Document:

EXHIBIT 10.18

                     SEVERANCE AGREEMENT AND MUTUAL RELEASE

          This Severance Agreement and Mutual Release (the "Agreement") is
entered into as of this 3rd day of March, 2003, by and between Transport
Corporation of America, Inc. (the "Company") and Richard R. Lane ("Lane").

                                    RECITALS

          WHEREAS, the Company has executed an Employment Letter, dated May 3,
2001 (prepared and intended to be dated May 3, 2002) (the "Employment Letter")
which offered to Lane employment as a Vice President of Sales and Marketing of
the Company and twelve months' severance, subject to certain restrictions in the
event that Lane's employment is terminated for any reason other than for cause;

          WHEREAS, the Company and Lane have entered into an Addendum to the
Employment Letter, dated as of March 28, 2002 and executed as of June 2, 2002
(the "Addendum to the Employment Letter") imposing certain confidentiality
restrictions on Lane, a covenant not to compete with the Company for the term of
the severance, and a covenant not to solicit any employees or customers of the
Company for the term of the severance;

          WHEREAS, Lane was employed by the Company as its Vice President of
Sales and Marketing;

          WHEREAS, the Company and Lane have severed the employment relationship
Lane has with the Company, effective immediately;

          WHEREAS, the parties wish to revise the terms of the Employment Letter
and the Addendum to the Employment Letter and set forth all outstanding
obligations of both parties going forward;

          WHEREAS, the parties wish to settle all differences, disputes,
grievances, claims, charges and complaints, whether known or unknown, accrued or
unaccrued, that each party has or arguably may have against the other party; and

          WHEREAS, Lane and the Company desire to enter into this Agreement;

                                    AGREEMENT

          NOW, THEREFORE, in consideration of the mutual covenants contained in
this Agreement and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Agreement
hereby agree as follows:

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          1. DEPARTURE FROM EMPLOYMENT. The parties agree that Lane's employment
relationship with the Company shall end effective as of the date of this
Agreement set forth above (the "Departure Date"), and that, except for payment
by the Company to Lane of compensation in the aggregate sum of $11,317.68 (less
applicable withholding) for 147.13 hours of earned and unused vacation time and
personal leave, plus $615.39 of earned but unpaid salary (less applicable
withholding), the Company will stop all salary and other compensation payments
to Lane as of the Departure Date subject only to the provisions of this
Agreement.

          2. SEVERANCE PAYMENTS. In lieu of the severance payments and
restrictions set forth in the Employment Letter and the Addendum to the
Employment Letter, Lane and the Company hereby agree that as consideration for
the restrictions, agreements and other promises made in this Agreement, and
subject to any rescission of this Agreement as provided later in this Agreement,
the Company will pay to Lane each week, for a period of twenty-six (26) weeks,
an amount equal to the weekly salary that was in effect for Lane as of the
Departure Date ($3,076.93), less applicable taxes and withholding (the
"Severance Payments"). The parties agree that the Company's obligation to make
the Severance Payments to Lane will be effective only if Lane executes this
Agreement and does not rescind it within the rescission periods provided for
later in this Agreement. In the event that Lane executes and does not rescind
this Agreement, the weekly Severance Payments will accrue as of the Departure
Date and will be paid to Lane upon the receipt by the Company of the Exhibit to
this Agreement, signed and dated by Lane. Subsequent weekly Severance Payments
will be paid thereafter, when due.

          3. BENEFITS. Lane may elect to continue to participate in those
medical, dental and/or life insurance benefits that Lane was participating in as
of the Departure Date as provided for by COBRA. The Company is not obligated to,
and will not pay any portion of Lane's premium cost of participating in the
elected benefits after the Departure Date. Lane hereby agrees that he is
responsible for the entire cost of continuing coverage subject only to Lane's
rights under COBRA. Except as expressly provided for in this paragraph, all
benefits will be discontinued immediately upon the Departure Date.

          4. CONFIDENTIALITY. The Parties hereby agree that Lane continues to be
bound by the Confidentiality Restrictions contained in paragraph 2 of the
Addendum to the Employment Letter. Lane hereby agrees to continue to comply with
such terms.

          5. RETURN OF PROPERTY. Lane hereby agrees to immediately return any of
the Company's property in his possession and all copies thereof, including but
not limited to all office equipment, keys, documents, hardware and software and
specifically including any confidential information; provided, however, that
Lane will be permitted to keep and to use the Company's cell phone in accordance
with the Company's policies through March 10, 2003. Lane hereby agrees to return
the Company's cell phone to the Company no later than March 10, 2003.

          6. NON-COMPETE OBLIGATION. Although Lane has agreed in the Employment
Letter and the Addendum to the Employment Letter to refrain from competing with
the Company by rendering

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services directly or indirectly, for a competing business anywhere within the
United States, whether as an officer, director, owner, partner, affiliate,
employee, contractor, or otherwise for the term of the Severance Payments, the
Company and Lane hereby agree, subject to any rescission of this Agreement, that
Lane will be obligated to comply with the noncompete covenant with the Company
as set forth in paragraph 3 of the Addendum to the Employment Letter only from
the Departure Date through the end of the thirteenth (13th) week in which the
Severance Payments are made by the Company to Lane.

          7. NON-SOLICITATION OF CUSTOMERS. Lane hereby agrees that as of the
Departure Date and for the twelve (12) month period immediately following the
Departure Date, Lane will not:

                    (a) solicit or sell, or attempt to solicit or sell, to any
          of the Company's customers who are listed on Appendix A, which is
          attached hereto and incorporated herein by reference, services or
          products that compete with services or products provided by the
          Company, or that were in the process of being developed by the Company
          during Lane's employment with the Company; or

                    (b) interfere in any way with, or induce any of the
          Company's customers, suppliers or other entity to terminate or alter
          its business relationship with the Company.

          8. NON-SOLICITATION OF EMPLOYEES OR OTHERS. Lane hereby agrees that as
of the Departure Date and for the twelve (12) month period immediately following
the Departure Date, that he will not solicit or accept - directly or indirectly,
as an individual or through any other person or entity - any active employee of
the Company or retained consultant under contract with the Company for
employment or any other arrangement for compensation to perform services for any
other person, regardless of the nature of their business, or induce such persons
to terminate or alter their relationship with the Company.

          9. RELEASE OF CLAIMS AGAINST LANE. The Company, on behalf of itself
and its past and present subsidiaries, and its and their past and present
officers, directors, shareholders, employees and indemnitors, acting in such
capacity, and for their successors and assigns, (the "Releasing Parties"), do
hereby release and forever discharge Lane in his capacity as an employee and
officer of the Company, and his successors and assigns, from any and all claims
and causes of action, known or unknown, which the Releasing Parties may have
against Lane arising from or relating to his employment relationship with, or
position as an officer of, the Company or any of its past or present
subsidiaries. Through this release, the Releasing Parties extinguish all causes
of action against Lane occurring up to the date of this Agreement, which
liabilities, claims, demands and causes of action, either in law or at equity,
have arisen or may arise out of or are in any way connected with any act,
omission, event occurrence, representation, warranty, failure, default, breach,
actual or asserted, of Lane in his capacity as a shareholder, officer and
employee of the Company on or prior to the date of this Agreement.

          10. RELEASE OF CLAIMS AGAINST THE COMPANY. Lane, on behalf of himself
and his

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successors and assigns, does hereby release and forever discharge the Company,
its past and present subsidiaries, and its and their past and present officers,
directors, shareholders, employees and indemnitors, acting in such capacity
(collectively, the "Releasees") from any and all claims and causes of action,
known or unknown, which Lane and his successors and assigns may have against any
and all of the Releasees arising from or relating to his employment relationship
with, or position as an officer of, the Company or any of its past or present
subsidiaries. Through this release, Lane, on behalf of himself and his
successors and assigns, extinguishes all causes of action against the Releasees
occurring up to the date on which Lane executes this Agreement, including but
not limited to, any contract, compensation or benefit claims; intentional
infliction of emotional distress, defamation or any other tort claims arising
from Lane's employment relationship with or position of officer of the Company;
all claims relating to his status as an employee and officer of the Company and
its past and present subsidiaries, including but not limited to any claims
arising under Minnesota Statutes, Chapter 302A and common law (other than claims
for indemnification otherwise available to him by the Company or its insurance
carriers which shall remain available) and all claims arising from any federal,
state or municipal law or ordinance, including the Family and Medical Leave Act
and the Fair Labor Standards Act and all Minnesota labor and employment law
statutes. This release extinguishes any potential claims of employment
discrimination arising from Lane's employment with and termination from the
Company and any of its past and present subsidiaries, including specifically any
claims under the Minnesota Human Rights Act, the Americans With Disabilities
Act, Title VII of the Civil Rights Act of 1964 and the Age Discrimination in
Employment Act.

          11. CLAIMS NOT RELEASED BY LANE. This release does not relinquish
Lane's claims with respect to (i) wages earned by Lane through the Departure
Date, (ii) Lane's vested accounts in the Company's 401(k) Plan, the Employee
Stock Purchase Plan, and previously granted stock options, if Lane participated
in such plans and to the extent Lane is able to exercise or retain the benefits
of such plans on this date, and (iii) eligible claims under the Company's health
plan that Lane may have incurred on or before the date hereof.

          12. NO CLAIMS FILED. Each party hereby certifies that he or it: (a)
has not filed any claims, complaints or other actions against the other party,
and (b) hereby waives, as provided above, any right to recover from the other
party under any lawsuit or charge filed by such party or any federal, state or
local agency on such party's behalf based upon any event occurring up to the
date of this Agreement.

          13. CONSIDERATION PERIOD. Lane expressly understands and agrees that,
by signing this Agreement, he gives up all claims of every kind, that he may
have against the Company as of the date of this Agreement, whether he knows
about them now or not. Lane understands and acknowledges that he has an
opportunity to consult with an attorney of his choosing prior to executing this
Agreement, and is encouraged by the Company to consult with an attorney in
connection with the execution of this Agreement. Lane understands and
acknowledges that he is entitled to take up to 21 days to consider the terms of
this Agreement, and to discuss them with his attorney, before signing it
although he is free to sign the Agreement at any time during the 21 day
consideration period if he wishes to do so.

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          14. RESCISSION PERIOD. Lane understands and acknowledges that to the
extent this Agreement acts to release any and all claims he may have under the
Age Discrimination in Employment Act he has the right to rescind this Agreement
within seven (7) calendar days of signing it. He further understands and
acknowledges that to the extent this Agreement acts to release any and all
claims he may have under the Minnesota Human Rights Act he has the right to
rescind this Agreement within fifteen (15) calendar days of signing it. To be
effective, any rescission by Lane must be in writing and delivered to the
Company, in the care of Michael J. Paxton, Chairman, President and CEO, either
by hand or by mail within the appropriate period. If sent by mail, the
rescission must be:

                    a. Postmarked within the applicable 7 or 15 day period;

                    b. Properly addressed to Transport Corporation of America,
          Inc., attention: Michael J. Paxton, Chairman, President and CEO 1715
          Yankee Doodle Road, Eagan, MN 55121; and

                    c. Sent by certified mail, return receipt requested.

          If Lane rescinds this Agreement, the Company's obligation to make the
Severance Payment, its release of claims, and any other covenants under this
Agreement will immediately cease, and the Releasing Parties will be entitled to
pursue any claim they may arguably have against Lane. Lane hereby agrees to
submit a notice to the Company in substantially the form attached hereto as
Exhibit A, if he chooses not to rescind this Agreement within 15 days of signing
it.

          15. REASONABLENESS OF RESTRICTIONS. By entering into this Agreement,
Lane acknowledges and represents that (i) he has read and understands the nature
and scope of the restrictions imposed by this Agreement; (ii) the scope of the
restrictions are appropriate, necessary and reasonable for the protection of the
business, goodwill and property rights of the Company, and (iii) the
restrictions will not prevent Lane from earning a living subsequent to the date
of this Agreement.

          16. REMEDIES. Lane agrees that a breach or a threatened breach of any
provision of this Agreement would cause irreparable harm to the Company and that
damages or other remedies at law may be inadequate to protect the interests of
the Company. Therefore, a court may grant equitable relief such as restraining
orders or preliminary or permanent injunctions to specifically enforce the
provisions of this Agreement and to protect the Company against any breach or
threatened breach. Furthermore, the prevailing party in any litigation related
to this Agreement shall be entitled to recover its costs of litigation,
including without limitation reasonable attorneys fees.

          17. ENFORCEABILITY. The parties also agree that (i) if a court rules
that any part of this Agreement is unenforceable, the unenforceable part may be
modified by the court to make it enforceable; (ii) each of the Company's rights
under this Agreement is separate and in addition to all

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other rights under applicable law; and (iii) the Company's failure or delay to
act to enforce one or more rights shall not operate as a waiver of any right
under this Agreement or prevent the future exercise or enforcement of any right.

          18. COUNTERPARTS, MODIFICATIONS. This Agreement may be executed in
counterparts, each of which when executed and delivered, shall constitute one
and the same instrument. This Agreement shall not in any way be construed as an
admission of liability by either party. No change or modification of this
Agreement shall be valid unless in writing and signed by both parties.

          19. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement
between the parties and fully supersedes any prior agreements, contracts or
understandings between the parties. To the extent that there is any conflict
between this Agreement and the Employment Letter or the Addendum to the
Employment Letter, this Agreement will control. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of Minnesota,
without reference to its conflict of law provisions.

         [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK. SIGNATURES FOLLOW]

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<PAGE>

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

                              TRANSPORT CORPORATION OF AMERICA, INC.

                              By: /s/ Michael J. Paxton
                                  ----------------------------------------------
                                  Michael J. Paxton, Chairman, President and CEO

                                  /s/ Richard R. Lane
                                  ----------------------------------------------
                                  Richard R. Lane

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<PAGE>

                                    EXHIBIT A

____________, 2003

Michael J. Paxton, Chairman, President and CEO
Transport Corporation of America, Inc.
1715 Yankee Doodle Road
Eagan, MN 55121

Dear Mike:

This letter, signed and dated more than 15 days after I signed the agreement
between Transport Corporation of America, Inc. and me, dated March 3, 2003, is
to certify that I have taken no steps to exercise my rights of rescission, as
described in Section 14 of the Agreement.

Very truly yours,

Richard R. Lane

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<PAGE>

                                   APPENDIX A

1.      S.C. Johnson & Son
2.      Hon Company
3.      Federal Express
4.      Sears, Roebuck and Co.
5.      General Mills
6.      Ford Motor Co/Pacer/Fedex Supl.
7.      3M Company (U.S. Only)
8.      P.P.G. Industries
9.      United Sugars Corp
10.     Ashley Furniture
11.     Eagle Global Logistics
12.     Andersen Window Corporation
13.     Dupont
14.     Toys-R-Us/Kids-R-Us
15.     Polaris Industries (inc. Ruan Logistics)
16.     Golden Valley Foods
17.     Best Buy
18.     Arctic Cat Sales
19.     UPS Supply Chain (UPS Logistics)
20.     Saks (Proffitts Inc.)
21.     Dick's Sporting Goods
22.     Kellogg's
23.     CH Robinson - Misc.
24.     Osco Drug Distributors
25.     Limited Dist. Services
26.     Freightpro.com
27.     Boise Cascade
28.     CH Robinson - UPM Kymmene
29.     Anheuser Busch
30.     Hoffman Enclosures
31.     Hormel
32.     Ruan Logistics (Excl. Polaris)
33.     Home Depot
34.     LeSaffre Yeast (Red Star/Universal)
35.     Missouri Sea & Air
36.     Church & Dwight (USA Detergents)
37.     Air Bourne Express
38.     Hearth Technologies (Heat N Glo)
39.     TGT Transport (Dayton/Hudson)
40.     Yamaha Motor

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41.     K-Mart
42.     North American Transport
43.     ALCOA Engineered Product
44.     Ecolab, Inc.
45.     JohnsonDiversey, Inc.
46.     Unilever Bestfoods
47.     Walmart/Sams Club/USA Logistics
48.     Americal Eagle Outfitter
49.     Bridgestone/Firestone
50.     Transplace Texas

                                       10EXHIBIT 10.19

The following is a written description of the terms of employment of Ronald C.
Kipp, pursuant to Item 601(b)(10)(ii)(B) of Regulation S-K:

     Title:                     Vice President of Operations.

     Base Salary:               $120,000 per year.

     Annual Incentive Bonus:    40% of base salary, based on achieving specific
                                business goals.

     Stock Options:             5,000 options at market price on date of grant,
                                vesting over four years.

     Vacation:                  Three weeks per year.

     Company Benefit Plan:      Based on current company program

     Automobile:                Lease of up to $40,000 value vehicle.

     Other:                     Reimbursement of relocation expenses per TCA
                                policy. Sign-on bonus of $10,000 provided
                                employment begins November 1, 2002 or sooner.

     Change in Control:         Pursuant to TCA form of Change in Control
                                Agreement.

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