, statute, rule or regulation or order, judgment or decree of any Governmental Authority to which Buyer is subject.

3.14 Litigation. There are no actions, suits or proceedings pending or, to Buyer’s Knowledge, threatened against or affecting Buyer or its Affiliates at law or in equity, by or before any Governmental Authority, or arbitration or mediation authority, which could adversely affect Buyer’s performance under any Transaction Document to which it is a party or the consummation of the transactions contemplated thereby.

3.15 Brokerage. There are no claims for brokerage commissions, finders’ fees or similar compensation in connection with the transactions contemplated by this Agreement based on any arrangement or agreement made by or on behalf of Buyer.

3.16 Investment Representation. Buyer is acquiring the Company Equity for its own account with the intention of holding such Company Equity for investment purposes and not with a view to, or for sale in connection with, any distribution of such securities in violation of any federal or state securities laws. Buyer is an “accredited investor” as defined in Regulation D promulgated by the United States Securities and Exchange Commission (“SEC”) under the Securities Act. Buyer acknowledges that the Company Equity has not been registered under the Securities Act or any state or foreign securities laws and that the Company Equity may not be sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of unless such transfer, sale, assignment, pledge, hypothecation or other disposition is pursuant to the terms of an effective registration statement under the Securities Act and the Company Equity is registered under any applicable state or foreign securities laws or sold pursuant to an exemption from registration under the Securities Act and any applicable state or foreign securities laws.

3.17 Financial Statements. Buyer has previously made available to the Companies (through the SEC’s EDGAR filing system) copies of Buyer’s Annual Report on Form 10-K for the year ended December 31, 2017, and Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 and the financial statements contained therein (collectively, the “Buyer Financial Statements”). Subject, in the case of any unaudited Buyer Financial Statements, to normal year-end adjustments and the absence of footnote disclosure, the Buyer Financial Statements fairly present, in material conformity with GAAP (except as may be indicated in the notes thereto), the consolidated financial position of Buyer and its Subsidiaries as of the dates thereof, and cash flows and changes in financial position for the periods then ended.

3.18 SEC Reports. Buyer has timely filed all registration statements, forms, reports and other documents that Buyer is required to file with the SEC under the Exchange Act and the rules and regulations promulgated thereunder. As of its respective date, each such registration statement, form, report and document did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading.

3.19 Solvency. Buyer is not and will not be, after giving effect to the transactions contemplated by this Agreement, insolvent within the meaning of 11 U.S.C. 101(32) or similar laws of any jurisdiction. No transfer of property is being made and no obligation is being incurred in connection with the transactions contemplated by this Agreement with actual intent to hinder, delay or defraud either present or future creditors of Buyer. At the Closing, Buyer will have sufficient funds to enable it to consummate the transactions contemplated by this Agreement.

3.20 Absence of Certain Changes or Events. Since June 30, 2018, there have been no events, changes or occurrences that have had, or are reasonably likely to have, individually or in the aggregate, a Material Adverse Effect on Buyer.

3.21 Buyer Shares. The shares of Buyer Common Stock to be issued to Todd Davis as consideration pursuant to Section 1.01(a) have been adequately reserved and will, when issued, be validly issued, fully paid and non-assessable, free of restrictions on transfer other than restrictions on transfer under this Agreement, applicable state and federal securities laws and blackout policies of Buyer, to the extent such policies apply to Buyer Common Stock held by a Seller, and not subject to preemptive rights or other similar rights, options, understandings, agreements or rights of first refusal. The shares of Buyer Common Stock to be issued to Todd Davis as consideration pursuant to Section 1.01(a), when issued in accordance with this Agreement, will be free and clear of all Liens, other than restrictions imposed by this Agreement, applicable state and federal securities laws and blackout policies of Buyer, to the extent such policies apply to Buyer Common Stock held by a Seller.

ARTICLE 4

INDEMNIFICATION

4.10 Survival. All of the representations and warranties contained in Article 2 and Article 3 and the right of any Person to assert any claim for indemnification or recovery from the Escrow Account in respect thereof pursuant to this Article 4 will survive the Closing, but will terminate and be of no further force or effect after the date eighteen (18) months after the Closing Date; provided, however, that notwithstanding the foregoing the representations set forth in in Section 2.01 (Organization; Power and Authority; Enforceability), Section 2.02 (Authorization; No Conflicts), Section 2.04 (Equity Securities; Title), Section 2.10 (Taxes), Section 2.14 (Employee Benefit Plans), Section 2.17 (Environmental Matters) and Section 2.19 (Brokerage and Expenses) (collectively, the “Fundamental Representations”), will survive the Closing, but will terminate and be of no further force and effect upon the expiration date of the applicable statute of limitations. All covenants and agreements that require performance prior to or at the Closing will terminate immediately after the Closing. All covenants and agreements will survive in accordance with their terms and applicable law.

4.11 Indemnification by Buyer. From and after the Closing (but subject to the provisions of this Article 4), Buyer will indemnify Sellers and hold them harmless from any Losses incurred by them to the extent resulting from any (a) breach or inaccuracy of any representation or warranty of Buyer contained in Article 3, (b) nonfulfillment or breach of any covenant or agreement of Buyer contained in this Agreement, (c) nonfulfillment or breach of any covenant or agreement of the Companies requiring performance by any Company after the Closing or (d) Third Party Claim arising out of (i) the presence of any substance, material or waste that is identified or defined as hazardous by any Governmental Authority, as such identification may be amended at any time in the future, (ii) solid wastes, asbestos, PCBs, underground storage tanks, groundwater contamination, well, urea-formaldehyde, oil, petroleum, petroleum product or any other substance regulated by the EPA and/or (iii) the violation or potential violation of any Environmental Laws, in each case, which Third Party Claim relates to the Owned Real Property or the Leased Real Property and arises from circumstances first existing after the Closing. All payments under this Section 4.02 will be deemed to be adjustments for Tax purposes to the aggregate purchase price paid by Buyer for the Company Equity.

4.12 Indemnification by Sellers. From and after the Closing (but subject to the provisions of this Article 4), Sellers will jointly and severally indemnify Buyer, the Companies, each of Buyer’s Affiliates (including the Companies after the Closing) and each of the Companies’ Affiliates after the

Closing (all such foregoing persons, collectively, the “Buyer Indemnitees”) and hold the Buyer Indemnitees harmless from any Losses incurred by a Buyer Indemnitee, to the extent resulting from:

(a) a breach or inaccuracy of any representation or warranty contained in Article 2; provided, however, that, solely for purposes of calculating any Losses (but not for determining whether any breach of a representation or warranty has occurred), if any such representation is qualified by the use of the term “Material Adverse Effect” or by the word “material” or by any word formed from such words, then such representation or warranty will be construed as if the word “material” (and such words formed therefrom) or the term “Material Adverse Effect” were not included in such representation or warranty; provided, further, that, notwithstanding the foregoing clause, for purposes of determining whether a breach of the representations and warranties in Section 2.05(a) has occurred, and for purposes of calculating any Losses under Section 2.05(a), such representations and warranties will be construed as if the word “material” appearing prior to the words “conformity with GAAP” were not included in such representations and warranties; and provided, further, that with respect to a breach or inaccuracy of any representation or warranty contained in Section 2.29, Sellers receiving shares of Buyer Common Stock as consideration pursuant to Section 1.01(a) shall severally and not jointly indemnify and hold the Buyer Indemnitees harmless from any Losses incurred by a Buyer Indemnitee to the extent resulting from such breach or inaccuracy;

(b) fraud by or on behalf of any Seller;

(c) any breach by any Restricted Person of his or her obligations under his or her Restrictive Covenant Agreement during the five (5) years after the Closing Date;

(d) any nonfulfillment or breach of any covenant or agreement of any Company (required to be performed at the Closing) or Sellers or Sellers’ Representative (required to be performed at any time) contained in this Agreement;

(e) any Indebtedness or Transaction Expenses not paid at or prior to the Closing and not taken into account in determining the Final Aggregate Closing Consideration;

(f) any Seller Taxes;

(g) any Schedule 4.03(g) Item;

(h) any obligation of any Company to any Seller or any Affiliate of such Seller for events, circumstances, actions, omissions or liabilities arising prior to the Closing Date under any contract, agreement, arrangement, lease or other understanding between any Company, on the one hand, and any Seller or any Affiliate of such Seller, on the other hand, other than ordinary course obligations for rent, insurance, taxes and similar accruals under the leases of Real Property between a Company and any Seller or any Affiliate of such Seller to the extent set forth in such leases;

(i) any Third Party Claim arising out of (i) the presence of any substance, material or waste that is identified or defined as hazardous by any Governmental Authority, as such identification may be amended at any time in the future, (ii) solid wastes, asbestos, PCBs, underground storage tanks, groundwater contamination, well, urea-formaldehyde, oil, petroleum, petroleum product or any other substance regulated by the EPA and/or (iii) the violation or potential violation of any Environmental Laws, in each case, which Third Party Claim arose from circumstances which existed prior to the Closing and related to the Owned Real Property or the Leased Real Property; or

(j) any nonfulfillment or breach of any covenant or agreement contained in Section 5.08.

4.13 Escrow.

(a) At any time and from time to time after the Closing, the Buyer Indemnitees will be entitled to make claims against the Escrow Account in respect of Losses for which they are indemnified hereunder.

(b) Notwithstanding anything herein to the contrary, the rights of Buyer pursuant to this Article 4 will be subject to the following limitations:

(i) no Buyer Indemnitee will be entitled to indemnification pursuant to Section 4.03(a) unless and until the aggregate amount of Losses that otherwise would be payable pursuant to Section 4.03(a) to any one or more Buyer Indemnitees exceeds on a cumulative basis an amount equal to $200,000 (the “Threshold”) and then the Buyer Indemnitees will be entitled to the aggregate amount of all such Losses that exceed the Threshold; and

(ii) the amount that the Buyer Indemnitees may recover with respect to any and all Losses under Section 4.03(a) (excluding Losses that result from a breach or inaccuracy of any of the Fundamental Representations) will not exceed, in the aggregate, $7,950,000.

Anything to the contrary notwithstanding, the limitations contained in Section 4.04(b)(i) and Section 4.04(b)(ii) will not apply to Losses relating to Sections 4.03(c), 4.03(d), 4.03(e), 4.03(f), 4.03(g), 4.03(h), 4.03(i), 4.03(j) or to breach of any of the Fundamental Representations; provided, however, that (x) the amount the Buyer Indemnitees may recover with respect to any and all Losses relating to Section 4.03(j) will not exceed, in the aggregate, $500,000 and (y) the amount the Buyer Indemnitees may recover with respect to any and all Losses hereunder will not exceed, in the aggregate, the Purchase Price. For the avoidance of doubt, neither the limitations contained in Section 4.04(b)(i) and Section 4.04(b)(ii) nor the limitation contained in the foregoing sentence will apply to any fraud by or on behalf of any Seller.

(c) No later than ten (10) days following the date eighteen (18) months after the Closing Date (the “Release Date”), Buyer and Sellers’ Representative will deliver joint written instructions to the Escrow Agent to cause the Escrow Agent to distribute to Sellers’ Representative, on behalf of Sellers, by wire transfer of immediately available funds to the account specified by Sellers’ Representative, an amount equal to the funds remaining in the Escrow Account, less all amounts for which Buyer Indemnitees will have, prior to the applicable date set forth in Section 4.01, made a valid claim pursuant to the procedures set forth in this Article 4 and for which recovery has not been satisfied from the Escrow Account as of the relevant date (the “Outstanding Escrow Claims”). As soon as any Outstanding Escrow Claim that is unresolved as of the Release Date is resolved pursuant to the procedures set forth in this Article 4 and funds in the amount of the Outstanding Escrow Claims are delivered to the Buyer Indemnitees in respect of such resolved Outstanding Escrow Claim, the Escrow Agent will distribute, pursuant to joint written instructions from Buyer and Sellers’ Representative, to Sellers’ Representative (on behalf of Sellers), the remaining funds held in the Escrow Account, less any unresolved Outstanding Escrow Claims.

(d) All payments made from the Escrow Account will be deemed to be adjustments for Tax purposes to the aggregate purchase price paid by Buyer for the Company Equity.

(e) Except for Buyer pursuant to Section 1.01(a), no Person will have any obligation to fund or replenish the Escrow Account at any time.

4.14 Procedures Relating to Indemnification.

(a) Subject to the limitations set forth elsewhere in this Article 4, in order for any Person (such Person the “Claiming Party”) to be entitled to indemnification or recovery under this Agreement in respect of a claim or demand made by any Person against the Claiming Party (a “Third Party Claim”), such Claiming Party will notify Buyer (in cases of claims for indemnification under Section 4.02) or Sellers’ Representative (in cases of claims for indemnification under Section 4.03) (in either case, the “Defending Party”) in writing, and in reasonable detail, of the Third Party Claim as promptly as reasonably possible after receipt by such Claiming Party of notice of the Third Party Claim; provided, however, that failure to give such notification on a timely basis will not affect the indemnification or escrow recovery, as applicable, provided hereunder except to the extent the Defending Party will have been actually and materially prejudiced as a result of such failure. Thereafter, the Claiming Party will deliver to the Defending Party, reasonably promptly after the Claiming Party’s receipt thereof, copies of all notices and documents (including court papers) received by the Claiming Party relating to the Third Party Claim.

(b) If a Third Party Claim is made against a Claiming Party, the Defending Party will be entitled to participate in the defense thereof and, if it so chooses, to assume the defense thereof with reputable counsel selected by the Defending Party, so long as the requirements of this Section 4.05(b) remain true: (i) the Defending Party notifies the Claiming Party within thirty (30) days after the Claiming Party has given written notice of a Third Party Claim to the Defending Party (unless in such notice the Claiming Party certifies, in good faith, that the failure to assume such defense within fifteen (15) days would materially prejudice the Claiming Party by a delay in assuming the defense beyond fifteen (15) days, in which case, the Claiming Party will have the right to assume the defense subsequent to the expiration of such fifteen (15) day period if the Defending Party fails to so assume the defense thereof), that the Defending Party is assuming the defense of such Third Party Claim; and (ii) the Defending Party conducts the defense of the Third Party Claim in an active and diligent manner; provided, however, that the Defending Party will not be entitled to assume the defense (unless otherwise agreed to in writing by the Claiming Party) if (x) the Third Party Claim relates to any criminal proceeding, action, indictment, allegation or investigation or (y) the Third Party Claim primarily seeks an injunction or equitable relief against the Claiming Party. Notwithstanding the foregoing, a Defending Party will not be entitled to assume the defense of a Third Party Claim unless it has acknowledged in writing to the Claiming Party that indemnification or recovery from the Escrow Account (to the extent, if any, that the claimant with respect such Third Party Claim ultimately recovers from the Claiming Party) applies to such Third Party Claim. Should a Defending Party so elect to assume the defense of a Third Party Claim, the Defending Party will not be liable to the Claiming Party for legal expenses subsequently incurred by the Claiming Party in connection with the defense thereof unless (I) the employment of separate counsel will have been authorized in writing by the Defending Party in connection with the defense of such Third Party Claim or (II) the Claiming Party’s counsel will have advised the Claiming Party in writing, with a copy delivered to the Defending Party, that there is a conflict of interest that would make it inappropriate under applicable standards of professional conduct to have common counsel. If the Defending Party assumes such defense, the Claiming Party will have the right to participate in the defense thereof and to employ counsel, at its own expense, separate from the counsel employed by the Defending Party, it being understood, however, that the Defending Party will control such defense (including any settlement with respect thereto); provided, however, that the Defending Party will obtain the prior written consent of the Claiming Party (which will not be unreasonably withheld, conditioned or delayed) before entering into any settlement, compromise, admission or acknowledgement of the validity of the Third Party Claim if such resolution would involve anything other than the payment of monetary damages in an amount less than the amount remaining in the Escrow Account and does not include an unconditional provision

whereby the plaintiff or claimant in the matter releases the Claiming Party and all of its Affiliates and representatives from all liability with respect thereto. If the Defending Party chooses to defend any Third Party Claim, then all the parties hereto will cooperate in the defense or prosecution of such Third Party Claim, including by retaining and (upon the Defending Party’s request) providing to the Defending Party all records and information which are reasonably relevant to such Third Party Claim, and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. Sellers’ Representative will act on behalf of all Defending Parties in the case of all Third Party Claims with respect to which Buyer is seeking indemnification pursuant to Section 4.03(a), funds from the Escrow Account under Section 4.04. Whether or not Sellers’ Representative will have assumed the defense of a Third Party Claim, neither Buyer nor any of its Affiliates will admit any liability with respect to, or settle, compromise or discharge, any Third Party Claim for which any sums are recoverable from the Escrow Account without the prior written consent of Sellers’ Representative (which will not be unreasonably withheld, conditioned or delayed); provided, that truthful answers as part of any legal process will not be a violation of this sentence.

(c) In any case in which a Claiming Party seeks indemnification or recovery from the Escrow Account under this Agreement not arising out of a Third Party Claim, the Claiming Party will notify the Defending Party in writing of any Losses that such Claiming Party claims are subject to indemnification or recovery from the Escrow Account under the terms of this Agreement. The notice will describe the indemnification sought in reasonable detail to the extent known, and will indicate the amount (estimated, if necessary, and if then estimable) of the Loss that has been or may be suffered. Subject to the limitations set forth in Section 4.04(b) and this Section 4.05, the failure of the Claiming Party to exercise promptness in such notification will not amount to a waiver of such claim unless and only to the extent that the resulting delay actually materially and adversely prejudices the position of the Defending Party with respect to such claim.

4.15 Determination of Loss Amount.

(a) Any Losses claimed hereunder will be calculated after taking into consideration the net proceeds (after taking into account the costs of collecting any such proceeds) of insurance or third party recoveries actually received by any Person entitled to indemnification or escrow recovery, as applicable. In the event that any such net proceeds of insurance or other third party recovery is made by any such Person with respect to any Loss for which any such Person already has been indemnified or otherwise recovered hereunder, then a refund equal to the aggregate net amount of the recovery from the insurance or other third party recovery will be made promptly to the Person providing the indemnity or other recovery hereunder. Buyer will use commercially reasonable efforts, consistent with Buyer’s past practices, to submit claims to insurance companies for Losses covered by insurance policies of the Companies or of Buyer. Buyer will use commercially reasonable efforts, consistent with Buyer’s past practices, to submit claims and seek indemnification from any third party Person (except insurance companies as discussed in the previous sentence) who may have an obligation to indemnify Buyer, its Affiliates (including the Companies after the Closing), or the Companies against any such Losses.

(b) In no event will any Person be entitled to recover or make a claim for any amounts in respect of consequential, punitive or exemplary damages (except to the extent payable in connection with a Third Party Claim).

(c) No Person will be entitled to recover damages or obtain payment, reimbursement, restitution or indemnity hereunder more than once in respect of any one Loss or related group of Losses. For example, Buyer Indemnitees will not be entitled to recover damages or obtain payment, reimbursement, restitution or indemnity hereunder with respect to any Loss arising from a breach of a

representation or warranty set forth in Article 2 relating in any way to the Companies’ Indebtedness, Transaction Expenses, Cash on Hand or Net Working Capital to the extent such Loss is factored into the amount of Indebtedness, Transaction Expenses, Cash on Hand or Net Working Capital that are included in the Final Aggregate Closing Consideration.

(d) All Losses for which the Companies had, prior to Closing, established a specific reserve on the Latest Balance Sheet will be determined after taking into account the amount of such reserve.

4.16 Acknowledgments.

(a) Except as specifically provided elsewhere in this Agreement (including in Section 1.02), this Article 4 and the Escrow Agreement set forth the sole and exclusive remedy with respect to any and all rights, claims and causes of action Buyer may have against Sellers relating to the subject matter of this Agreement and the other Transaction Documents and the transactions contemplated hereby and thereby, whether arising under or based upon any law or otherwise (including any right, whether arising at law or in equity, to seek indemnification, contribution, cost recovery, damages, or any other recourse or remedy, including as may arise under common law). Notwithstanding the foregoing or any other provision of this Agreement to the contrary, the liability of Sellers under the indemnification and escrow recovery provisions set forth in this Article 4 will be in addition to, and not exclusive of, (i) any other liability that such Person may have at law or equity due to the fraud of such Person (and none of the provisions set forth in this Agreement, including the provisions set forth in this Section 4.07(a), will be deemed a waiver by any Person of (or a limitation on) any right or remedy that such Person may have at law or equity due to the fraud of any other Person); and (ii) any equitable relief to which a Person may be entitled relating to the breach of any covenant or agreement contained in this Agreement or any other Transaction Document.

(b) Each Seller and each Restricted Person agrees that he, she or it will not make any claim for indemnification against Buyer or any of the Companies by reason of the fact that he, she or it was a controlling Person, director, officer, employee, agent or other representative of one or more of the Companies (whether such claim is for Losses of any kind or otherwise and whether such claim is pursuant to any legal requirement, organizational document, contractual obligation, or otherwise) with respect to any claim brought by any Buyer Indemnitee against any Seller or any Restricted Person under this Agreement. With respect to any claim brought by a Buyer Indemnitee against any Seller or any Restricted Person under this Agreement, each Seller and each Restricted Person expressly waives any right of subrogation, contribution, advancement, indemnification or other claim against any of the Companies with respect to any amounts owed by him, her or it.

ARTICLE 5

ADDITIONAL AGREEMENTS

5.10 Tax Matters.

(a) Except as otherwise provided in this Section 5.01, Buyer will prepare or cause to be prepared all Tax Returns of the Companies required to be filed after the Closing Date for all Pre-Closing Periods and all Straddle Periods. Such Tax Returns will be prepared on a basis consistent with the past practice of the Companies, except as otherwise required by applicable law. At least thirty (30) days prior to the date on which each such Tax Return is to be filed (taking into account any validly obtained extensions of time to file), Buyer will submit such Tax Return to Sellers’ Representative for review and approval, which will not be unreasonably withheld, conditioned or delayed. Buyer will cause such Tax Return to be timely filed and will provide a copy to Sellers’ Representative. To the extent any Seller Taxes are unpaid or become due after the Closing, such Seller Taxes will be paid by Sellers or, in the

event Buyer or any Company pays any Seller Taxes (or portion thereof), Sellers will reimburse the payor thereof for such amount. Sellers’ Representative will prepare or cause to be prepared all Tax Returns of the Companies relating to income and loss (“Income Tax Returns”) passed through to any S-corporation shareholders and filed or required to be filed after the Closing Date (including any amended Tax Returns and Tax Returns on Internal Revenue Service Form 1120-S (or comparable applicable state or local form)) for all Pre-Closing Periods. At least thirty (30) days prior to the date on which each such Income Tax Return is to be filed (taking into account any validly obtained extensions of time to file), Sellers’ Representative will submit such Income Tax Return to Buyer for review and approval, which will not be unreasonably withheld, conditioned or delayed. Sellers’ Representative will cause each such Income Tax Return to be timely filed and will provide a copy of each such Income Tax Return to Buyer.

(b) In completing any Income Tax Returns for the Tax period ending on the Closing Date and any Straddle Period, the Indebtedness, Transaction Expenses and any other applicable expenses of the Companies associated with the transactions contemplated hereby will, to the extent properly deductible for federal or applicable state and local income Tax purposes as determined by Sellers’ Representative in its reasonable discretion, be allocated to such Income Tax Returns (provided, for the avoidance of doubt, that any of Buyer’s Transaction Expenses paid by Buyer after the Closing shall be deductible by Buyer). For the avoidance of doubt, any accrued liabilities taken into account in computing the “aggregate deemed sale price” pursuant to Treasury Regulation Section 1.338-4 will, to the extent properly deductible for federal or applicable state and local income Tax purposes as determined by Sellers’ Representative in its reasonable discretion, be allocated to such Income Tax Returns pursuant to Treasury Regulations Sections 1.461-4(d)(5) and 1.338-4(d). The parties will not make an election under Treasury Regulation Section 1.1502-76(b)(2)(ii) (or any corresponding or similar provision of applicable state, local, or foreign income Tax law) to ratably allocate the 2018 income and loss of the Companies.

(c) In the case of such Taxes that are payable with respect to any Straddle Period, the portion of any such Taxes that is attributable to the portion of the period ending on the Closing Date will be:

(i) in the case of Taxes other than those imposed on a periodic basis with respect to the assets or capital of the Companies deemed equal to the amount that would be payable if the Tax period of the Companies ended with (and included) the Closing Date; provided, that exemptions, allowances or deductions that are calculated on an annual basis (including depreciation and amortization deductions) will be allocated between the period ending on and including the Closing Date and the period beginning after the Closing Date in proportion to the number of days in each period; and

(ii) in the case of Taxes that are imposed on a periodic basis with respect to the assets or capital of the Companies, deemed to be the amount of such Taxes for the entire Straddle Period (or, in the case of such Taxes determined on an arrears basis, the amount of such Taxes for the immediately preceding period), multiplied by a fraction the numerator of which is the number of calendar days in the portion of the period ending on and including the Closing Date and the denominator of which is the number of calendar days in the entire period.

(d) Buyer, the Companies, Sellers’ Representative and Sellers will cooperate, as and to the extent reasonably requested by any other party, in connection with the filing of Tax Returns pursuant to this Section 5.01 and any audit, litigation or other proceeding (each, a “Tax Proceeding”) with respect to Taxes imposed on or with respect to the assets, operations or activities of the Companies. Each of Sellers’ Representative and Buyer agrees, upon request of the other, to use commercially reasonable efforts to obtain any certificate or other documentation from any Governmental Authority or any other Person as may be necessary to mitigate, reduce or eliminate any Tax that could be imposed on Buyer, the

Companies or Sellers, including, but not limited to, with respect to the transactions contemplated hereby; provided, however, that neither Sellers’ Representative nor Buyer will be required to take any action (other than any action required by law or by contract or to prevent any breach of a provision of this Agreement other than this sentence) that would impose or increase any obligation on its part, unless the other party agrees in writing to indemnify such acting party for the relevant increase in obligation. The Companies and Sellers will (i) retain all books and records with respect to Tax matters pertinent to the Companies relating to any taxable period beginning before the Closing Date until thirty (30) days after the expiration of the statute of limitations (and, to the extent notified by Buyer or any Seller, any extensions thereof) of the respective taxable periods, and to abide by all record retention agreements entered into with any taxing authority, and (ii) give the other party reasonable written notice prior to transferring, destroying or discarding any such books and records and, if the other party so requests, the Companies or Sellers, as the case may be, will allow the other party to take possession of such books and records.

(e) Any Tax refunds that are received by Buyer or its Affiliates (including the Companies after the Closing), and any amounts credited against Taxes to which Buyer or its Affiliates (including the Companies after the Closing) may become entitled, that relate to Pre-Closing Periods or portions thereof ending on the Closing Date for any Straddle Period (other than any refund resulting from the carryback of a net operating loss or other Tax attribute arising in a Tax period or portion thereof beginning after the Closing Date) will be for the account of Sellers, and Buyer will pay over to Sellers’ Representative, on behalf of Sellers, any such refund or credit within five (5) days after receipt or entitlement thereto. If any such refund or credit is subsequently disallowed, the Taxes payable by the Companies in connection with the disallowance of such refund or credit will be treated as Seller Taxes subject to indemnification or escrow recovery under Sections 4.03 and 4.04. Any Tax refunds that are received by any Sellers or their Affiliates, and any amounts credited against Taxes to which Sellers or their Affiliates may become entitled, that relate to post-Closing periods or portions thereof (other than any refund resulting from the carryback of a net operating loss or other Tax attribute arising in a Tax period or portion thereof ending before the Closing Date, and including, for the avoidance of doubt, any Transfer Taxes directly or indirectly imposed on Buyer that Buyer pays) will be for the account of Buyer, and Sellers will pay over to Buyer any such refund or credit within five (5) days after receipt or entitlement thereto. If any such refund or credit is subsequently disallowed, the Taxes payable by Sellers or their Affiliates in connection with the disallowance of such refund or credit will be subject to indemnification.

(f) All transfer, documentary, sales, use, stamp, registration or other similar Taxes imposed on the Companies or Sellers directly or indirectly as a result of the transactions contemplated by this Agreement (collectively, “Transfer Taxes”) and any penalties or interest with respect to the Transfer Taxes will be borne by Sellers. Buyer will file all necessary Tax Returns and other documentation with respect to all such Transfer Taxes. Buyer and Sellers will cooperate in the filing of any returns with respect to the Transfer Taxes, including promptly supplying information in their possession that is reasonably necessary to complete such Tax Returns. Sellers’ portion of such Transfer Taxes will be paid from the Aggregate Closing Consideration and will be retained by Buyer at Closing for such purposes.

(g) The Companies and each Seller will join with Buyer in making the Section 338(h)(10) Election. Buyer will prepare or cause to be prepared and file or cause to be filed the Section 338(h)(10) Election. Buyer and Sellers will comply fully with all filing and other requirements necessary to effectuate the Section 338(h)(10) Election on a timely basis and agree to cooperate in good faith with each other in the preparation and timely filing of any Tax Returns required to be filed in connection with the making of the Section 338(h)(10) Election, including the exchange of information and the joint preparation and filing of Internal Revenue Service Form 8023 and Internal Revenue Service Form 8883

(and all supplements thereto). At the Closing, Sellers will deliver to Buyer an executed Internal Revenue Service Form 8023.

(h) Buyer and Sellers agree that the Final Aggregate Closing Consideration and the liabilities of the Companies (plus other relevant items) will be allocated to the assets of the Companies for all purposes (including Tax and financial accounting) in accordance with Schedule 5.01(h) (such allocation, the “Section 338(h)(10) Allocation”). Buyer and Sellers agree to act in accordance with the Section 338(h)(10) Allocation in the preparation and filing of all Tax Returns and in the course of any Tax Proceeding relating thereto, except as may be required by applicable law. Upon payment of any amounts pursuant to any indemnification obligations hereunder resulting in an adjustment of the Aggregate Closing Consideration, the Section 338(h)(10) Allocation will be appropriately adjusted in accordance with the procedures described in this Section 5.01.

(i) Buyer will provide Sellers’ Representative with a proposed Section 338(h)(10) Allocation not more than ninety (90) days after the Closing. The Section 338(h)(10) Allocation will become final and binding on the parties hereto thirty (30) days after Buyer provides the Section 338(h)(10) Allocation to Sellers’ Representative, unless Sellers’ Representative delivers notice of its disagreement (an “Allocation Notice of Disagreement”) to Buyer on or prior to such date. The Allocation Notice of Disagreement must identify with specificity each item in the Section 338(h)(10) Allocation that Sellers’ Representative disagrees with and Sellers’ Representative must prepare an alternative Section 338(h)(10) Allocation; provided, however, that Sellers’ Representative may object only on the basis that Buyer’s proposed Section 338(h)(10) Allocation is inconsistent with Schedule 5.01(h). If Sellers’ Representative timely delivers an Allocation Notice of Disagreement, then the Section 338(h)(10) Allocation will become final and binding on the parties to this Agreement on the earlier of (i) the date Buyer and Sellers’ Representative resolve in writing any differences they have with respect to the matters specified in the Allocation Notice of Disagreement, and (ii) the date all matters in dispute are finally resolved in writing by the Independent Accountants.

(j) During the thirty (30) days following delivery of an Allocation Notice of Disagreement or in the event of a 338(h)(10) dispute, Buyer and Sellers’ Representative will seek in good faith to resolve in writing any differences that they may have with respect to the matters specified in the Allocation Notice of Disagreement or the 338(h)(10) liability calculation. At the end of such thirty (30) day period, Buyer and Sellers’ Representative will submit such dispute to the Independent Accountants for resolution of all matters which remain in dispute which were included in the Allocation Notice of Disagreement or the 338(h)(10) liability calculation (and will take all actions reasonably requested by the Independent Accountants in connection with such resolution, including submitting written claims to the Independent Accountants if so requested), and the Independent Accountants will make a final determination of the Section 338(h)(10) Allocation or the 338(h)(10) liability calculation in accordance with the terms of this Agreement (with it being understood that Buyer and Sellers’ Representative will request that the Independent Accountants deliver to Buyer and Sellers’ Representative its resolution in writing not more than thirty (30) days after its engagement). The Independent Accountants will make a determination only with respect to the matters still in dispute and, with respect to each such matter, their determination will be within the range of the dispute between Buyer and Sellers’ Representative. The Independent Accountants’ determination will be based solely on written materials submitted by Buyer and Sellers’ Representative (i.e., not on independent review) and on the definitions of “Section 338(h)(10) Allocation” (and related definitions) included herein and the provisions of this Agreement. The costs and expenses of the Independent Accountants will be allocated equally between Buyer and Sellers, and Buyer and Sellers will each bear 50% of the Independent Accountants’ costs and expenses.

(k) The parties hereto agree to be bound by the Section 338(h)(10) Allocation and will take no action inconsistent with the Section 338(h)(10) Election or the Section 338(h)(10) Allocation for the purpose of all Tax Returns filed by them, and will not voluntarily take any action inconsistent therewith unless required by applicable law. In the event of any Tax Proceeding that impacts the Section 338(h)(10) Election and the Section 338(h)(10) Allocation, the party receiving notice of such Tax Proceeding will promptly notify the other parties thereof, and take all commercially reasonable efforts to defend the validity and accuracy of the Section 338(h)(10) Election and Section 338(h)(10) Allocation. In the event (x) any Tax Proceeding determines that any Company was not a valid S-corporation or entity disregarded as separate from its owner for Tax purposes through the Closing Date and as a result the Section 338(h)(10) Election is determined invalid such that Buyer does not obtain the increase in Tax basis that would have been obtained in the Section 338(h)(10) Election and (y) Sellers legally are entitled to amend their Tax Returns to reduce their Tax obligations as a result (for example, because the transactions contemplated hereby would be treated as a sale of C corporation stock subject to capital gain rates), then Sellers will amend their returns (at Buyer’s cost) and turn over any cash benefit (if and when received) or any reduction in cash Taxes owed by Sellers (if and when realized) to Buyer. Without limiting the foregoing, in the event that any Company's S-corporation election is found to be invalid or to have terminated on or before Closing, Sellers will (x) use their best efforts to obtain from the Internal Revenue Service a waiver of the invalidity or termination on the grounds of inadvertency, (y) take such steps and make such adjustments as may be required by the Internal Revenue Service pursuant to Section 1362(f)(3) and (4) of the Code, and (z) bear the expense of procuring such waiver, including, without limitation, the legal, accounting, and tax costs of taking such steps and making such adjustments as may be required. To the extent the parties disagree about the resolution of any matter in this Section, the disagreement will be resolved subject to the procedures set forth in Sections 5.01(i) and 5.01(j). Notwithstanding anything in this Agreement to the contrary, Sellers’ obligation to indemnify Buyer under this Agreement for Losses attributable to the failure of Buyer to obtain the benefits of the Section 338(h)(10) Election and the Section 338(h)(10) Allocation as a result of the failure of any Company to qualify as an S-corporation or entity disregarded as separate from its owner for Tax purposes at or prior to Closing will not exceed the amount of such cash benefit received by Sellers or any reduction in cash Taxes owed by Sellers.

(l) If, subsequent to the Closing, Buyer or any of its Affiliates (including the Companies after the Closing) receives notice of a Tax Proceeding with respect to any Tax Return for a Pre-Closing Period or any Straddle Period, then within fifteen (15) days after receipt of such notice, Buyer will promptly notify Sellers’ Representative of such notice in writing. Sellers’ Representative will have the right to control, at Sellers’ expense, the conduct and resolution of any Tax Proceeding with respect to any Tax Return for a Pre-Closing Period that may be subject to indemnification under Section 4.03 and any Income Tax Return for a Pre-Closing Period, provided, that Sellers’ Representative (i) will keep Buyer reasonably informed of the progress of such Tax Contest and (ii) will not effect any settlement or compromise of any such Tax Proceeding without obtaining Buyer’s prior written consent thereto, which will not be unreasonably withheld, conditioned or delayed, if such settlement or compromise could reasonably be expected to increase the liability for Taxes of Buyer or its Affiliates (including the Companies after the Closing) in a Tax period (or portion thereof) beginning after the Closing Date. Buyer will have the right to control the conduct and resolution of any Tax Proceeding with respect to any Tax Return for a Straddle Period that may be subject to indemnification under Section 4.03 and any Income Tax Return for a Pre-Closing Period or Straddle Period, provided, that Buyer (i) will keep Sellers’ Representative reasonably informed of the progress of such Tax Contest and (ii) will not effect any settlement or compromise of any such Tax Proceeding without obtaining Sellers’ Representative’s prior written consent thereto, which will not be unreasonably withheld, conditioned or delayed, if such settlement or compromise could reasonably be expected to increase the liability for Taxes of Sellers or for which Sellers are responsible under this Agreement, and provided, further, that Sellers’ Representative

will have the right to participate, at Sellers’ expense, in the conduct and resolution of any such Tax Proceeding. In the event of any conflict or overlap between the provisions of this Section 5.01(l) and Section 4.05, the provisions of this Section 5.01(l) will control.

5.11 Further Assurances. From time to time from and after the Closing, as and when reasonably requested by any party hereto and at such requesting party’s expense, any other party will execute and deliver, or cause to be executed and delivered, all such documents and instruments and will take, or cause to be taken, all such further or other actions as the requesting party may reasonably deem necessary to evidence and effectuate the transactions contemplated by this Agreement.

5.12 Access to Books and Records. From and after the Closing, Buyer will cause the Companies to provide Sellers’ Representative and its authorized representatives with reasonable access (for the purpose of examining and copying) during normal business hours (and without causing undue interruption or interference with the Companies’ businesses) and with advance written notice to Buyer, to the books and records of the Companies with respect to periods or occurrences prior to the Closing Date for any reasonable purpose relating to this Agreement and the Companies; provided, however, that notwithstanding the foregoing, Sellers’ Representative and its authorized representatives are not entitled to access, review, examine or copy any books and records of the Companies containing any confidential information the disclosure of which is prohibited under a confidentiality or similar agreement with a third party or privileged (including attorney-client privilege) information unless in the case of confidential information that is not privileged (including attorney-client privilege) information such confidential information is reasonably necessary to Sellers’ Representative’s duties relating to this Agreement and Sellers’ Representative has executed a confidentiality agreement in form and substance reasonably satisfactory to the Companies. Unless otherwise consented to in writing by Sellers’ Representative, Buyer will not, and Buyer will not permit the Companies to, for a period of five (5) years following the Closing Date, destroy or otherwise dispose of any books or records of the Companies, or any portions thereof, relating to periods prior to the Closing Date without first giving reasonable prior notice to Sellers and offering to surrender to Sellers’ Representative such books and records or such portions thereof.

5.13 Non-Competition, Non-Solicitation and Non-Disclosure.

(a) Contemporaneous with the Closing, the Restricted Persons shall enter into written agreements, in the form of Exhibit F to this Agreement, which shall provide that the Restricted Persons shall not compete with Buyer or interfere with Buyer’s relationships with Buyer’s employees, agents, Independent Contractors, suppliers and customers in the business of interstate or intrastate transportation of freight by truck (motor carrier) and/or arranging for the interstate or intrastate transportation of freight by truck (brokerage), in each case using dry van, flat bed or refrigerated trailers, or any intermodal, drayage, logistics, freight forwarding or LTL parcel business, or any combination thereof, and specifically including any business conducted by any Company, Buyer or Buyer’s Affiliates as of or within six (6) months prior to the Closing Date (the “Restrictive Covenant Agreements”), for the period set forth in each Restricted Person’s Restrictive Covenant Agreement.

(b) For purposes of this Agreement, “Restricted Person” means each of Bill Davis, Gary Davis and Todd Davis (acting directly or indirectly).

5.14 Repayment of Guarantied Obligations; Release of Guaranties; No Intercompany Obligations.

(a) From and after the Closing, Buyer will either (i) cause the Restricted Persons and Sellers to be released from all personal guaranties under, or (ii) cause to be repaid without any liability on the part

of the Restricted Persons and Sellers, all of the Indebtedness of the Companies included in the calculation of Estimated Aggregate Closing Consideration, which Indebtedness has been personally guaranteed by the Restricted Persons and Sellers.

(b) At or prior to Closing, Sellers will have caused the Companies to be released from all guaranties and other obligations (and any related pledge or security agreements) pursuant to documentation satisfactory to Buyer in its discretion, relating to all Indebtedness other than Indebtedness taken into consideration in the calculation of Estimated Aggregate Closing Consideration and Indebtedness associated with Permitted Liens.

(c) Effective as of the Closing, all obligations (other than the obligations contemplated by this Agreement and the other Transaction Documents) of the Companies to Sellers, and all obligations (other than the obligations contemplated by this Agreement and the other Transaction Documents) of Sellers to the Companies, are hereby canceled and of no further force or effect.

5.10 Holding Period for Buyer Common Stock.

(a) In addition to any holding period that may be required by law (including Rule 144 under the Securities Act), Todd Davis agrees and acknowledges that he must retain beneficial ownership of, and full pecuniary interest (without any hedging or similar transaction) as follows:


Until April 30, 2019						100% of Buyer Common Stock received as consideration pursuant to Section 1.01(a)

Until July 31, 2019						75% of Buyer Common Stock received as consideration pursuant to Section 1.01(a)
Until October 31, 2019						75% of Buyer Common Stock received as consideration pursuant to Section 1.01(a)

Until January 31, 2020						75% of Buyer Common Stock received as consideration pursuant to Section 1.01(a)

Until April 30, 2020						50% of Buyer Common Stock received as consideration pursuant to Section 1.01(a)

Notwithstanding anything to the contrary in this Agreement, (x) Todd Davis (and his transferees and assignees permitted under Section 5.06(b)) may not sell in excess of 20,000 shares of Buyer Common Stock in the aggregate on any one trading day and (y) neither Todd Davis nor his transferees and assignees permitted under Section 5.06(b) may sell any shares of Buyer Common Stock in violation of any blackout policy of Buyer.

(b) Notwithstanding anything to the contrary in Section 5.06(a), the share holding requirements and restrictions on transfer set forth in Section 5.06(a), except for the restrictions imposed by the last sentence of Section 5.06(a), will not prohibit or in any way limit Todd Davis’s right to effect (subject to any restrictions on transfer imposed generally by applicable securities laws, blackout policies or Buyer and restrictions on insider trading), any transfer of Buyer Common Stock from Todd Davis to

any member or members of such Seller’s immediate family or to a trust, family limited partnership, family limited liability company or other bona fide estate planning or planned gifting vehicle for the benefit of such Seller or one or more members of such Seller’s immediate family (including, without limitation, any such permitted transfer by beneficiary designation, will or intestate succession), provided, such immediate family member, entity or estate planning vehicle agrees to be bound by the share retention obligations set forth in this Agreement and not to transfer or sell any of such shares unless following such sale or transfer such immediate family member, entity or estate planning vehicle, when considered together with such Seller, would collectively hold sufficient shares of Buyer Common Stock to comply with the holding requirements set forth in Section 5.06(a).

5.10 Certificates of Title. Not later than three (3) Business Days after the Closing Date, Todd Davis shall have submitted applications for duplicate certificates of title to the applicable Governmental Authority in the applicable jurisdiction authorized by applicable state vehicle titling, and paid all fees in connection therewith, for each of the ten (10) trailers title to Todd Davis individually, to be issued in the name of B & G Leasing and delivered to Buyer by overnight courier.

5.11 Obligation to Pay for Certain Repairs. In the event any of the Operational Tractors and Trailers or any of the Out of Service Tractors and Trailers is in a condition, as of the Closing Date, that would cause it not to meet the requirements of Section 2.09(a) that would cost in excess of $2,500 (in case of a tractor) or $1,000 (in the case of a trailer) to repair, other than ordinary wear and tear and damage that is fully accrued on the Latest Balance Sheet, Sellers, jointly and severally, shall pay to Buyer by wire transfer of immediately available funds to an account specified by Buyer an amount equal to the aggregate amount of such excess within three (3) Business Days of Buyer’s demand therefor. Notwithstanding anything in this Agreement to the contrary, in no event shall Sellers’ obligations pursuant to this Section 5.08 exceed, in the aggregate, $500,000 and, for the avoidance of doubt, Sellers’ obligations pursuant to this Section 5.08 shall not be subject to Section 4.04(b)(i).

ARTICLE 6

DEFINITIONS

6.10 Definitions. For purposes hereof, the following terms, when used herein with initial capital letters, will have the following meanings.

(a) “Accounts Receivable” has the meaning set forth in Section 2.06.

(b) “Affiliate” of any particular Person means any other Person controlling, controlled by or under common control, directly or indirectly, with such particular Person, where control may be by either management authority or equity interest.

(d) “Agreement” has the meaning set forth in the Preamble.

(e) “Allocation Notice of Disagreement” has the meaning set forth in Section 5.01(i).

(f) “BASIC” has the meaning set forth in Section 2.09(c).

(g) “Benefit Program” has the meaning set forth in Section 2.14(a)(ii).

(h) “Business Day” means any day, other than a Saturday, a Sunday or any other day on which banks located in New York, New York are closed for business as a result of federal, state or local holiday.

(i) “Buyer” has the meaning set forth in the Preamble.

(j) “Buyer Common Stock” has the meaning set forth in Section1.01(a).

(k) “Buyer Financial Statements” has the meaning set forth in Section 3.08.

(l) “Buyer Indemnitees” has the meaning set forth in Section 4.03.

(m) “Buyer’s Knowledge” or words of similar import means the actual knowledge after reasonable inquiry of the following officers of Buyer: James Reed, Jason Bates, Zachary King, and Katherine Knight.

(n) “Cash on Hand” means, as of a particular time of determination, the Companies’ unrestricted cash and cash equivalents as determined in accordance with GAAP reflected on the general ledger of the Companies, which deducts outstanding .

(o) “Claiming Party” has the meaning set forth in Section 4.05(a).

(p) “Closing” has the meaning set forth in Section 1.03.

(q) “Closing Consideration Notice of Disagreement” has the meaning set forth in Section 1.02(c).

(r) “Closing Date” has the meaning set forth in Section 1.03.

(s) “Closing Statement” has the meaning set forth in Section 1.02(b).

(t) “COBRA” means the requirements of Part 6 of Subtitle B of Title I of ERISA and Section 4980B of the Code.

(u) “Code” means the Internal Revenue Code of 1986, as amended.

(v) “Company” or “Companies” has the meaning set forth in the Preamble.

(w) “Company Equity” has the meaning set forth in the Preamble.

(x) “Computer Systems” means computers and related equipment including central processing units and other processors (e.g. microprocessors and embedded processors), controllers, modems, communications and telecommunications equipment (e.g. voice, data, video), cables, storage devices, printers, terminals, other peripherals and input and output devices, and other tangible mechanical and electronic equipment intended for the input, output, storage, communication and retrieval of information and data, the absence of which would be reasonably likely to cause a material disruption to the operations of the business as currently conducted and is necessary for the operations of the business as currently conducted.

(y) “CSA” has the meaning set forth in Section 2.09(c).

(z) “Customer Contracts” has the meaning set forth in Section 2.11(c).

(aa) “Defending Party” has the meaning set forth in Section 4.05(a).

(bb) “DOT” means the U.S. Department of Transportation.

(cc) “Electronic Delivery” has the meaning set forth in Section 7.17.

(dd) “Environmental Laws” has the meaning set forth in Section 2.17(a).

(ee) “EPA” means the United States Environmental Protection Agency.

(ff) “ERISA” has the meaning set forth in Section 2.14(a)(i).

(gg) “ERISA Affiliate” means any trade or business related to a Company under the terms of Sections 414(b), (c), (m), and (o) of the Code or Section 4001 of ERISA.

(hh) “Escrow Account” has the meaning set forth in Section 1.01(a).

(ii) “Escrow Agent” means Bank of America, National Association, in its capacity as escrow agent.

(jj) “Escrow Agreement” has the meaning set forth in Section 1.01(a).

(kk) “Escrow Amount” has the meaning set forth in Section 1.01(a).

(ll) “Estimated Aggregate Closing Consideration” means Sellers’ good-faith estimate of the Aggregate Closing Consideration, determined in consultation with Buyer, at or prior to the Closing, based on the Companies’ consolidated balance sheet as of August 31, 2018, and such adjustments of Cash on Hand, Indebtedness and Transaction Expenses as may be reasonably practicable.

(mm) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(nn) “FHWA” has the meaning set forth in Section 2.09(c).

(oo) “Final Aggregate Closing Consideration” has the meaning set forth in Section 1.02(f).

(pp) “Financial Statements” has the meaning set forth in Section 2.05(a).

(qq) “FMCSA” has the meaning set forth in Section 2.09(c).

(rr) “Fundamental Representations” has the meaning set forth in Section 4.01.

(ss) “GAAP” means accounting principles generally accepted in the United States.

(tt) “Georgia Carolina” has the meaning set forth in Section 2.05(a).

(uu) “Governmental Authority” means any federal, state, local or foreign government, political subdivision, legislature, court, agency, department, bureau, commission or other governmental regulatory authority, body or instrumentality.

(vv) “Income Tax Returns” has the meaning set forth in Section 5.01(a).

(ww) “Indebtedness” means, without duplication, any of the following and whether or not then due and payable: (i) the unpaid principal amount, together with any related unpaid accrued interest and

prepayment premiums or penalties (and other penalties, fees, expenses and breakage costs), of all obligations for amounts owed to Persons other than the Companies (except for bona fide trade accounts payable and accrued expenses in the ordinary course of business) of the Companies, whether classified or debt, or capitalized lease obligations, or otherwise, and whether represented by bonds, debentures, notes or other securities, (ii) all cash overdrafts or checks in excess of cash balances of the Companies, (iii) all deferred obligations of the Companies for the payment of the purchase price of property or capital assets purchased, (iv) obligations of the Companies to pay rent or other payment amounts under a lease of real or personal property which is required to be classified and accounted for as a capital lease under GAAP, (v) any outstanding reimbursement obligation of the Companies with respect to letters of credit, bankers’ acceptances or similar facilities issued for the account of the any Company pursuant to which the applicable bank or similar entity has paid thereunder obligations for which such Company is required to repay, (vi) any payment obligation of the Companies under any currency, commodity or interest rate swap agreement, forward rate agreement, interest rate cap or collar agreement or other financial agreement or arrangement entered into for the purpose of limiting or managing interest rate risks, (vii) all obligations secured by any Lien existing on property owned by the Companies, (viii) all guaranties, endorsements, assumptions and other contingent obligations of the Companies in respect of, or to purchase or to otherwise acquire, indebtedness of others the repayment of which is guaranteed by the Companies, and (ix) all other short-term and long-term liabilities of the Companies for borrowed money.

(xx) “Independent Accountants” means the Chattanooga offices of LBMC or such other independent accountants as Sellers’ Representative and Buyer may mutually identify.

(yy) “Independent Contractor” means any Person currently or formerly engaged by any Company (or any predecessor of any Company or other entity for which any Company has or may have successor liability) as an independent contractor, including, without limitation, owners of equipment and lessees of equipment that lease such equipment or their services to any Company pursuant to the regulations promulgated under 49 C.F.R. Part 376, and including any lease-purchase operator or owner-operator engaged by any Company.

(zz) “Independent Contractor Financing Agreement” has the meaning set forth in Section 2.23(d).

([[) “Insurance Policies” has the meaning set forth in Section 2.15.

(aaa) “Intellectual Property” means any or all of the following, and all rights arising out of or association therewith, throughout the world: (i) all patents and applications therefor and all reissues, divisions, renewals, extensions, provisional, continuations and continuations-in-part thereof, including any design patents, industrial designs, and equivalent or similar statutory rights in inventions (whether patentable or not), software, invention disclosures, improvements, trade secrets, proprietary information, know-how, technology, technical data and customer lists; (ii) all copyrights, copyright registrations and applications therefor, and all other rights corresponding thereto, including moral rights; and (iii) all trade names, trademarks and service marks, trademark and service mark registrations and applications therefor, trade dress, protectable product configuration, domain names, telephone and fax numbers, know-how, logos, and slogans, whether at common law or statutory, and all goodwill of the Companies.

(bbb) “Latest Balance Sheet” has the meaning set forth in Section 2.05(a).

(ccc) “Lease” or “Leases” has the meaning set forth in Section 1.04(g).

(ddd) “Leased Real Property” has the meaning set forth in Section 2.08(b).

(eee) “Liens” means any charge, claim, community or other marital property interest, lien, license, option, mortgage, security interest, pledge, right of way, easement, encroachment, servitude, encumbrance, right of first offer or first refusal, buy/sell agreement and any other restriction or covenant with respect to, or condition governing the use, construction, voting (in the case of any security or equity interest), transfer, receipt of income or exercise of any other attribute of ownership.

(fff) “Loss” means any loss, liability, obligation, claim, action, suit, proceeding, hearing, investigation, charge, complaint, demand, injunction, judgment, order, decree, ruling, damages, dues, penalty, fine, costs, judgments, amounts paid in settlement, expense (including costs of investigation and defense and reasonable attorneys’ fees), Tax or Lien whether or not involving a third-party claim.

(ggg) “Material Adverse Effect” means any fact, circumstance, event, change, effect or occurrence that, individually or in the aggregate with all other facts, circumstances, events, changes, effects and occurrences has had, or reasonably would be expected to have, a material adverse effect on the business, assets, liabilities, operations (including results of operations), condition (financial or otherwise) of any Company, or the ability of Sellers or any Company to consummate the transactions contemplated hereby, but will exclude any change, effect or occurrence to the extent arising or resulting from:

(i) any change in general business or economic conditions, or in the industry in which a Company operates, that does not disproportionately affect such Company as compared to other Persons in such industry,

(ii) national or international political or social conditions, including the engagement by the United States in hostilities, whether or not pursuant to a declaration of a national emergency or war, or any escalation thereof, or the occurrence of any military or terrorist attack upon the Unites States of America or any of its territories, possessions or diplomatic or consular offices or upon any military installation, equipment or personnel of the United States,

(iii) changes in GAAP,

(iv) any changes in laws or other binding directives issued by any Governmental Authority (including any changes in the interpretation of any law or other binding directive issued by any Governmental Authority) that does not disproportionately affect the businesses, assets, liabilities, financial condition, operations (including results of operations) or financial position of the applicable Company as compared to other Persons in such industry,

(v) the announcement or pendency of the transactions contemplated by this Agreement, or

(vi) the taking of any action required by this Agreement and the other agreements contemplated hereby.

(hhh) “Net Working Capital” means Net Working Capital as of the Closing Date as calculated using the account items set forth on Exhibit G.

(iii) “Net Working Capital Target” means the net working capital of the Companies calculated in accordance in GAAP (current assets minus current liabilities), which, for the avoidance of doubt, shall be calculated on an accrual basis regardless of historical practices of the Companies.

(jjj) “Open Source Code” will mean free and open source software and includes those components of software which qualify as public domain software or are licensed as shareable freeware or

open source software. “Shareable freeware” is copyrighted computer software which is made available to the general public for use free of charge, for an unlimited time, without restrictions on field of use or redistribution. “Open source software” includes software licensed or distributed under a license that, as a condition of use, modification or distribution of the software: (i) requires that such software or other software distributed with or combined with the software be disclosed or distributed in source code form, licensed for the purpose of making derivative works or redistributable at no charge, or (ii) otherwise imposes a limitation, restriction or condition on the right of any Company to use, modify or distribute all or part of a proprietary software program or to enforce an Intellectual Property right of any Company. Open Source Code includes without limitation software code that is licensed under any license that conforms to the Opens Software Initiative definition of opens source software in effect as of the date of this Agreement, and any versions of the GNU General Public License, GNU Lesser General Public License, Mozilla License, Common Public License, Apache License, BSD License, Artistic License, or Sub Community Source License.

(kkk) “Operational Tractors and Trailers” has the meaning set forth in Section 2.09(a).

(lll) “Options” means all options, warrants or other rights to acquire capital equity or other equity securities of any Company held by any employee, officer, director, any Seller or any other Person pursuant to any employee equity or stock option plan of any Company or pursuant to any agreement with such Company or any Seller or any other Person.

(mmm) “Out of Service Tractors and Trailers” has the meaning set forth in Section 2.09(a).

(nnn) “Outstanding Escrow Claims” has the meaning set forth in Section 4.04(c).

(ooo) “Overpayment” has the meaning set forth in Section 1.02(g).

(ppp) “Owned Real Property” has the meaning set forth in Section 2.08(a).

(qqq) “Permitted Liens” means (i) inchoate statutory Liens (not evidenced by any filing) for Taxes or other governmental charges not yet due and payable or the amount or validity of which is being contested in good faith by the Companies, (ii) mechanic’s, carriers’, workers’, repairers’ and similar inchoate statutory Liens (not evidenced by any filing) arising or incurred in the ordinary course of business, (iii) zoning, entitlement, building and other land use regulations imposed by any Governmental Authority having jurisdiction over the Owned Real Property or the Leased Real Property which are not violated by the current use and operation of the Owned Real Property or the Leased Real Property, (iv) covenants, conditions, restrictions, easements and other similar matters of record affecting the Companies’ interest in the Owned Real Property or the Leased Real Property, (v) Liens arising under worker’s compensation, unemployment insurance, social security, retirement and similar legislation, and (vi) those matters identified in Schedule 6.01(rrr).

(rrr) “Person” means an individual, a partnership, a corporation, a limited liability company, an association or a joint stock company, a trust, a joint venture, an unincorporated organization and a Governmental Authority.

(sss) “Personal Property” means all of the rolling stock, equipment, tools, vehicles, furniture, leasehold improvements, office equipment, computer hardware, software, plant, converters, spare parts and other tangible personal property which are owned or leased by the Companies.

(ttt) “Pre-Closing Period” means any taxable period ending on or prior to the Closing Date and the portion of any Straddle Period ending on the Closing Date.

(uuu) “Plan” has the meaning set forth in Section 2.14(a)(i).

(vvv) “Real Property Leases” has the meaning set forth in Section 2.08(b).

(www) “Registered Intellectual Property” has the meaning set forth in Section 2.12(a).

(xxx) “Release Date” has the meaning set forth in Section 4.04(c)

(yyy) “Restricted Person” has the meaning set forth in Section 5.04(b).

(zzz) “Restrictive Covenant Agreement” has the meaning set forth in Section 5.04(a).

([[[) “Schedule 4.03(g) Item” means any liability, event, circumstance, condition or item listed on Schedule 4.03(g).

(aaaa) “Schedules” has the meaning set forth in the lead-in paragraph to Article 2.

(bbbb) “SEC” has the meaning set forth in Section 3.07.

(cccc) “Section 280G Payment” has the meaning set forth in Section 2.14(i).

(dddd) “Section 338(h)(10) Allocation” has the meaning set forth in Section 5.01(h).

(eeee) “Section 338(h)(10) Election” has the meaning set forth in Section 2.10(d).

(ffff) “Securities Act” means the Securities Act of 1933, as amended.

(gggg) “Seller” or “Sellers” has the meaning set forth in the Preamble.

(hhhh) “Seller Property” means the equity interests of STB Leasing and the personal property of Sellers identified on Schedule 1.04(q).

(iiii) “Seller Releases” has the meaning set forth in Section 1.04(m).

(jjjj) “Seller Taxes” means (a) any and all Taxes (and any payments and expenses or other Losses in resolution or settlement thereof) of any Seller or the Companies that are imposed on Buyer or the Companies or for which Buyer or the Companies may otherwise be liable (i) for any Pre-Closing Period and for the portion of any Straddle Period ending on the Closing Date (as determined under Section 5.01(a)); (ii) resulting from a breach by any Seller of the covenants set forth in Section 5.01; (iii) of any member of any consolidated group of which the Companies (or any predecessor of any Company) is or was a member on or prior to the Closing Date by reason of Treasury Regulation Section 1.1502-6(a) or any analogous or similar foreign, state or local law; (iv) of any other Person for which the Companies are or have been liable as a transferee or successor, by contract or otherwise (other than pursuant to customary Tax indemnification provisions in commercial contracts, agreements or arrangements not primarily related to Taxes), which Taxes relate to an event or transaction occurring prior to the Closing; (v) that are social security, Medicare, unemployment or other employment or withholding Taxes owed as a result of any payments of Final Aggregate Closing Consideration hereunder or distributions made to any Seller on or prior to the Closing Date, and (vi) with respect to the Companies for any Pre-Closing Period relating to any jurisdiction in which the Companies failed to properly file Tax Returns, and (b) (i) the amount of any and all Taxes imposed on Buyer and the Companies with respect to, and (ii) the present value to Buyer and the Companies of any expected Tax benefits relating to the expected increase in tax basis in the Companies’ assets as reflected in the 338(h)(10) Allocation which are

not obtained, in each case attributable to any Company’s failure to qualify as an S-corporation or an entity disregarded as separate from its owner for Tax purposes on or before the Closing Date (compared with the amount of Taxes imposed and present value of expected Tax benefits had each Company qualified as an S-corporation or entity disregarded as separate from its owner for Tax purposes on the Closing Date); provided, that no such Tax will constitute a Seller Tax to the extent it was included in the determination of Final Aggregate Closing Consideration, a reserve exists on the Closing Statement, or results from a breach by Buyer of the covenants set forth in Section 5.01.

(kkkk) “Sellers’ Knowledge” or words of similar import means the actual knowledge (after reasonable inquiry) of Bill Davis, Gary Davis, Todd Davis and Linda Bowers.

(llll) “Sellers’ Representative” has the meaning set forth in Section 7.16(a).

(mmmm) “Software” will mean all proprietary computer programs designed, created, developed or modified by any Company, including any and all software implementation of algorithms, models and methodologies (whether in source code, object code or other form), databases, compilations, descriptions, flow-charts and other work product to design, plan, organize and develop any of the foregoing screens, user interfaces, report formats, firmware, development tools, templates, menus, buttons and icons, and all documentation, including user manuals and other training documentation, related to any of the foregoing.

(nnnn) “STB Leasing” has the meaning set forth in Section 1.04(q).

(oooo) “Straddle Period” means any Tax period beginning on or before and ending after the Closing Date.

(pppp) “Subsidiary” means, with respect to any Person, any corporation, partnership, limited liability company, association or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a partnership, limited liability company, association or other business entity (other than a corporation), a majority of the partnership or other similar ownership interests thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons will be deemed to have a majority ownership interest in a partnership, limited liability company, association or other business entity (other than a corporation) if such Person or Persons will be allocated a majority of such partnership’s, limited liability company’s, association’s or other business entity’s gains or losses or will be or control the managing director, managing member, general partner or other managing Person of such partnership, limited liability company, association or other business entity. The term “Subsidiary” will include all Subsidiaries of such Subsidiary. With respect to any Company, “Subsidiary” will include any current or former Subsidiary of such Company.

(qqqq) “Tax” or “Taxes” means (a) any taxes, assessments, fees, unclaimed property and escheat obligations and other governmental charges imposed by or under the laws of any Governmental Authority, including income, profits, gross receipts, net proceeds, alternative or add on minimum, ad valorem, value added, turnover, sales, use, property, personal property (tangible and intangible), environmental, stamp, leasing, lease, user, excise, duty, franchise, capital equity, transfer, registration, license, withholding, social security (or similar), unemployment, disability, payroll, employment, social contributions, fuel, excess profits, occupational, premium, windfall profit, severance, estimated, or other charge in the nature

of taxes of any kind whatsoever, including any interest, penalty or addition thereto; and (b) any liability for the payment of any amounts of the type described in clause (a) as a result of being a member of a consolidated group for any period; and (c) any liability for the payment of any amounts of the type described in clause (a) or (b) as a result of the operation of law or any express or implied obligation to indemnify any other Person.

(rrrr) “Tax Proceeding” has the meaning set forth in Section 5.01(d).

(ssss) “Tax Returns” means any return, declaration, claim for refund, report, information return or other document relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

(tttt) “Technology” means all the software, prototypes, devices, drawings, specifications, lab notebooks, manuals, databases, equipment, files, technical memoranda, invention disclosures, patent application files, research studies, testing data, plans, files, formulas, computer programs, data and information, quality control records and procedures, research and development files containing, embodying or revealing the trade secrets, confidential information, and know-how that constitute Intellectual Property.

(uuuu) “Third Party Claim” has the meaning set forth in Section 4.05(a).

(vvvv) “Threshold” has the meaning set forth in Section 4.04(b)(i).

(wwww) “Transaction Documents” means each of this Agreement, the Escrow Agreement, the Leases, the Restrictive Covenant Agreements, the Transfer Agent Instruction Letter, the Seller Releases, the Section 338(h)(10) Election and each other agreement, certificate, instrument and document referred to herein or therein or delivered pursuant hereto or thereto.

(xxxx) “Transaction Expenses” means the aggregate fees and expenses incurred by the Companies, Restricted Persons, Sellers’ Representative and Sellers in connection with the negotiation of this Agreement, the performance of their obligations hereunder, and the consummation of the transactions contemplated hereby to the extent payable by the Companies but unpaid as of Closing and whether or not accrued before or after Closing, including, without limitation, (i) all investment banking, financial advisory, legal, accounting, management, consulting and other fees and expenses of third parties, and (ii) all fees and expenses allocated to Sellers hereafter and in the other Transaction Documents (including Transfer Taxes), and (iii) all fees and expenses, if any, associated with the termination or amendment of the contracts listed on Schedule 1.04(k). In no event will “Transaction Expenses” be deemed to include (x) any fees and expenses to the extent incurred by Buyer or otherwise relating to Buyer’s or its Affiliates’ financing (including obtaining any consent or waiver relating thereto) for the transactions contemplated hereby or any other liabilities or obligations incurred or arranged by or on behalf of Buyer or its Affiliates in connection with the transactions contemplated hereby, or (y) current liabilities included in the determination of Net Working Capital.

(yyyy) “Transfer Agent Instruction Letter” has the meaning set forth in Section 1.01(a).

(zzzz) “Transfer Taxes” has the meaning set forth in Section 5.01(f).

([[[[) “Unaudited Interim Financial Statements” has the meaning set forth in Section 2.05(a).

(aaaaa) “Underpayment” has the meaning set forth in Section 1.02(f).

(bbbbb) “Vendor Contracts” has the meaning set forth in Section 2.11(d).

(ccccc) “Year-end Financial Statements” has the meaning set forth in Section 2.05(a).

6.11 Other Definitional Matters. All references in this Agreement to Exhibits, Schedules, Articles, Sections and subsections refer to the corresponding Exhibits, Schedules, Articles, Sections and subsections of or to this Agreement, unless expressly provided otherwise. Titles appearing at the beginning of any Articles, Sections and subsections of this Agreement are for convenience only, do not constitute any part of this Agreement and will be disregarded in construing the intent of the parties hereto. The Schedules to this Agreement are incorporated herein by this reference. The word “including” (in its various forms) means including without limitation. The word “or” is not exclusive and the words “herein,” “hereof,” “hereby,” “hereto” and “hereunder” refer to this Agreement as a whole and not to the particular provision in which such words appear. Pronouns in masculine, feminine or neuter genders will be construed to state and include any other gender, and words, terms and titles (including terms defined herein) in the singular form will be construed to include the plural and vice versa, unless the context otherwise requires. References to “law”, “laws” or to a particular statute or law will be deemed also to include any and all rules and regulations promulgated thereunder and will refer to such statute, law, rules and regulations as amended from time to time and includes any successor legislation thereto; provided that, for the purposes of the representations and warranties set forth herein, with respect to any violation or alleged violation of any statute, law, rules and regulations, the reference to such law, rules or regulations means such, law, rules or regulations as in effect at the time of such violation or alleged violation. References to an agreement, instrument or document means such agreement, instrument or document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and not prohibited by this Agreement. The Schedules referred to herein will be construed with and as an integral part of this Agreement to the same extent as if they were set forth verbatim herein.

ARTICLE 7

MISCELLANEOUS

7.10 Press Releases and Announcements. Prior to the Closing, no public release or announcement concerning the transactions contemplated hereby will be issued or made by or on behalf of any party without the prior written consent of the other parties, except that Buyer may make any announcement to the extent advised by counsel is advisable to comply with the securities laws and regulations of Nasdaq. After the Closing, none of the Sellers nor any of their post-Closing Affiliates will make any public announcement or other communication concerning the transactions contemplated hereby without prior written approval of Buyer.

7.11 Expenses. Buyer will pay all of its fees, costs and expenses (including investment bankers’ and attorneys’ fees and expenses) incurred in connection with the negotiation of this Agreement, the performance of its obligations hereunder and the consummation of the transactions contemplated hereby. Sellers will pay, on behalf of themselves and the Companies, all Transaction Expenses, or such Transaction Expenses, if paid by the Companies, will be recorded as a current liability in the calculation of Final Aggregate Closing Consideration. Except as otherwise provided in Section 1.02(e) and Section 5.01(j), in the event of a dispute between any of the parties hereto in connection with any Transaction Document or the transactions contemplated thereby, each of the parties agrees that the prevailing party will be entitled to reimbursement by the other party of reasonable legal fees and expenses incurred in connection with any such action or proceeding.

7.12 Notices. All notices, demands and other communications to be given or delivered under or by reason of the provisions of this Agreement will be in writing and will be deemed to have been delivered (a) when personally delivered, (b) when transmitted via email to the email address set out below if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), or (c) the day following the day (except, if not a Business Day, then the next Business Day) on which the same has been delivered prepaid to a reputable national overnight air courier service for next day delivery. Notices, demands and communications will be sent to the applicable address set forth below, unless another address has been previously specified in writing:

Notices to Buyer:

USA Truck, Inc.

3200 Industrial Park Road

Van Buren, Arkansas 72956

Attention: Katherine Knight

Email: Katherine.Knight@usa-truck.com

with a copy to (which will not constitute delivery of notice):

Scudder Law Firm, P.C., L.L.O.

411 S. 13th Street, Suite 200

Lincoln, NE 68508

Attention: Heidi Hornung-Scherr

Email: hscherr@scudderlaw.com

Notices to Sellers and Sellers’ Representative:

Todd Davis

120 Milledge Heights

Athens, GA 30606

tdavis@davistransfer.com

Gary Davis

236 Westview Drive

Athens, GA 30606

gdavis@davistransfer.com

Bill Davis

2691 Lake Rabun Road

Lakemont, GA 30552

2323bdavis@gmail.com

John Carpentier

3630 Peachtree Road NE, Suite 600

Atlanta, GA 30326

jcarpentier@windhambrannon.com

with a copy to (which will not constitute delivery of notice):

Fortson, Bentley and Griffin, P.A.

2500 Daniel’s Bridge Road

Building 200, Suite 3A

Athens, Georgia 30606

Attention: Walter W. Hays Jr.

Email: wwh@fbglaw.com

7.13 Assignment. This Agreement will be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns, but with it being understood that neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned or delegated by any party hereto; provided, however, that Buyer may assign any or all of its rights pursuant to this Agreement and the Escrow Agreement to one or more of its Affiliates (including any of the Companies after the Closing), provided, that Buyer will nonetheless remain liable for all of its obligations hereunder and thereunder.

7.14 Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. Upon such a determination, Buyer and Sellers’ Representative will negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

7.15 Construction and Disclosure. Buyer, each Seller, each Company and Sellers’ Representative each acknowledge and agree that they and their respective counsel have reviewed, negotiated and adopted this Agreement as the joint agreement and understanding of the parties hereto, and the language used in this Agreement will be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction will be applied against any Person. The specification of any dollar amount or the inclusion of any item in the representations and warranties contained in this Agreement or the Schedules is not intended to imply that the amounts, or higher or lower amounts, or the items so included, or other items, are or are not required to be disclosed (including whether such amounts or items are required to be disclosed as material or threatened) or are within or outside of the ordinary course of business, and no party will use the fact of the setting of the amounts or the fact of the inclusion of any item in this Agreement or the Schedules in any dispute or controversy between the parties as to whether any obligation, item or matter not described or included in this Agreement or in any Schedule is or is not required to be disclosed (including whether the amount or items are required to be disclosed as material or threatened) or is within or outside of the ordinary course of business for purposes of this Agreement. The information contained in this Agreement and in the Schedules hereto is disclosed solely for purposes of this Agreement, and no information contained herein or therein will be deemed to be an admission by any party hereto to any third party of any matter whatsoever (including any violation of law or breach of contract). Disclosure of an item on one Schedule will be deemed disclosure on another Schedule if (i) a cross reference to such other Schedule is made or (ii) it is readily apparent that the disclosed contract, event, fact, circumstance or other matter relates to the representations or warranties covered by such other Schedule. Capitalized terms used in the Schedules and not otherwise defined therein have the meanings given to them in this Agreement. Time is of the essence in the performance of each of the parties’ respective obligations contained herein.

7.16 Captions. The captions used in this Agreement and descriptions of the Schedules are for convenience of reference only and do not constitute a part of this Agreement and will not be deemed to

limit, characterize or in any way affect any provision of this Agreement, and all provisions of this Agreement will be enforced and construed as if no such caption or description had been used in this Agreement.

7.17 Amendment and Waiver. This Agreement may be amended only in a writing executed and delivered by each of Buyer, each Company and Sellers’ Representative on behalf of Sellers. Any provision of this Agreement may be waived only in a writing signed by the party against whom such waiver is to be enforced. For the avoidance of doubt, with respect to a waiver by any Seller, such waiver may be signed by Sellers’ Representative. No waiver of any provision hereunder or any breach or default hereunder will extend to or affect in any way any other provision or prior or subsequent breach or default.

7.18 Complete Agreement. This Agreement and the other Transaction Documents, collectively with the Mutual Non-Disclosure and Confidentiality Agreement between Buyer and DTC, dated August 4, 2018 and any other agreements referred to herein or therein and executed and delivered on or after the date hereof in connection herewith or therewith, contain the complete agreement among the parties hereto and supersede any prior understandings, agreements or representations by or between such parties, written or oral, which may have related to the subject matter hereof in any way. Notwithstanding anything in this Agreement to the contrary, the indemnity contained in any Affidavit of Loss and Indemnity Agreement delivered in connection with any lost, stolen or destroyed stock certificate representing Company Equity will survive indefinitely as specified in such Affidavit of Loss and Indemnity Agreement and such survival will not be affected by the limited survival of Sellers’ representations and warranties in this Agreement, and such indemnity will not be limited by or subject to the other provisions of this Agreement, including Article 4 hereof.

7.19 Counterparts. This Agreement may be executed in multiple counterparts, each of which will be deemed to be an original, any one of which need not contain the signatures of more than one party, but all such counterparts taken together will constitute one and the same instrument.

7.20 Governing Law. All matters relating to the interpretation, construction, validity and enforcement of this Agreement will be governed by and construed in accordance with the domestic laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of laws of any jurisdiction other than the State of Delaware.

7.21 JURISDICTION; VENUE; SERVICE OF PROCESS. SUBJECT TO THE PROVISIONS OF SECTION 1.02 AND SECTION 5.01 (WHICH WILL GOVERN ANY DISPUTE ARISING THEREUNDER), THE PARTIES AGREE THAT JURISDICTION AND VENUE IN ANY SUIT, ACTION OR PROCEEDING BROUGHT BY ANY PARTY SEEKING RELIEF UNDER OR PURSUANT TO THIS AGREEMENT WILL PROPERLY, BUT NOT EXCLUSIVELY, LIE IN ANY FEDERAL COURT (OR, IF SUCH FEDERAL COURT DOES NOT HAVE JURISDICTION OVER SUCH SUIT, ACTION OR PROCEEDING, IN A STATE COURT) IN THE STATE OF TENNESSEE. BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY IRREVOCABLY SUBMITS TO THE JURISDICTION OF SUCH COURTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY WITH RESPECT TO SUCH SUIT, ACTION OR PROCEEDING. THE PARTIES IRREVOCABLY AGREE THAT VENUE WOULD BE PROPER IN SUCH COURT, AND HEREBY WAIVE ANY OBJECTION THAT ANY SUCH COURT IS AN IMPROPER OR INCONVENIENT FORUM FOR THE RESOLUTION OF SUCH SUIT, ACTION OR PROCEEDING. THE PARTIES FURTHER AGREE THAT THE MAILING BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, OF ANY PROCESS REQUIRED BY ANY SUCH COURT WILL CONSTITUTE VALID AND LAWFUL SERVICE OF PROCESS AGAINST THEM, WITHOUT

NECESSITY FOR SERVICE BY ANY OTHER MEANS PROVIDED BY STATUTE OR RULE OF COURT.

7.22 WAIVER OF JURY TRIAL. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING UNDER THIS AGREEMENT OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY, OR OTHERWISE. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION WILL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

7.23 No Third Party Beneficiaries. Except for the Buyer Indemnities under Article 4, no Person other than the parties hereto will have any rights, remedies, or benefits under any provision of this Agreement.

7.24 Payments Under Agreement. Each party agrees that all amounts required to be paid hereunder will be paid in United States currency and, except as otherwise expressly set forth in this Agreement, without discount, rebate or reduction and subject to no counterclaim or offset (except any withholding required by applicable law), on the dates specified herein.

7.25 Sellers’ Representative.

(a) Each Seller constitutes and appoints John Carpentier as its representative (“Sellers’ Representative”) and its true and lawful attorney in fact, with full power and authority in its name and on its behalf:

(i) to act on such Seller’s behalf in the absolute and reasonable discretion of Sellers’ Representative with respect to all matters relating to this Agreement (including, without limitation, actions or inactions in respect of Section 1.02, Section 5.01 and Article 4 hereof) and the other Transaction Documents, and in connection with the activities to be performed on behalf of Sellers under this Agreement, the Escrow Agreement and the other Transaction Documents, including, without limitation, execution and delivery of the Transaction Documents, with such modifications or changes as Sellers’ Representative will have consented to; any amendment, supplement, or modification of this Agreement or the other Transaction Documents; and the pursuit, defense, settlement or waiver of any claim or right arising out of or relating to this Agreement or the other Transaction Documents; and

(ii) in general, to do all things and to perform all acts in the absolute and reasonable discretion of Sellers’ Representative, including, without limitation, (A) disputing or refraining from disputing any claim made by Buyer or any Buyer Indemnitee under or with respect to any provisions of this Agreement or any other Transaction Document, (B) acting on behalf of Sellers in any litigation or arbitration or mediation involving this Agreement (including the indemnification and escrow recovery obligations set forth in Article 4) or any other Transaction Document and negotiating and compromising on behalf of Sellers, any dispute that may arise

under, and exercising or refraining from exercising any remedies available under the Transaction Documents, (C) executing, on behalf of each Seller, any settlement, release, waiver or other document with respect to such dispute or remedy, (D) executing and delivering all agreements, certificates, receipts, instructions, notices and other instruments contemplated by or deemed advisable to effectuate the provisions of this Section 7.16, and (E) any and all things deemed necessary or desirable in the absolute discretion of Sellers’ Representative in connection with the exercise of any of the foregoing powers and authorities, including, without limitation, engaging legal counsel, experts, accountants, consultants or other agents or representatives to advise Sellers’ Representative or act on Sellers’ Representative’s behalf in fulfilling its obligations.

(b) This appointment and grant of power and authority is coupled with an interest and is in consideration of the mutual covenants made in this Agreement and is irrevocable and will not be terminated by any act of any Seller or by operation of law, whether by the death, incompetency, incapacity, bankruptcy or liquidation of any Seller or by the occurrence of any other event, and will be binding on any successor thereto. Each Seller hereby consents to the taking of any and all actions, the execution of any and all documents and agreements, and the making of any decisions required or permitted to be taken or made by Sellers’ Representative pursuant to this Section 7.16. Each Seller agrees that Sellers’ Representative will have no obligation or liability to any Person for any action taken or omitted by Sellers’ Representative in good faith, and each Seller will indemnify and hold harmless Sellers’ Representative from, and will pay to Sellers’ Representative the amount of, or reimburse Sellers’ Representative for, any loss or expense that Sellers’ Representative may suffer, sustain or become subject to as a result of any such action or omission by Sellers’ Representative under this Agreement or the other Transaction Documents, unless such loss or expense will have been finally adjudicated to have been caused by the willful misconduct or gross negligence of Sellers’ Representative.

(c) Any decision or action by Sellers’ Representative hereunder will constitute a decision or action of Sellers and will be final, binding and conclusive upon each Seller, and no Seller will have the right to object to, dissent from, protest or otherwise contest any such decision or action. Any notices required to be made or delivered to Sellers hereunder or under any other Transaction Document will be made or delivered to Sellers’ Representative for the benefit of the applicable Seller and the making or delivering of such notice to Sellers’ Representative will discharge in full the applicable notice requirement.

(d) Buyer will be entitled to rely exclusively and absolutely upon the communications of Sellers’ Representative relating to the foregoing as the communications of Sellers, and upon any document or other paper delivered by Sellers’ Representative as being authorized by Sellers, from the date hereof until all obligations and transactions contemplated by and under this Agreement and any other Transaction Document will have been consummated and/or discharged. Buyer will be entitled to rely on the authority of Sellers’ Representative to act on behalf of Sellers hereunder, and Buyer will not be liable or accountable in any manner to any Seller for any action taken or omitted to be taken by Buyer based on such reliance, or for any act or omission of Sellers’ Representative in such capacity.

(e) John Carpentier and any Person selected to replace John Carpentier pursuant to this Agreement, may resign as Sellers’ Representative at any time by delivering prior written notice to Sellers, the Companies and Buyer. Until all obligations under this Agreement and the other Transaction Documents will have been discharged, Sellers may, from time to time upon notice to Buyer and the Companies, appoint a new Sellers’ Representative upon the death, incapacity or resignation of Sellers’ Representative. If, after the death, incapacity or resignation of Sellers’ Representative, a successor Sellers’ Representative will not have been appointed by Sellers within fifteen (15) Business Days after the death, incapacity, or resignation of the prior Sellers’ Representative, Buyer may appoint a Sellers’

Representative from among Sellers and their Affiliates to fill any vacancy so created or may petition a court in the applicable jurisdiction to appoint a Sellers’ Representative from among Sellers and their Affiliates. Upon any appointment of a successor Sellers’ Representative by Sellers, Sellers will give Buyer prompt written notice (in any event no later than three (3) Business Days following such appointment) of the appointment of the successor Sellers’ Representative and the name and contact information for such successor Sellers’ Representative.

(f) Notwithstanding the foregoing provisions of this Section 7.16, Sellers’ Representative will have no authority to act as the attorney, agent or representative, or to execute any documents, on behalf of any Seller to the extent they relate to any claim by a Buyer Indemnitee for indemnification under Section 4.03.

(g) Sellers’ Representative acknowledges that it has carefully read and understands this Agreement and hereby accepts the appointment and designation made hereunder.

7.26 Electronic Delivery. This Agreement and any signed agreement or instrument entered into in connection with this Agreement, and any amendments hereto or thereto, to the extent delivered by means of a facsimile machine or electronic mail (any such delivery, an “Electronic Delivery”), will be treated in all manner and respects as an original agreement or instrument and will be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto or to any such agreement or instrument, each other party hereto or thereto will re-execute original forms hereof or thereof and deliver them to all other parties. No party hereto or to any such agreement or instrument will raise (a) the use of Electronic Delivery to deliver a signature or (b) the fact that any signature or agreement or instrument was transmitted or communicated through the use of Electronic Delivery, as a defense to the formation of a contract, and each such party forever waives any such defense, except to the extent such defense relates to lack of authenticity.

7.27 Legal Representation. Each of the parties to this Agreement hereby agrees that Fortson, Bentley and Griffin, P.A. may serve as counsel to Sellers, on the one hand, and the Companies, on the other hand, in connection with the negotiation, preparation, execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, and that following the Closing, Fortson, Bentley and Griffin, P.A. may serve as counsel to any Seller or any director, manager, member, partner, owner, officer, employee or Affiliate thereof in connection with any claim, dispute or other matter arising out of or relating to this Agreement or the transactions contemplated by this Agreement (including in connection with any matters contemplated by Section 1.02 or Section 5.01 hereof), notwithstanding such representation (or any continued representation) of Sellers, the Companies or any of their Affiliates, and each of the parties hereto hereby waives any conflict of interest arising therefrom or in connection therewith.

[Signature page follows]

IN WITNESS WHEREOF, the parties hereto have executed this Equity Purchase Agreement as of the date first written above.

BUYER:

USA Truck, Inc.

By: /s/ James D. Reed

Name: James D. Reed

Title: President and Chief Executive Officer

COMPANIES:

Davis Transfer Company Inc.

By: /s/ Todd Davis

Name: Todd Davis

Title: President

Davis Transfer Logistics Inc.

By: /s/ Todd Davis

Name: Todd Davis

Title: President

B & G Leasing, L.L.C.

/s/ William H. Davis_______________________

William H. Davis, Member

/s/ George Gary Davis______________________

George Gary Davis, Member

/s/ Todd Gary Davis________________________

Todd Gary Davis, Member

SELLERS:

/s/ William H. Davis______________________

William H. Davis, Individually

/s/ George Gary Davis_____________________

George Gary Davis, Individually

/s/ Todd Gary Davis_______________________

Todd Gary Davis, Individually

SELLERS’ REPRESENTATIVE:

/s/ John Carpentier________________________

John Carpentier, Individually

I, Sharon W. Davis, hereby consent to the transactions contemplated by this Agreement and the Transaction Documents, which include, but are not limited to, the purchase and sale of the Company Equity. I hereby release any and all interest or claims that I may have with respect to the Company Equity, effective upon payment of the Aggregate Closing Consideration by Buyer in accordance with the Agreement, including any claims released on my behalf.

/s/ Sharon W. Davis

individually

I, ____________, hereby consent to the transactions contemplated by this Agreement and the Transaction Documents, which include, but are not limited to, the purchase and sale of the Company Equity. I hereby release any and all interest or claims that I may have with respect to the Company Equity, effective upon payment of the Aggregate Closing Consideration by Buyer in accordance with the Agreement, including any claims released on my behalf.

individually

Exhibit A

ESCROW AGREEMENT

THIS ESCROW AGREEMENT (the “Agreement”) is made and entered into as of October 18, 2018, by and among USA Truck, Inc., a corporation organized under the laws of Delaware (“Buyer”), William H. Davis, a resident of the state of Florida (“Bill Davis”), George Gary Davis, a resident of the state of Georgia (“Gary Davis”), Todd Gary Davis, a resident of the state of Georgia (“Todd Davis,” and collectively with Bill Davis and Gary Davis, “Sellers,” and individually, a “Seller”), John Carpentier, the designated representative of Sellers (“Sellers’ Representative” and collectively with Buyer and Sellers, the “Parties” and individually, and “Party”), and Bank of America, National Association, a national banking association duly organized and existing under the laws of the United States of America, having an office in Chicago, Illinois (the “Escrow Agent”). Capitalized terms used herein and not otherwise defined will have the meanings set forth in the Equity Purchase Agreement (as hereinafter defined), a copy of which has not been provided to Escrow Agent as Escrow Agent is not expected to reference such meanings in performing its responsibilities hereunder.

WHEREAS, Buyer, Sellers, Davis Transfer Company Inc., a Georgia corporation (“DTC”), Davis Transfer Logistics Inc., a Georgia corporation (“DTL”), and B&G Leasing, L.L.C., a Georgia limited liability company (“B&G” and, collectively with DTC, DTL, and, unless context otherwise requires, any Subsidiary of any of them, the “Companies” and individually, a “Company”), have entered into an Equity Purchase Agreement dated of even date herewith (the “Equity Purchase Agreement”), to which Escrow Agent is not a party.

WHEREAS, pursuant to the Equity Purchase Agreement, Buyer has agreed to deposit a portion of the purchase price that may become payable to Sellers into an account with the Escrow Agent to be held, administered, invested, and distributed by the Escrow Agent on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

ESTABLISHMENT OF ESCROW

(a) Subsequent to the execution of this Agreement Buyer will deposit by wire transfer $5,300,000 (the “Initial Deposit”) with the Escrow Agent. It is acknowledged that additional wire transfer deposits may be made following the Initial Deposit. The Initial Deposit as well as any additional deposits, together with any investment earnings thereon, less any amounts previously disbursed from the Escrow Account as of any given point in time shall hereinafter collectively be referred to as the “Escrow Fund.”

(b) The parties hereto hereby appoint the Escrow Agent, and the Escrow Agent hereby agrees to serve, as the escrow agent and depositary subject to the terms and conditions set forth herein. The Escrow Agent shall receive the Initial Deposit and any additional deposits and agrees to hold the Escrow Fund in a separate and distinct account (the “Escrow Account”) which is hereby established and which will be held and disbursed by the Escrow Agent only in accordance with the express terms and conditions of this Agreement.

ARTICLE II

INVESTMENT OF ESCROW FUND

2.1 The Escrow Agent is hereby directed to invest the Escrow Fund, including earnings thereon, in a Bank of America Interest-Bearing Deposit Account (“Deposit Account”). Additional information about the Deposit Account is attached hereto as Schedule I.

2.2 Upon receipt of the Initial Deposit and any additional deposits, the Escrow Agent will invest the Escrow Fund in the indicated investment within two (2) Business Days or such reasonable additional time as may be required due to circumstances beyond the Escrow Agent’s control.

2.3 The Escrow Agent shall not be responsible to any party hereto or to any other person or entity for any loss or liability arising in respect of any investment made in accordance with the terms of Article II except for those resulting from the willful misconduct or gross negligence of the Escrow Agent in processing such investment.

2.4

(a) Buyer, on behalf of itself and the other Buyer Indemnitees, will have the rights of a secured party in the Escrow Account to secure Sellers’ indemnification and other obligations under the Equity Purchase Agreement; provided, however, that such rights will not preclude or supersede any right of Sellers to receive a distribution of Escrow Funds that is required to be made to Sellers pursuant to the Equity Purchase Agreement or this Agreement. The Escrow Funds will be held in custody and, except as specifically provided for in this Agreement, will not be subject to Liens of any Person or any creditor of any party hereto and will be used solely for the purposes and subject to the conditions set forth herein.

(b) Escrow agent shall have no responsibility for the creation, the perfection, the adequacy or the enforceability of the security interest provided for in subsection (a) above. Notwithstanding subsection (a) above, if the Escrow Account shall be attached, garnished, or levied upon pursuant to judicial process, or the delivery of amounts held in the Escrow Account shall be stayed or enjoined by any court order, or any court order shall be made or entered into affecting the Escrow Account, or any part thereof, the Escrow Agent is hereby expressly authorized to obey and comply with such judicial process or court order. In the event the Escrow Agent obeys or complies with any judicial process or court order, it shall not be liable to any person, firm or corporation by reason of such compliance, notwithstanding the subsequent reversal, modification, annulment, or setting aside of such court order.

ARTICLE III

DISBURSEMENTS FROM THE ESCROW ACCOUNT

3.1 The Escrow Agent shall only disburse amounts held in the Escrow Account upon receipt of a joint written notice (“Disbursement Request”) from Buyer and Sellers’ Representative (on behalf of Sellers) by 3:00 p.m. Central Time two (2) Business Days prior to the requested disbursement date specifying the information set forth as (i) through (ix) on Annex I. A form of Disbursement Request is attached hereto as Annex I. For the avoidance of

doubt, if any Disbursement Request authorizes the disbursement of all of the then-remaining Escrow Funds, such Disbursement Request shall constitute a Termination Notice (as defined below) and shall be treated as such in accordance with the provisions of Article VI. Further, the Escrow Agent is authorized to obtain confirmation of such Disbursement Request by telephone call-back to the person or persons designated for verifying such requests on Exhibit B (such person verifying the request shall be different than the person initiating the request). The Escrow Agent is authorized to disinvest the requisite amount of Escrow Funds one (1) Business Day prior to the requested disbursement date, or may do so earlier if the Escrow Agent determines in its sole good faith discretion that disinvesting more than one (1) Business Day prior to the disbursement date is necessary in order to assure the availability of funds on the requested disbursement date.

3.2 The Escrow Agent shall make payment from the Escrow Account only in accordance with (i) a Disbursement Request of Buyer and Sellers’ Representative (on behalf of Sellers) or (ii) an order, judgment or decree, accompanied by a legal opinion by counsel for the presenting Party reasonably satisfactory to the Escrow Agent (“Legal Opinion”) to the effect that such order, judgment or decree is the final and non-appealable ruling of a court of competent jurisdiction (a “Final Order”). Escrow Agent shall act on Final Order and Legal Opinion without further question.

3.3 If the Escrow Funds are invested, any payment date will require an additional Business Day thereafter to disinvest in accordance with Section 3.1. Also in accordance with Section 3.1, all instructions to disburse via Disbursement Request or Final Order must specify (i) – (iv) supra.

3.4 Any payment from the Escrow Account will be made without any deduction or withholding for or on account of any Tax unless such deduction or withholding is required by applicable law. If the Escrow Agent is required by law or regulation to make a deduction or withholding, the Parties hereby irrevocably authorize the Escrow Agent to make such deduction or withholding (as the case may be) from the Escrow Amount and the Escrow Agent will not pay any additional amount in respect of that deduction or withholding.

3.5 Escrow Agent will act on any Disbursement Request or Final Order subject to its rights under Article IV.

ARTICLE IV

COMPENSATION; EXPENSES

As compensation for its services to be rendered under this Agreement, for each year or any portion thereof, the Escrow Agent shall receive a fee in the amount specified in Exhibit A to this Agreement and shall be reimbursed upon request for all expenses, disbursements and advances, including reasonable fees of outside counsel, if any, incurred or made by it in connection with the carrying out of its duties under this Agreement and central bank negative interest rate charges incurred by the Escrow Agent in connection with the deposit of cash at a central bank. The Buyer shall be responsible for one-half (1/2) of such fees and expenses and the Sellers’ Representative (on behalf of the Sellers) shall be responsible for one-half (1/2) of such fees and expenses. The Escrow Agent is hereby authorized and directed to withdraw

from the Escrow Funds any fees or expenses that have been invoiced but that have remained unpaid for sixty (60) days or more. Further, and in addition to the right given to it in the preceding sentence, the Escrow Agent is hereby authorized to withhold any disbursement it would otherwise make from the Escrow Account if at the time of such disbursement any invoiced fees or expenses remain unpaid. It is agreed as between Buyer and Sellers that Escrow Agent’s right to withdraw or withhold as set forth in the preceding two sentences shall not eliminate the obligation of Buyer and Sellers (jointly and severally as among the Sellers) to each pay one-half of the fees and expenses owed to the Escrow Agent, and therefore (i) Buyer shall have an obligation to reimburse and pay to Sellers any Escrow Funds that would have been paid to Sellers but for a withdrawal or withholding of such Escrow Funds for fees and expenses of Escrow Agent that were owed by Buyer but not paid by Buyer directly, and (ii) Sellers (jointly and severally) shall have an obligation to reimburse and pay to Buyer any Escrow Funds that would have been paid to Buyer but for a withdrawal or withholding of such Escrow Funds for fees and expenses of Escrow Agent that were owed by Sellers but not paid by Sellers directly. Amounts due for fees and expenses at the time this Agreement is executed shall be deemed to have been invoiced at such time and for purposes of this Article IV shall be deemed an invoice.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

The Parties each hereto hereby represents and warrants as of the date hereof and each date prior to the termination of this Agreement as follows:

a.such party is duly organized, validly existing and in good standing under the laws of the State of its organization;

b.such Party is in full compliance with all applicable anti-money laundering and anti-terrorist financing laws and regulations;

c.the Escrow Account will be used by such Party for business use only and not primarily for personal, family or household use;

d.such Party will not use the Escrow Account for illegal transactions, including, without limitation, those prohibited by the Unlawful Internet Gambling Enforcement Act, 31 U.S.C. Section 5361 et. seq.

ARTICLE VI

EXCULPATION AND INDEMNIFICATION

6.1

(a) The obligations and duties of the Escrow Agent are confined to those specifically set forth in this Agreement which obligations and duties shall be deemed purely ministerial in nature. No additional obligations and duties of the Escrow Agent shall be inferred or implied from the terms of any other documents or agreements, notwithstanding references herein to other documents or agreements. In the event that any of the terms and provisions of any other agreement between any of the parties hereto conflict or are

inconsistent with any of the terms and provisions of this Agreement, the terms and provisions of this Agreement shall govern and control the duties of the Escrow Agent in all respects. The Escrow Agent shall not be subject to, or be under any obligation to ascertain or construe the terms and conditions of any other instrument, or to interpret this Agreement in light of any other agreement whether or not now or hereafter deposited with or delivered to the Escrow Agent or referred to in this Agreement. The Escrow Agent shall not be obligated to inquire as to the form, execution, sufficiency, or validity of any such instrument nor to inquire as to the identity, authority, or rights of the person or persons executing or delivering same. The Escrow Agent shall have no duty to know or inquire as to the performance or nonperformance of any provision of any other agreement, instrument, or document. The parties hereto shall provide the Escrow Agent with a list of authorized representatives, initially authorized hereunder as set forth on Exhibit B; as such Exhibit B may be amended or supplemented from time to time by delivery of a revised and re-executed Exhibit B to the Escrow Agent. The Escrow Agent may, but is not required to, investigate payment instructions, make further inquiries, and, where required, block or reject services due to domestic or global economic or trade-based sanctions. Notwithstanding the foregoing sentence, the Escrow Agent is authorized to comply with and rely upon any notices, instructions or other communications reasonably believed by it to have been sent or given by the parties or by a person or persons authorized by the parties. The Escrow Agent specifically allows for receiving direction by written or electronic transmission from an authorized representative with the following caveat, the Buyer and Sellers agree to indemnify and hold harmless the Escrow Agent against any and all claims, taxes, losses, damages, liabilities, judgments, costs and expenses (including reasonable attorneys' fees) (collectively, "Losses") incurred or sustained by the Escrow Agent as a result of or in connection with the Escrow Agent's reliance upon and compliance with instructions or directions given by written or electronic transmission, provided, however, that such Losses have not arisen from the gross negligence or willful misconduct of the Escrow Agent, it being understood that forbearance on the part of the Escrow Agent to verify or confirm that the person giving the instructions or directions, is, in fact, an authorized person shall not be deemed to constitute gross negligence or willful misconduct.

(b) In the event funds transfer instructions are given to the Escrow Agent pursuant to the terms of this Agreement (other than with respect to fund transfers to be made contemporaneously with the execution of this Agreement), regardless of the method used to transmit such instructions, such instructions must be given by an individual designated on Exhibit B. Further, the Escrow Agent is authorized to obtain and rely upon confirmation of such instructions by telephone call-back to the person or persons designated for verifying such instructions on Exhibit B (such person verifying the instruction shall be different than the person initiating the instruction). The Escrow Agent may require any party hereto which is entitled to direct the delivery of fund transfers to designate a phone number or numbers for purposes of confirming the requested transfer. The parties hereto aside from the Escrow Agent agree that the Escrow Agent may delay the initiation of any fund transfer until all security measures it deems to be necessary and appropriate have been completed and shall incur no liability for such delay.

6.2 The Escrow Account shall be maintained in accordance with applicable laws, rules and regulations and policies and procedures of general applicability to escrow accounts established by the Escrow Agent. The Escrow Agent shall not be liable for any act that it may do or omit to do hereunder in good faith and in the exercise of its own best judgment or for any damages not directly resulting from its gross negligence or willful misconduct. Without

limiting the generality of the foregoing sentence, it is hereby agreed that in no event will the Escrow Agent be liable for any lost profits or other indirect, special, incidental or consequential damages which the parties may incur or experience by reason of having entered into or relied on this Agreement or arising out of or in connection with the Escrow Agent’s duties hereunder, notwithstanding that the Escrow Agent was advised or otherwise made aware of the possibility of such damages, provided, however, that such damages have not arisen from the gross negligence or willful misconduct of the Escrow Agent. The Escrow Agent shall not be liable for acts of God, acts of war, breakdowns or malfunctions of machines or computers, interruptions or malfunctions of communications or power supplies, labor difficulties, actions of public authorities, or any other similar cause or catastrophe beyond the Escrow Agent’s reasonable control. Any act done or omitted to be done by the Escrow Agent pursuant to the written advice of its attorneys shall be conclusively presumed to have been performed or omitted in good faith by the Escrow Agent.

6.3 In the event the Escrow Agent is notified of any dispute, disagreement or legal action relating to or arising in connection with the escrow, the Escrow Fund, or the performance of the Escrow Agent's duties under this Agreement, the Escrow Agent will not be required to determine the controversy or to take any action regarding it. The Escrow Agent may hold all documents and funds and may wait for settlement of any such controversy by final appropriate legal proceedings, arbitration, or other means as, in the Escrow Agent's reasonable discretion, it may require. Furthermore, if confronted with conflicting demands such that it determines in good faith that it risks incurring expense or liability regardless of any action it may take or refrain from taking, the Escrow Agent may, at its option, file an action of interpleader requiring the parties to answer and litigate any claims and rights among themselves. The Escrow Agent is authorized, at its option, to deposit with the court in which such action is filed, all documents and funds held in escrow, except all costs, expenses, charges, and reasonable attorneys’ fees incurred by the Escrow Agent due to the interpleader action and which Buyer and Sellers (on a joint and several basis as among the Sellers) agree solely among themselves to pay, provided, however, Buyer, on the one hand, and Sellers (jointly and severally as among the Sellers), on the other hand, shall each be responsible for one-half of any such costs, expenses, charges, and reasonable attorney’s fees. Buyer shall promptly reimburse Sellers for any payments made to the Escrow Agent by Sellers pursuant to this Section 6.3 that in the aggregate are in excess of Sellers’ collective share of one-half of any Losses pursuant to this Section 6.3. Sellers (jointly and severally) shall promptly reimburse Buyer for any payments made to the Escrow Agent by Buyer pursuant to this Section 6.3 that are in excess of Buyer’s share of one-half of any Losses pursuant to this Section 6.3. Upon initiating such action, the Escrow Agent shall be fully released and discharged of and from all subsequent obligations and liability otherwise imposed by the terms of this Agreement.

6.4 The Buyer and Sellers hereby agree, on a joint and several basis, to indemnify and hold the Escrow Agent, and its directors, officers, employees, and agents, harmless from and against all costs, taxes, damages, judgments, reasonable attorneys’ fees (whether such attorneys shall be regularly retained or specifically employed), expenses, obligations and liabilities of every kind and nature which the Escrow Agent, and its directors, officers, employees, and agents, may incur, sustain, or be required to pay in connection with or arising out of this Agreement, unless the aforementioned results from the Escrow Agent’s gross negligence or willful misconduct, and to pay the Escrow Agent on demand the amount of all such costs, damages, judgments, attorneys’ fees, expenses, obligations, and liabilities.

Without limitation, the foregoing indemnities shall extend to any breach of the representations, warranties or covenants in Section 10.3 of this Agreement. The costs and expenses of enforcing this right of indemnification also shall be paid by the Buyer and Sellers. Buyer, on the one hand, and Sellers (on a joint and several basis as among the Sellers) agree solely among themselves to each be responsible for one-half of any Losses pursuant to this Article VI. Buyer shall promptly reimburse Sellers for any payments made to the Escrow Agent by Sellers pursuant to this Section 6.4 that in the aggregate are in excess of Sellers’ collective share of one-half of any Losses pursuant to this Section 6.4. Sellers (jointly and severally) shall promptly reimburse Buyer for any payments made to the Escrow Agent by Buyer pursuant to this Section 6.4 that are in excess of Buyer’s share of one-half of any Losses pursuant to this Section 6.4. The costs and expenses of enforcing this right of indemnification also will be paid one-half by Buyer and one-half by Sellers. The foregoing indemnities in this paragraph shall survive the resignation or substitution of the Escrow Agent and the termination of this Agreement.

ARTICLE VII

TERMINATION OF AGREEMENT

This Agreement shall terminate:

(a) On the termination date set forth in a properly executed and delivered Termination Notice (as defined below). The Parties may, at any time, terminate this Agreement by delivering to the Escrow Agent written notice (the “Termination Notice”) signed by all the Parties setting forth (i) the requested termination date and (ii) instructions for the return or delivery of the parties’ then-escrowed property. The Termination Notice shall be received by the Escrow Agent not fewer than two (2) Business Days prior to the requested termination date. If the Termination Notice does not set forth instructions for the return or delivery of the parties’ then-escrowed property, the Escrow Agent shall presume that such property is to be returned to the party or parties from which it was received and the Escrow Agent shall incur no liability for so presuming. A form of Termination Notice is attached hereto as Exhibit C.

(b) Should the Parties terminate the Agreement pursuant to this Article VI, it is understood and agreed by each of them that the Escrow Agent shall be entitled (i) to keep any monies paid to it in respect of fees or expenses previously due and owing and (ii) to offset from the amount of Escrow Funds on deposit as of the date of the Termination Notice , any amounts due for fees and expenses that, as of such date, have been previously invoiced and remain unpaid or which are then due and payable, provided that this right of offset shall not eliminate the obligation of Buyer and Sellers (jointly and severally as among the Sellers) to each pay one-half of the fees and expenses owed to the Escrow Agent, and therefore (x) Buyer shall have an obligation to reimburse and pay to Sellers any Escrow Funds that would have been paid to Sellers but for an offset of such Escrow Funds for fees and expenses of Escrow Agent that were owed by Buyer but not paid by Buyer directly, and (y) Sellers (jointly and severally) shall have an obligation to reimburse and pay to Buyer any Escrow Funds that would have been paid to Buyer but for an offset of such Escrow Funds for fees and expenses of Escrow Agent that were owed by Sellers but not paid by Sellers directly. The Escrow Agent is authorized to disinvest the remaining Escrow Funds one (1) Business Day prior to the requested date of termination set forth in the Termination Notice, or may do so earlier if

the Escrow Agent determines in its sole good faith discretion that disinvesting more than one (1) Business Day prior to the requested date is necessary in order to assure the availability of funds on the requested termination date. Notwithstanding any other provision hereof, this Agreement shall not terminate before all amounts in the Escrow Account (including interest which has accrued but cannot be distributed prior to being posted) shall have been distributed by the Escrow Agent in accordance with the terms of this Agreement.

ARTICLE VIII

RESIGNATION OF ESCROW AGENT

The Escrow Agent may resign at any time upon giving at least thirty (30) days prior written notice to all Parties; provided that no such resignation shall become effective until the appointment of a successor escrow agent which shall be accomplished as follows: All Parties shall use their best efforts to select a successor escrow agent within thirty (30) days after receiving such notice. If the Parties fail to appoint a successor escrow agent within such time, the Escrow Agent shall have the right at the expense of the Parties to petition any court of general jurisdiction sitting in Cook County, Illinois for the appointment of a successor escrow agent. The successor escrow agent shall execute and deliver an instrument accepting such appointment and it shall, without further acts, be vested with all the estates, properties, rights, powers, and duties of the predecessor escrow agent as if originally named as escrow agent. Upon delivery of such instrument, the Escrow Agent shall be discharged from any further duties and liability under this Agreement. The Escrow Agent shall be paid any outstanding fees and expenses prior to transferring assets to a successor escrow agent.

ARTICLE IX

NOTICES

All notices required by this Agreement shall be in writing and shall be deemed to have been received (a) immediately if sent by facsimile transmission (with a confirming copy sent the same Business Day by registered or certified mail), or by hand delivery (with signed return receipt), (b) the next Business Day if sent by nationally recognized overnight courier or (c) the second following Business Day if sent by registered or certified mail, in any case to the respective addresses as follows:

Notices and other communications including Disbursement Requests hereunder may be delivered or furnished by electronic mail provided that any Disbursement Request or other formal notice be attached to an email message in PDF format and provided further that any notice or other communication sent to an e-mail address shall be deemed received upon and only upon the sender’s receipt of affirmative acknowledgement or receipt from the intended recipient. For purposes hereof no acknowledgement of receipt generated on an automated basis shall be deemed sufficient for any purpose hereunder or admissible as evidence of receipt.

If to Buyer:

USA Truck, Inc.

3200 Industrial Park Road

Van Buren, Arkansas 72956

Attention: Katherine Knight

Telephone: (479) 471-2631

Email address: Katherine.Knight@usa-truck.com

with a copy to (which will not constitute delivery of notice):

Scudder Law Firm, P.C., L.L.O.

411 S. 13th Street, Suite 200

Lincoln, NE 68508

Attention: Heidi Hornung-Scherr

Email: hscherr@scudderlaw.com

If to Sellers’ Representative:

John Carpentier

3630 Peachtree Road NE

Suite 600

Atlanta, GA 30326

Telephone: 404-898-2000

Fax: 404-898-2010

Email: jcarpentier@windhambrannon.com

with a copy to (which will not constitute delivery of notice):

Fortson, Bentley and Griffin, P.A.

2500 Daniel’s Bridge Road

Building 200, Suite 3A

Athens, Georgia 30606

Attention: Walter W. Hays Jr.

Email: wwh@fbglaw.com

If to the Escrow Agent:

Bank of America, National Association

Global Custody and Agency Services

135 S. LaSalle Street

IL4-135-18-51

Chicago, Illinois 60603

Attention: Norma Birts

Telephone: (312) 992-9802

Fax: (312) 453-4443

Email address: gcas_amrs_escrow_client_service@baml.com

ARTICLE X

TAX REPORTING

10.1 The Escrow Agent shall, for each calendar year (or portion thereof) that the Escrow Account is in existence, report the income of the Escrow Account (i) to Buyer, and (ii) to the IRS, as required by law. The parties to this Agreement agree that they will not take any position in connection with the preparation, filing or audit of any tax return that is in any way inconsistent with the foregoing determination or the information returns or reports provided by the Escrow Agent.

10.2 The Parties understand and agree that they are required to provide the Escrow Agent with a correct, complete and applicable Internal Revenue Service Form W-9 or W-8 and that the Escrow Agent may not perform its duties hereunder without having been provided with such form. Accordingly, the parties hereto other than the Escrow Agent understand and agree that unless and until all parties hereto have provided Internal Revenue Service Form W-9 or W-8, as applicable, to the Escrow Agent, the Escrow Account shall not be invested as otherwise provided herein nor shall disbursements be made from the Escrow Account as otherwise provided at Article III. In the case of a Party that is a "United States person" within the meaning of Section 7701(a) (30) of the Code, an Internal Revenue Service Form W-9 (or applicable successor form) that is not more than 30 days old is required. In the case of a Party that is not a "United States person" within the meaning of Section 7701(a)(30) of the Code, the applicable Internal Revenue Service Form W-8ECI, W-8IMY, W-8EXP, W-8BEN, W-8BEN-E (or applicable successor form), with all required attachments (if applicable), is required. Such Internal Revenue Service form shall be delivered: (i) as of the date of this Agreement, (ii) before December 31 of each third succeeding calendar year, (iii) promptly upon reasonable demand by Escrow Agent, and (iv) promptly upon learning that any such tax form previously provided by the Parties has become expired, obsolete or incorrect. Tax withholding may occur absent proper tax documentation. Upon reasonable demand by Escrow Agent, the Parties shall promptly provide any other form or document that may be required or reasonably requested in writing in order to allow Escrow Agent to make a payment without any deduction or withholding for or on account of any Tax or with such deduction or withholding at a reduced rate, with any such form or document to be accurate and completed in a manner reasonably satisfactory to Escrow Agent.

10.3 The Parties hereby (i) represent and warrant each for themselves that, as of the date this Agreement is made and entered into, the Escrow Account is not a Qualified Settlement Fund, Designated Settlement Fund, or Disputed Ownership Fund within the meaning of Section 468B of the Code (and the regulations thereunder) and (ii) covenant that they shall not take, fail to take or permit to occur any action or inaction, on or after the date this Agreement is made and entered into, that causes the Escrow Account to become such a Qualified Settlement Fund, Designated Settlement Fund, or Disputed Ownership Fund at any time.

10.4 The Parties to this Agreement agree that they are not relieved of their respective obligations, if any, to prepare and file information reports under Section 6041 of the Code, and the Treasury regulations thereunder, with respect to amounts of imputed interest income, as

determined pursuant to Sections 483 or 1272 of the Code. The Escrow Agent shall not be responsible for determining or reporting such imputed interest.

ARTICLE XI

MISCELLANEOUS PROVISIONS

11.1 Each party hereto represents and warrants that such party has all requisite corporate or other power, authority and capacity, and such other consents and approvals as are required to enter into this Agreement and to perform the obligations required of it hereunder and thereunder. The execution and delivery of this Agreement, and the consummation of the transactions contemplated herein, have been duly and validly authorized by all necessary action. Each party hereto represents and warrants, assuming this Agreement is a valid and legally binding agreement of the other parties hereto, that this Agreement constitutes a valid and legally binding agreement of such party enforceable in accordance with its terms, and no offset, counterclaim or defense exists to the full performance by such party of this Agreement, except as the same may be limited by bankruptcy, insolvency, reorganization and similar laws affecting the enforcement of creditors’ rights generally and by general equity principles.

11.2 This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware and the parties hereto consent to jurisdiction in the State of Arkansas and venue in any state or Federal court located in the Crawford County, Arkansas.

11.3 Any bank or corporation into which the Escrow Agent may be merged or with which it may be consolidated, or any bank or corporation to whom the Escrow Agent may transfer a substantial amount of its escrow business, shall be the successor to the Escrow Agent without the execution or filing of any paper or any further act on the part of any of the parties, anything herein to the contrary notwithstanding.

11.4 This Agreement may be amended, modified, and/or supplemented only by an instrument in writing executed by all parties hereto.

11.5 This Agreement may be executed by the parties hereto individually or in one or more counterparts, each of which shall be an original and all of which shall together constitute one and the same agreement. This Agreement, signed and transmitted by facsimile machine or pdf file, is to be treated as an original document and the signature of any party hereon, if so transmitted, is to be considered as an original signature, and the document so transmitted is to be considered to have the same binding effect as a manually executed original.

11.6 The headings used in this Agreement are for convenience only and shall not constitute a part of this Agreement. Any references in this Agreement to any other agreement, instrument, or document are for the convenience of the parties and shall not constitute a part of this Agreement.

11.7 As used in this Agreement, “Business Day” means a day other than a Saturday, Sunday, or other day when banking institutions in Chicago, Illinois are authorized or required by law or executive order to be closed.

11.8 This Agreement constitutes a contract solely among the parties by which it has been executed and is enforceable solely by the parties by which it has been executed and no other

persons. It is the intention of the parties hereto that this Agreement may not be enforced on a third party beneficiary or any similar basis.

11.9 The parties agree that if any provision of this Agreement shall under any circumstances be deemed invalid or inoperative this Agreement shall be construed with the invalid or inoperative provisions deleted and the rights and obligations of the parties shall be construed and enforced accordingly.

11.10 No party hereto shall assign its rights hereunder until its assignee has submitted to the Escrow Agent (i) Patriot Act disclosure materials and the Escrow Agent has determined that on the basis of such materials it may accept such assignee as a customer and (ii) assignee has delivered an IRS Form W-8 or W-9, as appropriate, to the Escrow Agent which the Escrow Agent has determined to have been properly signed and completed.

11.11 Any claim against the Escrow Agent arising out of or relating to this Agreement shall be settled by arbitration in accordance with commercial rules of the American Arbitration Association. Arbitration proceedings conducted pursuant to this Article X shall be held in Chicago, Illinois.

11.12 The Parties will treat the terms of this Agreement, including any Fee Schedule, as confidential except on a "need to know" basis to persons within or outside such Party's organization (including affiliates of such Party), such as attorneys, accountants, bankers, financial advisors, auditors and other consultants of such party and its affiliates, except as required by any law, court, regulator or legal process and except pursuant to the express prior written consent of the other parties, which consent shall not be unreasonably withheld.

11.13 No Plan Assets. All parties hereto aside from Escrow Agent represent and warrant themselves at the date of this Agreement and at all times until the termination of this Agreement that they are not and are not acting on behalf of (i) an “employee benefit plan” within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended, (“ERISA”) that is subject to Part 4 of Subtitle B of Title I of ERISA, (ii) a “plan” within the meaning of Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended (the “Code”), to which Section 4975 of the Code applies, (iii) an entity whose underlying assets include “plan assets” subject to Title I of ERISA or Section 4974 of the Code by reason of Section 3(42) of ERISA, U.S. Department of Labor Regulation 29 CFR Section 25 10.3-101 or otherwise, or (IV) a “governmental plan” (as defined in ERISA or the Code) or another type of plan (or an entity whose assets are considered to include the assets of any such governmental or other plan) that is subject to any law, rule or restriction that is substantively similar or of similar effect to Section 406 of ERISA or Section 4975 of the Code (“Similar Law”). All parties hereto aside from Escrow Agent will provide written notice to Escrow Agent if it is aware that it is in breach of this representation and warranty or is aware that with the passing of time, giving of notice or expiring of any applicable grace period it will be in breach of this representation and warranty.

[signatures appear on the following page(s)]

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the day and year first above written.

Buyer:

USA TRUCK, INC.

By:

Name: James D. Reed

Title: President and Chief Executive Officer

Sellers:

_____________________________________

William H. Davis, Individually

_____________________________________

George Gary Davis, Individually

_____________________________________

Todd Gary Davis, Individually

Sellers’ Representative:

_____________________________________

John Carpentier, Individually

Escrow Agent:

BANK OF AMERICA, NATIONAL ASSOCIATION

By:

Name:

Title:

EXHIBIT A

ESCROW AGENT FEE SCHEDULE

Set-Up Fee: $ 500.00

Tax Reporting Set-up Fee: $ 250.00

Administration Fee: $ 2,500.00

Covers the first 12 months from the date of this agreement (‘the Initial Period”). Should the escrow account remain open beyond the Initial Period, Escrow Agent may bill an additional fee of $2,500.00 annually.

Wire Disbursement Fee Six (6) disbursements via wire transfer are included in the Annual Administration Fee. $150 per disbursement will be assessed for any additional disbursements.

THE SET-UP FEES AND ADMINISTRATION FEES FOR THE INITIAL PERIOD ARE DUE UPON EXECUTION OF THE ESCROW AGREEMENT.*

Escrow Agent reserves the right to bill at cost for all out-of-pocket expenses, including out-of-pocket expenses in connection with the closing. Out-of-pocket expenses include, but are not limited to, professional services (e.g. reasonable legal or accounting fees), travel expenses, telephone and facsimile transmission costs, postage (including express mail and overnight delivery charges), and copying charges.

*(The Administration Fee will be invoiced yearly in advance, without pro-ration for partial years. Wire disbursement fees will be invoiced on an annual basis in arrears.)

[AN “EXHIBIT B” MUST BE COMPLETED AND EXECUTED FOR EACH PARTY TO THE AGREEMENT]

ALL MUST INDICATE AT LEAST TWO NAMES, ALONG WITH THE CONTRACT INFORMATION ON THE FORM BELOW.

***Please note: An individual verifying a disbursement request must be different from the person initiating the request.

***NO ELECTRONIC SIGNATURES – Hand written signatures only.

EXHIBIT B

Escrow Agreement Dated as of [date] by and among [Designate Parties]

Certificate of Authorized Representatives – [Designate Party]

Name:

Title:

PrimaryPhone:

Primary Phone:

Alternate Phone:

E-mail:

Signature:

Authority Level: Authority Level:

Authorized signatory initiating Authorized signatory initiating

disbursement requests disbursement requests

Call back contact to verify disbursement Call back contact to verify disbursement

Name:

Title:

PrimaryPhone:

Primary Phone:

Alternate Phone:

E-mail:

Signature:

Authority Level: Authority Level:

Authorized signatory initiating Authorized signatory initiating

disbursement requests disbursement requests

Call back contact to verify disbursement Call back contact to verify disbursement

The Escrow Agent is authorized to comply with and rely upon any notices, instructions or other communications believed by it to have been sent or given by the person or persons identified above including without limitation, to initiate and verify funds transfers as indicated.

[Name of Party]:

By: ____________________________

Name:

Title:

Date: ______________

[AN “EXHIBIT B” MUST BE COMPLETED AND EXECUTED FOR EACH PARTY TO THE AGREEMENT]

ALL MUST INDICATE AT LEAST TWO NAMES, ALONG WITH THE CONTRACT INFORMATION ON THE FORM BELOW.

***Please note: An individual verifying a disbursement request must be different from the person initiating the request.

***NO ELECTRONIC SIGNATURES – Hand written signatures only.

EXHIBIT B

Escrow Agreement Dated as of October ___, 2018 by and among USA Truck, Inc., a corporation organized under the laws of Delaware (“Buyer”), William H. Davis, a resident of the state of Florida (“Bill Davis”), George Gary Davis, a resident of the state of Georgia (“Gary Davis”), Todd Gary Davis, a resident of the state of Georgia (“Todd Davis,” and collectively with Bill Davis and Gary Davis, “Sellers,” and individually, a “Seller”), John Carpentier, the designated representative of Sellers (“Sellers’ Representative” and collectively with Buyer and Sellers, the “Parties” and individually, and “Party”), and Bank of America, National Association, a national banking association duly organized and existing under the laws of the United States of America, having an office in Chicago, Illinois (the “Escrow Agent”).

Certificate of Authorized Representatives – USA Truck, Inc.

Name:

Title:

PrimaryPhone:

Primary Phone:

Alternate Phone:

E-mail:

Signature:

Authority Level: Authority Level:

Authorized signatory initiating Authorized signatory initiating

disbursement requests disbursement requests

Call back contact to verify disbursement Call back contact to verify disbursement

Name:

Title:

PrimaryPhone:

Primary Phone:

Alternate Phone:

E-mail:

Signature:

Authority Level: Authority Level:

Authorized signatory initiating Authorized signatory initiating

disbursement requests disbursement requests

Call back contact to verify disbursement Call back contact to verify disbursement

USA Truck, Inc.:

By: ____________________________

Name: James D. Reed

Title: President and Chief Executive Officer

Date: October ___, 2018

EXHIBIT C

FORM OF TERMINATION NOTICE

[Date]

Bank of America, National Association

Global Custody and Agency Services

135 South LaSalle Street

IL4-135-18-51

Chicago, Illinois 60603

Attention: [•]

Fax: (312) 453-4443

NOTICE OF TERMINATION

Escrow Account Number #[________]

Ladies and Gentlemen:

We refer you to that certain Escrow Agreement (the “Agreement”), dated as of [•], among USA Truck, Inc., a corporation organized under the laws of Delaware (“Buyer”), William H. Davis, a resident of the state of Florida (“Bill Davis”), George Gary Davis, a resident of the state of Florida (“Gary Davis”), Todd Gary Davis, a resident of the state of Georgia (“Todd Davis,” and collectively with Bill Davis and Gary Davis, “Sellers,” and individually, a “Seller”), John Carpentier, the designated representative of Sellers (“Sellers’ Representative” and collectively with Buyer and Sellers, the “Parties” and individually, and “Party”), and Bank of America, National Association, a photocopy of which is attached hereto. Capitalized terms used but not defined in this letter shall have the meanings given them in the Agreement.

We hereby notify you, in accordance with the terms and provisions of Article VII(a) of the Agreement, that we are terminating the Agreement. Accordingly, we request that you terminate the Agreement as of [•]. Those undertakings that, under the provisions of the Agreement, shall survive termination of the Agreement shall continue as provided therein. All Escrow Funds or items of property thereafter on deposit or held in the Escrow Account or by the Escrow Agent pursuant to the Agreement shall, concurrently with the termination of the Agreement, be delivered by, as applicable, federal wire transfer or nationally recognized overnight courier service as follows:

i.Disbursement Date:

ii.Dollar Amount $

iii.Beneficiary Name:

iv.Beneficiary Address, City, State Zip Code and Country

v.Beneficiary Bank Name:

vi.Beneficiary Bank ABA/Routing # (9 digits):

vii. Beneficiary Account Number:

viii.Reference:

ix. If Intermediary Bank is required, please include Intermediary Bank Name, Intermediary Bank Address, SWIFT Code and any other relevant bank information required.

Interest which has accrued but which has not posted as of the Disbursement Date will be disbursed when posted pursuant to the foregoing instructions.

The undersigned acknowledge that the Escrow Agent will act on this Notice of Termination subject to its rights under Article VII.

Very truly yours,

Buyer:

USA TRUCK, INC.

By:

Name: James D. Reed

Title: President and Chief Executive Officer

Sellers:

_____________________________________

William H. Davis, Individually

_____________________________________

George Gary Davis, Individually

_____________________________________

Todd Gary Davis, Individually

Sellers’ Representative:

_____________________________________

John Carpentier, Individually

SCHEDULE I

ESCROW ACCOUNT INVESTMENT INFORMATION

INFORMATION AND DISCLOSURES REGARDING INVESTMENT IN A BANK OF AMERICA, N.A.

INTEREST BEARING DEPOSIT ACCOUNT

Interest Bearing Deposit Account:

U.S and non U.S. Corporate and Institutional Investor Use Only

TERMS AND CONDITIONS - The Interest Bearing Deposit Account (“IBDA”) is a demand deposit account held at Bank of America, N.A. To deposit funds in IBDA you must establish and maintain an account with Bank of America, N.A. (the “Bank”) pursuant to the terms of a written account agreement, including the Escrow Agreement (the “Relationship Terms”). Your funds may only be placed on deposit in or withdrawn from IBDA by the Escrow Agent acting on your behalf under the Relationship Terms and under the terms and conditions set forth herein. You will receive a statement from the Escrow Agent reflecting any balances held in IBDA at Bank and such balances, and any deposits to or withdrawals from IBDA on your behalf, will not be reflected on any other statement you receive from Bank.

An IBDA is a type of demand deposit account as described in the Bank Deposit Agreement and Disclosures, and may be reflected on your account statement as Interest Bearing Deposit Account.

Past performance is no guarantee of future results. Funds deposited in IBDA are insured to the maximum extent permitted by law and regulation by the Federal Deposit Insurance Corporation. IBDA has a normal cutoff time of 4:00PM (central time) and any cash received after that time will not be invested until the next business day.


			Bank of America, N.A. Interest Bearing Deposit Account (IBDA)			999101140

ANNEX I

FORM OF DISBURSEMENT REQUEST

[Date]

Bank of America, National Association

Global Custody and Agency Services

135 South LaSalle Street

IL4-135-18-51

Chicago, Illinois 60603

Attention: Norma Birts

Fax: (312) 453-4443

DISBURSEMENT REQUEST

Escrow Account Number #[______]

Ladies and Gentlemen:

We refer you to that certain Escrow Agreement (the “Agreement”), dated as of [•], among USA Truck, Inc., a corporation organized under the laws of Delaware (“Buyer”), William H. Davis, a resident of the state of Florida (“Bill Davis”), George Gary Davis, a resident of the state of Georgia (“Gary Davis”), Todd Gary Davis, a resident of the state of Georgia (“Todd Davis,” and collectively with Bill Davis and Gary Davis, “Sellers,” and individually, a “Seller”), John Carpentier, the designated representative of Sellers (“Sellers’ Representative” and collectively with Buyer and Sellers, the “Parties” and individually, and “Party”), and Bank of America, National Association, as Escrow Agent. Capitalized terms used but not defined in this letter shall have the meanings given them in the Agreement.

You are hereby directed to disburse funds held in the Escrow Account as follows:

i.Disbursement Date:

ii.Dollar Amount $

iii.Beneficiary Name:

iv.Beneficiary Address, City, State Zip Code and Country

v.Beneficiary Bank Name:

vi.Beneficiary Bank ABA/Routing # (9 digits):

vii.Beneficiary Account Number:

viii.Reference:

ix.If Intermediary Bank is required, please include Intermediary Bank Name, Intermediary Bank Address, SWIFT Code and any other relevant bank information required. The undersigned acknowledge that the Escrow Agent will act on this Disbursement Request subject to its rights under Article IV.

The undersigned acknowledge that the Escrow Agent will act on this Disbursement Request subject to its rights under Article IV.

[Signature Page Follows]

Very truly yours,

Buyer:

USA TRUCK, INC.

By:

Name: James D. Reed

Title: President and Chief Executive Officer

Sellers’ Representative (on behalf of Sellers):

_____________________________________

John Carpentier, Individually

Exhibit B

October 18, 2018

VIA ELECTRONIC MAIL

Continental Stock Transfer and Trust Company

One State Street, 30^th Floor

New York, NY 10004-1561

Re: Transfer Agent Instruction Letter

To Whom It May Concern:

In accordance with that certain Equity Purchase Agreement (the "Agreement") dated as of October 18, 2018, by and among (i) USA Truck, Inc., a Delaware corporation (“Buyer”); (ii) Davis Transfer Company Inc., a Georgia corporation, (iii) Davis Transfer Logistics Inc., a Georgia corporation, (iv) B & G Leasing, L.L.C., a Georgia limited liability company, (v) William H. Davis, a resident of the state of Florida, (vi) George Gary Davis, a resident of the state of Georgia, (vii) Todd Gary Davis, a resident of the state of Georgia, and (viii) John Carpentier, as Sellers’ Representative, Continental Stock Transfer and Trust Company is hereby authorized and directed to issue shares of Buyer's common stock from Buyer's treasury shares account and issue shares in restricted book entry form for Buyer’s common stock as set forth below:

Issue shares in restricted book entry form for the Buyer’s common stock in accordance with Schedule I hereto.

All restricted book entry shares delivered pursuant hereto should affix the following legend:

"THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE ISSUER RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT. THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO HOLDING PERIODS AND CERTAIN RESTRICTIONS ON SALE CONTAINED IN THAT CERTAIN EQUITY PURCHASE AGREEMENT DATED OCTOBER 18, 2018, AND MAY NOT BE SOLD IN VIOLATION OF SUCH RESTRICTIONS."

[Signature Page Below]

Very truly yours,

USA Truck, Inc.

By: ______________________________

Name: James D. Reed

Title: President and Chief Executive Officer

Schedule I

Restricted Book Entry Instructions


Name						Number of Shares

Todd Gary Davis						41,783

Exhibit C

Seller Consideration Allocation

William H. Davis – 42.5 percent George Gary Davis – 42.5 percent

Todd Gary Davis – 15 percent

Exhibit D

ASSIGNMENT OF MEMBERSHIP INTERESTS

FOR VALUE RECEIVED, the undersigned does hereby sell, assign and transfer unto USA Truck, Inc., a Delaware corporation, 100% of the issued and outstanding membership interests in B & G Leasing, L.L.C., a Georgia limited liability company, free and clear of any and all pledges, liens and encumbrances.

The undersigned hereby irrevocably constitutes and appoints each of Katherine Knight and Scudder Law Firm, P.C., L.L.O. as attorney to transfer the said membership interests on the books of USA Truck, Inc. with full power of substitution in the premises.

Dated: October , 2018

William H. Davis, individually

George Gary Davis, Individually

Todd Gary Davis, Individually

Exhibit E

7.28

[AMENDED AND RESTATED] COMMERCIAL LEASE

THIS [AMENDED AND RESTATED] COMMERCIAL LEASE (“Lease”), effective as of [_______], 2018 (the “Effective Date”), is by and between (i) [_______], a [STATE] [ENTITY] (“Landlord”) and (ii) [_______], a [STATE] [ENTITY] (“Tenant”).

WHEREAS, Tenant currently leases from Landlord, and Landlord leases to Tenant, certain real property located in [_______], as set forth below, pursuant to that certain [Lease Agreement dated [_______] (the “Original Lease”)].

WHEREAS, Landlord and Tenant now desire to [amend and restate the Original Lease in its entirety to reflect modifications of certain terms thereof], pursuant to the terms and conditions set forth herein.

NOW THEREFORE, in consideration of the covenants contained herein and under the terms and conditions set forth herein, Landlord and Tenant hereby agree [that the Original Lease is hereby amended and restated in its entirety] as follows:

1.PREMISES. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord those certain Premises commonly known as [_______] and further described in Exhibit A, which is attached hereto and incorporated herein by this reference (the “Premises”).

2.TERM. The initial term of this Lease (the “Initial Term”) will be from the Effective Date through and ending at 11:59:59 p.m. Eastern Time on the day immediately preceding the [_____] anniversary of the Effective Date. [Tenant has the right, privilege, and option to renew and extend the Initial Term of this Lease (“Renewal Option”) for up to [____] additional periods of [____] years each (each, a “Renewal Term”), subject to the provisions and conditions of this Lease. Tenant may exercise a Renewal Option by providing written notice to Landlord of its intent to exercise a Renewal Option no later than six (6) months prior to the expiration of the then-current term. As used in this Lease, “Term” means both the Initial Term and, to the extent a Renewal Option has been exercised, the applicable Renewal Term(s). Notwithstanding anything to the contrary herein, Tenant may, (a) at any time during the Initial Term, terminate this Lease upon thirty (30) days’ written notice to Landlord, provided that Tenant shall pay to Landlord the net present value of all unpaid monthly rent for the remainder of the Initial Term, with such net present value calculated using a discount rate of six percent (6%) and (b) at any time during any Renewal Term, terminate this Lease upon thirty (30) days’ written notice to Landlord.]

3.MONTHLY RENT.

3.1. Initial Term. During the Initial Term, Tenant will pay to the Landlord at Landlord’s address specified in Section 16 below, or at such other place as the Landlord may hereinafter designate in a written notice to Tenant, on or before the first day of each calendar month, without offset or deduction, the following amount as rent for the Premises: $[_______] per month. The prorated first month’s rent will be paid upon execution of this Lease.

3.2. Renewal Terms. Monthly rent shall be adjusted prior to the start of each year of any Renewal Term. Such monthly rent for each year of any Renewal Term shall be obtained by multiplying the monthly rent provided for in Section 3.1, by a fraction, the numerator of which is the most recent monthly index number published prior to the start of such year in the Renewal Term in the Consumer Price Index for all Urban Consumers (index base: 1982-1984 = 100, U.S. City Average) published monthly by the Bureau of Labor Statistics of the United States Department of Labor (said table being herein referred to as the “CPI

-U”), and the denominator of which is the index number published for the first full month of the Initial Term of this Lease in the CPI-U.

4.QUIET ENJOYMENT. Landlord covenants that Tenant, upon paying the basic rent and all other charges herein provided for and observing and keeping all covenants, agreements and conditions of this Lease on its part to be kept, will quietly have and enjoy the Premises during the Term without hindrance by anyone claiming by or through Landlord.

5.UTILITIES. Tenant will pay promptly when due directly to the applicable utility provider all charges for water, sewer, garbage disposal, telephone, electricity, cable, heat, gas, power, and any other utilities or services and like charges, including any fire protection charge, furnished to or consumed upon the Premises. Landlord will not be liable for any failure or interruption of utility service to the Premises, unless such failure or interruption results from Landlord’s negligence or willful misconduct, in which event monthly rent and Tenant’s Costs (defined below) shall be abated with respect to the portion of the Premises in which Tenant’s use and enjoyment is impaired for its normal conduct of business from the date of commencement of such interference until the date Tenant’s use and enjoyment of such portion of the Premises is restored.

6.TAXES AND ASSESSMENTS.

6.1. Tenant’s Costs. In addition to the rent provided in Section 3 above, and commencing on the date of commencement specified in Section 2 above, Tenant agrees to pay to Landlord, as additional rent (referred to as “Tenant’s Costs”), an amount equal to Landlord’s insurance premiums for fire, extended coverage, general commercial liability, property and other insurance that Landlord reasonably deems necessary upon the Premises and, in each instance, that are customarily maintained by owners of similar buildings in the market where the Premises are located. If Tenant’s Costs in any calendar year shall increase more than five percent (5%) over Tenant’s Costs in the prior calendar year and Tenant is not satisfied with the amount of such increase over five percent (5%), Tenant has the option to procure its own insurance for fire, extended coverage, general commercial liability, property and other insurance that Landlord reasonably deems necessary upon the Premises, in each case, upon terms no less than the coverage then provided and subject to the requirements of the first sentence of Section 9.4. Landlord shall notify Tenant as soon as reasonably practicable of any increase in Tenant’s Costs prior to renewal of Landlord’s insurance policies in order to afford Tenant a reasonable opportunity to obtain replacement coverage. If Tenant procures its own insurance, the obligation to pay Tenant’s Costs to Landlord shall cease.

6.2. Billing of Charges. The Tenant will pay to the Landlord the Tenant’s Costs described above within thirty (30) days of billing for said costs by the Landlord.

6.3. Records. Landlord or its agents will keep records in reasonable detail showing all expenditures made for the items enumerated in subparagraph 6.1 above, which records will be available for inspection by Tenant at any reasonable time. If any such inspection reveals that Tenant has been overcharged, Landlord agrees to pay the amount of such overcharge to Tenant within thirty (30) days following delivery of written notice thereof and supporting documentation thereto.

6.4. Real Estate Taxes. Landlord shall timely pay when due all real estate taxes and assessments accruing against the Premises, which become due and payable during the Term or any extension or renewal thereof. Landlord shall pay such amounts directly to the appropriate taxing authorities and provide proof of payment to Tenant promptly after such payment, and Tenant will reimburse Landlord, as additional rent, for the actual amount of all such taxes paid by Landlord within thirty (30) days of Landlord’s

written demand therefor. Tenant’s portion of such taxes and assessments will be prorated for any partial calendar year of the Term. In no event will Tenant be responsible for any federal, state, or local income, payroll, gift, transfer, estate, or inheritance taxes of Landlord (collectively, “Excluded Taxes”).

6.5. Additional Taxes. Should there presently be in effect or should there be enacted during the Term any law, statute, or ordinance levying any tax or assessment (other than any Excluded Tax) directly or indirectly, in whole or in part, upon the Premises, or increasing any tax Tenant is required to pay under Section 6.4, Tenant will reimburse Landlord, as additional rent, for the actual amount of all such taxes paid by Landlord within thirty (30) days of Landlord’s written demand therefor.

7.REPAIRS, MAINTENANCE AND CONDITION OF PREMISES.

7.1. Condition of Premises. Tenant accepts the Premises “AS IS” in their current condition. No warranties or representations concerning the condition or suitability of the Premises for intended uses have been made, except as are expressly set forth herein.

7.2. Tenant’s Obligation to Repair. Except for Landlord’s specific obligations herein, Tenant will, at its own expense, at all times keep the Premises in good repair and adequately maintained (and replace if reasonably necessary), normal wear and tear excepted and damages covered by insurance excepted. Tenant’s repair and maintenance obligation includes, without limitation, gardening and landscaping; interior and exterior painting; electrical lighting; lamp replacement; routine parking lot maintenance and repair (including, without limitation, sweeping and snow removal); routine maintenance and repair of all electrical, plumbing, heating and air conditioning equipment, telephone and other utility systems and routine roof maintenance and repair, provided however that Tenant shall not be required to make major repairs to Structural Elements (as hereinafter defined). Landlord shall have no responsibility to inspect the Premises for repairs or replacements to the Structural Elements and Tenant shall inform Landlord of any needed or required repairs or replacements to the Structural Elements. Landlord and Tenant will cooperate in good faith to determine whether any major repairs or replacements are required to the structural elements of the Premises consisting of the windows, doors, roof covering, roof structure, heating, ventilation, and air conditioning systems, foundation, parking lot, load-bearing walls, and other structural elements of the Premises (collectively, the “Structural Elements”), and if the parties determine that such major repairs or replacements are required, then Landlord will make such repairs or replacements at Landlord’s own expense. Notwithstanding the foregoing, Tenant shall be responsible for any repairs or replacements to Structural Elements that become necessary due to damage caused by Tenant, its employees or agents. If the Tenant fails to maintain the Premises in accordance with this Section, or fails to make the repairs required by this Section, Landlord may make repairs on fifteen (15) days’ notice to the Tenant, and Tenant will pay the reasonable cost thereof, as additional rent, within thirty (30) days of demand therefor from Landlord. The right of Landlord to make such repairs will be without prejudice to any rights it may have because of Tenant’s failure to make such repairs.

7.3. Alterations. Upon the prior written consent of Landlord (which shall not be unreasonably withheld, conditioned or delayed), Tenant, at its sole cost and expense, may make alterations, additions and improvements in the Premises; provided, that Tenant will not be required to obtain Landlord’s consent for any alterations, additions or improvements that cost less than $25,000 in the aggregate for any one project. In addition, Landlord will provide a $25,000 allowance in the first year of the Term to for certain Tenant improvements to the Premises. In the performance of such work, Tenant will hold Landlord harmless from any damage, loss or expense, and will comply in all material respects with all laws, ordinance, rules and regulations of any public authority, obtaining all necessary permits, approvals or authorizations. Tenant will not allow any liens to be filed against the Premises; in the event of filing of a lien claim Tenant will promptly take such action as may be required to remove the lien, including, without limitation, obtaining

a bond, if required. All such alterations, additions and improvements to the Premises (except trade fixtures) will be the property of Landlord, and will be surrendered with the Premises upon the expiration, cancellation, or prior termination of this Lease. Upon demand by Landlord given at least thirty (30) days prior to the end of the Term, Tenant will remove any alterations, additions or improvements made by Tenant, designated by Landlord to be removed, at Tenant’s sole cost and expense, unless such alterations, additions or improvements had previously been consented to by Landlord. In such event, Tenant will repair any damage to the Premises caused by such removal, and as far as reasonably possible, return the Premises to their condition prior to making of any such alterations, improvements or additions.

At the expiration, cancellation, or prior termination of this Lease, Tenant will have the right to remove all trade fixtures located on the Premises, which were installed by the Tenant prior to or after the Effective Date. However, in such event, Tenant will repair all damage caused to the Premises by such installation and removal, returning the Premises, as far as reasonably possible, to their condition prior to installation of such trade fixtures.

Trade fixtures will not be deemed to include any heating, air conditioning, ventilation, plumbing or electrical equipment, or other fixtures relating primarily to general usage of the building or Premises, as opposed to fixtures specifically used for the operation of the Tenant’s particular type of business or that were installed by Tenant prior to or after the Effective Date.

7.4. Entry and Inspection. Tenant will permit Landlord or its agents to enter the Premises at reasonable times and after prior notice of not less than 24 hours to inspect, clean, or repair the Premises, or to show the Premises to prospective purchasers or tenants.

8.USE OF PREMISES.

8.1. Permitted Use. Tenant shall use the Premises for a trucking terminal and/or related office use and no other use without the prior written consent of Landlord (which shall not be unreasonably withheld, conditioned or delayed). In no event shall Tenant install underground storage tanks on the Premises.

8.2. Hazardous Substances. Tenant agrees to comply in all material respects with all applicable air and water pollution control and prevention laws and regulations, in each case, from and after the Effective Date. Tenant agrees to comply in all material respects with all federal and state laws and regulations regarding hazardous waste or substances (“Environmental Laws”) from and after the Effective Date. In the event of any discharge by Tenant or Tenant’s agents of hazardous or toxic substances on or to the Premises on or after the Effective Date in violation of applicable Environmental Laws, Tenant will promptly notify Landlord thereof, and remediate such violation in accordance in all material respects with all applicable Environmental Laws. After the expiration, cancellation, or prior termination of this Lease for any reason, Tenant will remove from the Premises all hazardous and toxic materials and containers for those materials, in each case, that Tenant brought onto the Premises after the Effective Date. Landlord hereby releases Tenant, its parent companies, and their respective affiliates, officers, agents, and employees from all claims Landlord may have against Tenant relating to the actual or threatened release, disposal, deposit, seepage, migration or escape of Hazardous Substances at, from, into or underneath the Premises, or compliance or noncompliance with Environmental Laws, in each case under the Original Lease or otherwise attributable to circumstances first existing before the Effective Date. Landlord hereby acknowledges and agrees that Tenant is not responsible for any breach, violation, or non-performance of any provision of the Original Lease and is not responsible for any compliance or noncompliance with any laws prior to the Effective Date.

8.3. Disposal of Non-Hazardous Waste Materials. All non-hazardous waste materials will be disposed of by Tenant properly and in accordance in all material respects with all applicable laws and regulations.

8.4. Compliance with Law. Tenant will not use the Premises or permit anything to be done in or about the Premises which will in any material respect conflict with any law, statute, zoning restriction, ordinance or governmental rule or regulation or requirements of duly constituted public authorities now in force or which may hereafter be enacted or promulgated. With respect to its use of the Premises, Tenant will at its sole cost and expense promptly comply in all material respects with all laws, statutes, ordinances and governmental rules, regulations or requirements now in force or which may hereafter be in force.

9.INSURANCE; INDEMNITY.

9.1. Public Liability Insurance. Tenant, at its own expense, will procure and maintain in effect commercial general liability insurance coverage with limits of not less than Two Million Dollars ($2,000,000) combined single limits, which coverage may be provided by a combination of basic and umbrella policies; insuring against any and all liability of Tenant with regard to the Premises or use or occupancy thereof. In no event will the limits of said policies be considered as limiting the liabilities of Tenant under this Lease.

9.2. Casualty Insurance. Landlord will maintain property insurance on the Premises covering the full replacement cost of the Premises, which such insurance shall not include a deductible more than Five Thousand Dollars ($5,000), and will charge Tenant for such insurance in accordance with Section 6.1 above. However, Tenant understands and acknowledges that such insurance does not cover the personal property of Tenant located on the Premises, and may not cover fixtures installed by Tenant. Tenant, at its expense, will maintain fire and extended coverage insurance covering all inventory, equipment and other personal property located on the Premises, together with trade fixtures and improvements installed in or made by Tenant to the Premises. Upon request by Landlord, Tenant will provide proof of such insurance. Landlord will have no liability whatsoever for any loss or damage to property of Tenant, except where such loss or damage was caused by the gross negligence or willful misconduct of Landlord, its agents or employees.

9.3. Umbrella/Excess Liability. Tenant, at its expense, will maintain umbrella/excess liability insurance on an occurrence basis in excess of the underlying insurance described in Section 9.1. Such insurance will provide coverage of $Five Million Dollars ($5,000,000) per occurrence and in the aggregate.

9.4. Insurance Policies; Self-Insurance. All insurance policies Tenant is required to maintain under Section 9 will name Landlord as an additional insured, will be with reputable insurance companies doing business in the state where the Premises are located and with a rating of A minus (A-) VII (seven) or better in the most recent A.M Best Insurance Report (or other comparable publication agreed to by Landlord), and will contain loss-payable clauses reasonably satisfactory to Landlord, and copies of policies or certificates evidencing such insurance, including an acknowledgement of waiver of subrogation as required in Section 9.7, will be delivered to Landlord by Tenant. Tenant will provide reasonable proof at least thirty (30) days before any policy expires that the expiring policy will be replaced or renewed. Notwithstanding anything herein to the contrary, Tenant shall have the right and option, upon notice to Landlord, to self-insure against the risks described in this Section 9 which are required to be maintained by Tenant, provided that Tenant shall be responsible for the payment of at least the same coverage and benefits to Landlord as the insurance described in Section 9 in the event of any occurrence that would otherwise give rise to a claim under such insurance policies. Tenant’s right to self-insure is personal to Tenant and any other

consolidated subsidiary of USA Truck, Inc. to which this Lease is transferred in accordance with this Lease, and shall not apply to any other assignee or subtenant hereunder, unless otherwise approved in writing by Landlord, which approval may be withheld in Landlord’s sole discretion.

9.5. Waiver of Subrogation. Landlord and Tenant mutually agree to waive their right of recovery against each other, and their respective officers, employees or agents, for losses or damages occurring to the Premises, improvements, contents, other property of the waiving party or under its control, or business interruptions related to the loss or damage to such property. Permission to grant this waiver is to be included in the provisions of the insurance policies now carried by both Landlord and Tenant. The continuation of this mutual waiver of subrogation is subject to the insurance continuing to grant this option on renewal policies.

9.6. Indemnification. From and after the Effective Date, Tenant agrees to indemnify, defend, and hold harmless Landlord, its parent companies, and their respective affiliates, officer, agents, and employees from any and all demands, claims, causes of action, fines, penalties, damages (except any consequential, punitive, incidental, special, indirect, or exemplary damages, including loss of future revenue or income, loss of business reputation or opportunity, diminution of value, or any damages based on any type of multiple (except, in each case, to the extent payable in connection with a third-party claim)), liabilities, judgments and expenses, including reasonable attorney’s fees and costs, and litigation-related expenses (collectively, “Damages”) arising out of (a) any injury or damage, however occurring, on or about the Premises, attributable to circumstances first existing on or after the Effective Date, except to the extent such claims or expenses are caused by the negligence or willful misconduct of Landlord, its agents or employees, (b) the use or occupancy or manner of use or occupancy of the Premises, attributable to circumstances first existing on or after the Effective Date, by Tenant or any person claiming under Tenant, or (c) any breach, violation or non-performance of any provision in this Lease, attributable to circumstances first existing on or after the Effective Date, by Tenant or any person claiming under Tenant. From and after the Effective Date, Landlord agrees to indemnify, defend, and hold harmless Tenant, its parent companies, and their respective affiliates, officers, agents, and employees from any and all Damages arising out of (x) any breach, violation or non-performance of any provision in this Lease by Landlord or any person claiming under Landlord, (y) any events, circumstances, omissions, or liabilities arising prior to the Effective Date or (z) any injury or damage to the extent caused by the negligence or willful misconduct of Landlord, its agents or employees. The provisions of this Section shall survive the expiration, cancellation, or prior termination of this Lease. If any action or proceeding is brought against Landlord or its employees or agents by reason of any such claims for which Tenant has indemnified Landlord, Tenant, upon written notice from Landlord, shall defend the same at Tenant’s expense with counsel approved by Landlord. The limits of Tenant’s insurance coverage with respect to the Premises shall in no way imply any limitation to Tenant’s indemnification obligations hereunder.

9.7. Waiver and Release. From and after the Effective Date, Landlord and its employees and agents will not be liable for any loss or injury to persons or damage to property, in or about the Premises, from any cause, which at any time may be suffered by Tenant or by its invitees or employees or agents, except to the extent said damage is caused by or resulting solely from the negligence or willful misconduct of Landlord, its agents or employees without contributory negligence on the part of Tenant or any other lessees or occupants of the Premises. Tenant, as a material part of the consideration to Landlord for this Lease, by this Section waives and releases all claims against Landlord, its employees and agents and each of their respective affiliates, with respect to all matters for which such parties have disclaimed liability pursuant to the provisions of this Lease, in each case, to the extent arising from and after the Effective Date. The provisions of this Section shall survive the expiration or earlier termination of this Lease.

10.RECONSTRUCTION AND RESTORATION.

10.1. Minor Damage. If during the Term, the Premises are damaged by fire or other perils covered by the fire and extended coverage insurance on the Premises, and such damage is not substantial, Landlord will promptly repair such damage at Landlord’s expense after the application of all insurance proceeds, and this Lease will continue in full force and effect.

10.2. Substantial Damage. If during the Term, the Premises are destroyed or damaged by fire or other perils covered by the insurance, and if such damage is substantial, or if damaged by an uninsured peril where the estimated cost of repair exceeds two (2) months’ rent, Landlord may at its option either (a) promptly repair such damage at Landlord’s expense, in which event this Lease will continue in full force and effect, or (b) cancel this Lease as of the date of such damage, by giving Tenant written notice of its election within ten (10) days after the date Tenant notifies Landlord of such damage. If Landlord elects option (a), Landlord will include in the notice a good faith estimate of the time Landlord expects to complete such repairs. If (x) the estimated completion date for the repairs is more than one hundred eighty (180) days after the date Tenant notifies Landlord of such damage or (y) the remaining portion of the Premises not destroyed or damaged is of such size or configuration that Tenant, in Tenant’s commercially reasonable judgment, determines that Tenant is unable conduct its business in the Premises, Tenant will have an option to cancel this Lease by giving Landlord written notice of its election to do so within ten (10) days after the date Tenant receives the notice from Landlord as to the expected date of completion of the repair work, which cancellation will be effective at such date specified by Tenant, which such date shall be no later than ninety (90) days after the date Tenant receives the notice from Landlord as to the expected date of completion of the repair work.

10.3. Abatement of Rent. If the Premises are destroyed or damaged (including minor damage under Section 10.1 and substantial damage under Section 10.2), the rent payable hereunder for the period during which such damage, repair or restoration continues will be abated in proportion to the proportion of usable Premises space compared to the total Premises space. Tenant will have no claim against Landlord for any damage suffered by Tenant by reason of such damage, destruction, repair or restoration, unless such damage or destruction is caused by the negligence or willful misconduct of Landlord, its agents or employees.

11.ASSIGNMENT AND SUBLETTING; RIGHT OF FIRST REFUSAL; PURCHASE OPTION.

11.1. Assignment and Subletting. Except as provided in this Section, Tenant will not be permitted to sublease all or any portion of the Premises or assign this Lease without Landlord’s prior written consent, not to be unreasonably withheld, conditioned, or delayed. If Tenant is a corporation or association, the sale or assignment of any stock or interest in such corporation or association (for other than security purposes) in the aggregate in excess of fifty percent (50%) in any two-year period, will be deemed an assignment within the meaning and provisions of this Section; provided, this sentence will not apply if Tenant’s stock or ownership interests is listed on a recognized securities exchange or if at least eighty percent (80%) of Tenant’s stock or ownership interests is owned by an entity whose stock or ownership interests is listed on a recognized securities exchange. Tenant agrees to reimburse Landlord for Landlord’s reasonable out-of-pocket costs and attorney’s fees incurred with the documentation of such assignment or other transfer of this Lease or Tenant’s interest in and to the Premises. No assignment or sublease by Tenant will serve to relieve Tenant, or any guarantor of Tenant’s obligations under this Lease, from continuing liability under this Lease, unless Landlord expressly releases any such person from liability in writing. Notwithstanding anything herein to the contrary, the following transfers will not require Landlord’s consent: (a) any transfer to a subsidiary, parent, affiliate, division, or entity controlling, controlled by, or under common control with Tenant or (b) any successor to Tenant as a result of merger, consolidation, reorganization, sale of all or

substantially all of Tenant’s stock or ownership interests or assets, provided such successor entity has a net worth equal to or greater than Tenant’s as of the Effective Date.

11.2. Right of First Refusal. Tenant is hereby granted a right of first refusal (“ROFR”) to purchase the Premises for the same price and on substantially the same terms and conditions as Landlord is prepared to accept from a third party at any time during the Term. Landlord will notify Tenant of the receipt of any offer to purchase the Premises (the “Offer”) from any third party during the Term that Landlord is prepared to accept, prior to accepting the same, and Tenant will have twenty (20) days after the receipt thereof to notify Landlord in writing that Tenant elects to exercise its ROFR and purchase the Premises on the terms and conditions contained in the Offer. In the event Tenant declines to exercise its ROFR, or fails to timely deliver to Landlord written notice of Tenant’s election to exercise its ROFR, Landlord will be permitted to sell the Premises to the third party offeror on the same terms and conditions contained in the Offer. If the sale to such third party offeror is not consummated on the same terms and conditions contained in the offer within nine (9) months after the date on which Tenant declines to exercise its ROFR or fails to timely deliver to Landlord written notice of Tenant’s election to exercise its ROFR, then Tenant will again have the ROFR with respect to any other Offers received by Landlord during the Term.

11.3. Option to Purchase. Tenant shall have an option to purchase the Premises (the “Purchase Option”) under the terms and conditions set forth in Exhibit B attached hereto; provided, that if Landlord proposes to sell the Premises to a third party offeror and Tenant fails to exercise its ROFR as provided in Section 11.2, and Landlord does sell the Premises to such third party offeror on the same terms and conditions contained in the Offer, Tenant’s Purchase Option hereunder shall be extinguished upon the sale of the Premises to such third party offeror.

12.CONDEMNATION.

12.1. Entire or Substantial Taking. If the entire Premises, or so much thereof as to make the balance not reasonably adequate for the conduct of Tenant’s business (notwithstanding restoration by Landlord as herein provided) will be taken under the power of eminent domain, this Lease will automatically terminate on the date the condemning authority takes possession.

12.2. Partial Taking. In the event of any taking under the power of eminent domain which does not so result in a termination of this Lease, the monthly rental payable hereunder will be reduced, effective on the date the condemning authority takes possession, in the same portion as the value of the Premises after the taking relates to the value of the Premises prior to the taking. Landlord will promptly, at its sole expense, restore the portion of the Premises not taken to as near its former condition as is reasonably possible, and this Lease will continue in full force and effect; provided, that if there is a taking of twenty-five percent (25%) or more of the Premises or if the remaining portion of the Premises is of such size or configuration that it is not commercially reasonable for Tenant to conduct its business in the Premises, then Tenant shall have the right to terminate this Lease upon notice to Landlord given within thirty (30) days after the date of the vesting of title in the condemning authority, which termination will be effective at such date specified by Tenant within the ninety (90) days after the vesting of title in the condemning authority.

12.3. Awards. Any award for taking of all or any part of the Premises under the power of eminent domain will be the property of the Landlord, whether such award will be made as compensation for diminution in value of the leasehold or for taking of the fee. Nothing herein, however, will be deemed to preclude Tenant from obtaining, or to give Landlord any interest in, any award to Tenant for loss of or damage to or cost of removal of Tenant’s trade fixtures and removable personal property, or for damages for cessation or interruption of Tenant’s business.

13.LIENS AND ENCUMBRANCES. Except as expressly provided in this Lease, Tenant agrees that it will pay all costs for work done or caused to be done by it on the Premises, and Tenant will keep the Premises free and clear of all mechanic’s and other liens on account of work done for Tenant or persons claiming under Tenant. Should any claim of lien be filed against the Premises or any action affecting the title to such property be commenced, the party receiving notice of such lien or action will promptly give the other party written notice thereof. In the event a dispute between Tenant and a third party having lien rights arising from work performed for Tenant results in litigation to enforce such lien right in which Landlord or any party deriving rights from Landlord is named a party defendant, defense of such action will, at Landlord’s option, and using counsel reasonably approved by Landlord, immediately be assumed by Tenant. Tenant will appear and defend Landlord and any parties deriving interest through Landlord or will pay reasonable out-of-pocket costs and attorney’s fees incurred by Landlord or parties deriving interest through Landlord in respect to their own defenses to such action and will indemnify and hold Landlord and parties deriving interest through Landlord harmless from any judgment arising out of such litigation.

14.SURRENDER OF PREMISES.

14.1. Surrender of Premises. Tenant will promptly surrender possession of the Premises to Landlord upon the expiration, cancellation, or prior termination of this Lease. The Premises will be surrendered in the same condition as they were at the commencement of the Term, normal wear and tear and damages covered by insurance or caused by casualty or condemnation excepted.

14.2. Holding Over. Any holding over by Tenant after the expiration, cancellation, or prior termination of this Lease will be construed to be a tenancy at will, terminable at any time by Landlord. Tenant shall pay to Landlord one hundred and ten percent (110%) of the rental amount for the month immediately preceding the expiration, cancellation, or prior termination of this Lease, and in addition thereto, without limiting the liability of Tenant for its unauthorized occupancy of the Premises, Tenant shall indemnify, defend and hold harmless Landlord and any replacement tenant of the Premises for any loss, cost, liability, expenses, or damages suffered by Landlord or the replacement tenant (including reasonable attorneys’ fee) resulting from Tenant’s failure timely to vacate the Premises. The provisions of this section shall not exclude Landlord’s right of re-entry or any other right hereunder.

14.3. Sub-Tenancies. The voluntary or other surrender of this Lease by Tenant, or a mutual cancellation thereof, will terminate all and any existing subtenancies, or may, at the option of Landlord, operate as an assignment to it of any and all such subtenancies.

15.DEFAULT BY TENANT.

15.1. Default. The occurrence of any one or more of the following events will constitute breach of this Lease by Tenant:

15.1.1. Failure to Pay Rent. The failure by Tenant to make any payment of monthly rent, Tenant’s costs, or any other payment required to be made by Tenant hereunder, within five (5) business days of receiving written notice from Landlord that the same is past-due.

15.1.2. Failure to Perform. The failure by Tenant to observe or perform any of the covenants, conditions or provisions of this Lease to be observed or performed by the Tenant, other than payment of rent, where such failure will continue for a period of thirty (30) days after written notice thereof

by Landlord to Tenant or, if cure would reasonably require more than thirty (30) days to complete, if Tenant fails to commence performance within the thirty (30) day period and fails to diligently pursue such cure to completion.

15.1.3. Bankruptcy. The making by Tenant of any general assignment or general arrangement for the benefit of creditors; or by the filing by or against Tenant of a petition to have Tenant adjudged bankrupt, or a petition or reorganization or arrangement under any law relating to bankruptcy (unless, in the case of a petition filed against Tenant, the same is dismissed within sixty (60) days of filing); or the appointment of a trustee or a receiver to take possession of substantially all of Tenant’s assets located at the Premises or of Tenant’s interest in this Lease, where such seizure is not discharged in thirty (30) days after appointment of said trustee or receiver, or the filing of a petition for the appointment of the same, whichever will first occur.

15.1.4. Vacating the Premises. The vacating or abandonment of the Premises by Tenant without the delivery of prior notice thereof to Landlord. Tenant will be conclusively deemed to have abandoned the Premises upon removal of all or substantially all personal property of Tenant from the Premises (unless prior written notice was given to Landlord explaining the basis for such removal and that occupancy was intended to be re-commenced within thirty (30) days).

15.2. Remedies in Default. In the event of any such default or breach by Tenant, Landlord may at any time thereafter, with or without notice or demand and without limiting Landlord in the exercise of any right or remedy which Landlord may have by reason of such default or breach:

15.2.1. Terminate Tenant’s right to possession of the Premises by any lawful means, in which case this Lease will terminate and Tenant will immediately surrender possession of the Premises to Landlord. In such event Landlord will be entitled to recover from Tenant all damages incurred by Landlord by reason of Tenant’s default, including but not limited to:

(i) the reasonable out-of-pocket cost of recovering possession of the Premises; and

(ii) reasonable expenses of reletting the Premises, including necessary renovation and alteration of the Premises; and

(iii) reasonable attorneys’ fees, any real estate commission actually paid, and that portion of the leasing commission, if any, paid by Landlord with respect to this Lease, applicable to the unexpired Term; and

(iv) all unpaid rent due at the time of award by the court having jurisdiction thereof, plus interest as provided below; plus the worth at the time of the award of all unpaid rent and other charges required herein for the balance of the Term after the time of such award, except to the extent that Tenant proves such amount can reasonably be avoided by reletting the Premises; and

(v) if Landlord has financed any Tenant Improvements and the cost of such improvements is being amortized over a period of time during the Term, Landlord may accelerate and declare the entire unreimbursed balance of financed Tenant improvement costs immediately due and payable.

Unpaid installments of rent or other sums will bear interest from the date due at the rate of one and one-half percent (1.5%) per month per month (or the maximum legal rate if lesser and applicable). In the event Tenant will have abandoned the Premises, Landlord will have the option of (1) retaking possession of the

Premises and recovering from Tenant the amount specified in this Section 15.2.1, or (2) proceeding under Section 15.2.2. As used in this paragraph, “the worth at the time of award” is to be computed by discounting by the amount of the discount rate of five percent (5%).

15.2.2. Maintain Tenant’s right to possession, in which case this Lease will continue in effect whether or not Tenant will have abandoned the Premises. In such event, Landlord will be entitled to all of Landlord’s rights and remedies under this Lease including the right to recover the rent as it becomes due hereunder.

15.2.3. Pursue any other remedy now or hereafter available to Landlord under the laws or judicial decisions of the state in which the Premises are located.

15.3. Late Charges. In addition to all other remedies available for nonpayment, if the amount due from the Tenant is not received by the Landlord on or before the tenth (10^th) day following the date on which Tenant received written notice from Landlord that such amount was past due (beyond any notice and cure periods), a late charge of one and one-half percent (1.5%) of said amount owed will become due and payable as additional rent hereunder, which represents a fair and reasonable estimate of the processing and accounting costs that Landlord will incur by reason of such late payment.

15.4. Mitigation of Damage. Following a breach of this Lease by Tenant, Landlord shall use reasonable efforts to mitigate damages.

16.NOTICES. Any notice, consent, approval or other communication required or permitted pursuant to this Lease shall be in writing and shall be deemed to have been given (i) when delivered by hand, (ii) when delivered by first class registered or certified mail, postage prepaid, return receipt requested, (iii) when delivered by a nationally recognized overnight courier with written proof of delivery, in any case addressed to the parties at the address below:

If to Landlord: [________________]

[________________] [________________]

Attn: [____________]

If to Tenant: [________________]

[________________] [________________]

Attn: [____________]

Either Landlord or Tenant may change its address for purposes of this provision by giving written notice of such change to the other party in the manner stated herein.

17.LANDLORD’S FINANCING. This Lease will automatically be subordinate to any deed of trust, mortgage and other security instruments now existing or hereafter placed on the Premises or any part thereof by the Landlord and all advances made or to be made thereunder. Within ten (10) days of presentation, Tenant will execute, acknowledge, and deliver to Landlord (i) any commercially reasonable subordination or nondisturbance agreement or other instrument that Landlord may require to carry out the provisions of this Section, provided that such agreement will provide that as long as Tenant is not in default after notice and the expiration of any applicable cure period, the holder of such deed of trust, mortgage or other security instrument will not disturb or impair Tenant’s possession of the Premises and its rights under this Lease and (ii) any estoppel certificate requested by Landlord, with any such mortgagee or beneficiary certifying in writing, if such be true, that Tenant will be in occupancy and that the Lease is in full force and effect, and the dates to which the rent and other charges will have been paid, and that there will be no rental offsets or claims.

18.SIGNAGE. Tenant will observe and comply with the requirements of all laws applicable to signage.

19.MISCELLANEOUS.

19.1. Waivers. No waiver by Landlord of any provision of this Lease will be deemed to be a waiver of any other provision hereof or of any subsequent breach by Tenant of the same or any other provision. Landlord’s consent to or approval of any act by Tenant requiring Landlord’s consent or approval will not be deemed to render unnecessary the obtaining of Landlord’s consent to or approval of any subsequent act by Tenant, whether or not similar to the act so consented to or approved.

19.2. Interest on Past Due Obligations. Any amount due from Tenant to Landlord hereunder which is not paid when due will bear interest at the rate of one and one-half percent (1.5%) per month, or the highest legal rate, if applicable, from the date due until paid, but the payment of such interest will not excuse or cure any default by Tenant.

19.3. Construction.

19.3.1. This Lease will be construed and governed by the laws of the State in which the Premises are located;

19.3.2. The invalidity or unenforceability of any provision hereof will not affect or impair any other provisions hereof;

19.3.3. This Lease constitutes the entire agreement of the parties and supersedes all prior agreements or understandings between the parties with respect to the subject matter hereof.

19.3.4. This Lease may not be modified or amended except by written agreement signed and acknowledged by both parties;

19.3.5. Time is of the essence of this Lease in each and every provision hereof;

19.3.6. Nothing contained herein will create the relationship of principal and agent or of partnership or of joint venture between the parties hereto and no provisions contained herein will be deemed to create any relationship other than that of Landlord and Tenant; and

19.3.7. Tenant has had the opportunity to have this document reviewed by counsel of its choice. Tenant agrees that no interpretation or construction will be made with respect to this document based on which party drafted the document.

19.4. Successor. Subject to any limitations on assignments herein, all of the provisions of this Lease will inure to the benefit of and be binding upon the successors and assigns of the parties hereto.

19.5. Costs and Attorneys’ Fees. If by reason of any breach or default on the part of either party hereto it becomes necessary for the other party hereto to employ an attorney, then the non-breaching party will have and recover against the other party in addition to costs allowed by law, reasonable attorneys’ fees and litigation-related expenses. The non-breaching party will be entitled to recover

reasonable attorneys’ fees and costs and expenses, as provided above, regardless of whether litigation is actually commenced.

19.6. Jurisdiction and Venue. The parties hereto do hereby consent to jurisdiction and venue of the courts of the County and State in which the Premises are located.

19.7. Counterparts. This document may be executed in one or more counterparts, each of which shall be deemed an original and both of which together will constitute one and the same instrument.

19.8. Memorandum of Lease. The parties will, upon the request of either party, execute and record a memorandum of this Lease in the records of the County in which the Premises are located, which will include notice of the ROFR and the Purchase Option.

[Signature pages follow.]

EXECUTED TO BE EFFECTIVE AS OF THE DATE FIRST WRITTEN ABOVE.

TENANT:

[___________________]

By:

Name:

Title:

EXECUTED TO BE EFFECTIVE AS OF THE DATE FIRST WRITTEN ABOVE.

LANDLORD:

[_________________]

By: _______________________________

Name: _______________________________

Title: _______________________________

STATE OF _________________ )

) ss.

COUNTY OF _______________ )

I certify that I know or have satisfactory evidence that James D. Reed is the person who appeared before me, and said person acknowledged that s/he signed this instrument, on oath stated that s/he was authorized to execute the instrument and acknowledged it as the Chief Executive Officer and President of Davis Transfer Company Inc., a Georgia corporation, to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument.

Dated: October ___, 2018.

(Signature)

Name:

NOTARY PUBLIC in and for the State of

_____________ residing in

My commission expires:

STATE OF [_________________] )

) ss.

COUNTY OF [_______________] )

I certify that I know or have satisfactory evidence that ________________________ is the person who appeared before me, and said person acknowledged that s/he signed this instrument, on oath stated that s/he was authorized to execute the instrument and acknowledged it as the ____________ of [_________________], a [_________________] [limited liability company, corporation], to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument.

Dated: [___], 2018.

(Signature)

Name:

NOTARY PUBLIC in and for the State of

[___________] residing in

My commission expires:

GUARANTY OF LEASE

WHEREAS, the Landlord has refused to enter into the within and foregoing Lease between __________________, as Landlord, and ., as Tenant, dated ______________ (the “Lease”) unless USA TRUCK, INC., a Delaware corporation (the “Guarantor”) guarantees the Lease in the manner herein set forth; and

WHEREAS, the Guarantor, for the benefits accruing to it as owner of Tenant, have agreed to guaranty the Lease in the manner herein set forth;

NOW, THEREFORE, for and in consideration of the premises and the Lease, the Guarantor hereby agrees as follows:

1. (a) The Guarantor unconditionally guarantees to the Landlord, its successors and assigns, the full and punctual performance and observance by the Tenant of all the terms, covenants and conditions in the Lease contained on Tenant’s part to be kept, performed or observed. This guaranty shall include any liability of Tenant which shall accrue under the Lease for any period following the term of the Lease (but not for any period preceding the term of the Lease). The Guarantor waives notice of any breach or default by Tenant.

(b) If, at any time, default shall be made by the Tenant in the performance or observance of any of the terms, covenants and conditions in the Lease contained on the Tenant’s part to be kept, performed or observed, the Guarantor will keep, perform and observe the same, as the case may be, in place and stead of the Tenant.

2. Any act of the Landlord, or the successors or assigns of the Landlord, consisting of a waiver of any of the terms or conditions of the Lease, or the giving of any consent to any matter or thing relating to the Lease, or the granting of any indulgences or extensions of time to the Tenant, may be done without notice to the Guarantor and without releasing the obligations of the Guarantor hereunder.

3. The obligations of the Guarantor hereunder shall not be released by Landlord’s receipt, application or release of security given for the performance and observance of covenants and conditions in the Lease contained on Tenant’s part to be performed or observed, nor by any modification of the Lease, but in case of any such modification, the liability of the Guarantor shall be deemed modified in accordance with the terms of any such modification of the Lease.

4. The liability of the Guarantor hereunder shall in no way be affected by (a) the release or discharge of the Tenant in any creditors’, receivership, bankruptcy or other proceedings; (b) the impairment, limitation or modification of the liability of the Tenant or the estate of the Tenant in bankruptcy, or of any remedy for the enforcement of the Tenant’s said liability under the Lease, resulting from the operation of any present or future provision of the United State Bankruptcy Code or other statute or from the decision in any courts; (c) the rejection or disaffirmance of the Lease in any such proceedings; (d) the assignment or transfer of the Lease by the Tenant; (e) any disability or other defense of the Tenant; or (f) the cessation from any cause whatsoever of the liability of the Tenant other than payment and performance in full under the terms of the Lease.

5. Until all the covenants and conditions in the Lease on the Tenant’s part to be performed and observed are fully performed and observed, the Guarantor: (a) shall have no right of subrogation against the Tenant by reason of any payments or acts of performance by the Guarantor, in compliance with the obligations of the Guarantor hereunder; (b) waive any right to enforce any remedy which the Guarantor now

or hereafter shall have against the Tenant by reason of any one or more payments or acts of performance in compliance with the obligations of the Guarantor hereunder; and (c) subordinate any liability or indebtedness of the Tenant now or hereafter held by the Guarantor to the obligations of the Tenant to the Landlord under the Lease.

6. This Guaranty shall apply to the Lease, any extension or renewal thereof and to any holdover term following the term hereby granted or any extension or renewal thereof.

7. This instrument may not be changed, modified, discharged or terminated orally or in any

manner other than by an agreement in writing signed by the Guarantor and the Landlord.

[Signature page follows.]

IN WITNESS WHEREOF, the Guarantor has hereunto set its hand and seal this ____ day of October, 2018.

GUARANTOR:

USA Truck, Inc.

By:_________________________

Name:

Title:

Signed, sealed and delivered

in the presence of:

___________________________

Unofficial Witness

___________________________

Notary Public

My commission expires:________

(SEAL)

_________________________(SEAL)

)

EXHIBIT A

PREMISES

[EXHIBIT B

PURCHASE OPTION

a.Purchase Option. Tenant shall have the right and option, exercisable by Tenant in its sole discretion by written notice to Landlord at any time during the Term, except during the Initial Term (the “Option Notice”), to purchase the Premises from Landlord for a purchase price equal to the Option Price (as hereinafter defined). Upon the determination of the Option Price, Landlord and Tenant (or an affiliate of Tenant) shall promptly and diligently negotiate and execute a definitive purchase and sale agreement in form and substance mutually acceptable to Landlord and Tenant (a “Definitive Agreement”) for the sale of the Premises to Tenant for a purchase price equal to Option Price, and shall thereafter close such sale in accordance with the terms of the Definitive Agreement. The Definitive Agreement will allocate all closing costs and expenses, including without limitation, escrow costs, title insurance costs and premiums, documentary stamp, deed or transfer taxes, recording fees, and sales commissions, in a manner that is customary for the market in which the Premises are located.

b.Option Price. The Option Price shall be equal to %2. the Fair Market Value of the Premises (as defined in Section 5 of this Exhibit), as reduced by %2. the principal balance of, and any accrued but unpaid interest on, any indebtedness to be assumed by Tenant as part of its acquisition of the Premises.

c.Continuing Rights. The Purchase Option shall be an ongoing and continuing right and option during the Term, and shall be binding upon any successor Landlord under this Lease.

d.Termination of the Purchase Option. The Purchase Option shall automatically expire and be of no further force or effect upon the expiration or earlier termination of the Lease.

e.Fair Market Value. “Fair Market Value” means the value of the Premises, as determined in accordance with the following protocols and procedures:

a.Landlord and Tenant shall initially attempt to agree upon a mutually-acceptable purchase price for the Premises. If Landlord and Tenant are able to agree upon a purchase price for the Premises within thirty (30) days after Tenant’s delivery of the Option Notice, such agreed-upon price shall be deemed to be the Fair Market Value of the Premises for purposes of this Exhibit B. If, however, Landlord and Tenant are unable to agree upon a purchase price within such 30-day period, the Fair Market Value of the Premises shall be determined by the appraisal process described in the remainder of this Section 5.

b.If the Fair Market Value of the Premises is to be determined by appraisal, within ten (10) days following the parties' failure to agree upon a purchase price, each of Landlord and Tenant shall select an appraiser who is a member of the Appraisal Institute or its successor (“MAI”), and who has at least five (5) years of experience in valuing commercial properties similar to the Premises in the market in which the Premises are located (a “Qualified Appraiser”). If one party fails to name a Qualified Appraiser within such 10-day period, the other party may select a second Qualified Appraiser. The two Qualified Appraisers so selected shall be instructed to promptly determine, independently of one another, the Fair Market Value of the Premises and provide an oral opinion of Fair Market Value within twenty (20) days, and an electronic summary appraisal report within thirty (30) days, after the appointment of the second Qualified Appraiser. If either Qualified Appraiser fails to deliver a report to the parties containing the Fair Market Value determined by such Qualified Appraiser within the applicable 30-day period, but the other Qualified Appraiser timely delivers his or her report, the determination of Fair Market Value of the Qualified Appraiser who has timely delivered his or her report shall be determinative of the Fair Market Value of the Premises, and final and binding on both Landlord and Tenant.

c.If the two Qualified Appraisers have made their determinations of Fair Market Value within the time period set forth in Section 5(b) above, and if the difference between the two amounts so determined is less than or equal to five percent (5%) of the lesser of such amounts, then the Fair Market Value of the Premises shall be the average of the fair market values determined by each of the two Qualified Appraisers. If the difference between the two amounts exceeds five percent (5%) of the lesser of such amounts, then the two Qualified Appraisers shall, within five (5) business days after delivery of the second Qualified Appraiser’s report, select a third Qualified Appraiser. If the two Qualified Appraisers appointed by the parties are unable to agree upon a third Qualified Appraiser within the applicable 5-business day period, the third Qualified Appraiser shall be selected by the president (or equivalent officer) of the local chapter of the MAI, or his or her designee or, if there is no such organization or if such individual declines to make such appointment, then either Party may request appointment of the third Qualified Appraiser by the American Arbitration Association. The third Qualified Appraiser shall be instructed to determine the Fair Market Value of the Premises and deliver an oral opinion to the parties within twenty (20) days, and an electronic summary appraisal report to the parties within thirty (30) days, after his or her selection. Of the three appraisals, the appraisal which differs most in terms of dollar amount from the other two appraisals shall be excluded, and the average of the remaining two appraisals shall be determinative of the Fair Market Value of the Premises, and final and binding upon both Landlord and Tenant. Each party shall pay and bear the fees and expenses of the Qualified Appraiser selected by or on behalf of such party, and the parties shall share equally in the fees and expenses of the third Qualified Appraiser. Each party shall have the right to submit such data and memoranda to each of the Qualified Appraisers in support of its respective positions as it may deem necessary or appropriate.

d.In determining the Fair Market Value of the Premises, the Qualified Appraisers shall conduct a comprehensive broker cap rate survey in accordance with USPAP standards. The reports issued by the Qualified Appraisers shall be in full compliance with USPAP and the market standard definition of market value. The typical standard shall be the definition from the Federal Register, Volume 55, 12 C.F.R. Part 34.42(g), page 34696, August 24, 1990, as amended at Federal Registers, Volume 57 Page 12202, April 9, 1992; Federal Register Volume 59 Page 29499, June 7, 1994. The definition is:

The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

a.The buyer and seller are typically motivated.

b.Both parties are well informed or well advised, and acting in what they consider their own best interests.

c.A reasonable time is allowed for exposure in the open market.

d.Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto.

x.The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.]

Exhibit F

RESTRICTIVE COVENANT AGREEMENT

This Restrictive Covenant Agreement (this “Agreement”) is executed and delivered as of October __, 2018, by and among USA Truck, Inc., a Delaware corporation (“Buyer”), William H. Davis, a resident of the state of Florida, George Gary Davis, a resident of the state of Florida, and Todd Gary Davis, a resident of the state of Georgia.

WHEREAS, Buyer, Davis Transfer Company Inc., a Georgia corporation (“DTC”), Davis Transfer Logistics Inc., a Georgia corporation (“DTL”), B & G Leasing, L.L.C., a Georgia limited liability company (“B & G” and, collectively with DTC, DTL, and, unless context otherwise requires, any Subsidiary of any of them, the “Companies” and individually, a “Company”), William H. Davis, a resident of the state of Florida (“Bill Davis”), George Gary Davis, a resident of the state of Florida (“Gary Davis”), Todd Gary Davis, a resident of the state of Georgia (“Todd Davis,” and collectively with Bill Davis and Gary Davis, “Sellers,” and individually, a “Seller”), and John Carpentier, as Sellers’ Representative, have entered into an Equity Purchase Agreement, dated of even date herewith (the “Equity Purchase Agreement”) pursuant to which Buyer has agreed to acquire all of the outstanding shares of the capital equity of the Companies;

WHEREAS, the individual Restricted Persons (as hereinafter defined) are the equity holders of the Companies and the Restricted Persons will receive substantial benefits from the payment of the Final Aggregate Closing Consideration and the performance of other obligations under the Equity Purchase Agreement by Buyer and the Companies after the Closing;

WHEREAS, each Restricted Person possesses valuable relationships, knowledge, and/or information concerning the business of the Companies that could be used to compete with the Companies and thereby diminish the financial return that Buyer realizes as a result of the contemplated transaction;

WHEREAS, Buyer is willing to pay the Final Aggregate Closing Consideration and proceed with the transactions contemplated by the Equity Purchase Agreement because of the Companies’ customer, driver, contractor, employee and agent relationships, and that the same may be severely and irreparably harmed by competition from such Restricted Person;

WHEREAS, Buyer is willing to purchase the Company Equity from the Restricted Persons only on the condition that each Restricted Person enters into this Agreement to protect Buyer’s legitimate interests in the business of the Companies; and

WHEREAS, each Restricted Person agrees that the restrictive covenants contained in this Agreement are reasonable and necessary to induce Buyer to enter into the Equity Purchase Agreement and consummate the transactions contemplated in the Equity Purchase Agreement.

NOW, THEREFORE, each Restricted Person agrees as follows:

1. Certain Definitions.

a. For purposes of this Agreement:

i. “Competitive Business” means (A) for each Restricted Person, the interstate or intrastate transportation of freight by truck (motor carrier) and/or arranging for the interstate or intrastate transportation of freight by truck (brokerage), in each case using dry van, flat bed or

refrigerated trailers, or any intermodal, drayage, logistics, freight forwarding or LTL parcel business, or any combination thereof, and (B) for Todd Davis (but not, for the avoidance of doubt, Bill Davis or Gary Davis) any business conducted by any Company, Buyer or Buyer’s Affiliates as of or within the preceding six (6) months;

ii. “Confidential Information” means any and all information, data, and knowledge (whether in oral, written, graphic, electronic, machine-readable, or other form) of any Protected Party (as hereinafter defined) that is not generally known by an individual, a corporation, an association, a partnership, an estate, a trust, or any other entity or organization, other than the applicable Protected Party (“Persons”), and any and all information, whether or not publicly known in whole or in part, which if disclosed by the Protected Party, would assist in competition against such Protected Party, including, but not limited to, information relating to (i) the development, research, testing, manufacturing, know how, marketing and financial activities of any Protected Party, (ii) the products and services of any Protected Party, (iii) the costs, sources of supply, financial performance, and strategic plans of any Protected Party, (iv) the identity and needs of the customers of any Protected Party, (v) the other Persons with whom any Protected Party has business relationships, including, but not limited to, employees and independent contractors of any Protected Party, and the nature and substance of those relationships, and (vi) any and all information belonging to customers or others that is received by any Protected Party with any understanding, expressed or implied, that it would not be disclosed.

iii. “Restricted Person” means Bill Davis, an individual, Gary Davis, an individual, and Todd Davis, an individual (in each case, acting directly or indirectly); and

iv. “Restricted Period” means the period from the Closing Date through the later of (a) the fifth (5^th) anniversary of the Closing Date, and (b) the second (2^nd) anniversary of the Restricted Person’s termination of employment with Buyer or a Company.

b. All other capitalized terms used herein but not otherwise defined will have the meanings set forth in the Equity Purchase Agreement.

2. Restrictive Covenants. In consideration of the Closing and the transactions contemplated by the Equity Purchase Agreement, each Restricted Person agrees, jointly and severally with each other Restricted Person (subject to Article IV of the Equity Purchase Agreement, and provided that a violation by one Restricted Person of the restrictive covenants herein will not be deemed to be a violation by any other Restricted Person of the restrictive covenants herein), to abide by the following restrictive covenants:

a. Non-Competition. For the Restricted Period, each Restricted Person will not, and his or her respective Affiliates will not, directly or indirectly through another Person, without the prior written consent of Buyer, which may be withheld in Buyer’s sole and absolute discretion, directly or indirectly engage or invest in, own, manage, operate, finance, control or participate in the ownership, management, operation, financing or control of, be employed by, serve as an agent, officer, director or consultant to, be associated with or in any manner connected with, lend his or her name or any similar name to, lend his or her credit or render services or advice to, any Competitive Business anywhere in North America, provided, however, that nothing herein will be deemed to prevent any Restricted Person from acquiring through market purchases and owning, solely as an investment, less than two percent (2%)

in the aggregate of the equity securities of any entity that derives more than fifty percent (50%) of its gross revenues from the conduct of any Competitive Business, whose shares are registered under Section 12(b) or Section 12(g) of the Exchange Act, as amended, and are listed or admitted for trading on any United States national securities exchange or are quoted on any system of automated dissemination of quotations of securities prices in common use, so long as such Restricted Person is not directly or indirectly a member of any “control group” (within the meaning of the rules and regulations of the SEC) or any such issuer; and provided further, however, that nothing herein will be deemed to prevent any Restricted Person from acquiring through market purchases and owning, solely as an investment, any shares, units or other interest in a mutual fund, exchange-traded fund, unit investment trust, or similar investment vehicle whose holdings include investments in any Competitive Business or any entity involved in a Competitive Business.

b. Non-Solicitation. In consideration of the Closing and the transactions contemplated by the Equity Purchase Agreement, for the Restricted Period, each Restricted Person will not, and his or her respective Affiliates will not, directly or indirectly through another Person, without the prior written consent of Buyer, which may be withheld in Buyer’s sole and absolute discretion:

i. whether for a Restricted Person’s own account or for the account of another Person, solicit any Competitive Business from any Person that is or was in the twelve (12) months prior to such solicitation a customer of any Company, Buyer or any Subsidiary or Affiliate of any Company or Buyer (each a “Protected Party”);

ii. whether for a Restricted Person’s own account or the account of any other Person, solicit, employ or otherwise engage as an employee, independent contractor, agent or otherwise, any Person who is or was at any time within the previous twelve (12) months an employee, independent contractor, agent or otherwise engaged with any Protected Party to terminate his, her or its employment, engagement or relationship with such Protected Party; or

iii. at any time interfere with any Company’s or Buyer’s or any Affiliate of a Company or Buyer’s relationship with any Person, including any Person who was at any time within the previous twelve (12) months an employee, contractor, supplier, agent or customer of any Protected Party, including, without limitation, soliciting, encouraging, advising or influencing such Person(s) to discontinue or reduce the extent of such relationship.

c. Non-Disclosure. For the applicable Restricted Period each Restricted Person will not, and his or her respective Affiliates will not, directly or indirectly through another Person, without the prior written consent of Buyer, which may be withheld in Buyer’s sole and absolute discretion:

i. disparage any Protected Party or any of their stockholders, directors, officers, employees or agents; or

ii. divulge, communicate, use to the detriment of any Protected Party or for the benefit of any other Person(s), or misuse in any way, any Confidential Information or trade secrets pertaining to any Protected Party except as required by law.

3. Scope and Reasonableness. Each Restricted Person hereby acknowledges and agrees that the restrictive covenants contained in this Agreement are reasonable and necessary to induce Buyer to enter into the Equity Purchase Agreement and consummate the transactions contemplated thereby, and that the scope of the restrictions set forth in the restrictive covenants herein are reasonably tailored, and

not broader than necessary, to protect the legitimate business interests of Buyer, and do not prevent or preclude the Restricted Person from earning a suitable livelihood.

4. Remedies for Breach of Agreement. Each Restricted Person acknowledges that the injury that would be suffered by Buyer as a result of a breach of the provisions of this Agreement would be irreparable and that the award of monetary damages for such breach would be an inadequate remedy. Consequently, Buyer will have the right, in addition to, and not in limitation of, any other rights it may have, to obtain injunctive relief to restrain any breach or threatened breach or otherwise to specifically enforce any provisions of this Agreement, and Buyer will not be obligated to post bond or other security in seeking such relief.

5. Termination of this Agreement. This Agreement shall terminate and be of no further force and effect from and after the Closing Date through the later of (a) the fifth (5^th) anniversary of the Closing Date, and (b) the second (2^nd) anniversary of the Restricted Person’s termination of employment with Buyer or a Company. Notwithstanding the termination of this Agreement, the Restricted Persons shall remain liable to Buyer for a period of one (1) year after termination of this Agreement for any violation of this Agreement that occurred prior to the termination of this Agreement (subject to Article IV of the Equity Purchase Agreement, and provided that a violation by one Restricted Person of the restrictive covenants herein will not be deemed to be a violation by any other Restricted Person of the restrictive covenants herein).

6. Separate Agreement. The covenants set forth in this Agreement will be deemed and construed as a separate agreement independent of any provisions of the Equity Purchase Agreement or any other agreement between Buyer and a Restricted Person or any Affiliate of a Restricted Person. The existence of any claim or cause of action by a Restricted Person (directly or indirectly), whether predicated on the Equity Purchase Agreement or otherwise, will not constitute a defense to the enforcement by Buyer of the covenants of this Agreement.

7. Severability. If any term or provision of this Agreement will be determined by any court of competent jurisdiction to be invalid, illegal or unenforceable, in whole or in part, and such determination will become final, such provision or portion will be deemed to be severed or limited, but only to the extent required to render the remaining terms and provisions of this Agreement enforceable. This Agreement as thus amended will be enforced so as to give effect to the intention of the parties insofar as that is possible. In addition, the parties hereby expressly empower a court of competent jurisdiction to modify any term or provision of this Agreement to the extent necessary to comply with existing law and to enforce this Agreement as modified.

8. Choice of Law, Jurisdiction, and Venue. This Agreement will in all respects be interpreted, enforced, and governed by the laws of the State of Delaware, regardless of its principles regarding conflicts of law or the principles of conflicts of law of any other jurisdiction. The parties intend to and hereby confer jurisdiction to enforce the obligations set forth in this Agreement upon the courts of any jurisdiction within the United States in which a breach of such obligations occurred. Each of the parties consents to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objections to venue laid therein.

9. Entire Agreement. This Agreement constitutes the entire agreement between the Parties and supersedes all prior negotiations, understandings, and agreements concerning the subject matter hereof, provided, however, that nothing herein will supersede or nullify any obligations undertaken by

each Restricted Person under the Equity Purchase Agreement. This Agreement will not be amended or modified except in a writing signed by the Restricted Person and Buyer.

7. Restricted Person’s Acknowledgment. Each Restricted Person acknowledges that he or she has carefully read and understands the terms and conditions of this Agreement; is signing this Agreement knowingly and voluntarily of his or her own free will, without any duress, coercion, or undue influence by any other person or entity, and agrees that he or she has not relied on any statement by anyone associated with the Companies or Buyer that is not contained in this Agreement in deciding to sign this Agreement.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto have executed this Restrictive Covenant Agreement as of the date first written above.

BUYER:

USA Truck, Inc.

By:

Name: James D. Reed

Title: President and Chief Executive Officer

RESTRICTED PERSONS:

________________________________________

William H. Davis, individually

________________________________________George Gary Davis, individually

________________________________________Todd Gary Davis, individually

March 7, 2018

Mr. George Henry IV

Transmitted via E-mail

Dear George,

On behalf of USA Truck, Inc. (the “Company”), I am pleased to offer you the position of Senior Vice President, Logistics, reporting to the Chief Executive Officer and President of the Company, with a start date no later than April 1, 2018. The following outlines the terms of employment, but does not constitute a contract of employment or a guarantee of employment. This offer is subject to approval by the Company’s Board of Directors and your compensation package as outlined is subject to approval of the Executive Compensation Committee of the Company’s Board of Directors (the “Committee”).

Base Salary. Your starting base salary will be $18,750.00 per month annualized to $225,000, less applicable taxes, deductions, and withholdings, paid monthly and subject to annual review. The Company’s regularly scheduled pay days are currently on the last day of every month.

Key Management Incentive Plan. You will participate in the established Key Management Incentive Plan, beginning in 2018 and you will be entitled to:

Cash Incentive. You are eligible for a target cash incentive of 50% of your annualized base salary, pro- rated based on the period of time you are employed at the Company during 2018 and less applicable taxes, deductions and withholdings. Target incentives do not constitute a promise of payment. To qualify for the incentive bonus, you must remain employed with the Company through the date that the incentive bonus is paid (as specified in the Key Management Incentive Plan). Your actual plan payout will depend on the Company’s and your individual performance relative to pre-established goals, subject to and governed by the terms and requirements of the Key Management Incentive Plan as determined by the Committee.

Equity Incentive. You are eligible for a target equity grant of restricted shares of the Company’s common stock equal to up to 75% of your annualized base salary for 2018 under the 2018 Equity Incentive Plan (the “2018 EIP”) to be established by the Committee. The number of restricted shares awarded will be based upon your annualized base salary and the closing price of the Company’s

common stock on the award date. Awards under the 2018 EIP will be 40% time-based and the balance will be performance-based. The time-based portion is expected to have a four (4) year ratable vesting period, and the performance-based portion is expected to vest at the completion of three (3) years, depending upon performance relative to goals established by the Committee. The maximum target achievable under the plan is 175% of your target performance based portion of the EIP program. All incentive compensation (whether cash or equity) for all employees, including you, is subject to the discretion of the Committee.

Upon the occurrence of a Payment Trigger described in subparagraph (ii) Paragraph (L) of Section 1 of Exhibit A hereto, all unvested shares subject to time-based vesting would become fully vested and any unvested shares subject to performance-based vesting would vest in accordance with the award agreement relating to such shares.

Sign-On Bonus. You also will receive a Sign-On Cash Bonus of $75,000, less applicable taxes, deductions, and withholdings. The Sign-On Bonus is payable in one installment and shall be payable to you on the first monthly paycheck that occurs 30 days or more after your start date.

If your employment is terminated by the Company for "Cause" (as defined in Exhibit A) or voluntarily by you at any time prior to the expiration of 24 months from your start date, this bonus will be subject to repayment on a pro-rated basis in relation to the portion of the 24-month period during which you are actually employed by the Company.

Obligations. You may be required to serve as an officer and/or director of one or more subsidiaries of the Company, for which you will receive no additional compensation.

Relocation Assistance. There is none offered, relocation to Van Buren, Arkansas is not required.

Benefits. A significant part of your total compensation at the Company is derived from a competitive benefits package for employees. Eligible Company employees may participate in health insurance benefits (medical, dental, and vision), life insurance, short term and long term disability, the Company’s Employee Stock Purchase Plan, 401(k) Plan, and Flexible Spending Plan. All benefits are subject to the plan documents and eligibility requirements.

You will receive $1,000 per year to be applied towards premium payments on a supplemental term life insurance or you may choose to receive it as wages in your monthly payroll check (at the rate of $83.33 per month) and subject to required withholding of federal, state and local income, excise and employment related taxes.

The Company will reimburse you the net amount for ninety (90) days COBRA coverage to assist you in continual coverage of your current healthcare plan during the mandatory waiting period.

Paid Time Off. You will receive five (5) weeks of paid time off per year.

Business Travel and Expense. You will be expected to travel in connection with your employment. The Company will reimburse you for reasonable business expenses incurred in connection with your employment and in accordance with the Company’s Business Entertainment and Travel Policy.

You will be provided a laptop and cellular phone at the Company's expense.

Confidential Information or Trade Secrets. You will observe all rules, regulations, and security requirements of the Company concerning the safety of persons and property. You agree that you will comply with the Company's employee handbook, Code of Business Conduct and Ethics Policy, the Open Door Policy, the Whistleblower Policy, the Stock Ownership and Anti-Hedging and Pledging Policy, the Clawback Policy, and any other policies of the Company as they relate to employees, officers, or directors of the Company.

Executive Change in Control Agreement. You and the Company will enter into an Executive Change in Control Agreement in the form of Exhibit A attached hereto and incorporated by reference herein.

Employment At-Will. This letter does not create an express or implied contract of employment or any other contractual commitment. This letter contains the complete, final, and exclusive embodiment of the understanding between you and the Company regarding the terms of your employment and supersedes in all respects any prior or other agreement or understanding, written or oral, between you and the Company with respect to the subject matter of this letter. Your employment relationship with the Company is on an at-will basis, which means that either you or the Company may terminate the employment relationship at any time for any reason or no reason, consistent with applicable law.

Notwithstanding the terms of this letter, the Company shall have the right change its compensation, welfare, benefit, incentive, and employment plans, policies, and terms from time to time in its sole discretion.

Background Verification. This offer is contingent on the successful completion of the verification of information provided by you in your job application and drug and background screenings.

Eligibility to Work. You will be required to provide proof of eligibility for employment in the United States no later than three days from the beginning of employment per the Immigration and Control Act of 1986; Form I-9 is mandatory.

You represent and warrant that your signing of this letter and the performance of your obligations under it (including, without limitation, your employment with the Company and your performance of services for the Company) will not breach or be in conflict with any covenant not to compete and/or similar obligations by which you are or may be bound. You also agree that you will not disclose to or use on behalf of the Company any proprietary information of another person or entity without that person's or entity's consent.

We are excited to start working with you and look forward to you joining USA Truck, Inc. Please review and acknowledge your acceptance of the terms of this letter by signing below and faxing or emailing the signed letter to my attention.

Sincerely,

Cheryl Stone

Senior Vice President of, Human Resources

I accept this offer of employment with USA Truck, Inc. and agree to the terms and conditions outlined in the letter.

/s/ George T .Henry 3-14-2018

Signature Date

George T. Henry IV 3-28-2018

Full Name Planned Start Date

Exhibit A

[Executive Change In Control Agreement Attached]

EXECUTIVE SEVERANCE AND CHANGE IN CONTROL AGREEMENT

This Executive Severance and Change in Control Agreement (this “Agreement”), dated as of March 13, 2018 is made by and between USA Truck, Inc., a Delaware corporation (as hereinafter defined, the “Company”), and George Henry IV, Senior Vice President, Logistics of the Company (as hereinafter defined, the “Executive”).

WHEREAS, the Company and the Executive have entered into that Employment Letter Agreement by and between the Company and the Executive dated March 13, 2018 (the "Employment Letter Agreement"); and

WHEREAS, the Company and the Executive desire to set forth the circumstances under which the Executive may receive payments under this Agreement.

NOW THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Company and the Executive hereby agree as follows:

1.Defined Terms.

below:

For purposes of this Agreement, the following terms shall have the meanings indicated

(A) “Board” shall mean the Board of Directors of the Company, as constituted from time to time.

(B) “Cause” for termination by the Company of the Executive's employment shall mean (i) failure by the Executive to perform the essential functions of the Executive’s position with the Company, other than any failure resulting from the Executive's incapacity due to physical or mental disability; (ii) failure to comply with any lawful directive by the Board; (iii) a material violation by the Executive of the corporate governance guidelines, code of ethics, insider trading policy, governance policy, or other policy of the Company; (iv) a breach of any fiduciary duty to Company; (v) misconduct in the course and scope of employment by the Executive that is injurious to the Company, from a monetary or reputational standpoint; (vi) any attempt to willfully obtain any personal profit from any transaction which is adverse to the interests of the Company or any of its subsidiaries and in which the Company or any of its subsidiaries has an interest or any other act of fraud or embezzlement against the Company, any of its subsidiaries or any of its customers or suppliers; (vii) a breach by the Executive of any of the covenants contained in Sections 14, 15, and 16 of this Agreement; (viii) the repeated use of alcohol by the Executive that interferes with the Executive's duties, the use of illegal drugs by the Executive, or a violation by the Executive of the drug and/or alcohol policies of the Company; (ix) violation of any applicable law, rule or regulation, including without limitation the Sarbanes-Oxley Act of 2002 or other federal or state securities law, rule, or regulation; or (x) the conviction or plea of guilty or nolo contendere to a felony or a misdemeanor involving moral turpitude. With respect to subsections (i), (ii) and (iii) above, the Executive shall be notified in writing (including via email) of any alleged failure, breach or violation, such notice shall specify

in reasonable detail the facts and circumstances claimed to constitute Cause under subsections (i), (ii) or (iii) as applicable and the Executive shall be given at least fifteen (15) calendar days to remedy or cure any failure, breach or violation. For purposes of this definition following a Change in Control, the Board’s determination of “Cause” must be made in good faith.

(i) Any “Person” as defined in Section 3(a)(9) of the Exchange Act, and as used in Section 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) of the Exchange Act (but excluding the Company and any employee benefit plan sponsored or maintained by the Company (including any trustee of such plan acting as trustee)), directly or indirectly, becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities (other than indirectly as a result of the Company’s redemption of its own securities); or

(ii) The consummation of any merger or other business combination of the Company, a sale of more than 50% of the Company’s assets, the liquidation or dissolution of the Company or any combination of one or more of the foregoing transactions (the “Transactions”) other than a Transaction immediately following which either (x) the stockholders of the Company and any trustee or fiduciary of any Company employee benefit plan immediately prior to the Transaction own more than 50% of the voting power, directly or indirectly, of (A) the surviving corporation in any such merger or other business combination; (B) the purchaser of or successor to the Company’s assets; (C) both the surviving corporation and the purchaser in the event of any combination of Transactions; or (D) the parent company owning 100% of such surviving corporation, purchaser or both the surviving corporation and the purchaser, as the case may be ((A), (B), (C) or (D), as applicable, the “Surviving Entity”) or (y) the Incumbent Directors, as defined below, shall continue to serve as a majority of the board of directors of the Surviving Entity without an agreement or understanding that such Incumbent Directors will later surrender such majority; or

(iii) Within any twenty-four (24)-month period, the individuals who were directors immediately before the beginning of such period (the “Incumbent Directors”) shall cease (for any reason other than death) to constitute at least a majority of the Board or the board of directors of any successor to the Company, including any Surviving Entity. For this purpose, any director who was not a director at the beginning of such period shall be deemed to be an Incumbent Director if such director was elected to the Board by, or on the recommendation of, or with the approval of, at least two-thirds of the directors who then qualified as Incumbent Directors (so long as such director was not nominated by a Person who commenced or threatened to commence an election contest or proxy solicitation by or on behalf of a Person (other than the Board) or who has entered into an agreement to effect a Change in Control or expressed an intention to cause such a Change in Control).

time.

(D)

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to

(E) “Company” shall mean USA Truck, Inc. and any successor to its business or assets, by operation of law or otherwise.

(F) “Constructive Termination” shall mean the occurrence of any of the following, without the Executive’s express written consent, at any time within twelve (12) months following a Change in Control:

(i) material diminution in the overall scope of the Executive’s duties, authorities and responsibilities from those held by the Executive immediately prior to the time of a Change in Control;

(ii) geographic relocation of the Executive’s assigned principal business location to a location greater than forty (40) miles from the place of the Executive’s principal business location immediately prior to the time of a Change in Control; or

(iii) diminution by ten percent (10%) or more of the Executive’s annual base salary or target bonus in effect immediately prior to the time of a Change in Control.

hereof.

(G)

“Date of Termination” shall have the meaning stated in Paragraph (B) of Section 5

(H) “Disability” shall mean a medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six months, where such impairment causes the Executive to be unable to perform the duties of his or her position of employment or any substantially similar position of employment.

(I) “Executive” shall mean the individual named in the first paragraph of this Agreement.

(J) “Incumbent Directors” shall mean directors who were directors of the Company as of the date hereof or who are appointed, elected or nominated to the Board in accordance with the following sentence. It is understood that any individual becoming a member of the Board subsequent to the date hereof whose appointment was approved by a vote of at least a two-thirds majority of the Continuing Directors remaining in office at the time of appointment or whose election or nomination for election by the Company’s stockholders was approved by a vote of at least a two-thirds majority of the Continuing Directors remaining in office at the time of election or nomination shall be considered, for purposes of this Agreement, as though such individual were a Continuing Director on the date hereof.

(K) “Notice of Termination” shall have the meaning stated in Paragraph (A) of Section 5 hereof.

(L) “Payment Trigger” shall mean any of the following that occurs during the term of this Agreement:

(i) termination of the Executive’s employment by the Company without Cause, at any time other than within twelve (12) months following a Change in Control, and other than as a result of the Executive’s Disability; or

(ii) Constructive Termination of the Executive while the Executive remains employed by the Company or its successor, or termination of the Executive’s employment by the Company without Cause within twelve (12) months following a Change in Control occurring during the term of this Agreement.

For the avoidance of doubt, a termination of the Executive by the Company for Disability shall not be deemed a termination of the Executive without Cause.

(M) “Person” shall have the meaning given in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended from time to time, as modified and used in Sections 13(d) and 14(d) thereof; except that, a Person shall not include (i) the Company, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company, or (iii) an underwriter temporarily holding securities pursuant to an offering of such securities.

2.Term of Agreement.

This Agreement shall be effective as of the date set forth in the first paragraph of this Agreement and shall continue in effect until the Date of Termination or the death of the Executive; provided, that all covenants (including, without limitation, the covenants of the Executive contained in Sections 14, 15, and 16 of this Agreement and the covenants of the Company following a Payment Trigger) shall survive in accordance with their terms.

3.General Provisions.

(A) The Company hereby represents and warrants to the Executive that the execution and delivery of this Agreement and the performance by the Company of the actions contemplated hereby have been duly authorized by all necessary corporate action on the part of the Company. This Agreement is a legal, valid and legally binding obligation of the Company enforceable in accordance with its terms.

(B) No amount or benefit shall be payable under this Agreement unless there shall have occurred a Payment Trigger during the term of this Agreement.

(C) This Agreement and the Employment Letter Agreement shall not be construed as creating an express or implied contract of employment and, except as otherwise agreed in writing between the Executive and the Company, the Executive shall not have any right to be retained in the employ of the Company. Notwithstanding the immediately preceding sentence or any other provision of this Agreement, any purported termination of the Executive’s employment that is not effected in accordance with a Notice of Termination satisfying Paragraph (A) of Section 5 shall not be effective for purposes of this Agreement. The Executive’s continued employment for

any period of time after a Payment Trigger, up to the maximum time specified in Paragraph (B) of Section 5, shall not constitute a waiver of the Executive’s rights with respect to any payment obligations of the Company under this Agreement. The waiver by the Executive of any particular event meeting the definition of or constituting a Constructive Termination shall not operate as a waiver by the Executive of any benefits or rights under this Agreement should any subsequent event or circumstance occur that constitutes a Constructive Termination under this Agreement.

4.Payments Due Upon a Payment Trigger.

(A) The Company shall pay to the Executive the payments described in this Section 4 upon the occurrence of a Payment Trigger during the term of this Agreement.

(B) (i) Upon the occurrence of a Payment Trigger during the term of this Agreement arising by reason of the circumstances described in subparagraph (i) of Paragraph (L) of Section 1:

a.the Company shall pay the Executive monthly payments, in cash, equal to one-twelfth (1/12) of the Executive's annual base salary in effect immediately prior to the Date of Termination, on or as near as practicable to the same date in each month as monthly installments (each of which shall be considered a separate "payment" for purposes of Code Section 409A, as defined in Section 23) of the annual base salary were made to the Executive prior to the Date of Termination, for a period of six (6) months following the Date of Termination or such lesser number of months Executive is employed by the Company (pro-rated for partial months);

b.the Company shall pay to the Executive a lump sum amount, in cash, if and to the extent earned, under any short term cash incentive compensation plan for the fiscal year in which the Date of Termination occurs, which plan has been adopted by the Executive Compensation Committee of the Board prior to the Date of Termination, pro- rated for the number of days Executive was employed by the Company in the applicable fiscal year through the Date of Termination, and payable at the time and on the same basis as paid to recipients still employed by the Company; and

c.the Company shall pay the Executive any other amounts (other than any payment of short term cash incentive compensation described in Section 4(B)(i)(b) above or Section 4(C) below) that may be due to the Executive under any employee welfare, benefit, vacation, equity, or long term incentive plan then in effect to the extent the Executive is an eligible participant, subject to and upon the terms and conditions set forth in any such plan.

i.Upon the occurrence of a Payment Trigger during the term of this Agreement arising by reason of the circumstances described in subparagraph (ii) of Paragraph (L) of Section 1:

(a) the Company shall pay the Executive a lump sum payment, in cash, equal to the sum of one hundred fifty percent (150%) of the Executive's annual base salary in effect immediately prior to the Date of Termination, provided that if the Change in

Control does not constitute a change in control event as defined in Code Section 409A, then the portion of the lump sum payment, if any, that is considered deferred compensation subject to Code Section 409A shall be paid in installments as described in Section 4(B)(i)(a);

(b) to the extent the Executive has established full time residency in the Ft. Smith/Van Buren, Arkansas area for Executive and his family, the Company shall pay to the Executive a lump sum payment, in cash, equal to the amount set forth on the signature page to this Agreement (if any) and identified as relocation services benefit, to defray the Executive's costs of relocation services;

(c) the Company shall pay to the Executive a lump sum amount, in cash, equal to one hundred fifty percent (150%) of the target amount of any short term incentive cash compensation plan for the fiscal year in which the Date of Termination occurs, which plan has been adopted by the Executive Compensation Committee of the Board prior to the Date of Termination, that would have been paid to the Executive for the fiscal year in which the Date of Termination occurs, assuming all performance and other vesting criteria were satisfied for such year; provided, that if no short term cash incentive cash compensation plan has been adopted for the fiscal year in which the Date of Termination occurs, such

target amount will be equal to the Executive’s target amount under the short term incentive cash compensation plan adopted by the Executive Compensation Committee of the Board for the fiscal year immediately preceding the fiscal year in which the Date of Termination occurs;

(d) the Company shall reimburse, on an after-tax basis, any premiums paid by the Executive pursuant to the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"), during a period of eighteen (18) months following the Date of Termination; and

(e) the Company shall pay the Executive any other amounts (other than any payment of short term cash incentive compensation described in Section 4(B)(ii)(c) or Section 4(C)) that may be due the Executive under any employee welfare, benefit, vacation, equity, or long term incentive plan then in effect to the extent the Executive is an eligible participant, subject to and upon the terms and conditions set forth in any such plan.

(C) Notwithstanding any provision of any incentive compensation plan adopted by the Executive Compensation Committee of the Board prior to the Date of Termination, and in addition to any payments under Paragraph (B) hereof, the Company shall pay to the Executive a lump sum amount, in cash, equal to the amount of any cash incentive compensation that has been awarded to and earned by the Executive under any cash incentive compensation plan adopted by the Executive Compensation Committee of the Board for a completed fiscal year preceding the occurrence of the Date of Termination but that has not yet been paid to the Executive.

(D) The payments provided for in subparagraph (ii)(a) of Paragraph (B) and, if applicable and due upon the occurrence of a Payment Trigger during the term of this Agreement by reason of the circumstances described in subparagraph (ii) of Paragraph (L) of Section 1, Paragraph (C) of this Section 4 shall be made within a reasonable time following the expiration of the applicable waiting periods following execution and delivery of the General Release (as hereinafter defined).

(E) As a condition to the receipt of the severance and other payment benefits described in this Agreement, the Executive shall execute and comply with the terms of a general release of all claims (the “General Release”) against the Company, its affiliates and representatives, in the form attached hereto as Exhibit A, as updated by the Company for any change in laws. The General Release must be signed, and the period provided therein for revocation must have expired, not later than sixty days from the Date of Termination. Notwithstanding anything to the contrary contained herein, no severance benefits or other payments required under this Agreement shall be paid until the General Release is signed and the revocation period has expired, and any amounts that would otherwise have been paid prior to such date shall be paid within a reasonable time after such date, without interest. Notwithstanding the foregoing, if the sixty-day period after the Date of Termination ends in the calendar year following the year that includes the Date of Termination, no such amount that is subject to Code Section 409A shall be paid sooner than the first day of the year following the year that includes the Date of Termination, regardless of when the General Release is signed.

1.Termination Procedures.

(A) During the term of this Agreement, any purported termination of the Executive’s employment (other than by reason of death) shall be communicated by a Notice of Termination from one party hereto to the other party hereto in accordance with this Section 5(A). For purposes of this Agreement, a “Notice of Termination” shall mean, (i) in the case of a termination of the Executive’s employment by the Company without Cause, a written notice of termination, (ii) in the case of a termination of the Executive’s employment by the Company for Cause, a written notice of termination, which will indicate the conduct set forth in the definition of Cause in Paragraph (B) of Section 1 that the Executive was found to have violated, and (iii) in the case of the Executive terminating his or her employment with the Company, a written or verbal notice of termination; provided, that a Notice of Termination by the Executive in the case of a Constructive Termination shall specify in reasonable detail the event or circumstance constituting the Constructive Termination under Paragraph (F) of Section 1 of this Agreement, and such notice of Constructive Termination must be provided by the Executive to the Company within sixty (60) days of the initial existence of the condition giving rise to the Constructive Termination. Notwithstanding anything to the contrary contained herein, if the Executive engages in conduct that is reasonably believed to be imminently harmful to the Company, the Company may terminate the Executive’s employment by giving the Executive a verbal Notice of Termination, which may be effective immediately, and which shall be effective for purposes of this Agreement.

(B) "For purposes of this Agreement, a "Notice of Termination" shall mean a written or verbal notice of termination in accordance with Paragraph (A) of Section 5. In the case of a Notice of Termination for Cause, the Notice of Termination will indicate the conduct set forth in

the definition of Cause in Paragraph (B) of Section 1 that the Executive was found to have violated."

(C) “Date of Termination” with respect to any purported termination of the Executive’s employment during the term of this Agreement (other than by reason of death) shall mean:

(i) if the Executive’s employment is terminated by the Company for Disability, thirty (30) days after Notice of Termination is given (provided that the Executive shall not have returned to the full-time performance of the Executive’s duties during that thirty (30) day period);

(ii) if the Executive's employment is terminated by the Company for any other reason except in the case of a termination for Cause, the date specified in the Notice of Termination;

(iii) if the Executive’s employment is terminated by the Company for Cause, the date specified in the Notice of Termination; and

(iv) in the case of termination by the Executive (including a Constructive Termination following a Change in Control), thirty (30) days after the date such Notice of Termination is given; provided, in the case of a Constructive Termination, the Notice of Termination contemplated by Paragraph (A) of this Section 5 shall be deemed cancelled, void and of no further force and effect, and no payment obligation of the Company shall arise therefrom, if the Company rescinds or otherwise eliminates or reverses the action or event that would otherwise constitute grounds for Constructive Termination, and so notifies the Executive in writing within thirty (30) days of its receipt of the notice of Constructive Termination. The rescission, elimination

or reversal of any such action or event constituting a Constructive Termination shall not operate to release or discharge the Company from any other liability or obligation under this Agreement, including any liability or obligation arising from any subsequent action or event that constitutes a Constructive Termination.

2.No Mitigation; No Setoff.

The Executive shall not be required to mitigate the amount of any benefits the Company becomes obligated to provide to the Executive in connection with this Agreement by seeking other employment or otherwise. The benefits to be provided to the Executive in connection with this Agreement may not be reduced, setoff or subject to recovery by the Company by any benefits the Executive may receive from other employment, from retirement benefits or otherwise. Further, the amount of any payment or benefit provided for in this Agreement shall not be setoff against any amount claimed to be owed by the Executive to the Company, or otherwise, except for a violation of Section 14, 15, or 16.

3.Disputes

(A) If a dispute or controversy arises out of or in connection with this Agreement, the parties shall first attempt in good faith to settle the dispute or controversy by mediation under the Commercial Mediation Rules of the American Arbitration Association before resorting to arbitration or litigation. Thereafter, any remaining unresolved dispute or controversy arising out of or in connection with this Agreement may be settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association in a city located within Crawford County, Arkansas. Judgment may be entered on the arbitrator’s award in any court having jurisdiction. The Executive shall, however, be entitled to seek specific performance of the Company’s obligations hereunder during the pendency of any dispute or controversy arising under or in connection with this Agreement. The Company shall be entitled, in addition to any other rights it may have, to obtain injunctive relief to restrain any breach or threatened breach of, or to otherwise seek specific performance of the Executive's obligations under, any of the covenants contained in Section 14, 15, or 16 of this Agreement during the pendency of any dispute or controversy arising under or in connection with this Agreement, and the Company shall not be obligated to post bond or other security in seeking such relief.

(B) Any legal action concerning this Agreement, other than a mediation or an arbitration described in Paragraph (A) of this Section 7, whether instituted by the Company or the Executive, shall be brought and resolved only in a state or federal court of competent jurisdiction located in Crawford County, Arkansas or the Fort Smith Division of the Western District of Arkansas. The parties hereby irrevocably consent and submit to and shall take any action necessary to subject themselves to the personal jurisdiction of any such court and hereby irrevocably agree that all claims in respect of the action shall be instituted, heard, and determined in such court. The parties agree that such court is a convenient forum, and hereby irrevocably waive, to the fullest extent they may effectively do so, the defense of an inconvenient forum to the maintenance of the action. Any final judgment in the action may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

(C) The Company shall pay all costs and expenses, including attorneys’ fees and disbursements, of the Company and the Executive in connection with any legal proceeding

(including arbitration), whether or not instituted by the Company or the Executive, relating to the interpretation or enforcement of any provision of this Agreement, that is resolved in favor of the Executive pursuant to a final, unappealable judgment. The Executive shall pay all costs and expenses, including attorneys’ fees and disbursements, of the Company and the Executive in connection with any legal proceeding (including arbitration), whether or not instituted by the Company or the Executive, relating to the interpretation or enforcement of any provision of this Agreement, that is resolved in favor of the Company pursuant to a final, unappealable judgment. The non-prevailing party, as set forth above, shall pay prejudgment interest on any money judgment obtained by the prevailing party as a result of such proceeding, calculated at the rate provided in Section 1274(b)(2)(B) of the Code.

4.Successors; Binding Agreement.

(A) In addition to any obligations imposed by law upon any successor to the Company, the Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation, or otherwise, and whether or not such a transaction constitutes a Change in Control) to all or substantially all of the business or assets of the Company expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain the assumption and agreement prior to the effectiveness of any succession shall be a breach of this Agreement for which the Executive shall have any and all of the remedies available to him under this Agreement. The provisions of this Section 8 shall continue to apply to each subsequent employer of the Executive bound by this Agreement in the event of any merger, consolidation, or transfer of all or substantially all of the business or assets of that subsequent employer, whether or not that transaction constitutes a Change in Control.

(B) This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees, and legatees. If the Executive shall die while any amount would be payable to the Executive hereunder (other than amounts which, by their terms, terminate upon the death of the Executive) if the Executive had continued to live, the amount, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the executors, personal representatives, or administrators of the Executive’s estate.

5.Effect on Prior Agreements.

This Agreement contains the complete, final, and exclusive embodiment of the agreement and understanding among the parties hereto regarding severance, change in control, or similar payments to the Executive and supersedes in all respects any prior or other agreement or understanding, written or oral, among the parties with respect to the subject matter of this Agreement, including, but not limited to, Change in Control Severance Agreements, the Employment Letter Agreement, employment agreements or company policies, or other agreements or arrangements with respect to severance, change in control, or similar payments.

6.Exclusive Remedy.

In the event of a Payment Trigger, the provisions of Section 4 are intended to be and are exclusive and in lieu of any other rights or remedies to which the Executive or the Company may

otherwise be entitled (including any contrary provisions in any written or oral employment agreement or arrangement the Executive may have with the Company), whether at law, tort or contract, in equity, or under this Agreement. The Executive shall not be entitled to any severance or Change in Control benefits or rights upon a Payment Trigger other than those benefits expressly set forth in Section 4.

7.Notices.

For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, addressed

to the respective addresses set forth below, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon actual receipt:

To the Company: USA Truck, Inc.

3201 Industrial Park Road Van Buren, Arkansas 72956

Attention: Chairman of the Board

To the Executive: Mr. George Henry IV 12231 Churchill Downs Elm Springs, AR 72762

8.Miscellaneous.

No provision of this Agreement may be modified, waived, or discharged unless such waiver, modification, or discharge is agreed to in writing and signed by the Executive and an officer of the Company specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement. All references to sections of the Code shall be deemed also to refer to any successor provisions to such sections.

9.Governing Law.

The validity, interpretation, construction, and performance of this Agreement shall be governed by the internal, substantive laws of the State of Delaware, without giving effect to the law or principles of conflict of laws of any jurisdiction.

10.Obligation Not to Solicit and Compete.

The Executive hereby agrees that during his employment with the Company and for a period of six (6) months thereafter or, in the event of a Change in Control, eighteen (18) months thereafter (the applicable period being referred to herein as the "Restricted Period"), the Executive will not, directly or indirectly, in any manner (i) attempt to induce or assist others to attempt to induce any officer, employee, driver, independent contractor, customer, or vendor of the Company

or its affiliates to terminate its association with or reduce or terminate business with the Company or its affiliates, nor do anything directly or indirectly to interfere with the relationship between the Company or its affiliates and any such persons or concerns, unless part of a management directive, or (ii) engage or invest in, own, manage, operate, finance, control or participate in the ownership, management, operation, financing or control of, be employed by,

serve as an agent, officer, director or consultant to, be associated with or in any manner connected with, lend his name or any similar name to, lend his credit or render services or advice to, any Competitive Business (as hereinafter defined) anywhere in North America; provided, in order to bind the Executive to the provisions of Section 14(ii) when there is no Payment Trigger, the Company must make monthly payments, in cash, equal to one-twelfth (1/12) of the Executive’s annual base salary in effect immediately prior to the Date of Termination, on or as near as practicable to the same date in each month as monthly installments of the annual base salary were made to the Executive prior to the Date of Termination, for such portion of the Restricted Period as the Company determines (the "Non-Compete Payments"), which benefits will commence when the General Release is signed and the revocation period has expired. The Company will give the Executive notice within ten (10) days following the Date of Termination if it elects to not make the Non-Compete Payments and, once Non- Compete Payments commence, the Company will give the Executive thirty (30) days' written notice before discontinuing the Non-Compete Payments. The provisions of Section 14(i)will automatically apply to the Executive regardless of whether there is a Payment Trigger and the provisions of Section 14(ii) will automatically apply to the Executive if there is a Payment Trigger; the Executive acknowledging that he has received sufficient consideration for such covenants. For purposes of this Agreement, Competitive Business will mean the interstate or intrastate transportation of freight by truck (motor carrier), interstate or intrastate transportation freight through the use of a combination of rail and truck (intermodal), arranging for the interstate or intrastate transportation of freight by truck or a combination of rail and truck (brokerage), any business conducted by the Company or the Company's affiliates during Executive's employment, and any business where plans were developed during the Executive's employment to engage in such business. Nothing herein will be deemed to prevent the Executive from acquiring through market purchases and owning, solely as an investment, less than two percent (2%) in the aggregate of the equity securities of any issuer whose shares are registered under Section 12(b) or Section 12(g) of the Exchange Act, as amended, and are listed or admitted for trading on any United States national securities exchange or are quoted on any system of automated dissemination of quotations of securities prices in common use, so long as the Executive is not directly or indirectly a member of any "control group" (within the meaning of the rules and regulations of the SEC).

11.Confidentiality.

The Executive acknowledges that during his employment with the Company, he may acquire confidential proprietary information of the Company or its affiliates ("Confidential Information") that is, and remains, the sole property of the Company. Such Confidential Information is a valuable asset of the Company and substantially contributes to the effective and successful conduct of the Company's business. Confidential Information is intended to remain secret and misappropriation by any means is strictly prohibited. The Executive agrees to comply with the policies and procedures of the Company for protecting Confidential Information and agrees not to disclose to any person or use any Confidential Information obtained by the Executive incident to the Executive's employment or other association with the Company or its affiliates, other than as required for the proper performance of the Executive's duties and responsibilities to the Company or as required by applicable law after notice to the Company and a reasonable

opportunity for it to protect Confidential Information. This restriction will continue to apply after the Executive's employment terminates, regardless of the reason for such termination, for so long as such Confidential Information remains confidential or, if sooner, until the expiration of the Restricted Period following the date the Executive's employment with the Company terminates. The obligations of confidentiality imposed by this Section 15 will not apply to Confidential Information that becomes generally known to the public hereafter through no act of the Executive's in breach of this Agreement and no act of any other person in breach of an obligation of confidentiality to the Company. Notwithstanding anything to the contrary herein, the Executive acknowledges that the requirements for confidentiality as set forth in the Company handbook continue to apply to the Executive while the Executive is receiving compensation and benefits under this Agreement and during the Restricted Period.

The Executive also acknowledges that the requirements for confidentiality set forth in the Company handbook continue to apply to the Executive for the term provided therein. Notwithstanding anything to the contrary herein or set forth in the Company handbook, nothing herein or therein will (i) limit Executive's ability to file a charge or complaint with the Equal Employment Opportunity Commission, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (“Government Agencies”), (ii) limit Executive’s ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company, or (iii) limit Executive’s right to receive an award for information provided to any Government Agencies.

12.Non-disparagement.

The Executive agrees that he will not make to any person or entity any false, disparaging, or derogatory comments about the Company or its affiliates, or their business affairs, directors, officers, employees, drivers, independent contractors, customers, or vendors.

13.Remedies

Upon breach of any of the covenants contained in Section 14, 15, or 16 of this Agreement,

(a) the Company can and may take any and all actions available at law and in equity, including obtaining a restraining order or injunctive relief, (b) all compensation and benefits described in this Agreement will immediately cease, (c) the Executive will remain obligated to comply with the covenants in this Agreement, and (d) the periods set forth above in Sections 14 and 15 will be tolled during any period in which the Executive is in violation of such Section(s) so that the Company is provided with the full benefit of the Restricted Period.

14.Withholding.

All payments provided for hereunder will be subject to required withholding of federal, state and local income, excise, and employment-related taxes. If any such excise taxes would otherwise be imposed, the Company shall determine in good faith whether the Executive will either receive all of the benefits to which he is entitled under this Agreement, subject to the excise tax, or have his benefits under this Agreement reduced to a level at which the excise tax

will not apply, depending upon which approach will provide the Executive with the greater net after-tax benefit.

15.Severability.

If any portion or provision of this Agreement shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

16.Counterparts.

This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

17.Payment; Assignment.

Benefits payable under this Agreement will be paid only from the general assets of the Company. No person has any right to or interest in any specific assets of the Company by reason of this Agreement or the Employment Letter Agreement. To the extent benefits under this Agreement are not paid when due to any individual, he or she is a general unsecured creditor of the Company with respect to any amounts due. Benefits payable pursuant to this Agreement and the right to receive future benefits may not be anticipated, alienated, sold, transferred, assigned, pledged, encumbered, or subject to any charge.

18.Further Assurances.

The parties to this Agreement agree to perform, or cause to be performed, such further acts and deeds and to execute and deliver or cause to be executed and delivered, such additional or supplemental documents or instruments as may be reasonably required by the other party to carry into effect the intent and purpose of this Agreement.

19.Code Section 409A.

It is intended that any amounts payable under this Agreement shall either be exempt from or comply with Code Section 409A (including the Treasury regulations and other published guidance relating thereto) (“Code Section 409A”) so as not to subject the Executive to payment of any additional tax, penalty or interest imposed under Code Section 409A. The provisions of this Agreement shall be construed and interpreted, and if necessary modified or reformed (including any modification or reformation regarding the timing and amount of any payment) to avoid the imputation of any such additional tax, penalty or interest under Code Section 409A yet preserve (to the nearest extent reasonably possible) the intended benefit payable to the Executive. A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits that the Company determines may be considered nonqualified deferred compensation under Code Section 409A upon or following a termination of employment unless such termination is also a "separation

from service" within the meaning of Code Section 409A, and, for purposes of any such provision of this Agreement, references to a "termination," "termination of employment" or like term, and the timing thereof, shall mean such a separation from service. Notwithstanding any other provision of this Agreement, in the event the Executive is a “specified employee” as defined in Code Section 409A on the date the Executive incurs a separation from service, as so defined, to the extent

required by Code Section 409A, payments and benefits hereunder to which Code Section 409A would apply may not commence to the Executive until the earlier of the first day of the seventh month following the month that includes the Executive’s separation from service (as defined in Code Section 409A) or the date of the Executive’s death and any delayed payments and benefits shall be paid and provided in the aggregate, without interest, no later than ten (10) days following such date. For purposes of Code Section 409A, the Executive's right to receive the payments and benefits hereunder shall be treated as a right to receive a series of separate and distinct payments and benefits. Whenever a payment or benefit hereunder specifies a payment or benefit period with reference to a number of days, the actual date of payment or benefit within the specified period shall be within the sole discretion of the Company. In no event may the Executive, directly or indirectly, designate the calendar year of any payment to be made under this Plan, to the extent such payment is subject to Code Section 409A. The Company makes no representation or warranty and shall have no liability to the Executive or any other person if any provisions of this Agreement are determined to constitute deferred compensation subject to Code Section 409A, but do not satisfy an exemption from, or the conditions of, Code Section 409A. Any terms of this Agreement that are undefined or ambiguous shall be interpreted by the Company in its discretion in a manner that complies with Code Section 409A to the extent necessary to comply therewith. If for any reason any provision of this Agreement does not accurately reflect its intended establishment of an exemption from or compliance with Code Section 409A, as demonstrated by consistent interpretations or other evidence of intent, such provision shall be considered ambiguous as to its exemption from or compliance with Code Section 409A and shall be interpreted by the Company in a manner consistent with such intent, as determined in the discretion of the Company.

[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]

IN WITNESS WHEREOF, the parties have signed this Agreement as of the date set forth above.

USA TRUCK, INC.

By: /s/ Cheryl Stone

Name: Cheryl Stone

Title: VP, Human Resources

George Henry IV

Signature /s/ George Henry IV

Amount of Relocation Services Benefit

Exhibit A General Release

In exchange for the payments and benefits described in the agreement to which this release is attached (the “Agreement”), Executive, on his own behalf and on behalf of his heirs, executors, administrators, assigns and successors, does hereby covenant not to sue and acknowledges full and complete satisfaction of and hereby releases, absolves and discharges the Company and its Affiliates and their successors and assigns, parents, subsidiaries and affiliates, past and present, as well as their trustees, directors, officers, agents, attorneys, insurers, stockholders and employees, past and present, and each of them (hereinafter collectively referred to as “Releasees”), with respect to and from any and all claims, demands, liens, agreements, contracts, covenants, actions, suits, causes of action, obligations, debts, wages, vacation pay, expenses, attorneys’ fees, damages, judgments, orders and liabilities of whatever kind or nature in law, equity or otherwise, whether now known or unknown, suspected or unsuspected, and whether or not concealed or hidden, which Executive now owns or holds or has at any time heretofore owned or held as against said Releasees, or any of them, arising out of or in any way connected with his employment or other relationships with the Company or its Affiliates, or his separation from any such employment or other relationships (collectively, “Released Claims”), including specifically, but without limiting the generality of the foregoing, any claim under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Age Discrimination in Employment Act of 1967, as amended by the Older Worker’s Benefit Protection Act (“ADEA”), the federal Family and Medical Leave Act, the Fair Labor Standards Act, the Equal Pay Act, the Employee Retirement Income Security Act of 1974, the Worker Adjustment and Retraining Notification Act, or any other employment related federal, state or local law, regulation or ordinance; provided, however, that the foregoing release will not include or affect (and the following are expressly excluded from any Released Claims): (i) Executive’s rights under the Agreement; (ii) Executive’s rights to file claims for workers’ compensation or unemployment insurance benefits, (iii) Executive’s regular and usual salary accrued prior to the Separation Date, accrued but unused vacation through the Separation Date, COBRA continuation coverage and life insurance conversion rights, if any, and (iv) Executive’s rights to provide information, assist or participate in any investigation, proceedings, or litigation concerning any administrative claim with any government agency under any applicable law that protects such rights, or to file such a claim. This General Release does not (i) limit Executive's ability to file a charge or complaint with the Equal Employment Opportunity Commission, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (“Government Agencies”), (ii) limit Executive’s ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company, or (iii) limit Executive’s right to receive an award for information provided to any Government Agencies.

Executive acknowledges that the non-disparagement and confidentiality provisions contained in the Agreement infringe on Executive’s rights described in this release, and Executive agrees that he is aware of and has consented to such infringement. Furthermore, notwithstanding the foregoing release, Executive will continue to be entitled to all of his respective statutory rights to indemnification, including, without limitation, indemnification pursuant to the Company’s organizational documents, insurance policies or under applicable law to the same extent Executive would have had the right to be indemnified absent this release.

Executive acknowledges that he is waiving and releasing any rights he may have under the ADEA and that this waiver and release is knowing and voluntary. Executive and the Company agree that

this waiver and release does not apply to any rights or claims that may arise under the ADEA after the Effective Date (as hereinafter defined) of the Agreement. Executive acknowledges that the consideration given for

the Agreement is in addition to anything of value to which he was already entitled. Executive further acknowledges that he has been advised by this writing that:

d.He should consult with an attorney prior to executing the Agreement;

e.He has at least twenty-one (21) days within which to consider the Agreement, but if he wishes to sign the Agreement earlier, he may do so by signing the Acknowledgment and Waiver of the 21-day consideration period in the form attached as Exhibit B to the Agreement;

Agreement;

He has seven (7) days following his execution of the Agreement to revoke the

g.This Agreement will not be effective until the eighth day after Executive executes and does not revoke the Agreement (the “Effective Date”); and

h.Nothing in the Agreement prevents or precludes Executive from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA, nor does it impose any condition precedent, penalties or costs from doing so, unless specifically authorized by federal law. Any revocation must be in writing and hand delivered to the Company by close of business on or before the seventh day from the date that Executive signs the Agreement. In the event that Executive exercises his right of revocation, neither Executive nor any member of the Company or its Affiliates will have any further rights or obligations under the Agreement.

Executive represents and warrants that he has no present knowledge of any injury, illness or disease to him that is or might be compensable as a workers’ compensation claim or similar claim for workplace injuries, illnesses or diseases.

Terms used herein and not otherwise defined will have the meanings set forth in the Agreement to which this Release was attached.

[Signature page follows]

Intending to be legally bound, I have signed this General Release as of the date written below.

Signature:_____________________________

George Henry IV

Date Signed: _________________

Exhibit 23.01

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have issued our reports dated February 27, 2019, with respect to the consolidated financial statements and internal control over financial reporting included in the Annual Report of USA Truck, Inc. on Form 10-K for the year ended December 31, 2018. We consent to the incorporation by reference of said reports in the Registration Statements of USA Truck, Inc. on Form S-3 (File No. 333-224571, effective May 11, 2018) and Forms S-8 (File No. 333-218573, effective June 7, 2017, File No. 333-196695, effective June 11, 2014, File No. 333-117856, effective August 2, 2004, File No. 333-40317, effective November 14, 1997).

/s/ GRANT THORNTON LLP

Tulsa, Oklahoma

February 27, 2019

EXHIBIT 31.01

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

USA TRUCK, INC.

I, James D. Reed, certify that:

1.I have reviewed this annual report on Form 10-K of USA Truck, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date:	February 27, 2019	/s/ James D. Reed
		James D. Reed
		President and Chief Executive Officer

EXHIBIT 31.02

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

USA TRUCK, INC.

I, Jason R. Bates, certify that:

1.I have reviewed this annual report on Form 10-K of USA Truck, Inc.;

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date:	February 27, 2019	/s/ Jason R. Bates
		Jason R. Bates
		Chief Financial Officer

EXHIBIT 32.01

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the Annual Report on Form 10-K of USA Truck, Inc. (the “Company”) for the annual period ended December 31, 2018 (the “Report”), I, James D. Reed, President and Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date:	February 27, 2019	/s/ James D. Reed
		James D. Reed
		President and Chief Executive Officer

EXHIBIT 32.02

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18.S.C. SECTION 1350)

In connection with the Annual Report on Form 10-K of USA Truck, Inc. (the “Company”) for the annual period ended December 31, 2018 (the “Report”), I, Jason R. Bates, Chief Financial Officer of the Company, certify pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date:	February 27, 2019	/s/ Jason R. Bates
		Jason R. Bates
		Chief Financial Officer