EMPLOYMENT AGREEMENT
made as of this 29th day of April, 2004

B E T W E E N:

RICK E. GAETZ
(hereinafter the “Employee”)

and

VITRAN CORPORATION INC.
(hereinafter the “Company”)

WHEREAS the Employee has been employed with the Company since September 11, 1989
and has been serving the Company in the capacity of President and Chief
Executive Officer since May 2002.

AND WHEREAS the Company’s Board of Directors (the “Board”) has determined that
it is in the best interests of the Company and its shareholders to ensure that
the Company will have the continued dedication and objectivity of the Employee,
notwithstanding the possibility or occurrence of a Change of Control (as defined
below) of the Company;

AND WHEREAS the Board believes it is imperative to provide the Employee with
certain enhanced severance benefits upon the Employee’s termination of
employment following a Change of Control which provide the Employee with
financial security and provide sufficient incentive and encouragement to the
Employee to remain with the Company following a Change of Control;

AND WHEREAS it is in the best interests of the Company and the Employee to enter
into this Agreement to reflect the Employee’s current employment arrangements
with the Company as well as the additional benefits he will receive in the event
that there is a Change of Control of the Company.

NOW THEREFORE IN CONSIDERATION of the mutual covenants and promises contained in
this Agreement, the parties hereby agree as follows:

1. EMPLOYMENT POSITION

The Employee shall continue to serve the Company in the capacity of President
and Chief Executive Officer, and shall perform such duties and exercise such
powers as are incidental to such position and such other compatible duties and
powers as may from time to time be assigned to him by the Board.

 

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

 

The Employee agrees that he shall devote the whole of his time, attention and
ability to the business of the Company insofar as his time, attention and
ability are directed towards business interests. He shall competently and
faithfully serve the Company and use his best efforts to promote the interests
of the Company.

2. COMPENSATION

  (a)   BASE SALARY

The Employee shall receive an annual gross salary of $380,000 (the “base
salary”). The base salary shall be payable in accordance with the Company’s
customary payment policy. The base salary shall be subject to annual review. Any
increases in the base salary will be at the sole discretion of the Board.

  (b)   BONUS

Bonus shall be determined by meeting performance criteria outlined from time to
time by the Board’s Compensation Committee, and approved by the Board. The bonus
criteria are subject to annual review.

  (c)   BENEFITS

The Company will continue to provide the Employee with those group health and
insurance benefits made available by the Company generally to its senior
employees as the same may change from time to time. The Employee shall also be
entitled to the following perquisites:

  (i)   annual dues in respect of the Employee’s club membership at the
Mississauga Golf and Country Club, including any expenses incurred at such club
in accordance with Company policy;     (ii)   continuation of a Company car
allowance, in accordance with Company policy; and     (iii)   continued
entitlement to participate in the Company’s stock option plan.

3. TERMINATION

This Agreement shall terminate in the following events:

  (i)   by mutual agreement of the parties; or     (ii)   forthwith, without
notice or any payment in lieu of notice, if the Company has just cause at common
law for termination; or

Page 2 of 5

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

 

  (iii)   if the employment of the Employee is terminated by the Company, and
the Company does not have just cause at common law for such termination, the
Employee shall receive 24 months’ salary, which 24 months’ salary shall be paid
to the Employee in equal monthly instalments during the 12 month period
following the effective date of termination of his said employment, such that in
the one year period following any such termination of employment the Employee
shall receive two years’ salary. The value of one month’s salary, for the
purposes herein, shall be one-thirty-sixth of the total of the base salary and
bonuses received by the Employee during the 36 months immediately prior to such
termination of his employment. In addition, in the event of any such termination
of employment the Employee shall be entitled to continuation of group health and
insurance benefits (to the extent that such benefits, or any one or number of
them can be continued by the Company at standard premium rates) for 12 months,
or until he commences new employment, whichever first occurs. The Employee’s
entitlement to the perquisites referred to in clauses 2(c) (i), (ii) and (iii)
above shall cease immediately upon any such termination of employment, save that
any outstanding stock options held by the Employee at the time of such
termination will continue to be governed by the express provisions of the
Company’s stock option plan.

4. CHANGE OF CONTROL

     A “Change of Control” shall be deemed to have occurred if, as a result of:

  (a)   a take over bid or acquisition any person, company, association,
partnership or any of them singly or under any voting trust or similar
arrangement has the legal ability to cause to be cast votes with respect to
greater than 50% of the shares at any meeting of the shareholders called for the
purpose of electing the directors of the Company; or     (b)   a merger,
consolidation or sale of all, or substantially all, of the assets of the
Company, the persons who were the directors of the Company immediately before
the transaction, cease to constitute a majority of the Board either directly, or
indirectly, as a result of the transaction.

In addition, the election at any time of three or more directors (together or
separately) whose election is opposed by the then majority of the directors of
the Company shall be deemed, in itself, to be a Change of Control.

If there is a Change of Control of the Company, the Employee has continued to
well and faithfully serve the Company including, without limitation, following
all lawful directives of the Board and not engaging in any conduct which is
inconsistent with his duties of loyalty and fidelity to the Company, and the
employment of the Employee is terminated without just cause or the Employee
resigns from his said employment at any time within 1 year of the Change of
Control, the Company shall pay to the Employee a lump sum amount equivalent to
30 months’ salary. The value of one month’s salary, for the purposes herein,
shall be one-thirty-sixth of the total of the base salary and bonuses received
by the Employee during the

Page 3 of 5

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

 

36 months immediately prior to such termination or resignation. Any outstanding
stock options held by the Employee at the time of such termination or
resignation will continue to be governed by the express provisions of the
Company’s stock option plan.

5. COVENANTS OF THE EMPLOYEE

  (a)   CONFIDENTIALITY

All confidential records, material and information, and copies thereof, and any
and all trade secrets concerning the business or affairs of the Company, or any
of its affiliates, obtained by the Employee in the course and by reason of his
employment shall remain the exclusive property of the Company. During the
Employee’s employment, and at all times thereafter, the Employee shall not
divulge the contents of such confidential records or material or any of such
confidential information or trade secrets to any person other than to the
Company’s qualified employees and the Employee shall not, following the
termination of his employment hereunder, for any reason whatsoever, use the
contents of such confidential records or material or other confidential
information or trade secrets for any purpose whatsoever.

  (b)   NON-SOLICITATION OF EMPLOYEES

The Employee shall not, without the prior written consent of the Company, at any
time during the period of 18 months following any termination of his employment
with the Company for any reason whatsoever including, without limitation, any
resignation by the Employee from his said employment, either directly or
indirectly, on the Employee’s own behalf or on behalf of others, offer
employment to or endeavour to entice away from the Company, or any affiliate
thereof, any person who is employed by the Company or any such affiliate.

  (c)   NON-SOLICITATION OF CUSTOMERS

     The Employee shall not, at any time during the period of 18 months
following any termination of his employment with the Company for any reason
whatsoever including, without limitation, any resignation from his said
employment, contact any customers of the Company, or any of its subsidiaries,
for the purpose of selling to those customers any products or services which are
the same as, or substantially similar to, or competitive with the products or
services sold by the Company or any of its subsidiaries at such date.

6. GENERAL CONTRACT PROVISIONS

  (a)   OTHER ENTITLEMENTS

For the purposes of this Agreement, it is agreed that no other notice of
termination or related entitlements, express or implied by law, shall apply,
subject only to such

Page 4 of 5

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

 

minimum notice entitlements as may be prescribed from time to time by any
applicable employment standards legislation.

  (b)   SEVERABILITY

In the event that any provision herein or part hereof shall be deemed void or
invalid by a court of competent jurisdiction, the remaining provisions or parts
hereof shall be and remain in full force and effect.

  (c)   ENTIRE AGREEMENT

This Agreement constitutes and expresses the entire agreement of the parties
hereto with reference to the employment of the Employee by the Company. All
promises, representations, collateral agreements and understandings relative
thereto and not incorporated herein are hereby superseded and cancelled by this
Agreement.

  (d)   SUCCESSORS AND ASSIGNS

This Agreement shall enure to the benefit of and be binding upon the Employee
and his heirs and personal representatives, and upon the Company and its
successors and assigns. This Agreement is personal to the Employee and may not
be assigned by him.

  (e)   APPLICABLE LAW

This Agreement shall be governed by and construed in accordance with the laws of
the Province of Ontario, and the laws of Canada applicable therein.

     
VITRAN CORPORATION
  THE EMPLOYEE
 
   
per: /s/ Richard D. McGraw
  /s/ Rick E. Gaetz

  RICK E. GAETZ

Page 5 of 5