10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2010

OR

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

For the transition period from              to             

Commission file number 000-49828

PACER INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

Tennessee	62-0935669
(State or other jurisdiction of organization)	(I.R.S. employer identification no.)

2300 Clayton Road, Suite 1200

Concord, CA 94520

Telephone Number (887) 917-2237

Indicate by checkmark 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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ¨    No  ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by checkmark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at May 3, 2010
Common stock, $.01 par value per share	34,952,551 shares

PACER INTERNATIONAL, INC. AND SUBSIDIARIES

FORM 10-Q

FISCAL QUARTER ENDED MARCH 31, 2010

TABLE OF CONTENTS

			Page
Part 1.	Financial Information
	Item 1.	Condensed Consolidated Financial Statements (Unaudited):
		Condensed Consolidated Balance Sheets	3
		Condensed Consolidated Statements of Operations	4
		Condensed Consolidated Statement of Stockholders’ Equity	5
		Condensed Consolidated Statements of Cash Flows	6
		Notes to Condensed Consolidated Financial Statements	7
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
	Item 4.	Controls and Procedures	30
Part 2.	Other Information
	Item 1.	Legal Proceedings	32
	Item 1A.	Risk Factors	32
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
	Item 3.	Defaults Upon Senior Securities	32
	Item 4.	(Removed and Reserved)	32
	Item 5.	Other Information	32
	Item 6.	Exhibits	33
	Signatures		34

PART 1 – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

PACER INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31, 2010			December 31, 2009
(In millions)
ASSETS
Current assets
Cash and cash equivalents	$	4.3		$	2.8
Accounts receivable, net of allowances of $3.7 million and $3.8 million, respectively		148.3			152.3
Prepaid expenses and other		26.6			27.2
Deferred income taxes		1.1			1.0
Total current assets		180.3			183.3
Property and equipment
Property and equipment at cost		109.6			107.7
Accumulated depreciation		(65.6	)		(64.5	)
Property and equipment, net		44.0			43.2
Other assets
Deferred income taxes		35.5			35.1
Other assets		15.6			14.3
Total other assets		51.1			49.4
Total assets	$	275.4		$	275.9
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Current maturities of debt and capital leases	$	24.5		$	23.3
Book overdraft		3.2			4.5
Accounts payable and other accrued liabilities		144.4			144.7
Total current liabilities		172.1			172.5
Long-term liabilities
Other		6.2			5.9
Total long-term liabilities		6.2			5.9
Total liabilities		178.3			178.4
Commitments and contingencies (Note 5)
Stockholders’ equity
Preferred stock: $0.01 par value, 50,000,000 shares authorized, none issued and outstanding		—			—
Common stock: $0.01 par value, 150,000,000 shares authorized, 34,952,551 and 34,904,051 issued and outstanding at March 31, 2010 and December 31, 2009, respectively		0.4			0.4
Additional paid-in-capital		301.8			301.5
Accumulated deficit		(204.8	)		(204.3	)
Accumulated other comprehensive loss		(0.3	)		(0.1	)
Total stockholders’ equity		97.1			97.5
Total liabilities and stockholders’ equity	$	275.4		$	275.9

The accompanying notes are an integral part of the condensed consolidated financial statements.

3

PACER INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended
	March 31, 2010			March 31, 2009
(in millions, except share and per share data)
Revenues	$	363.7		$	358.6
Operating expenses:
Cost of purchased transportation and services		299.6			297.4
Direct operating expenses (excluding depreciation)		23.3			32.9
Selling, general and administrative expenses		38.8			49.3
Goodwill impairment charge (Note 1)		—			200.4
Depreciation and amortization		1.4			1.7
Total operating expenses		363.1			581.7
Income (loss) from operations		0.6			(223.1	)
Interest expense		(1.3	)		(0.3	)
Interest income		—			—
Loss before income taxes		(0.7	)		(223.4	)
Income tax benefit		(0.2	)		(46.0	)
Net loss	$	(0.5	)	$	(177.4	)
Loss per share (Note 7):
Basic:
Loss per share	$	(0.01	)	$	(5.11	)
Weighted average shares outstanding		34,787,301			34,739,745
Diluted:
Loss per share	$	(0.01	)	$	(5.11	)
Weighted average shares outstanding		34,787,301			34,739,745

The accompanying notes are an integral part of the condensed consolidated financial statements.

4

PACER INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

Three Months Ended March 31, 2010

(Unaudited)

	Common Shares	Common Stock and Paid-in- Capital		Accumulated Deficit			Accumulated Other Comprehensive Income/(Loss)			Total Stockholders’ Equity
(in millions, except share amounts)
Balance at December 31, 2009	34,904,051	$	301.9	$	(204.3	)	$	(0.1	)	$	97.5
Net loss	—		—		(0.5	)		—			(0.5	)
Other comprehensive loss	—		—		—			(0.2	)		(0.2	)
Total comprehensive loss					(0.5	)		(0.2	)		(0.7	)
Stock based compensation	—		0.3		—			—			0.3
Issuance (forfeiture) of restricted stock	48,500		—		—			—			—
Balance at March 31, 2010	34,952,551	$	302.2	$	(204.8	)	$	(0.3	)	$	97.1

Total comprehensive loss for the three months ended March 31, 2009 was $(177.8) million.

The accompanying notes are an integral part of the condensed consolidated financial statements.

5

PACER INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended
	March 31, 2010			March 31, 2009
(in millions)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(0.5	)	$	(177.4	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization		1.4			1.7
Gain on sale of property, equipment and other assets		(0.1	)		(0.3	)
Initial gain on sale lease-back transaction		(0.3	)		—
Deferred taxes		(0.5	)		(27.5	)
Goodwill impairment charge		—			200.4
Stock based compensation expense		0.3			0.5
Changes in operating assets and liabilities:
Accounts receivable, net		4.0			9.9
Prepaid expenses and other		0.6			(24.8	)
Accounts payable and other accrued liabilities		(2.0	)		(8.4	)
Other long-term assets		(1.3	)		(1.6	)
Other long-term liabilities		(1.1	)		0.4
Net cash provided by (used in) operating activities		0.5			(27.1	)
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		(2.7	)		(3.2	)
Net proceeds from sale lease-back transaction		2.4			—
Proceeds from sales of property, equipment and other assets		0.1			0.4
Net cash used in investing activities		(0.2	)		(2.8	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net borrowings (repayments) under revolving line of credit agreement		1.3			35.0
Dividends paid to shareholders		—			(5.2	)
Debt and capital lease obligation repayment		(0.1	)		(0.1	)
Net cash provided by financing activities		1.2			29.7
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		1.5			(0.2	)
CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD		2.8			5.0
CASH AND CASH EQUIVALENTS – END OF PERIOD	$	4.3		$	4.8

The accompanying notes are an integral part of the condensed consolidated financial statements.

6

PACER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements as of March 31, 2010 and December 31, 2009 and for the three-month periods ended March 31, 2010 and March 31, 2009 for Pacer International, Inc. (the “Company” or “Pacer”) do not contain all information required by generally accepted accounting principles in the United States of America to be included in a full set of financial statements. In the opinion of management, all adjustments, consisting of only normal recurring adjustments, which are necessary for a fair statement of the results for the interim periods have been included. The results of operations for any interim period are not necessarily indicative of the results of operations to be expected for any full fiscal year. These unaudited condensed consolidated financial statements and footnotes should be read in conjunction with the audited financial statements of the Company included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009 as filed with the Securities and Exchange Commission (“SEC”). See “Change in Accounting Policies” below for a description of a change in revenue and cost recognition to completed service from percentage of completion for the Company’s Stacktrain business unit.

Before 2009, the Company’s fiscal year was the 52- or 53-week annual accounting period ending on the last Friday in December. Following completion of the implementation of the SAP America, Inc. (“SAP”) accounting modules software during the first quarter 2009, the Company’s and the Stacktrain business unit’s fiscal year was changed to a calendar year basis ending on December 31 of each year. Amounts for the transition period from December 27, 2008 to December 31, 2008 are included in the Company’s first quarter 2009 results. Accordingly, Stacktrain data included in the intermodal segment financial comparisons in this report reflect 90 days for the first quarter of 2010 compared to 95 days for the first quarter of 2009.

Principles of Consolidation

The condensed consolidated financial statements as of March 31, 2010 and December 31, 2009 and for the three-month periods ended March 31, 2010 and March 31, 2009 include the accounts of the Company and all entities that the Company controls. All significant intercompany transactions and balances have been eliminated in consolidation.

Change in Accounting Policies

In January 2009, our Stacktrain business unit implemented the general ledger module of SAP software which had been implemented by all other Pacer business units during 2008. With the SAP implementation and change from a fiscal year to a calendar year basis, the Company, on January 1, 2009, retrospectively changed the Stacktrain method of revenue and cost recognition to the completed service method in order to conform to other Pacer business units.

7

PACER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include costs of purchased transportation and services, allowance for doubtful accounts, and valuation of deferred income taxes. Actual results could differ from those estimates.

Financial Instruments

The carrying amounts for cash, accounts receivables and accounts payable approximate fair value due to the short-term nature of these instruments. The carrying value of debt approximates fair value.

Business and Industry Segments

Pacer is an asset-light North American freight transportation and logistics services provider that facilitates the movement of freight from origin to destination through its intermodal and logistics segments. The logistics segment provides highway brokerage, truck services (through August 17, 2009, see below), warehousing and distribution, international ocean shipping and freight forwarding, and supply chain management services. The intermodal segment offers intermodal transportation through Pacer Stacktrain (cost-efficient, two-tiered ramp to ramp rail transportation for containerized shipments), Pacer Cartage (local trucking) and Pacer Transportation Solutions (door-to-door service combining rail and truck transportation). Intermodal segment revenues are divided into two products based on the channel of distribution: wholesale (intermodal transportation services sold to international shipping companies and transportation intermediaries other than our rail brokerage operation and performed by our Stacktrain and cartage units) and retail (intermodal transportation services sold primarily to beneficial cargo owners by our retail brokerage unit which arranges the transportation to be performed by a combination of our Stacktrain and cartage operations as well as by third party transportation providers). Accordingly, the wholesale product includes all revenues recognized by our cartage and Stacktrain operations on shipments tendered by transportation intermediaries other than our rail brokerage operation, and the retail product represents all revenues recognized by our rail brokerage unit for transportation services arranged by the unit, whether through Stacktrain, Cartage or other underlying transportation providers.

On November 3, 2009, the Company entered into new multi-year agreements with Union Pacific Railroad Company (“Union Pacific”) covering domestic big box (48- and 53-ft. container) shipments tendered by Pacer for transportation by Union Pacific. The new arrangements, among other things:

• settled all outstanding claims and counterclaims between Union Pacific and Pacer relating to domestic big box shipments under the Company’s legacy agreement with Union Pacific (see Note 5 for information relating to an additional claim by Union Pacific);

• provide for a gradual adjustment over a two-year period to “market” rates of rates payable by the Company for Union Pacific’s transportation of domestic big box shipments and for continuation of the rates on competitive terms after October 11, 2011, the termination date of the Company’s legacy contract with Union Pacific; and

• establish a fleet sharing arrangement that (i) allows Union Pacific customer access to the Company’s equipment fleet and grants the Company expanded access to Union Pacific’s equipment fleet, and (ii) contains a mechanism that allows the Company to adjust fleet size up or down in the future to address estimated changes in the Company’s equipment needs.

8

PACER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

Under the new arrangements with Union Pacific, which have a multi-year term and thereafter will automatically renew for one-year periods, substantially all of the wholesale east-west domestic big box business that the Company had historically handled on behalf of intermodal marketing company customers on the Union Pacific network had transitioned away from the Company by the end of the first quarter of 2010. The Company continues to provide north/south Mexico automotive business and international ocean carrier business, including avoided repositioning cost (or “ARC”) services under the terms of the legacy agreement with Union Pacific which expires on October 11, 2011.

On August 17, 2009, the Company closed the sale of certain assets of Pacer Transport, Inc., S&H Transport, Inc. and S&H Leasing, Inc. to subsidiaries of Universal Truckload Services, Inc. (“UTSI”) under the Limited Asset Purchase Agreement signed on July 24, 2009.

Accounts Receivable

Accounts receivable are carried at original invoice amount less allowance made for doubtful accounts. Estimates are used when determining this allowance based on the Company’s historical collection experience, current trends, credit policy and a percentage of the accounts receivable by aging category. At March 31, 2010 and December 31, 2009, accounts receivable included unbilled amounts of $19.5 million and $16.1 million, respectively.

Goodwill

The Company complies with Financial Accounting Standards Board (“FASB”) ASC Topic 350 “Intangibles – Goodwill and Other” and Topic 820 “Fair Value Measurements and Disclosures” to evaluate goodwill. Based on a combination of factors, including the continued, sustained decline in the Company’s stock price and market capitalization during the first quarter of 2009, and the operating results of the Company’s intermodal and logistics reporting units during that quarter, management concluded that a goodwill impairment triggering event had occurred in the first quarter of 2009 for purposes of ASC Topic 350, and, accordingly, performed a testing of the carrying values of goodwill for both the intermodal and logistics reporting units as of March 31, 2009. After this testing, management concluded that the carrying value of each of the intermodal and logistics reporting units (including goodwill) exceeded the fair value of each respective reporting unit. Accordingly, the Company undertook the second step of the goodwill impairment analysis and determined that the implied fair value of each reporting unit’s goodwill was $0. As a result, management recorded a non-cash goodwill impairment charge of $200.4 million in the 2009 first quarter ($169.0 million of the pre-tax charge was recorded in the intermodal reporting unit and $31.4 million in the logistics reporting unit).

The Company had allocated goodwill to the reporting units as shown in the table below as of December 26, 2008 and March 31, 2009 (in millions):

	Logistics Segment			Intermodal Segment			Total
Goodwill Balance at December 26, 2008	$	119.3		$	169.0		$	288.3
Accumulated Impairment Losses		(87.9	)		—			(87.9	)
Net Balance at December 26, 2008		31.4			169.0			200.4
Goodwill Impairment 2009		(31.4	)		(169.0	)		(200.4	)
Goodwill Balance at March 31, 2009		119.3			169.0			288.3
Accumulated Impairment Losses		(119.3	)		(169.0	)		(288.3	)
Net Balance at March 31, 2009	$	—		$	—		$	—

9

PACER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

There were no additions or deletions to goodwill between March 31, 2009 and March 31, 2010.

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive loss includes foreign currency translation adjustments, net of related tax. Accumulated other comprehensive loss consists of the following (in millions):

	Foreign Currency Translation Adjustment
Balance at December 31, 2009	$	(0.1	)
Activity during 2010 (net of tax)		(0.2	)
Balance at March 31, 2010	$	(0.3	)

Recently Issued Accounting Pronouncements

In February 2010, the FASB issued Accounting Standards Update (“ASU”) 2010-09 Subsequent Events (Topic 855), Amendments to Certain Recognition and Disclosure Requirements (“ASU 2010-09”). ASU 2010-09 updates FASB ASC Topic 855. ASU 2010-09 removes the requirement to disclose the date through which an entity has evaluated subsequent events. The adoption of ASU 2010-09 in February 2010 did not have a material impact on the Company’s results of operations, financial condition or cash flows.

NOTE 2. DEBT AND CAPITAL LEASES

Debt and capital lease obligations are summarized as follows (in millions):

	March 31, 2010		December 31, 2009
A&R Credit Agreement (6.0%; expires April 5, 2012)	$	24.3	$	23.0
Capital lease obligations		0.2		0.3
Total		24.5		23.3
Less current portion of the Credit Agreement		24.3		23.0
Less current portion of capital lease obligations		0.2		0.3
Long-term portion	$	—	$	—

On August 28, 2009, the Company entered into an Amended and Restated Credit Agreement (the “A&R Credit Agreement”) with Bank of America, N.A., as Administrative Agent and Swing Line Lender, the letter of credit issuers parties thereto, the lenders parties thereto, and Banc of America Securities, LLC, as Sole Lead Arranger and Sole Book Manager, which replaced the Credit Agreement dated April 5, 2007.

Under the borrowing base formula determined as of March 31, 2010, $42.3 million was available under the A&R Credit Agreement, net of $24.3 million in outstanding loans, $22.7 million of outstanding letters of credit and a $3.5 million availability block (discussed below). The outstanding loan amount has been reduced and the availability amount has been increased by $16.6 million for cash deposited into the lenders lock-box on March 31, 2010 and applied to the repayment of outstanding loans on April 1, 2010. As of March 31, 2010, borrowings under the A&R Credit Agreement bore a weighted average interest rate of 6.0% per annum. The Company borrowed a net $1.3 million under the credit facility and repaid $0.1 million of capital lease obligations during the three-months ended March 31, 2010. The net book value of equipment under capital lease was $0.2 million at March 31, 2010.

10

PACER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

The A&R Credit Agreement, which maintains the original maturity of April 5, 2012, provides for a revolving credit facility of up to $125 million (including a $35 million letter of credit facility and a $10 million swing line loan facility), and an accordion feature providing for an increase in the facility of up to $50 million subject to certain conditions (for a total facility of $175 million if such conditions are met). Borrowing under the facility is determined on a daily basis as calculated under a borrowing base formula, determined on a monthly basis, equal to the lesser of (a) $125 million less the sum of substantially all obligations under outstanding letters of credit (the “L/C Reserve”) and an amount equal to the availability block (described below), or (b) an amount equal to (i) the sum of (x) 85% of the eligible accounts receivables and (y) 85% of eligible earned but unbilled accounts receivable up to $17.5 million and (z) the lesser of (I) 80% of the net liquidation value of eligible owned railcars and chassis and (II) $25.0 million, which lesser amount is reduced monthly by $250,000 beginning September 30, 2009 (or $1,750,000 at March 31, 2010), minus (ii) the availability reserve (described below).

The availability block is $500,000 per month on a cumulative basis beginning September 30, 2009, except that commencing on the last day of the month following the reporting of the March 31, 2010 fixed charge coverage ratio (at which time the availability block will have reached $3.5 million) the availability block will cease to escalate and instead will be released in four successive equal monthly installments if, and only for so long as, the Company has achieved a fixed charge coverage ratio of greater than 1.25:1.00 for the preceding 12 month period (or for periods ending on or prior to July 30, 2010, for the period beginning August 1, 2009). If the availability block fixed charge coverage ratio is 1.25:1.00 or lower for any such period, the release of any block will be suspended, and the availability block will recommence at the rate of $500,000 per month which will be added to any then existing availability block. As of March 31, 2010, the availability block was $3.5 million.

The availability reserve is the sum of (i) the L/C Reserve, (ii) reserves established by the Administrative Agent in its reasonable discretion for bank products extended to the Company and its subsidiaries by any lender party to the A&R Credit Agreement (such as foreign exchange and cash management services), (iii) obligations of the Company and its subsidiaries secured by liens that are senior to the liens under the A&R Credit Agreement, (iv) the availability block then in effect, and (v) such additional reserves established by the Administrative Agent in its reasonable discretion from time to time. As of March 31, 2010, the availability reserve was $26.2 million, comprised of $22.7 million in L/C Reserve and $3.5 million in availability block.

As required by the A&R Credit Agreement, the Company has established a lock-box arrangement under which all qualified daily cash receipts are applied on the next business day to repay outstanding borrowings under the A&R Credit Agreement. ASC 470-10-45-5A, “Debt,” indicates that when such arrangements exist, all outstanding borrowings under a revolving credit facility such as the A&R Credit Agreement are to be classified as a current liability.

Until the delivery of financial statements and a compliance certificate with respect to the period ended March 31, 2010, borrowings under the A&R Credit Agreement bear interest, at the Company’s option, at a base rate plus a margin of 3.75% per annum, or at a Eurodollar rate plus a margin of 4.75% per annum. Following delivery of such financial statements and compliance certificate, the margin may decline to 3.50% on base rate loans or 4.50% on Eurodollar rate loans if the Company’s fixed charge coverage ratio is greater than 1.50:1.00 for the preceding 12-month period (or for periods ending prior to July 30, 2010, for the period beginning August 1, 2009 through the end of the applicable month). The base rate is the highest of the prime lending rates of the Administrative Agent, the Eurodollar rate for a 30-day interest period plus 1.0%, or the federal funds rate plus  ¹/2 of 1%.

The A&R Credit Agreement contains affirmative, negative and financial covenants customary for such asset-based financings, including, among other things, limits on the incurrence of debt, the incurrence of liens, restricted payments, transactions with affiliates, capital expenditures and mergers and

11

PACER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

consolidations and a fixed charge coverage ratio. It also contains customary representations and warranties. Breaches of the covenants, representations or warranties may give rise to an event of default. Other events of default include the Company’s failure to pay certain debt, the occurrence of a default with respect to any indebtedness of the Company and its subsidiaries resulting in, or which permits, the acceleration, repurchase, repayment or redemption of such indebtedness, certain insolvency and bankruptcy proceedings, certain ERISA events or unpaid judgments over a specified amount, or a change in control as defined in the A&R Credit Agreement.

The fixed charge coverage ratio requires the Company to maintain as of the end of each month a minimum ratio for the preceding 12-month period (or for periods ending on or prior to July 30, 2010, for the period beginning August 1, 2009 through the end of the applicable month) of 1.25:1.00. At March 31, 2010, the Company was in compliance with the covenants of the A&R Credit Agreement, with a fixed charge coverage ratio of 3.22x. The fixed charge coverage ratio is the ratio of (a) EBITDA (defined as net income plus interest, income taxes, depreciation and amortization expense, non-recurring expenses reducing such net income which do not represent a cash item in the relevant or any future period, non-cash charges or expenses related to equity plans or stock option awards, payroll taxes on exercise of stock options, operating losses associated with Pacer Transport, Inc. (capped at $500,000), and non-recurring operational restructuring charges incurred before August 28, 2010 (capped at $2 million in any three-month period and $5 million in total) minus income tax credits and non-cash items increasing net income) to (b) fixed charges (cash interest expense, regularly scheduled principal payments on or redemptions or similar acquisitions for value of borrowed money, income taxes paid in cash, and capital expenditures (other than those financed with borrowed money other than under the A&R Credit Agreement)).

The A&R Credit Agreement is guaranteed by all of our direct and indirect (domestic) subsidiaries and is secured by a first priority, perfected security interest in substantially all of the present and future tangible and intangible assets, intercompany debts, stock or other equity interests owned by us, our domestic subsidiaries, and a portion of the stock or other equity interests of certain of our foreign subsidiaries.

The A&R Credit Agreement limits the Company’s annual capital expenditures to $8.1 million for 2010 and $6.5 million for each year thereafter.

NOTE 3. FACILITY CLOSINGS AND OTHER SEVERANCE COSTS

During 2010, the Company continued its organizational simplification and workforce reduction initiatives which began in 2009 to move toward operations organized by function rather than by business unit and to consolidate operations into a centralized operational headquarters based in Dublin, Ohio with two regional operations centers to be located in Los Angeles, California and Jacksonville, Florida. During the three-month period ended March 31, 2010, the Company reduced its workforce by 10 positions. By the end of 2010, the Company plans to eliminate additional positions and to consolidate additional office locations.

During the three-month period ended March 31, 2010, the Company recorded costs associated with these activities of $1.4 million ($0.2 million on the intermodal segment and $1.2 million on the corporate segment) included in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. At March 31, 2010, $2.3 million of severance costs were accrued in Accounts Payable and Other Accrued Liabilities on the Condensed Balance Sheet. All severance and lease termination costs associated with these activities will result in future cash expenditures during 2010 and 2011. The table below shows 2010 severance program activity for the three-months ended March 31, 2010 (in millions).

12

PACER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

	Severance Program
	Accrued		Paid		Balance
Balance at 12/31/09	$	7.2	$	5.4	$	1.8
2010 Activity		1.4		0.9		0.5
Balance at 3/31/10	$	8.6	$	6.3	$	2.3

NOTE 4. LONG-TERM INCENTIVE PLANS

On May 3, 2007, the shareholders of the Company approved the 2006 Long-Term Incentive Plan (the “2006 Plan”) which had been adopted by the Board of Directors in August 2006 subject to shareholder approval. The 2006 Plan expanded the range of equity-based incentive awards that may be issued to attract, retain, incentivize, and reward directors, officers, employees and consultants. The 2006 Plan gives the Company the ability to provide incentives through issuance of stock options, stock appreciation rights, restricted stock, performance awards and other stock-based awards. Up to 2,500,000 shares of common stock may be issued under the 2006 Plan.

Prior to May 3, 2007, the Company had two stock option plans, the 1999 Stock Option Plan (the “1999 Plan”) and the 2002 Stock Option Plan (the “2002 Plan”). Upon adoption of the 2002 Plan, no further awards were able to be made under the 1999 Plan, although outstanding awards under that plan were not affected. As of May 3, 2007, with the adoption of the 2006 Plan, no further awards may be made under the 2002 Plan, although outstanding awards under the 2002 Plan were not affected.

The 2006 Plan will continue in effect until July 31, 2016, unless terminated earlier by the Board. At March 31, 2010, 2,121,250 shares under the 2006 Plan were available for issuance.

The table below details the Company’s stock based compensation activity for the three-month periods ended March 31, 2010 and March 31, 2009, respectively.

	Three Months Ended
	March 31, 2010	March 31, 2009
Common Stock Options
Granted
@ $2.41 per share	—	12,000
Exercised	None	None
Canceled or Expired
@ $12.50 per share	9,400	—
@ $16.18 per share	—	1,200
@ $17.92 per share	—	600
@ $19.66 per share	8,000	—
@ $20.31 per share	1,500	—
@ $25.75 per share	—	3,000
Subtotal	18,900	4,800
Restricted Stock
Granted
@ $6.53 per share	50,000	—
Vested	None	None
Canceled or Expired
@ $27.64 per share	—	7,500
@ $22.41 per share	1,500	2,250
Subtotal	1,500	9,750

All canceled or expired options and restricted stock were due to employee terminations.

13

PACER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

NOTE 5. COMMITMENTS AND CONTINGENCIES

The Company is subject to routine litigation arising in the ordinary course of business, and, except as discussed below, none of which is expected to have a material adverse effect on the Company’s business, consolidated results of operations, financial condition or cash flows. Most of the lawsuits to which the Company is a party are covered by insurance and are being defended in cooperation with insurance carriers.

Union Pacific has asserted a claim against the Company for retroactive and prospective rate adjustments which is in the pre-trial stage of arbitration before a neutral third party arbitrator and relates to domestic shipments in 20-, 40- and 45 ft. international containers; the arbitration hearing is currently scheduled for November 2010. The information available to the Company at March 31, 2010 does not indicate that it is probable that a liability had been incurred as of the period ended March 31, 2010, and the Company could not make an estimate of the amount, or range of amounts, of any liability that would be incurred if this claim were resolved against it. Accordingly, the Company has not accrued any liability for this claim in its financial statements at and for the period ended March 31, 2010. The Company disputes this claim in its entirety and believes that it has meritorious defenses to it and that Union Pacific is not entitled to the claimed rate adjustments. The Company intends to vigorously defend against this claim by Union Pacific and to pursue its other related rights and remedies.

During the 2010 period, the Company entered into an amendment with a vendor to modify the volume commitment and related shortfall penalties established under the original agreement. Under the previous terms, the volume commitment was dependent upon volumes from previous periods. Under the amended terms, the volume commitment and related shortfall penalty is a fixed amount with a maximum exposure of $0.9 million.

NOTE 6. SEGMENT INFORMATION

The Company has two reportable segments, the intermodal segment and the logistics segment, which have separate management teams and offer different but related products and services. The intermodal segment provides intermodal rail transportation, intermodal marketing and local trucking services. The logistics segment provides highway brokerage, truck services (through August 17, 2009, see Note 1 above), warehousing and distribution, international freight forwarding and supply chain management services.

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PACER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

The following table presents revenues from continuing operations generated by country or geographical area for the three-month periods ended March 31, 2010 and March 31, 2009 (in millions).

	Three Months Ended
	March 31, 2010		March 31, 2009
United States	$	285.4	$	312.4
Foreign Revenues
Mideast		33.4		7.9
Russia/China		11.9		6.6
Europe		9.6		8.5
Far East		7.4		6.2
Mexico		3.4		2.6
Canada		2.8		3.5
South America		2.8		2.5
Australia/New Zealand		2.7		2.8
Africa		1.0		1.1
All Other		3.3		4.5
Total Foreign Revenues	$	78.3	$	46.2
Total Revenues	$	363.7	$	358.6

All of the foreign revenues are generated by the logistics segment with the exception of Mexico, where the majority of such Mexican revenues are generated by the Company’s intermodal Stacktrain operation. All material assets are located in the United States of America. For the three-month period ended March 31, 2010, the Company had two customers, each generating revenues in both reporting segments, that contributed more than 10% of total revenues (one contributed 14.5% and the other 14.4% of total revenues). The next largest contributing customer in the first quarter of 2010 generated 9.2% of total revenues. For the three-month period ended March 31, 2009, the Company had no customers contributing 10% or more of the Company’s total revenues. The increase in Mideast revenues in the first quarter of 2010 relates to government military shipments and the increase in Russia/China revenues is due to the opening of a new office in China which has increased imports to the U.S., both generated by our international unit.

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PACER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

The following table presents reportable segment information for the three-month periods ended March 31, 2010 and March 31, 2009 (in millions).

	Intermodal			Logistics			Corp./Other			Consolidated
3 Months ended March 31, 2010
Revenues	$	264.2		$	99.8		$	—		$	364.0
Inter-segment elimination		(0.3	)		—			—			(0.3	)
Subtotal		263.9			99.8			—			363.7
Income (loss) from operations		5.7			(0.3	)		(4.8	)		0.6
Depreciation		1.1			0.3			—			1.4
Capital expenditures		1.7			1.0			—			2.7
3 Months ended March 31, 2009
Revenues	$	271.3		$	87.6		$	—		$	358.9
Inter-segment elimination		(0.3	)		—			—			(0.3	)
Subtotal		271.0			87.6			—			358.6
Loss from operations 1/		(183.6	)		(34.7	)		(4.8	)		(223.1	)
Depreciation		1.3			0.3			0.1			1.7
Capital expenditures		2.6			0.5			0.1			3.2

1/ Included in loss from operations for the intermodal and logistics segments for the three-month period ended March 31, 2009 is a goodwill impairment charge of $169.0 million and $31.4 million, respectively.

Data in the “Corp./Other” column includes corporate amounts (primarily compensation, tax and overhead costs unrelated to a specific segment) and elimination of intercompany balances and subsidiary investment. The Chief Operating Decision Maker does not review assets by segment for purposes of allocating resources and as such they are not disclosed here.

NOTE 7. LOSS PER SHARE

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

	Three Months Ended
	March 31, 2010			March 31, 2009
Numerator:
Net loss (basic and diluted)	$	(0.5	)	$	(177.4	)
Income (loss) allocated to participating securities		—			—
Net loss available to common stockholders	$	(0.5	)	$	(177.4	)
Denominator:
Denominator for earnings per share-basic:
Weighted average common shares outstanding		34,787,301			34,739,745
Effect of dilutive securities:
Stock options/restricted stock		—			—
Denominator for earnings per share-diluted		34,787,301			34,739,745
Loss per share-basic	$	(0.01	)	$	(5.11	)
Loss per share-diluted	$	(0.01	)	$	(5.11	)

16

PACER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

Anti-dilutive shares attributable to outstanding stock options were excluded from the calculation of diluted net income per share. For the three-month periods ended March 31, 2010 and March 31, 2009, 523,521 shares and 525,837 shares were anti-dilutive, respectively.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management’s Discussion and Analysis (“MD&A”) should be read in conjunction with the MD&A, including the discussion of our critical accounting policies, and the Condensed Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009 (the “2009 Annual Report”) filed with the Securities and Exchange Commission (“SEC”) on February 23, 2010.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains 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, that reflect our current estimates, expectations and projections about our future results, performance, prospects and opportunities. Forward-looking statements include, among other things, the information concerning our possible future consolidated results of operations, business and growth strategies, financing plans, our competitive position and the effects of competition, the projected growth of the industries in which we operate, and the benefits to be obtained from our cost reduction initiatives. Forward-looking statements include all statements that are not historical facts and can be identified by forward-looking words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “plan,” “may,” “should,” “will,” “would,” “project” and similar expressions. These forward-looking statements are based on information currently available to us and are subject to a number of risks, uncertainties and other factors that could cause our actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. Important factors that could cause our actual results to differ materially from the results referred to in the forward-looking statements we make in this Quarterly Report are discussed under “Item 1A. Risk Factors” of the 2009 Annual Report and include:

• general economic and business conditions, including the continued effect of the current economic recession and the timing and strength of any economic recovery;

• industry trends, including changes in the costs of services from rail and motor transportation providers;

• changes resulting from our new arrangements with Union Pacific Railroad Company (“Union Pacific”) that have reduced revenues and may compress margins, result in operational difficulties, and reduce our results of operation;

• the terms of new or replacement contracts with our major underlying rail carriers that are less favorable to us relative to our legacy contracts as these expire (including our legacy contract with Union Pacific, expiring in 2011 which continues to apply to our automotive and international lines of business, and our legacy contract with CSX Intermodal (“CSX”), expiring in 2014);

• our ability to borrow amounts under our credit agreement due to borrowing base limitations and/or to comply with the financial ratio and other covenants in our credit agreement;

• increases in interest rates;

• the loss of one or more of our major customers;

• the success of our cost reduction initiatives in improving our operating results and cash flows;

• the effect of the current economic recession and credit market disruption on our customers, including reduced transportation needs and an inability to pay us on time or at all;

• the impact of competitive pressures in the marketplace;

• the frequency and severity of accidents, particularly involving our trucking operations;

• changes in, or the failure to comply with, government regulations;

• changes in our business strategy, development plans or cost savings plans;

• congestion, work stoppages, equipment and capacity shortages, weather related issues and service disruptions affecting our rail and motor transportation providers;

• the degree and timing of changes in fuel prices, including changes in the fuel costs and surcharges that we pay to our vendors and those that we are able to collect from our customers;

• our ability to successfully defend or resolve customer and vendor rate and volume adjustment claims against us;

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• changes in international and domestic shipping patterns;

• availability of qualified personnel;

• selecting, developing and implementing applications and solutions to update or replace our diverse legacy systems;

• increases in our leverage;

• our ability to integrate acquired businesses; and

• terrorism and acts of war.

Our actual consolidated results of operations and the execution of our business strategy could differ materially from those expressed in, or implied by, the forward-looking statements contained in this Quarterly Report on Form 10-Q. In addition, past financial or operating performance is not necessarily a reliable indicator of future performance and you should not use our historical performance to anticipate future results or future period trends. This is especially important given the August 17, 2009 sale of certain assets of our truck services business unit and the new rail carrier transportation arrangements entered into on November 3, 2009 with Union Pacific, which, among other changes, has resulted in our intermodal marketing company customers transitioning their domestic east-west big box traffic away from us. We can give no assurances that any of the events anticipated or implied by the forward-looking statements we make will occur or, if any of them do occur, what impact they will have on our consolidated results of operations, financial condition or cash flows. In evaluating our forward-looking statements, you should specifically consider the risks and uncertainties discussed under “Item 1A. Risk Factors” in the 2009 Annual Report. Except as otherwise required by federal securities laws, we undertake no obligation to publicly revise our forward-looking statements to reflect events or circumstances that arise after the date of this Quarterly Report on Form 10-Q. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements included in this Quarterly Report on Form 10-Q and our other filings with the SEC.

Executive Summary

Since the end of 2009, Pacer has continued to make progress in establishing a strong foundation for future growth. We have increased overall revenues, operating income and cash flow from operations in the first quarter of 2010 as compared to the corresponding 2009 period notwithstanding the transition of the wholesale domestic east-west big box business we previously handled for intermodal marketing companies as discussed below. Income from operations for the 2010 period was $0.6 million compared to a loss from operations of $223.1 million for the 2009 period which included a $200.4 million non-cash goodwill impairment charge. Excluding the $200.4 million non-cash goodwill impairment charge recorded in the first quarter of 2009 and $1.4 million and $1.2 million of severance expense in the 2010 and 2009 periods, respectively, Pacer’s first quarter 2010 adjusted operating income improved by $23.5 million as compared to the 2009 period. Our cash flows from operations improved by $27.6 million in the 2010 period compared to the 2009 period. A reconciliation of GAAP financial results to adjusted financial results included in this Quarterly Report which exclude the impact of the goodwill impairment and severance charges is contained elsewhere in this Quarterly Report. In addition, our average employment level has been reduced by one-third, or 530 people, quarter-over-quarter through the combined impacts of severance activity, attrition, and the August 2009 sale of certain assets of our truck services unit.

Our intermodal segment recorded operating income of $5.7 million in the first quarter of 2010 compared to a loss of $183.6 million, which included a $169.0 million goodwill impairment charge, in the first quarter of 2009. Excluding the goodwill impairment charge in the first quarter of 2009 and $0.2 million and $0.7 million of severance expense in the 2010 and 2009 periods, respectively, intermodal segment adjusted income from operations improved $19.8 million to $5.9 million in the 2010 period compared to an adjusted loss of $13.9 million in the 2009 period. This improvement reflected strong automotive business coupled with quarter-over-quarter improvement in our retail intermodal product. As expected, under the new arrangements with Union Pacific, substantially all of the wholesale east-west domestic big box business that we have historically handled on behalf of intermodal marketing company customers on the Union Pacific network transitioned away from Pacer during the first quarter of 2010.

19

Our logistics segment recorded a $0.3 million operating loss for the first quarter 2010 compared to a $34.7 million loss, which included a $31.4 million goodwill impairment charge, in the 2009 period. Excluding the goodwill impairment and $0.5 million of severance expense in the 2009 period, loss from operations decreased $2.5 million to a $0.3 million loss in the 2010 period compared to an adjusted loss of $2.8 million in the 2009 period. This decreased operating loss reflected improved performance in each business unit.

Our debt level remains low at $24.5 million outstanding at March 31, 2010, and we are continuing to develop internally new transportation management and operations solutions systems to replace and enhance the systems currently provided by APL. We expect to complete the development and implementation efforts during the second quarter 2010.

Critical Accounting Policies

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes. Future events and their effects cannot be predicted with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results inevitably will differ from those estimates, and such differences may be material to the financial statements. Management believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its consolidated financial statements. For additional information regarding critical accounting policies, including the potential effect of specified deviations from certain management estimates, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies” in our 2009 Annual Report.

Recognition of Revenue. We recognize revenue when all of the following conditions are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is determinable and collectability is reasonably assured. We maintain signed contracts with many of our customers and have bills of lading specifying shipment details including the rates charged for our services. Our intermodal segment and our logistics segment recognize revenue after services have been completed.

Recognition of Cost of Purchased Transportation and Services. Both our intermodal and logistics segments estimate the cost of purchased transportation and services and accrue an amount on a load by load basis in a manner that is consistent with revenue recognition.

Allowance for Doubtful Accounts. We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. Estimates are used in determining this allowance based on our historical collection experience, current trends, credit policy and a percentage of our accounts receivable by aging category. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances could be required. Historically, our actual losses have been within the estimated allowances. However, unexpected or significant future changes could result in a material impact to future results of operations.

Deferred Tax Assets. At March 31, 2010, we have recorded net deferred tax assets of $36.6 million and have not recorded a valuation reserve as we believe that future earnings will more likely than not be sufficient to fully utilize the assets. The minimum amount of future taxable income required to realize this asset is approximately $93.8 million. Should we not be able to generate this future income, we would be required to record valuation allowances against the deferred tax assets resulting in additional income tax expense in our Statement of Operations.

Goodwill. The Company complies with FASB ASC Topic 350 “Intangibles – Goodwill and Other” and Topic 820 “Fair Value Measurements and Disclosures” to evaluate goodwill. Based on a combination of factors, including the continued, sustained decline in our stock price and market capitalization during the first quarter of 2009, and the operating results of our intermodal and logistics reporting units during that quarter, we concluded that a goodwill impairment triggering event had occurred

20

in the first quarter of 2009 for purposes of ASC Topic 350, and, accordingly, performed a testing of the carrying values of goodwill for both the intermodal and logistics reporting units as of March 31, 2009. As a result, we recorded a non-cash goodwill impairment charge of $200.4 million in the 2009 first quarter ($169.0 million of the pre-tax charge was recorded in the intermodal reporting unit and $31.4 million in the logistics reporting unit). After the charge, there was no remaining goodwill assigned to either the intermodal or logistics reporting units. For more information, see Note 1 to the Condensed Consolidated Financial Statements.

Use of Non-GAAP Financial Measures

From time to time in press releases regarding quarterly earnings, presentations and other communications, we may provide financial information determined by methods other than in accordance with GAAP. Recent non-GAAP financial measures have presented financial information excluding our non-cash goodwill impairment write-off in the first quarter of 2009 as well as severance expenses in both the first quarter of 2010 and 2009. Management uses these non-GAAP measures in its analysis of the Company’s performance and regularly reports such information to our Board of Directors. Management believes that presentations of financial measures excluding the impact of these charges provides useful supplemental information that is essential to a proper understanding of the operating results of our core businesses and allows investors, management and our Board to more easily compare operating results from period to period. However, the use of any such non-GAAP financial information should not be considered in isolation or as a substitute for net income or loss, operating income or loss, cash flows from operations or other income or cash flow data prepared in accordance with GAAP or as a measure of our profitability or liquidity. These non-GAAP measures may not be comparable to those used by other companies.

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Results of Operations

Three Months Ended March 31, 2010 Compared to Three Months Ended March 31, 2009

The following table sets forth our historical financial data by reportable segment for the three months ended March 31, 2010 and March 31, 2009 (in millions).

	2010			2009			Change		% Change
Revenues
Intermodal	$	264.2		$	271.3		(7.1	)	(2.6	)%
Logistics		99.8			87.6		12.2		13.9
Inter-segment elimination		(0.3	)		(0.3	)	—		—
Total		363.7			358.6		5.1		1.4
Cost of purchased transportation and services
Intermodal		212.3			224.5		(12.2	)	(5.4	)
Logistics		87.6			73.2		14.4		19.7
Inter-segment elimination		(0.3	)		(0.3	)	—		—
Total		299.6			297.4		2.2		0.7
Direct operating expenses
Intermodal		23.3			32.9		(9.6	)	(29.2	)
Logistics		—			—		—		—
Total		23.3			32.9		(9.6	)	(29.2	)
Selling, general & administrative expenses
Intermodal		21.8			27.2		(5.4	)	(19.9	)
Logistics		12.2			17.4		(5.2	)	(29.9	)
Corporate		4.8			4.7		0.1		2.1
Total		38.8			49.3		(10.5	)	(21.3	)
Goodwill impairment write-off
Intermodal		—			169.0		(169.0	)	(100.0	)
Logistics		—			31.4		(31.4	)	(100.0	)
Corporate		—			—		—		—
Total		—			200.4		(200.4	)	(100.0	)
Depreciation and amortization
Intermodal		1.1			1.3		(0.2	)	(15.4	)
Logistics		0.3			0.3		—		—
Corporate		—			0.1		(0.1	)	(100.0	)
Total		1.4			1.7		(0.3	)	(17.6	)
Income (loss) from operations
Intermodal		5.7			(183.6	)	189.3		(103.1	)
Logistics		(0.3	)		(34.7	)	34.4		(99.1	)
Corporate		(4.8	)		(4.8	)	—		—
Total		0.6			(223.1	)	223.7		(100.3	)
Interest (expense) income		(1.3	)		(0.3	)	(1.0	)	333.3
Income tax benefit		(0.2	)		(46.0	)	45.8		(99.6	)
Net loss	$	(0.5	)	$	(177.4	)	176.9		(99.7	)%

Revenues. Revenues increased $5.1 million, or 1.4%, for the three months ended March 31, 2010 compared to the three months ended March 31, 2009. Intermodal segment revenues decreased $7.1 million, reflecting decreases in the wholesale intermodal product revenues partially offset by increased retail intermodal product revenues.

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Revenues for our wholesale intermodal product of $177.2 million for the 2010 period declined 8.9% compared to the 2009 period, on overall volume declines of 22.0%. Domestic volume declined 67.1%, international volumes declined 11.0% while auto volumes increased 48.0%. The average freight revenue per container increased 16.8% in the 2010 period compared to the 2009 period due to the combination of rate increases and higher fuel surcharges. The domestic volume decline was due primarily to the implementation of the November 2009 Union Pacific arrangements which, as contemplated, resulted in the transition of most of the east-west big box business away from us during the 2010 period. Revenues associated with the transitioned business were $57.8 million in the 2009 period. During the 2010 period, this business generated revenues of $12.5 million. The international volume decline was due primarily to reduced shipments from one international shipper. Auto volumes increased from all of the auto manufacturers we serve. We expect that temporary plant shut-downs for re-tooling which typically begin at the end of the second quarter and into the third quarter and the April 1, 2010 shutdown of the New United Motor Manufacturing, Inc. (“NUMMI”) joint venture between General Motors and Toyota, will adversely impact third quarter volumes and beyond. The average fuel surcharge in effect during the 2010 period was 20.7% compared to 12.7% during the 2009 period.

Revenues for our retail intermodal product of $87.0 million for the 2010 period increased 13.3% compared to the 2009 period, on an overall volume increase of 11.2% between periods. The average freight revenue per container increased 1.9% for the 2010 period due primarily to the higher fuel surcharge.

Revenues in our logistics segment increased $12.2 million, or 13.9%, in the 2010 period compared to the 2009 period reflecting the August 2009 sale of certain assets of our truck services unit and our ceasing to provide truck services at that time, combined with increased revenues in our international and warehousing and distribution units. Our truck services unit revenues were $20.4 million in the 2009 period. Revenues in our international unit increased 80.0% due primarily to increased military shipments coupled with increased import volumes from China during the 2010 period. Our warehousing and distribution unit’s revenues increased 6.0% due primarily to higher warehouse and local trucking volumes during the 2010 period. Revenues in our logistics solutions unit (highway brokerage and supply chain services combined) were comparable between periods.

Cost of Purchased Transportation and Services. Cost of purchased transportation and services increased $2.2 million, or 0.7%, in the 2010 period compared to the 2009 period. The intermodal segment’s cost of purchased transportation and services decreased $12.2 million, or 5.4%, in the 2010 period compared to the 2009 period reflecting decreases in the wholesale intermodal product principally due to the shift of east-west big box business away from us. $1.4 million of the intermodal decrease reflects the amortization of a portion of the $11.3 million deferred gain we recognized under the Union Pacific arrangements entered into in the fourth quarter of 2009. Under those arrangements, our cost of purchased transportation and services in the intermodal segment in future periods will be negatively affected as the rail rates we pay Union Pacific for big box domestic shipments continue to gradually increase to “market” rates through the October 11, 2011 termination date of our legacy contract with Union Pacific. The amortization of the deferred gain is recorded as a reduction of the cost of purchased transportation and services because the $11.3 million deferred gain relates to these future increases in the cost of purchased transportation and services that will occur through October 11, 2011. The cost of purchased transportation related to the transitioned big box business was $62.9 million in the 2009 period. During the 2010 period, this business generated costs of $12.2 million before giving effect to the deferred gain amortization. Partially offsetting the wholesale intermodal decrease were increased costs in the retail intermodal product related to the increased volumes noted above.

The overall transportation margin percentage, revenues less the cost of purchased transportation divided by revenues, for the intermodal segment increased from 17.2% in the 2009 period to 19.6% in the 2010 period. The increase was due to the combination of rate increases and the timing of fuel surcharges to customers compared to fuel related costs from transportation providers which adversely impacted the 2009 quarter.

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Cost of purchased transportation and services in our logistics segment increased $14.4 million, or 19.7%, in the 2010 period compared to the 2009 period. The increase was due primarily to increased costs in our international unit related to the increase in military shipments and China import volumes during the 2010 period partially offset by the elimination of costs in our former truck services unit ($18.2 million in the 2009 period) as a result of the August 2009 sale of certain assets in that unit. The overall transportation margin percentage for our logistics businesses decreased from 16.5% in the 2009 period to 12.2% in the 2010 period. The decrease was due primarily to the truck services asset sale combined with lower margins on a higher amount of military shipments in our international unit.

Direct Operating Expenses. Direct operating expenses, which are only incurred by our Stacktrain operations, decreased $9.6 million, or 29.2%, in the 2010 period compared to the 2009 period due primarily to lower equipment lease, maintenance and repair costs related to a smaller fleet. At March 31, 2010, we utilized and maintained 10,115, or 37.8%, fewer containers and 10,182, or 34.5%, fewer chassis than at March 31, 2009. These reduced equipment amounts reflect the impact of Pacer equipment maintained and utilized by Union Pacific under the November 2009 Union Pacific arrangements. Union Pacific reimbursed us a net $3.8 million for container and chassis lease and maintenance costs associated with the equipment utilized by Union Pacific during the 2010 period. In addition, rail car lease costs were $0.3 million, or 4.9%, less during the 2010 period compared to the 2009 period. Also during the 2010 period, we entered into a sale leaseback arrangement for 4,000 53-ft containers and recorded, as a reduction of lease expense, a gain of $0.3 million and deferred an additional gain of $2.1 million which will be amortized over the lease term.

Selling, General and Administrative Expenses. Selling, general and administrative expenses decreased $10.5 million, or 21.3%, in the 2010 period compared to the 2009 period. The decrease was due primarily to the impact of cost reduction efforts taken in 2009 and continuing in 2010. Our average employment level declined by 530 people, or 33.9%, in the 2010 period compared to the 2009 period due to severance activities, the sale of certain assets of our truck services unit and attrition, and, when combined with the April 2009 across the board temporary salary reductions and discontinuation of the Company’s 401(k) plan matching expenses, resulted in reduced expense in the 2010 period. A total of $1.4 million in severance costs were incurred during the 2010 period, $1.2 million at corporate and $0.2 million in the intermodal segment. A total of $1.2 million of severance costs were incurred during the 2009 period, $0.7 million in the intermodal segment and $0.5 million in the logistics segment.

Goodwill Impairment Write-Off. Due to the continuing sustained decline in our stock price and market capitalization during the first quarter of 2009, and the operating results of our intermodal and logistics reporting units during the first quarter of 2009, we concluded that a goodwill impairment triggering event had occurred for purposes of ASC Topic 350 “Intangibles – Goodwill and Other,” in the first quarter of 2009 and, accordingly, performed a testing of the carrying values of goodwill for both the intermodal and logistics reporting units as of March 31, 2009. After this testing, we concluded that the carrying value of our intermodal and logistics reporting units (including goodwill) exceeded the fair value of each respective reporting unit. As a result, we recorded a non-cash impairment charge of $200.4 million during the first quarter of 2009. We recorded $169.0 million of the pre-tax charge in the intermodal reporting unit and $31.4 million in the logistics reporting unit.

Depreciation and Amortization. Depreciation and amortization expenses decreased $0.3 million, or 17.6%, in the 2010 period compared to the 2009 period due primarily to certain owned chassis utilized by our intermodal segment becoming fully depreciated during the 2010 period.

Income (Loss) From Operations. Income from operations increased $223.7 million from an operating loss of $223.1 million, including a $200.4 million goodwill impairment charge, in the 2009 period to operating income of $0.6 million in the 2010 period. Income (loss) from operations, adjusted to exclude the goodwill impairment charge in 2009 and severance expense in both periods, increased $23.5 million from an adjusted loss of $21.5 million in the 2009 period to an adjusted income of $2.0 million in the 2010 period. The primary drivers of the improvement were increased automotive business, increased retail intermodal business, the August 2009 sale of certain assets of our truck services unit and the impact of employment level and other cost reduction activity begun in 2009. See the table below reconciling the GAAP financial results to adjusted financial results excluding the goodwill impairment and severance charges.

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Intermodal segment income from operations increased $189.3 million to income of $5.7 million from an operating loss of $183.6 million which included a $169.0 million goodwill impairment charge in 2009. Excluding the 2009 goodwill impairment charge and severance expense in both periods, intermodal segment income from operations increased $19.8 million to an adjusted income from operations of $5.9 million in the 2010 period from an adjusted loss of $13.9 million in the 2009 period. The primary drivers of the improvement were increased automotive business, increased retail intermodal business and the impact of employment level and other cost reduction activity begun in 2009.

Logistics segment loss from operations decreased $34.4 million to a loss of $0.3 million from a loss of $34.7 million which included a $31.4 million goodwill impairment charge in 2009. Excluding the 2009 goodwill impairment charge and the 2009 severance expense, logistics segment loss from operations improved $2.5 million to a loss of $0.3 million in the 2010 period compared to an adjusted loss of $2.8 million in the 2009 period. Each business unit recorded improved income from operations for the 2010 period compared to the 2009 period. In addition, the improvement was partially due to the August 2009 sale of certain assets of our truck services unit combined with the impact of employment level and other cost reduction activity begun in 2009.

Corporate expenses in the 2010 period were comparable to the 2009 period reflecting reduced labor costs substantially offset by $1.2 million of severance expense in the 2010 period.

Interest (Expense) Income. Interest (expense) income, increased by $1.0 million for the 2010 period compared to the 2009 period. The increase was due primarily to higher deferred loan fee amortization, letter of credit fees and interest rates resulting from our Amended and Restated Credit Agreement (the “A&R Credit Agreement”) which we executed in August 2009. See “Liquidity and Capital Resources” below. The average interest rate during the 2010 period was 5.7% compared to 2.0% during the 2009 period. Also, during the 2010 and 2009 periods a reduction of $0.1 million to expense was recorded for the capitalization of interest related to the new transportation management systems and SAP project, respectively. The outstanding debt balance at March 31, 2010 was $24.5 million compared to $79.5 million at March 31, 2009. We expect that in the second quarter of 2010 the interest rate we pay under our credit facility will be positively impacted by the lower margin that will be applicable to our borrowings as a result of our having achieved the required fixed charge coverage ratio necessary for a reduction in the margin.

Income Tax Benefit. We recorded an income tax benefit of $0.2 million in the 2010 period compared to an income tax benefit of $46.0 million in the 2009 period. The decrease was due to the change in income resulting primarily from the 2009 goodwill impairment charge.

Net Loss. Net loss decreased by $176.9 million from $177.4 million in the 2009 period to a net loss of $0.5 million in the 2010 period. Excluding the 2009 goodwill impairment charge and severance expense in both periods, adjusted net income increased by $12.9 million, from an adjusted net loss of $12.5 million in the 2009 period to an adjusted net income of $0.4 million in the 2010 period reflecting the increased income from operations (up $23.5 million) as discussed above, offset by increased interest expense (up $1.0 million) and higher income tax expense (up $9.6 million).

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Reconciliation of GAAP Financial Results to Adjusted Financial Results For the Three-Months Ended

March 31, 2010 and March 31, 2009 (in millions, except share and per share amounts)

	First Quarter 2010									First Quarter 2009
	GAAP Results			Adjustments			Adjusted Results			GAAP Results			Adjustments			Adjusted Results			Adjusted Variance 2010 vs 2009
Income (loss) from operations-Intmdl	$	5.7		$	0.2	1/	$	5.9		$	(183.6	)	$	169.7	4/	$	(13.9	)	$	19.8
Loss from operations – Logistics		(0.3	)					(0.3	)		(34.7	)		31.9	5/		(2.8	)		2.5
Loss from operations – Corporate		(4.8	)		1.2	2/		(3.6	)		(4.8	)		—			(4.8	)		1.2
Income (loss) from operations – Total		0.6			1.4			2.0			(223.1	)		201.6			(21.5	)		23.5
Interest expense, net		1.3			—			1.3			0.3			—			0.3			1.0
Income (loss) before income taxes		(0.7	)		1.4			0.7			(223.4	)		201.6			(21.8	)		22.5
Income tax (benefit)		(0.2	)		0.5	3/		0.3			(46.0	)		36.7	6/		(9.3	)		9.6
Net income (loss)	$	(0.5	)	$	0.9		$	0.4		$	(177.4	)	$	164.9		$	(12.5	)	$	12.9
Diluted earnings (loss) per share	$	(0.01	)	$	0.03		$	0.01		$	(5.11	)	$	4.75		$	(0.36	)	$	0.37
Weighted average shares outstanding		34,787,301			34,813,072			34,813,072			34,739,745			34,739,745			34,739,745			73,327

1/ and 2/ Severance expense.

3/ Income tax impact.

4/ Intermodal segment goodwill impairment charge of $169.0 million plus severance expense of $0.7 million.

5/ Logistics segment goodwill impairment charge of $31.4 million plus severance expense of $0.5 million.

6/ Income tax impact.

Liquidity and Capital Resources

Cash generated by (used in) operating activities was $0.5 million and $(27.1) million for the three month periods ended March 31, 2010 and March 31, 2009, respectively. The increase in cash provided by operating activities was due primarily to the higher income from operations in the 2010 period, as well as decreases in accounts receivable, deferred taxes and prepaid expenses. Partially offsetting the increased cash flow from operating activities was a net tax refund of $0.8 million in the 2010 period compared to a tax refund of $2.5 million in the 2009 period

Cash generated from operating activities is principally used for working capital purposes, to fund capital expenditures and fund any dividends if declared by our Board, to repay debt under our revolving credit facility, and in the future would be available to fund any acquisitions we decide to make or repurchase common stock, if re-authorized by our Board. As required under our A&R Credit Agreement, qualified daily cash receipts are applied on the next business day to repay outstanding borrowings, and cash requirements on a daily basis are borrowed under the A&R Credit Agreement. We had working capital of $8.2 million and $81.9 million at March 31, 2010 and March 31, 2009, respectively. The decrease is due primarily to the current requirement to classify our bank borrowings as a current liability as a result of the lock-box arrangements under the A&R Credit Facility combined with the reduced level of accounts receivable and payable.

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Our operating cash flows are typically the primary source for funding our contractual obligations. The table below summarizes our major commitments as of March 31, 2010 (in millions).

Contractual Obligations

	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Debt	$	24.3	$	24.3	$	—	$	—	$	—
Capitalized lease obligation		0.2		0.2		—		—		—
Interest on debt		10.0		5.0		5.0		—		—
Operating leases		329.7		78.1		130.7		84.6		36.3
Volume incentives		2.1		2.1		—		—		—
APL IT agreement		2.7		2.7		—		—		—
SAP IT agreements		11.7		5.8		5.7		0.2		—
Other IT agreements		5.9		2.0		2.3		1.3		0.3
Human resources agreements		1.5		0.7		0.8		—		—
Severance liability		2.3		2.3		—		—		—
Purchased transportation		24.2		24.2		—		—		—
Total	$	414.6	$	147.4	$	144.5	$	86.1	$	36.6

Debt is the amount outstanding under our A&R Credit Agreement which we entered into in August 2009. As a result of the lock-box arrangements under the A&R Credit Facility, amounts outstanding thereunder at March 31, 2010 are classified as a current liability on our consolidated balance sheet under ASC 470-10-45-5A. The capital lease obligations were incurred in 2008 and are related to our SAP software project. Cash interest expense on debt was estimated using current rates as of March 31, 2010 for all periods based upon the current outstanding balance through April 5, 2012, the maturity date of the A&R Credit Agreement.

The majority of the operating lease obligations relate to our intermodal segment’s lease of railcars, containers and chassis, but also includes operating leases for tractors used in our local trucking operations. Each year a portion of the operating leases must be renewed or can be terminated based upon equipment requirements. Partially offsetting these lease payment requirements are railcar and container per diem revenues (not reflected in the table above) which were $12.1 million in the 2010 period and $12.4 million in the 2009 period. Also partially offsetting the lease payment requirements are amounts payable by Union Pacific (not reflected in the table above) for the portion of our 53-foot container and chassis fleet allocated to Union Pacific under our new equipment arrangements. Union Pacific assumed the responsibility for greater numbers of containers and chassis in stages with full responsibility for its allocated portion of the fleet beginning on February 1, 2010. For the first quarter of 2010, equipment payments of $4.7 million, recorded as a reduction of lease expense in the statement of operations, were due from Union Pacific for containers and chassis utilized by Union Pacific. Some of the operating leases for railcars contain provisions for automatic renewal for an additional five year period, resulting in a total lease term from lease inception of fifteen years. The above table assumes the automatic renewal and the minimum lease payments reflect the term for the fifteen years from lease inception. If we were to provide notice of non-renewal, the minimum lease payments (including the potential guaranteed portion of the residual value which may be payable) would be $89.0 million in less than one year period, $134.5 million for the 1 to 3 year period, $69.2 million for the 3 to 5 year period, and $24.7 million for the more than 5 year period above.

Volume incentives (which are recorded as a reduction of revenues in our consolidated financial statements) relate to amounts payable to companies that ship on our Stacktrain unit that met certain volume shipping commitments for the year 2009.

Our APL IT agreement is a long-term contract expiring in May 2019 and is cancelable by us on 120 days notice without penalty. We are currently working to develop internally new transportation management and operations solutions to replace and enhance the systems currently provided by APL. The new solutions are expected to include equipment management, pricing, billing and tracking and tracing

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applications. We expect to complete the development and implementation efforts during the second quarter of 2010. As permitted under the APL IT agreement we have notified APL that we intend to cease using its information technology services during the second quarter of 2010. Accordingly, the table shows our obligation through June 30, 2010.

The SAP IT agreement reflects commitments for ongoing maintenance and support to SAP and other parties. See the discussion below for further information on the SAP software project. The Other IT agreements reflect a telecommunications commitment for voice, data and frame relay services and IT licensing, hosting and maintenance commitments. The human resources agreements reflect our human resources benefit system and payroll processing contract. The severance liability relates to amounts to be paid related to our current cost reduction and lease termination activities. The purchased transportation amount reflects our estimate of the cost of transportation purchased by our segments that is in process at period-end but not yet completed and minimum container commitments to ocean carriers made by our non-vessel operating common carrier operation.

Cash flows used in investing activities were $0.2 million and $2.8 million for the three months ended March 31, 2010 and March 31, 2009, respectively. The 2010 cash capital expenditures included $1.7 million for the internally developed transportation management and operations solutions to replace the systems currently provided by APL and $1.0 million for normal computer replacement items. Also during the 2010 period, we entered into a sale leaseback arrangement for 4,000 53-ft containers and recorded, as a reduction of lease expense, a gain of $0.3 million and deferred an additional gain of $2.1 million which will be amortized over the lease term. The 2009 cash capital expenditures included $2.6 million for the SAP software project and $0.6 million for normal computer replacement items and leasehold improvements. During the 2010 period, we retired and sold primarily 48-ft. chassis in our Stacktrain unit for proceeds of $0.1 million. During the 2009 period, we retired and sold primarily 48-ft. chassis in our Stacktrain unit for proceeds of $0.4 million.

Cash flows provided by financing activities were $1.2 million and $29.7 million for the 2010 and 2009 periods, respectively. During the 2010 period, we borrowed a net $1.3 million under the A&R Credit Agreement to support our operations, and repaid $0.1 million of capital lease obligations related to the SAP software project. As of March 31, 2010, borrowings under the A&R Credit Agreement bore a weighted average interest rate of 6.0% per annum. The net book value of equipment under capital lease was $0.2 million at March 31, 2010. During the 2009 period, we borrowed $35.0 million on our prior revolving credit facility to support our operations, paid the $5.2 million fourth quarter 2008 cash dividend, and repaid $0.1 million of capital lease obligations related to the SAP software project.

The A&R Credit Agreement, which maintains the original maturity of April 5, 2012, provides for a revolving credit facility of up to $125 million (including a $35 million letter of credit facility and a $10 million swing line loan facility), and an accordion feature providing for an increase in the facility of up to $50 million subject to certain conditions (for a total facility of $175 million if such conditions are met). Under the borrowing base formula determined as of March 31, 2010, $42.3 million was available under the A&R Credit Agreement, net of $24.3 million in outstanding loans, $22.7 million of outstanding letters of credit and the $3.5 million availability block. The outstanding loan amount has been reduced and availability amount has been increased by $16.6 million for cash deposited into the lenders lock-box on March 31, 2010 and applied to the repayment of outstanding loans on April 1, 2010.

Borrowing under the facility is determined on a daily basis as calculated under a borrowing base formula determined on a monthly basis equal to the lesser of (a) $125 million less the sum of substantially all obligations under outstanding letters of credit (the “L/C Reserve”) and an amount equal to the availability block (described below), or (b) an amount equal to (i) the sum of (x) 85% of the eligible accounts receivables, (y) 85% of eligible earned but unbilled accounts receivable up to $17.5 million and (z) the lesser of (I) 80% of the net liquidation value of eligible owned railcars and chasses and (II) $25.0 million, which lesser amount is reduced monthly by $250,000 beginning September 30, 2009), minus (ii) the availability reserve (described below).

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The availability block is $500,000 per month on a cumulative basis beginning September 30, 2009, except that commencing on the last day of the month following the reporting of the March 31, 2010 fixed charge coverage ratio (at which time the availability block will have reached $3.5 million) the availability block will cease to escalate and instead will be released in four successive equal monthly installments if, and only for so long as, we have achieved a fixed charge coverage ratio of greater than 1.25:1.00 for the preceding 12 month period (or for periods ending on or prior to July 30, 2010, for the period beginning August 1, 2009). If the availability block fixed charge coverage ratio is 1.25:1.00 of lower for any such period, the release of any block will be suspended, and the availability block will recommence at the rate of $500,000 per month which will be added to any then existing availability block. As of March 31, 2010, the availability block was $3.5 million.

The availability reserve is the sum of (i) the L/C Reserve, (ii) reserves established by the Administrative Agent in its reasonable discretion for bank products extended to us by any lender party to the A&R Credit Agreement (such as foreign exchange and cash management services), (iii) obligations of the Company and its subsidiaries secured by liens that are senior to the liens under the A&R Credit Agreement, (iv) the availability block then in effect, and (v) such additional reserves established by the Administrative Agent in its reasonable discretion from time to time. As of March 31, 2010, the availability reserve was $26.2 million, comprised of $22.7 million in L/C Reserve and $3.5 million in availability block.

Until the delivery of financial statements and a compliance certificate with respect to the period ending March 31, 2010, borrowings under the A&R Credit Agreement will bear interest, at the Company’s option, at a base rate plus a margin of 3.75% per annum, or at a Eurodollar rate plus a margin of 4.75% per annum. Following delivery of such financial statements and compliance certificate, the margin may decline to 3.50% on base rate loans or 4.50% on Eurodollar rate loans if the Company’s fixed charge coverage ratio for the applicable period described below is greater than 1.50:1.00. We expect that in the second quarter of 2010 the interest rate we pay under our credit facility will be positively impacted by the lower margin that will be applicable to our borrowings as a result of our having achieved the required fixed charge coverage ratio necessary for a reduction in the margin. The base rate is the highest of the prime lending rates of the Administrative Agent, the Eurodollar rate for a 30-day interest period plus 1.0%, or the federal funds rate plus  ¹/2 of 1%.

The A&R Credit Agreement contains affirmative, negative and financial covenants customary for such asset-based financings, including, among other things, limits on the incurrence of debt, the incurrence of liens, restricted payments, transactions with affiliates, capital expenditures and mergers and consolidations and a fixed charge coverage ratio. It also contains customary representations and warranties. Breaches of the covenants, representations or warranties may give rise to an event of default. Other events of default include the Company’s failure to pay certain debt, the occurrence of a default with respect to any indebtedness of the Company and its subsidiaries resulting in, or which permits, the acceleration, repurchase, repayment or redemption of such indebtedness, certain insolvency and bankruptcy proceedings, certain ERISA events or unpaid judgments over a specified amount, or a change in control as defined in the A&R Credit Agreement.

The fixed charge coverage ratio requires the Company to maintain as of the end of each month a minimum ratio for the preceding 12-month period (or for periods ending on or prior to July 30, 2010, for the period beginning August 1, 2009 through the end of the applicable month) of 1.25:1.00 . At March 31, 2010, the Company was in compliance with the covenants of the A&R Credit Agreement, with a fixed charge coverage ratio of 3.22x. The fixed charge coverage ratio is the ratio of (a) EBITDA (defined as net income plus interest, income taxes, depreciation and amortization expense, non-recurring expenses reducing such net income which do not represent a cash item in the relevant or any future period, non-cash charges or expenses related to equity plans or stock option awards, payroll taxes on exercise of stock options, operating losses associated with Pacer Transport, Inc. (capped at $500,000), and non-recurring operational restructuring charges incurred before August 28, 2010 (capped at $2 million in any three-month period and $5 million in total) minus income tax credits and non-cash items increasing net income) to (b) fixed charges (cash interest expense, regularly scheduled principal payments on or redemptions or similar acquisitions for value of borrowed money, income taxes paid in cash, and capital expenditures (other than those financed with borrowed money other than under the A&R Credit Agreement)).

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The A&R Credit Agreement limits the Company’s annual capital expenditures to $8.1 million for 2010 and $6.5 million for each year thereafter.

The A&R Credit Agreement is guaranteed by all of our direct and indirect (domestic) subsidiaries and is secured by a first priority, perfected security interest in substantially all of the present and future tangible and intangible assets, intercompany debts, stock or other equity interests owned by us, our domestic subsidiaries, and a portion of the stock or other equity interests of certain of our foreign subsidiaries.

During the 2010 period, the intermodal segment returned 3,219 primarily 53-ft. leased containers, retired 1,172 primarily 53-ft owned containers, returned 447 leased chassis and retired 48 owned chassis. During the 2009 period, the intermodal segment returned 1,919 primarily 48-ft. and 53-ft. leased containers and received 802 new 53-ft. leased containers, returned 882 leased chassis and sold 280 owned chassis.

Recently Issued Accounting Pronouncements

In February 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2010-09 Subsequent Events (Topic 855), Amendments to Certain Recognition and Disclosure Requirements (“ASU 2010-09”). ASU 2010-09 updates FASB ASC Topic 855. ASU 2010-09 removes the requirement to disclose the date through which an entity has evaluated subsequent events. The adoption of ASU 2010-09 in February 2010 did not have a material impact on our results of operations or financial condition.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our market risk is affected primarily by changes in interest rates. Under our policies, we may use hedging techniques and derivative financial instruments to reduce the impact of adverse changes in interest rates.

We have market risk in interest rate exposure, primarily in the United States. We manage interest exposure through our floating rate debt. Interest rate swaps may be used from time to time to adjust interest rate exposure when appropriate based on market conditions. There were no swaps outstanding as of March 31, 2010.

Based upon the average variable interest rate debt outstanding during the three months ended March 31, 2010, a 1% change in our variable interest rates would affect our pre-tax earnings by approximately $0.2 million on an annual basis.

As our foreign business expands, we will be subjected to greater foreign currency risk.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures. We evaluated the effectiveness of the design and operation of our “disclosure controls and procedures” as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this report. This evaluation (the “disclosure controls evaluation”) was done under the supervision and with the participation of management, including our chief executive officer (“CEO”) and chief financial officer (“CFO”). Rules adopted by the SEC require that in this section of our Quarterly Report on Form 10-Q we present the conclusions of the CEO and the CFO about the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report based on the disclosure controls evaluation.

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Objective of Controls. Our disclosure controls and procedures are designed so that information required to be disclosed in our reports filed or submitted under the Exchange Act, such as this Quarterly Report on Form 10-Q, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Our disclosure controls and procedures are also intended to ensure that such information is accumulated and communicated to our management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives, and management necessarily is required to use its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures.

Conclusion. Based upon the disclosure controls and procedures evaluation, our CEO and CFO have concluded that as of the end of the period covered by this report, our disclosure controls and procedures were effective to provide reasonable assurance that the foregoing objectives are achieved.

Changes in Internal Control over Financial Reporting. There were no changes in our internal control over financial reporting during the quarter ended March 31, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

Information on legal proceedings is set forth in Note 5 to the Notes to Condensed Consolidated Financial Statements included in Part I of this report, which information is incorporated by reference herein.

ITEM 1A. RISK FACTORS.

Information on risk factors is set forth in “Managements’ Discussion and Analysis of Financial Condition and Results of Operations – Forward Looking Statements” in Part I-Item 2 of this Quarterly Report on Form 10-Q and in Part I – “Item 1A. Risk Factors” to the Company’s 2009 Annual Report. There have been no material changes from the risk factors previously described in Pacer’s 2009 Annual Report on Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. (Removed and Reserved).

ITEM 5. OTHER INFORMATION.

Our Board of Directors is divided into three classes that serve staggered three-year terms. At the 2010 Annual Meeting of Shareholders of Pacer International, Inc. held on May 4, 2010, the shareholders elected the following persons to the Company’s Board of Directors. Mr. Chantland was elected, by the votes indicated below, to serve until the 2012 Annual Meeting of Shareholders, or until his successor is elected and qualified. Mr. Avramovich, Mr. Coates and Mr. Giftos were elected, by the votes indicated below, to serve until the 2013 Annual Meeting of Shareholders, or until their successors are elected and qualified.

Name	For	Withheld
Dennis A. Chantland	22,806,585	584,026
Daniel W. Avramovich	22,814,427	576,184
J. Douglass Coates	22,777,832	612,779
P. Michael Giftos	20,328,521	3,062,090

Directors Robert Rennard and Robert F. Starzel will continue in office until the 2011 Annual Meeting and director Robert J. Grassi will continue in office until the 2012 Annual Meeting.

By a vote of 29,360,056 for, 90,907 against and 14,106 abstaining, the shareholders ratified the Board of Director’s selection of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2010. There were no broker non-votes on this matter.

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ITEM 6. EXHIBITS.

Exhibit No.	Description
10.1	Employment Agreement dated March 29, 2010 between Pacer International and Michael A. Burns. * +
10.2	Employment Agreement dated March 29, 2010 between Pacer International and John J. Hafferty. * +
10.3	Separation Agreement and Release of Claims between Pacer International and Marc Jensen. * +
10.4	Separation Agreement and Release of Claims between Pacer International and Brian C. Kane. * +
31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1	Certification of Chief Executive Officer and Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**

* filed herewith

** furnished herewith, but not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that we explicitly incorporate it by reference.

⁺ Management contract or compensatory plan or arrangement.

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SIGNATURES

Pursuant to the requirements 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.

	PACER INTERNATIONAL, INC.
Date: May 7, 2010	By:	/s/ Daniel W. Avramovich
		Chairman and Chief Executive Officer (Principal Executive Officer)
Date: May 7, 2010	By:	/s/ John J. Hafferty
		Executive Vice President and Chief Financial Officer (Principal Financial Officer)

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PACER INTERNATIONAL, INC. AND SUBSIDIARIES

EXHIBIT INDEX

Exhibit No.	Description
10.1	Employment Agreement dated March 29, 2010 between Pacer International and Michael A. Burns
10.2	Employment Agreement dated March 29, 2010 between Pacer International and John J. Hafferty
10.3	Separation Agreement and Release of Claims between Pacer International and Marc Jensen.
10.4	Separation Agreement and Release of Claims between Pacer International and Brian C. Kane.
31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer and Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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EX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT dated as of March 29, 2010, between Pacer International, Inc., a Tennessee corporation (the “Company”), and Michael A. Burns (the “Executive”).

The Company and the Executive are entering into this Agreement to set forth the terms of the Executive’s employment with the Company. Accordingly, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Company and the Executive, the Company and the Executive hereby agree as follows:

Section 1. Duties. On the terms and subject to the conditions contained in this Agreement, the Executive will be employed by the Company as its Chief Commercial Officer. The Executive shall perform such duties and services on behalf of the Company and its Affiliates (as defined in Section 24(b) below) consistent with such title and position as may reasonably be assigned to the Executive from time to time by the Company’s Board of Directors (the “Board”) or the Chief Executive Officer of the Company.

Section 2. Term. The Executive’s employment hereunder shall be for the period (the “Employment Period”) commencing on the date hereof (the “Commencement Date”) and ending on the effective date of the termination of such employment pursuant to and in accordance with the applicable provisions of this Agreement. Upon such termination of the Executive’s employment hereunder, the Executive (or, if applicable, the Executive’s beneficiaries or estate) shall be entitled only to those rights and benefits provided in Section 8(a) or Section 8(b), as applicable to such termination, subject to compliance with those continuing covenants and agreements set forth herein.

Section 3. Time to be Devoted to Employment. During the Employment Period, the Executive will devote substantially all of the Executive’s working energies, efforts, interest, abilities and time exclusively to the business and affairs of the Company and its Affiliates. The Executive will not engage in any other business or activity that, in the reasonable judgment of the Board, would conflict or interfere in any material respect with the Executive’s performance of his duties as set forth herein, whether or not such activity is pursued for gain, profit or other pecuniary advantage.

Section 4. Base Salary; Bonus; Benefits.

(a) During the Employment Period, the Company (or any of its Affiliates) shall pay the Executive a minimum annual base salary (the “Base Salary”) of $300,000, but subject to the Company-wide 10% salary reduction in effect as of the Commencement Date resulting in a minimum Base Salary of $270,000 until such time as the 10% salary reduction is rescinded. Such Base Salary will be payable in such installments (but not less often than monthly) as is generally the policy of the Company with respect to the payment of regular compensation to its executive officers. The Base Salary may be increased from time to time in the sole discretion of the Board. The Executive will also be entitled to four weeks vacation per year under and subject to the

Company’s policy. Such vacation shall accrue and may be taken in accordance with the Company’s policy in effect from time to time with respect to its executive officers generally, subject to the Company’s right at any time and from time to time generally to amend, modify, change or terminate such vacation policy in any respect. The Executive will also be entitled to such other benefits as may be made available to other executive officers of the Company generally, including participation in such health, life and disability insurance programs and retirement or savings plans, if any, as the Company may from time to time maintain in effect, as well as a monthly club dues allowance and a monthly car allowance in accordance with the Company’s policy from time to time for similarly situated executives, in all cases subject to the Company’s right at any time and from time to time generally to amend, modify, change or terminate in any respect any of its employee and other benefit plans, policies, or programs.

(b) During the Employment Period, the Executive shall be entitled to participate in the Company’s performance bonus plan or program as adopted by the Board and in effect from time to time with respect to similarly situated executives of the Company and its subsidiaries (the “Bonus Plan”), and to receive such performance bonus thereunder (if any) with respect to each fiscal year of the Company occurring during the Employment Period, subject in all cases to the terms and conditions of this Agreement and such Bonus Plan. The amount of such performance bonus, if any, that may be awarded and payable to the Executive hereunder with respect to any such fiscal year shall range up to fifty percent (50%) of the Base Salary in effect for such fiscal year as determined by the Board (or committee thereof) in its sole discretion based on and to the extent of the achievement or satisfaction of such targets, goals and conditions as may be provided in such Bonus Plan for such fiscal year, and as the Board (or committee thereof) may otherwise determine. Such targets, goals and conditions may include business, financial, operating and/or other performance measures applicable to (A) the Company and its Affiliates taken as a whole and (B) those business segment(s), divisions(s) or functional group(s) of the Company and its Affiliates for and with respect to which the Executive is responsible or has authority (e.g., the marketing and sales function) and (ii) such personal and individual performance criteria as may be determined by the Board (or committee thereof) taking into account the Executive’s duties and responsibilities to the Company and its Affiliates for the period in question. The performance bonus awarded and payable to the Executive under such Bonus Plan with respect to any such fiscal year (including any pro rated amount payable pursuant to the following provisions of this Section 4(b)) shall be paid at such time or times and in such manner as performance bonuses are paid to the other executive officers of the Company generally. If the Executive’s employment with the Company is terminated without “cause” pursuant to Section 7(b) below, the Executive will be entitled to receive that portion of the bonus payable for the fiscal year of the Company during which such termination occurs pro rated through the date of such termination based on the number of days elapsed through the termination date over 365 days. If the Executive’s employment with the Company is terminated for any reason other than without “cause” pursuant to Section 7(b) below, neither the Company nor any of its Affiliates will be obligated to pay the Executive any bonus with respect to the fiscal year of the Company in which such termination occurred or thereafter. The Executive’s rights to participate in, and to receive a performance bonus under, the Company’s Bonus Plan in effect for any given fiscal year shall be subject to the Company’s right at any time and from time to time to amend, modify, change or terminate such Bonus Plan in any respect. In the event of a conflict between this Agreement and such Bonus Plan, this Agreement shall control.

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Section 5. Reimbursement of Expenses. During the Employment Period, the Company shall reimburse the Executive in accordance with Company policy for all reasonable and necessary traveling expenses and other disbursements incurred by the Executive for or on behalf of the Company in connection with the performance of the Executive’s duties hereunder upon presentation of appropriate receipts or other documentation therefor, in accordance with all applicable policies of the Company.

Section 6. Disability or Death. If, during the Employment Period, the Executive is incapacitated or disabled by accident, sickness or otherwise (a “Disability”) so as to render the Executive mentally or physically incapable of performing the services required to be performed by the Executive under this Agreement for any period of 90 consecutive days or for an aggregate of 180 days in any period of 360 consecutive days, the Company may, at any time thereafter, at its option, terminate the Executive’s employment under this Agreement immediately upon giving the Executive written notice to that effect. In the event of the Executive’s death, the Executive’s employment will be deemed terminated as of the date of death.

Section 7. Termination.

(a) The Company may terminate the Executive’s employment hereunder at any time for “cause” by giving the Executive written notice of such termination, containing reasonable specificity of the grounds therefor. For purposes of this Agreement, “cause” shall mean (i) willful misconduct with respect to the business and affairs of the Company or any of its Affiliates, (ii) willful neglect of the Executive’s duties or the failure to follow the lawful directions of the Board or more senior officers of the Company to whom the Executive reports, including the violation of any material policy of the Company or of any of its Affiliates that is applicable to the Executive, (iii) the material breach of any provision of this Agreement or any other written agreement between the Executive and the Company or any of its Affiliates and, if such breach is capable of being cured, the Executive’s failure to cure such breach within 30 days of receipt of written notice thereof from the Company, (iv) the Executive’s commission of a felony, (v) the Executive’s commission of an act of fraud or financial dishonesty with respect to the Company or any of its Affiliates or (vi) any conviction of the Executive for a crime involving moral turpitude or fraud. A termination pursuant to this Section 7(a) shall take effect immediately upon the giving of the notice contemplated hereby.

(b) The Company may terminate the Executive’s employment hereunder at any time without “cause” by giving the Executive written notice of such termination, which termination shall be effective as of the date set forth in such notice, provided that such date shall not be earlier than the day on which such notice is delivered to Executive (determined pursuant to Section 16(b) below).

(c) The Executive may terminate his employment hereunder at any time for any or no reason by giving the Company written notice of such termination, which termination shall be effective as of the date set forth in such notice, provided that such date shall not be earlier than the day on which such notice is delivered to the Company (determined pursuant to Section 16(b) below).

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Section 8. Effect of Termination.

(a) Upon the effective date of a termination of the Executive’s employment under this Agreement for any reason other than a termination by the Company without cause pursuant to Section 7(b), neither the Executive nor the Executive’s beneficiaries or estate shall have any further rights under this Agreement or any claims against the Company or any of its Affiliates arising out of this Agreement, except the right to receive, within 30 days after the effective date of such termination (or such earlier period as may be required by applicable law):

(i) the unpaid portion of the Base Salary provided for in Section 4, computed on a pro rata basis to the effective date of such termination;

(ii) reimbursement for any expenses incurred by the Executive up to the effective date of such termination of employment and with respect to which the Executive shall not have theretofore been reimbursed, as provided in Section 5; and

(iii) the unpaid portion of any amounts earned by the Executive prior to the effective date of such termination pursuant to any employee benefit plan or program in which the Executive participated during the Employment Period (including any accrued and unused or unpaid vacation benefits that may be earned by or due to the Executive as of the effectiveness of such termination in accordance with the Company’s policy in effect at the effective time of such termination); provided, however, that the Executive shall not be entitled to receive any benefits under any such employee benefit plan or program that have accrued during any period if the terms of such plan or program require that the beneficiary be employed by the Company as of the end of any period ending on or after the effective date of such termination.

(b) Upon termination of the Executive’s employment under this Agreement by the Company without cause pursuant to Section 7(b), neither the Executive nor the Executive’s beneficiaries or estate shall have any further rights under this Agreement or any claims against the Company or any of its Affiliates arising out of this Agreement, except the right to receive the following amounts and benefits within 30 days after the effective date of such termination, in the case of amounts due pursuant to clause (i) below, and at such other times as provided in clauses (ii) and (iii) below in the case of amounts due thereunder (or in each case such earlier period as may be required by applicable law); provided, however, that in the case of clauses (ii) and (iii) below, the Executive is not in breach of any provision of this Agreement surviving such termination and does not engage in any activity or conduct proscribed by Section 9 or Section 10 (regardless of the extent to which such Section may be enforced under applicable law):

(i) the payments, if any, referred to in Section 8(a) above;

(ii) continued payment of an annual amount equal to the Base Salary as in effect immediately prior to the effective date of such termination for twelve (12) months following the effective date of such termination (the “Severance Period”), payable during the Severance Period in such manner as the Base Salary would have been payable pursuant to Section 4(a) but for such termination; and

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(iii) the payment of any pro rata bonus (or portion thereof), if any, awarded and payable to the Executive pursuant to and in accordance with Section 4(b) with respect to the fiscal year in which such termination occurs, to be paid when and as provided in such Section 4(b) (notwithstanding the proviso in Section 8(a)(iii) above).

Notwithstanding the provisions of this Section 8(b), if on the date of Executive’s termination, Executive is a “specified employee” as defined in Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”), and an exception from Section 409A’s requirements is not available as to any one or more payments or installments, Executive shall not receive a distribution of such payment or installment under this Agreement until six months after the date of termination. If Executive is subject to the restriction described in the previous sentence, Executive will be paid on the first day of the seventh month after termination an amount equal to the benefit that Executive would have been paid during such six-month period absent such restriction. In furtherance of the application of all possible exceptions to requirements of Section 409A, each payment or installment shall be treated as a separate payment in order to maximize the application of payments during the “short term deferral period” under Section 409A.

(c) Without limiting any other provision of this Agreement, if the Executive dies on or after the effective date of the termination of the Executive’s employment hereunder, the Executive’s heirs, beneficiaries or estate, as their respective interests may appear (but without duplication), shall be entitled to receive or continue to receive those benefits that would otherwise have been due and payable to the Executive pursuant to Section 8(a) above or Section 8(b) above, as applicable.

(d) In addition to, and not by way of limitation of, any other provision of this Agreement, upon the effective date of the termination of the Executive’s employment hereunder, the Executive shall surrender and deliver to the Company (i) all computers, cell phones, office equipment, credit cards, charge cards and other tangible property of or belonging to or issued in the name of the Company or any of its Affiliates, (ii) all membership cards for memberships maintained by or in the name of the Company or any of its Affiliates, (iii) all passwords, access codes, documents, records, and files (including all copies thereof, regardless of the form or media in which the same exist or are stored) in the Executive’s possession and belonging or relating to the Company or any of its Affiliates (except that the Executive may retain one copy thereof for personal archive purposes, subject to the other terms and conditions of this Agreement, including Section 9), and (iv) any and all other personal property in the Executive’s possession belonging to the Company or any of its Affiliates.

Section 9. Disclosure of Information.

(a) From and after the date hereof, the Executive shall not at any time disclose, divulge, furnish or make accessible to any Person any Confidential Information (as hereinafter defined) heretofore acquired or acquired during the Employment Period for any reason or purpose whatsoever (provided that nothing contained herein shall be deemed to prohibit or restrict the Executive’s right or ability to disclose, divulge, furnish or make accessible any Confidential Information (i) to any officer, director, employee, Affiliate or representative of the Company, or (ii) to any other Person as required in connection with the performance of the Executive’s duties under and in compliance with this Agreement, or as required by law or judicial process), nor shall

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the Executive make use of any Confidential Information for the Executive’s own purposes or benefit or for the purposes or benefit of any other Person except the Company and its Affiliates. The covenant contained in this Section 9 shall survive the termination or expiration of the Employment Period and any termination of this Agreement.

(b) For purposes of this Agreement, the term “Confidential Information” means (i) the Intellectual Property Rights (as hereinafter defined) of the Company and its Affiliates and (ii) all other information of a proprietary or confidential nature relating to the Company or any Affiliate thereof, or the business or assets of the Company or any such Affiliate, including: books and records; agent and independent contractor lists and related information; customer lists and related information; vendor lists and related information; supplier lists and related information; employee and personnel lists, policies and related information; contract terms and conditions (including those with customers, suppliers, vendors, independent contractors and agents, and present and former employees); terms and conditions of permits, orders, judgments and decrees; wholesale, retail and distribution channels; pricing information, cost information, and pricing and cost structures and strategies; marketing, product development and business development plans and strategies; management reports; financial statements, reports, schedules and other information; accounting policies, practices and related information; business plans, strategic plans and initiatives, forecasts, budgets and projections; and shareholder, board of directors and committee meeting minutes and related information; provided, however, that Confidential Information shall not include (A) information that is generally available to the public on the date hereof, or which becomes generally available to the public after the date hereof without action by the Executive in breach or violation of this Agreement, or (B) information that the Executive receives from a third party who does not have any obligation to the Company or any of its Affiliates to keep such information confidential and which the Executive does not know (or reasonably could not have known) is confidential to the Company or any of its Affiliates, or (C) information known by the Executive from a source other than the Company or any of its Affiliates.

(c) As used herein, the term “Intellectual Property Rights” means all industrial and intellectual property rights, including the following (whether patentable or not): patents, patent applications, and patent rights; trademarks, trademark applications, trade names; service marks and service mark applications; trade dress, logos and designs, and the goodwill associated with the foregoing; copyrights and copyright applications; certificates of public convenience and necessity, franchises and licenses; trade secrets, know-how, proprietary processes and formulae, inventions, improvements, devices and discoveries; development tools; marketing materials; instructions; Confidential Information; and all documentation and media constituting, describing or relating to the foregoing, including manuals, memoranda and records.

Section 10. Noncompetition Covenant.

(a) The Executive acknowledges and agrees that he will receive significant and substantial benefits from his employment with the Company under this Agreement, including the remuneration, compensation and other consideration inuring to his benefit hereunder, as well as introductions to, personal experience with, training in and knowledge of the Company and its Affiliates, the industries in which they engage, and third parties with whom they conduct business. Accordingly, in consideration of the foregoing, and to induce the Company to employ and continue to employ the Executive hereunder and provide such benefits to the Executive (in each

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case subject to the terms and conditions of this Agreement and the applicable employment policies of the Company and its Affiliates), the Executive agrees that he will not during the period beginning on the Commencement Date and ending twelve (12) months after the effective date of the termination of the Executive’s employment with the Company and its Affiliates (the “Non-Competition Period”) for any reason:

(i) in any city or county in any state or province of the United States, Canada or Mexico where the Company or any of its Affiliates conducts business during the Non-Competition Period, directly or indirectly engage or participate in any Competing Business (as defined in Section 10(b) below) (whether as an officer, director, employee, partner, consultant, holder of an equity or debt investment, lender or in any other manner, or capacity, including by the rendering of services or advice to any person), or lend his name (or any part or variant thereof) to, any Competing Business;

(ii) deal, directly or indirectly, with any customers, vendors, agents or contractors doing business with the Company or any of its Affiliates, or with any officer, director, employee of the Company or any of its Affiliates, in each case in any manner that is or could reasonably be expected to be competitive with the Company or any of its Affiliates;

(iii) take any action to solicit, encourage or induce any customer, vendor, agent or contractor doing business with the Company or any of its Affiliates, or any officer, director, employee or agent of the Company or any of its Affiliates:

(A) to terminate or alter in any manner adverse to the Company and its Affiliates his or its business, commercial, employment, agency or other relationship with the Company or such Affiliate (including any action to do business or attempt to do business with, or to hire, retain, engage or employ or attempt to hire, retain, engage or employ, any customer, vendor, agent or contractor, or any officer, director or employee, of the Company or any of its Affiliates);

(B) to become a customer, vendor, agent or contractor, or an officer, director or employee, of the Executive, the Executive’s Affiliates or any other Person; or

(C) to engage in any Competing Business; or

(iv) engage in or participate in, directly or indirectly, any business conducted under any name that shall be the same as or similar to the name of the Company or any of its Affiliates or any trade name used by any of them.

Ownership by the Executive for investment purposes only of less than 2% of the outstanding shares of capital stock or class of debt securities of any Person with one or more classes of its capital stock listed on a national securities exchange or actively traded in the over-the-counter market shall not constitute a breach of the foregoing covenant. The covenant contained in this Section 10 shall survive the termination or expiration of the Employment Period and any termination of this Agreement.

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(b) As used herein, the term “Competing Business” means any transportation or other business that the Company or any of its Affiliates has engaged in at any time during the Employment Period in any city or county in any country, state or province of the United States, Canada or Mexico, including any such business directly or indirectly engaged in providing any of the following:

(i) intermodal marketing or rail or intermodal brokerage services (whether in connection with domestic or international shipments or customers), car fleet management services, and railcar brokerage and management services;

(ii) highway brokerage services, including full trailer load, less than trailer load, trailer fleet management and depot operations services;

(iii) international freight transportation services, including ocean forwarding, custom house brokerage, ocean carrier services (including NVOCC operations), import/export air forwarding services, and special project services;

(iv) dry van trucking services, port and rail depot cartage services (whether in connection with domestic or international shipments or customers), and local and regional trucking services (including full truckload and less-than-truckload motor carrier services);

(v) freight consolidation and handling services, including third party warehouse, cross dock, consolidation, deconsolidation and distribution services;

(vi) comprehensive transportation management programs and services to third party customers, including supply chain and traffic management services, carrier rate and contract management services, logistics optimization planning, and vendor bid optimization; and

(vii) intermodal rail equipment (including double-stack rail car, container and chassis) supply and management services, including doublestack transportation services.

Section 11. Inventions Assignment. During the Employment Period, the Executive shall promptly disclose, grant and assign to the Company for its and its Affiliates’ sole use and benefit any and all inventions, improvements, technical information and suggestions reasonably relating to the business of the Company and its Affiliates (collectively, the “Inventions”) that the Executive may develop or acquire during the Employment Period (whether or not during usual working hours), together with all patent applications, letters patent, copyrights and reissues thereof that may at any time be granted for or with respect to the Inventions. In connection with the previous sentence, the Executive shall, at the expense of the Company, including a reasonable payment based on the Executive’s last per diem earnings with the Company for the time involved if (a) the Executive is not then in the Company’s employ, or (b) if the Executive is not then receiving severance payments pursuant to Section 8(b) above, or (c) if the Executive has not otherwise received one or more severance payments with respect to such period (whether on a lump sum, pre-paid, or accelerated basis or otherwise), (i) promptly execute and deliver such applications, assignments, descriptions and other instruments as may be necessary or proper in the opinion of the Company to vest title to the Inventions and any patent applications, patents,

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copyrights, reissues or other proprietary rights related thereto in the Company and to enable it to obtain and maintain the entire right and title thereto throughout the world, and (ii) render such reasonable assistance to the Company as may be required in the prosecution of applications for said patents, copyrights, reissues or other proprietary rights, in the prosecution or defense of interferences or infringements that may be declared involving any said applications, patents, copyrights or other proprietary rights and in any litigation in which the Company may be involved relating to the Inventions. The covenant contained in this Section 11 shall survive the termination or expiration of the Employment Period and any termination of this Agreement.

Section 12. Assistance in Litigation. At the request and expense of the Company (including a reasonable payment, based on the Executive’s last per diem earnings, for the time involved if (a) the Executive is not then in the Company’s employ, or (b) if the Executive is not then receiving severance payments from the Company pursuant to Section 8(b)(ii), or (c) if the Executive has not otherwise received one or more severance payments from the Company with respect to such period (whether on a lump sum, pre-paid or accelerated basis or otherwise)) and upon reasonable notice, the Executive shall, at all times during and after the Employment Period, furnish such information and assistance to each of the Company and its Affiliates as the Company may reasonably require in connection with any issue, claim or litigation in which the Company or any of its Affiliates may be involved. If such a request for assistance occurs after the expiration of the Employment Period, then the Executive will only be required to render such assistance to the Company and its Affiliates to the extent that the Executive can do so without materially adversely affecting the Executive’s other business obligations. The covenant contained in this Section 12 shall survive the termination or expiration of the Employment Period and any termination of this Agreement.

Section 13. Expenses; Taxes. Each party hereto shall bear his or its own expenses incurred in connection with this Agreement (including legal, accounting and any other third party fees, costs and expenses and all federal, state, local and other taxes and related charges incurred by such party). All references herein to remuneration, compensation and other consideration payable by the Company or any of its Affiliates hereunder to or for the benefit of the Executive or his heirs, representatives, or estate are to the gross amounts thereof before reductions, set-off, or deduction for taxes and other charges referred to below, and all such remuneration, compensation and other consideration shall be paid net of and after reduction, set-off and deduction for any and all applicable withholding, F.I.C.A., employment and other similar federal, state and local taxes and contributions required by law to be withheld by the Company or any such Affiliate.

Section 14. Representation. The Executive hereby represents and warrants to the Company that (a) the execution, delivery and performance of this Agreement by the Executive do not breach, violate or cause a default under any agreement, contract or instrument to which the Executive is a party or any judgment, order or decree to which the Executive is subject, and (b) the Executive is not a party to or bound by any employment agreement, consulting agreement, noncompetition agreement, confidentiality agreement or similar agreement with any other Person other than (i) the Separation Agreement dated November 2, 2009, between the Executive, Ozburn-Hessey Logistics LLC and OHH Acquisition Corporation (a true and correct copy of which has been provided to the Company) and (ii) the Employment Agreement dated January 15, 2007, between the Executive, Ozburn-Hessey Logistics LLC and OHH Acquisition Corporation (only portions of which have been provided to the Company).

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Section 15. Entire Agreement; Amendment and Waiver. This Agreement contains the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes any and all prior and contemporaneous agreements and understandings between the Executive and the Company or any predecessor of the Company, or any of their respective Affiliates, with respect to the subject matter hereof. Other than this Agreement, there are no other agreements or understandings continuing in effect relating to the subject matter hereof. No waiver, amendment or modification of any provision of this Agreement shall be effective unless in writing and signed by each party hereto. No waiver by any party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights or remedies arising by virtue of any such prior or subsequent occurrence.

Section 16. Notices.

(a) All notices or other communications pursuant to or contemplated by this Agreement shall be in writing and shall be deemed to be sufficient if delivered personally, telecopied, sent by nationally-recognized, overnight courier or mailed by registered or certified mail (return receipt requested), postage prepaid, to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

(i) if to the Company, to it:

Pacer International, Inc.

6805 Perimeter Drive

Dublin, Ohio 43016

Attention: Vice President, Human Resources

Telephone No.: (614) 923-1400

Facsimile No.: (614) 717-4165

with copy to:

Pacer International, Inc.

One Independent Drive, Suite 1250

Jacksonville, Florida 32202

Attention: General Counsel

Telephone No.: (904) 485-1001

Facsimile No.: (904) 485-1019

(ii) if to the Executive, to him or at his last known address contained in the records of the Company.

(b) All such notices and other communications shall be deemed to have been given and received (i) in the case of personal delivery, on the date of such delivery, (ii) in the case of delivery by telecopy, on the date of such delivery (if sent on a business day where sent, or if sent on other than a business day where sent, on the next business day where sent after the date sent), (iii) in the case of delivery by nationally-recognized, overnight courier, on the next business day

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where sent following dispatch, and (iv) in the case of mailing, on the third business day where sent next following such mailing. In this Agreement, the term “business day” means, as to any location, any day that is not a Saturday, a Sunday or a day on which banking institutions in such location are authorized or required to be closed.

Section 17. Severability. It is the desire and intent of the parties that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any provision of this Agreement is determined to be partially or wholly invalid, illegal or unenforceable in any jurisdiction, then such provision shall, as to such jurisdiction, be modified or restricted to the extent necessary to make such provision valid, binding and enforceable, or if such provision cannot be so modified or restricted, then such provision shall, as to such jurisdiction, be deemed to be excised from this Agreement; provided, however, that the legality, binding effect and enforceability of the remaining provisions of this Agreement, to the extent the economic benefits conferred upon the parties by virtue of this Agreement remain substantially unimpaired, shall not be affected or impaired in any manner, and any such invalidity, illegality or unenforceability with respect to such provision in such jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

Section 18. Remedies. The Executive acknowledges and agrees that the provisions of this Agreement (including Section 9, Section 10, Section 11, and Section 12) are of a special and unique nature, the loss of which cannot be adequately compensated for in damages by an action at law, and that the breach or threatened breach of any provision of this Agreement (including Section 9, Section 10, Section 11, and Section 12) would cause the Company irreparable harm. The Executive further acknowledges and agrees that in the event of a breach or threatened breach of any of the covenants contained in this Agreement (including Section 9, Section 10, Section 11, and Section 12), the Company shall be entitled to immediate relief enjoining the same in any court or before any judicial body having jurisdiction over such a claim. All rights and remedies provided for in this Agreement are cumulative, are in addition to any other rights and remedies provided for by law, and may, to the extent permitted by law, be exercised concurrently or separately. The exercise of any one right or remedy shall not be deemed to be an election of such right or remedy or to preclude the exercise or pursuit of any other right or remedy.

Section 19. Benefits of Agreement; Assignment. The terms and provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, assigns, representatives, heirs and estates, as applicable. This Agreement shall not be assignable by the Executive without the prior written consent of the Company (acting with approval its Board of Directors). Except as expressly provided in this Agreement, this Agreement shall not confer any rights or remedies upon any Person other than the parties hereto and their respective successors, permitted assigns, representatives, heirs and estates, as applicable.

Section 20. Governing Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF OHIO, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF OHIO, OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF OHIO TO BE APPLIED.

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Section 21. Jury Trial Waiver. THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER THIS AGREEMENT OR ANY DOCUMENTS RELATED TO THE SUBJECT MATTER HEREOF. EXECUTIVE UNDERSTANDS THAT THE WAIVER OF THE RIGHT TO A TRIAL BY JURY IS AN IMPORTANT RIGHT WHICH EMPLOYEE HEREBY FOREGOES.

Section 22. Jurisdiction and Venue; Service of Process.

(a) The parties hereto agree that all disputes among them arising out of, connected with, related to, or incidental to the relationship established between them in connection with this Agreement shall be resolved exclusively by state or federal courts located in Franklin County, Ohio and any appellate court from any thereof, or by an arbitrator located in Franklin County, Ohio in such cases where both parties hereto have expressly agreed to binding arbitration.

(b) Each of the parties hereto hereby irrevocably and unconditionally submits, for himself or itself and his or its property, to the exclusive jurisdiction of any Ohio state court or federal court of the United States of America sitting in Franklin County, Ohio, and any appellate court from any thereof, in any suit, action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereunder or thereunder or for recognition or enforcement of any judgment relating thereto, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such suit, action or proceeding may be heard and determined in any such Ohio state court or, to the extent permitted by law, in any such federal court. Each of the parties hereto agrees that a final judgment in any such suit, action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

(c) Each of the parties hereto hereby irrevocably and unconditionally waives, to the fullest extent he or it may legally and effectively do so, any objection that he or it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereunder or thereunder in any Ohio state or federal court of the United States of America sitting in Franklin County, Ohio. Each of the parties hereto hereby irrevocably waives, to the fullest extent he or it may legally and effectively do so, the defense of an inconvenient forum to the maintenance of such suit, action or proceeding in any such court.

(d) Each of the parties hereto hereby agrees that the mailing by certified or registered mail, return receipt requested, of any process required by any such court shall constitute valid and lawful service of process against them, without the necessity for service by any other means provided by law.

Section 23. Independence of Covenants and Representations and Warranties. All covenants hereunder shall be given independent effect so that if a certain action or condition constitutes a default under a certain covenant, the fact that such action or condition is permitted by another covenant shall not affect the occurrence of such default, unless expressly permitted under an exception to such initial covenant. In addition, all representations and warranties hereunder shall be given independent effect so that if a particular representation or warranty proves to be incorrect or is breached, the fact that another representation or warranty concerning the same or similar subject matter is correct or is not breached shall not affect the incorrectness of or a breach of a representation and warranty hereunder.

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Section 24. Interpretation and Construction; Defined Terms.

(a) The term “Agreement” means this Employment Agreement and any and all schedules, annexes and exhibits that may be attached hereto, as the same may from time to time be amended, modified, supplemented or restated in accordance with the terms hereof. The use in this Agreement of the word “including” means “including, without limitation.” The words “herein,” “hereof,” “hereunder,” “hereby,” “hereto,” “hereinafter,” and other words of similar import refer to this Agreement as a whole, and not to any particular article, section, subsection, paragraph, subparagraph or clause contained in, or any schedule, annex or exhibit that may be attached to, this Agreement. All references to articles, sections, subsections, paragraphs, subparagraphs, clauses, schedules, annexes and exhibits mean such provisions of this Agreement and the schedules, annexes and exhibits that may be attached to this Agreement, except where otherwise stated. The title of and the article, section, paragraph, schedule, annex and exhibit headings in this Agreement are for convenience of reference only and shall not govern or affect the interpretation of any of the terms or provisions of this Agreement. The use herein of the masculine, feminine or neuter forms also shall denote the other forms, as in each case the context may require. Where specific language is used to clarify by example a general statement contained herein, such specific language shall not be deemed to modify, limit or restrict in any manner the construction of the general statement to which it relates. The language used in this Agreement has been chosen by the parties to express their mutual intent, and no rule of strict construction shall be applied against any party. Accounting terms used but not otherwise defined herein shall have the meanings given to them under GAAP. Unless otherwise provided herein, the measure of one month or year for purposes of this Agreement shall be that date of the following month or year corresponding to the starting date, except that, if no corresponding date exists, the measure shall be the next day of the following month or year (e.g., one month following February 8 is March 8, and one month following March 31 is May 1).

(b) The term “Affiliate” means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with such Person, where “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

(c) The term “Person” shall be construed as broadly as possible and shall include an individual or natural person, a partnership (including a limited liability partnership), a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, a business, and any other entity, including a governmental entity such as a domestic or foreign government or political subdivision thereof, whether on a federal, state, provincial or local level and whether legislative, executive, judicial in nature, including any agency, authority, board, bureau, commission, court, department or other instrumentality thereof.

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Section 25. Counterparts and Facsimile Execution. This Agreement may be executed in two or more counterparts, and each such counterpart shall be an original instrument, but all such counterparts taken together shall be considered one and the same agreement, effective when one or more counterparts have been signed by each party and delivered to the other parties, it being understood that all parties need not sign the same counterpart. Any signed counterpart delivered by facsimile shall be deemed for all purposes to constitute such party’s good and valid execution and delivery of this Agreement.

Section 26. Further Assurances. Executive hereby agrees, in consideration of the Company’s covenants and agreements set forth herein, that contemporaneous with Executive’s (or his heirs’, beneficiaries’ or estate’s in the event of his death) acceptance of amounts payable under Section 8, Executive shall for himself, his heirs, beneficiaries, estate, successors and assigns, enter into such other documents, agreements and instruments reasonably requested by the Company, including a separate settlement agreement prepared by the Company with those provisions deemed appropriate by the Company, including a release of the Company and its Affiliates from, and a waiver of, all claims (including those related to alleged wrongful discharge or alleged employment discrimination under any federal, state or local statute or regulation) and confirmation of the confidentiality, non-competition and other covenants of this Agreement that survive termination of employment. Executive hereby agrees that Executive shall forfeit all rights to payments and benefits hereunder unless any Company property is returned pursuant to Section 8(d) and all documents, agreements and instruments specified in the previous sentence are signed, delivered and not revoked within sixty (60) days following the date of Executive’s separation from service within the meaning of Section 409A. If such property is so returned and such documents, agreements, and instruments are so signed, delivered and not revoked, then such payments or benefits shall be made or commence upon the sixtieth (60 ^th) day following Executive’s separation from service. The first such cash payment shall include payment of all amounts that otherwise would have been due prior thereto under the terms of this Agreement had such payments commenced immediately upon Executive’s separation from service, and any payments made thereafter shall continue as provided herein.

Section 27. Section 409A. The provisions of this Agreement are intended and shall be interpreted and administered so as to not result in the imposition of additional tax or interest under Section 409A where applicable. Without limiting the foregoing, this Agreement shall not be amended in a manner so as to result in the imposition of such tax or interest, any reference to “termination of employment” or similar term shall mean an event that constitutes a “separation from service” within the meaning of Section 409A, and any reimbursement of expenses shall occur no later than the end of the calendar year following the calendar year in which is the expense is incurred (or such earlier date as applies under the Company’s business expense reimbursement policy).

[Remainder of page intentionally left blank.]

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IN WITNESS WHEREOF, the parties have executed and delivered this Employment Agreement effective as of the date first written above.

THE COMPANY:
PACER INTERNATIONAL, INC.
By:	/s/ Dan Avramovich
Name:	Daniel W. Avramovich
Title:	Chief Executive Officer
THE EXECUTIVE:
/s/ Michael A. Burns
Michael A. Burns

EX-10.2

Exhibit 10.2

EMPLOYMENT AGREEMENT dated as of March 29, 2010, between Pacer International, Inc., a Tennessee corporation (the “Company”), and John J. Hafferty (the “Executive”).

The Company and the Executive are entering into this Agreement to set forth the terms of the Executive’s employment with the Company. Accordingly, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Company and the Executive, the Company and the Executive hereby agree as follows:

Section 1. Duties. On the terms and subject to the conditions contained in this Agreement, the Executive will be employed by the Company as its Chief Financial Officer. The Executive shall perform such duties and services on behalf of the Company and its Affiliates (as defined in Section 24(b) below) consistent with such title and position as may reasonably be assigned to the Executive from time to time by the Company’s Board of Directors (the “Board”) or the Chief Executive Officer of the Company.

Section 2. Term. The Executive’s employment hereunder shall be for the period (the “Employment Period”) commencing on the date hereof (the “Commencement Date”) and ending on the effective date of the termination of such employment pursuant to and in accordance with the applicable provisions of this Agreement. Upon such termination of the Executive’s employment hereunder, the Executive (or, if applicable, the Executive’s beneficiaries or estate) shall be entitled only to those rights and benefits provided in Section 8(a) or Section 8(b), as applicable to such termination, subject to compliance with those continuing covenants and agreements set forth herein.

Section 3. Time to be Devoted to Employment. During the Employment Period, the Executive will devote substantially all of the Executive’s working energies, efforts, interest, abilities and time exclusively to the business and affairs of the Company and its Affiliates. The Executive will not engage in any other business or activity that, in the reasonable judgment of the Board, would conflict or interfere in any material respect with the Executive’s performance of his duties as set forth herein, whether or not such activity is pursued for gain, profit or other pecuniary advantage.

Section 4. Base Salary; Bonus; Benefits.

(a) During the Employment Period, the Company (or any of its Affiliates) shall pay the Executive a minimum annual base salary (the “Base Salary”) of $300,000, but subject to the Company-wide 10% salary reduction in effect as of the Commencement Date resulting in a minimum Base Salary of $270,000 until such time as the 10% salary reduction is rescinded. Such Base Salary will be payable in such installments (but not less often than monthly) as is generally the policy of the Company with respect to the payment of regular compensation to its executive officers. The Base Salary may be increased from time to time in the sole discretion of the Board. The Executive will also be entitled to four weeks vacation per year under and subject to the

Company’s policy. Such vacation shall accrue and may be taken in accordance with the Company’s policy in effect from time to time with respect to its executive officers generally, subject to the Company’s right at any time and from time to time generally to amend, modify, change or terminate such vacation policy in any respect. The Executive will also be entitled to such other benefits as may be made available to other executive officers of the Company generally, including participation in such health, life and disability insurance programs and retirement or savings plans, if any, as the Company may from time to time maintain in effect, as well as a monthly car allowance in accordance with the Company’s policy from time to time for similarly situated executives, in all cases subject to the Company’s right at any time and from time to time generally to amend, modify, change or terminate in any respect any of its employee and other benefit plans, policies, or programs. The Company will reimburse the Executive for the reasonable costs incurred by the Executive for temporary housing in the vicinity of Dublin, OH, until the first to occur of (i) the Executive’s relocation to the Dublin, OH, vicinity and (ii) June 30, 2010. The Company will also reimburse the Executive for the reasonable costs and expenses incurred by the Executive (grossed up to cover any net income tax obligation incurred by the Executive with respect to such reimbursement) to relocate to the Dublin, OH, vicinity subject to and in accordance with the Company’s relocation policy.

(b) During the Employment Period, the Executive shall be entitled to participate in the Company’s performance bonus plan or program as adopted by the Board and in effect from time to time with respect to similarly situated executives of the Company and its subsidiaries (the “Bonus Plan”), and to receive such performance bonus thereunder (if any) with respect to each fiscal year of the Company occurring during the Employment Period, subject in all cases to the terms and conditions of this Agreement and such Bonus Plan. The amount of such performance bonus, if any, that may be awarded and payable to the Executive hereunder with respect to any such fiscal year shall range up to fifty percent (50%) of the Base Salary in effect for such fiscal year as determined by the Board (or committee thereof) in its sole discretion based on and to the extent of the achievement or satisfaction of such targets, goals and conditions as may be provided in such Bonus Plan for such fiscal year, and as the Board (or committee thereof) may otherwise determine. Such targets, goals and conditions may include (i) business, financial, operating and/or other performance measures applicable to (A) the Company and its Affiliates taken as a whole and (B) those business segment(s), divisions(s) or functional group(s) of the Company and its Affiliates for and with respect to which the Executive is responsible or has authority (e.g., the finance and accounting function) and (ii) such personal and individual performance criteria as may be determined by the Board (or committee thereof) taking into account the Executive’s duties and responsibilities to the Company and its Affiliates for the period in question. The performance bonus awarded and payable to the Executive under such Bonus Plan with respect to any such fiscal year (including any pro rated amount payable pursuant to the following provisions of this Section 4(b)) shall be paid at such time or times and in such manner as performance bonuses are paid to the other executive officers of the Company generally. If the Executive’s employment with the Company is terminated without “cause” pursuant to Section 7(b) below, the Executive will be entitled to receive that portion of the bonus payable for the fiscal year of the Company during which such termination occurs pro rated through the date of such termination based on the number of days elapsed through the termination date over 365 days. If the Executive’s employment with the Company is terminated for any reason other than without “cause” pursuant to Section 7(b) below, neither the Company nor any of its Affiliates will be obligated to pay the Executive any bonus with respect to the fiscal year of the Company in which such termination

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occurred or thereafter. The Executive’s rights to participate in, and to receive a performance bonus under, the Company’s Bonus Plan in effect for any given fiscal year shall be subject to the Company’s right at any time and from time to time to amend, modify, change or terminate such Bonus Plan in any respect. In the event of a conflict between this Agreement and such Bonus Plan, this Agreement shall control.

Section 5. Reimbursement of Expenses. During the Employment Period, the Company shall reimburse the Executive in accordance with Company policy for all reasonable and necessary traveling expenses and other disbursements incurred by the Executive for or on behalf of the Company in connection with the performance of the Executive’s duties hereunder upon presentation of appropriate receipts or other documentation therefor, in accordance with all applicable policies of the Company.

Section 6. Disability or Death. If, during the Employment Period, the Executive is incapacitated or disabled by accident, sickness or otherwise (a “Disability”) so as to render the Executive mentally or physically incapable of performing the services required to be performed by the Executive under this Agreement for any period of 90 consecutive days or for an aggregate of 180 days in any period of 360 consecutive days, the Company may, at any time thereafter, at its option, terminate the Executive’s employment under this Agreement immediately upon giving the Executive written notice to that effect. In the event of the Executive’s death, the Executive’s employment will be deemed terminated as of the date of death.

Section 7. Termination.

(a) The Company may terminate the Executive’s employment hereunder at any time for “cause” by giving the Executive written notice of such termination, containing reasonable specificity of the grounds therefor. For purposes of this Agreement, “cause” shall mean (i) willful misconduct with respect to the business and affairs of the Company or any of its Affiliates, (ii) willful neglect of the Executive’s duties or the failure to follow the lawful directions of the Board or more senior officers of the Company to whom the Executive reports, including the violation of any material policy of the Company or of any of its Affiliates that is applicable to the Executive, (iii) the material breach of any provision of this Agreement or any other written agreement between the Executive and the Company or any of its Affiliates and, if such breach is capable of being cured, the Executive’s failure to cure such breach within 30 days of receipt of written notice thereof from the Company, (iv) the Executive’s commission of a felony, (v) the Executive’s commission of an act of fraud or financial dishonesty with respect to the Company or any of its Affiliates or (vi) any conviction of the Executive for a crime involving moral turpitude or fraud. A termination pursuant to this Section 7(a) shall take effect immediately upon the giving of the notice contemplated hereby.

(b) The Company may terminate the Executive’s employment hereunder at any time without “cause” by giving the Executive written notice of such termination, which termination shall be effective as of the date set forth in such notice, provided that such date shall not be earlier than the day on which such notice is delivered to Executive (determined pursuant to Section 16(b) below).

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(c) The Executive may terminate his employment hereunder at any time for any or no reason by giving the Company written notice of such termination, which termination shall be effective as of the date set forth in such notice, provided that such date shall not be earlier than the day on which such notice is delivered to the Company (determined pursuant to Section 16(b) below).

Section 8. Effect of Termination.

(a) Upon the effective date of a termination of the Executive’s employment under this Agreement for any reason other than a termination by the Company without cause pursuant to Section 7(b), neither the Executive nor the Executive’s beneficiaries or estate shall have any further rights under this Agreement or any claims against the Company or any of its Affiliates arising out of this Agreement, except the right to receive, within 30 days after the effective date of such termination (or such earlier period as may be required by applicable law):

(i) the unpaid portion of the Base Salary provided for in Section 4, computed on a pro rata basis to the effective date of such termination;

(ii) reimbursement for any expenses incurred by the Executive up to the effective date of such termination of employment and with respect to which the Executive shall not have theretofore been reimbursed, as provided in Section 5; and

(iii) the unpaid portion of any amounts earned by the Executive prior to the effective date of such termination pursuant to any employee benefit plan or program in which the Executive participated during the Employment Period (including any accrued and unused or unpaid vacation benefits that may be earned by or due to the Executive as of the effectiveness of such termination in accordance with the Company’s policy in effect at the effective time of such termination); provided, however, that the Executive shall not be entitled to receive any benefits under any such employee benefit plan or program that have accrued during any period if the terms of such plan or program require that the beneficiary be employed by the Company as of the end of any period ending on or after the effective date of such termination.

(b) Upon termination of the Executive’s employment under this Agreement by the Company without cause pursuant to Section 7(b), neither the Executive nor the Executive’s beneficiaries or estate shall have any further rights under this Agreement or any claims against the Company or any of its Affiliates arising out of this Agreement, except the right to receive the following amounts and benefits within 30 days after the effective date of such termination, in the case of amounts due pursuant to clause (i) below, and at such other times as provided in clauses (ii) and (iii) below in the case of amounts due thereunder (or in each case such earlier period as may be required by applicable law); provided, however, that in the case of clauses (ii) and (iii) below, the Executive is not in breach of any provision of this Agreement surviving such termination and does not engage in any activity or conduct proscribed by Section 9 or Section 10 (regardless of the extent to which such Section may be enforced under applicable law):

(i) the payments, if any, referred to in Section 8(a) above;

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(ii) continued payment of an annual amount equal to the Base Salary as in effect immediately prior to the effective date of such termination for twelve (12) months following the effective date of such termination (the “Severance Period”), payable during the Severance Period in such manner as the Base Salary would have been payable pursuant to Section 4(a) but for such termination; and

(iii) the payment of any pro rata bonus (or portion thereof), if any, awarded and payable to the Executive pursuant to and in accordance with Section 4(b) with respect to the fiscal year in which such termination occurs, to be paid when and as provided in such Section 4(b) (notwithstanding the proviso in Section 8(a)(iii) above).

Notwithstanding the provisions of this Section 8(b), if on the date of Executive’s termination, Executive is a “specified employee” as defined in Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”), and an exception from Section 409A’s requirements is not available as to any one or more payments or installments, Executive shall not receive a distribution of such payment or installment under this Agreement until six months after the date of termination. If Executive is subject to the restriction described in the previous sentence, Executive will be paid on the first day of the seventh month after termination an amount equal to the benefit that Executive would have been paid during such six-month period absent such restriction. In furtherance of the application of all possible exceptions to requirements of Section 409A, each payment or installment shall be treated as a separate payment in order to maximize the application of payments during the “short term deferral period” under Section 409A.

(c) Without limiting any other provision of this Agreement, if the Executive dies on or after the effective date of the termination of the Executive’s employment hereunder, the Executive’s heirs, beneficiaries or estate, as their respective interests may appear (but without duplication), shall be entitled to receive or continue to receive those benefits that would otherwise have been due and payable to the Executive pursuant to Section 8(a) above or Section 8(b) above, as applicable.

(d) In addition to, and not by way of limitation of, any other provision of this Agreement, upon the effective date of the termination of the Executive’s employment hereunder, the Executive shall surrender and deliver to the Company (i) all computers, cell phones, office equipment, credit cards, charge cards and other tangible property of or belonging to or issued in the name of the Company or any of its Affiliates, (ii) all membership cards for memberships maintained by or in the name of the Company or any of its Affiliates, (iii) all passwords, access codes, documents, records, and files (including all copies thereof, regardless of the form or media in which the same exist or are stored) in the Executive’s possession and belonging or relating to the Company or any of its Affiliates (except that the Executive may retain one copy thereof for personal archive purposes, subject to the other terms and conditions of this Agreement, including Section 9), and (iv) any and all other personal property in the Executive’s possession belonging to the Company or any of its Affiliates.

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Section 9. Disclosure of Information.

(a) From and after the date hereof, the Executive shall not at any time disclose, divulge, furnish or make accessible to any Person any Confidential Information (as hereinafter defined) heretofore acquired or acquired during the Employment Period for any reason or purpose whatsoever (provided that nothing contained herein shall be deemed to prohibit or restrict the Executive’s right or ability to disclose, divulge, furnish or make accessible any Confidential Information (i) to any officer, director, employee, Affiliate or representative of the Company, or (ii) to any other Person as required in connection with the performance of the Executive’s duties under and in compliance with this Agreement, or as required by law or judicial process), nor shall the Executive make use of any Confidential Information for the Executive’s own purposes or benefit or for the purposes or benefit of any other Person except the Company and its Affiliates. The covenant contained in this Section 9 shall survive the termination or expiration of the Employment Period and any termination of this Agreement.

(b) For purposes of this Agreement, the term “Confidential Information” means (i) the Intellectual Property Rights (as hereinafter defined) of the Company and its Affiliates and (ii) all other information of a proprietary or confidential nature relating to the Company or any Affiliate thereof, or the business or assets of the Company or any such Affiliate, including: books and records; agent and independent contractor lists and related information; customer lists and related information; vendor lists and related information; supplier lists and related information; employee and personnel lists, policies and related information; contract terms and conditions (including those with customers, suppliers, vendors, independent contractors and agents, and present and former employees); terms and conditions of permits, orders, judgments and decrees; wholesale, retail and distribution channels; pricing information, cost information, and pricing and cost structures and strategies; marketing, product development and business development plans and strategies; management reports; financial statements, reports, schedules and other information; accounting policies, practices and related information; business plans, strategic plans and initiatives, forecasts, budgets and projections; and shareholder, board of directors and committee meeting minutes and related information; provided, however, that Confidential Information shall not include (A) information that is generally available to the public on the date hereof, or which becomes generally available to the public after the date hereof without action by the Executive in breach or violation of this Agreement, or (B) information that the Executive receives from a third party who does not have any obligation to the Company or any of its Affiliates to keep such information confidential and which the Executive does not know (or reasonably could not have known) is confidential to the Company or any of its Affiliates, or (C) information known by the Executive from a source other than the Company or any of its Affiliates.

(c) As used herein, the term “Intellectual Property Rights” means all industrial and intellectual property rights, including the following (whether patentable or not): patents, patent applications, and patent rights; trademarks, trademark applications, trade names; service marks and service mark applications; trade dress, logos and designs, and the goodwill associated with the foregoing; copyrights and copyright applications; certificates of public convenience and necessity, franchises and licenses; trade secrets, know-how, proprietary processes and formulae, inventions, improvements, devices and discoveries; development tools; marketing materials; instructions; Confidential Information; and all documentation and media constituting, describing or relating to the foregoing, including manuals, memoranda and records.

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Section 10. Noncompetition Covenant.

(a) The Executive acknowledges and agrees that he will receive significant and substantial benefits from his employment with the Company under this Agreement, including the remuneration, compensation and other consideration inuring to his benefit hereunder, as well as introductions to, personal experience with, training in and knowledge of the Company and its Affiliates, the industries in which they engage, and third parties with whom they conduct business. Accordingly, in consideration of the foregoing, and to induce the Company to employ and continue to employ the Executive hereunder and provide such benefits to the Executive (in each case subject to the terms and conditions of this Agreement and the applicable employment policies of the Company and its Affiliates), the Executive agrees that he will not during the period beginning on the Commencement Date and ending twelve (12) months after the effective date of the termination of the Executive’s employment with the Company and its Affiliates (the “Non-Competition Period”) for any reason:

(i) in any city or county in any state or province of the United States, Canada or Mexico where the Company or any of its Affiliates conducts business during the Non-Competition Period, directly or indirectly engage or participate in any Competing Business (as defined in Section 10(b) below) (whether as an officer, director, employee, partner, consultant, holder of an equity or debt investment, lender or in any other manner, or capacity, including by the rendering of services or advice to any person), or lend his name (or any part or variant thereof) to, any Competing Business;

(ii) deal, directly or indirectly, with any customers, vendors, agents or contractors doing business with the Company or any of its Affiliates, or with any officer, director, employee of the Company or any of its Affiliates, in each case in any manner that is or could reasonably be expected to be competitive with the Company or any of its Affiliates;

(iii) take any action to solicit, encourage or induce any customer, vendor, agent or contractor doing business with the Company or any of its Affiliates, or any officer, director, employee or agent of the Company or any of its Affiliates:

(A) to terminate or alter in any manner adverse to the Company and its Affiliates his or its business, commercial, employment, agency or other relationship with the Company or such Affiliate (including any action to do business or attempt to do business with, or to hire, retain, engage or employ or attempt to hire, retain, engage or employ, any customer, vendor, agent or contractor, or any officer, director or employee, of the Company or any of its Affiliates);

(B) to become a customer, vendor, agent or contractor, or an officer, director or employee, of the Executive, the Executive’s Affiliates or any other Person; or

(C) to engage in any Competing Business; or

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(iv) engage in or participate in, directly or indirectly, any business conducted under any name that shall be the same as or similar to the name of the Company or any of its Affiliates or any trade name used by any of them.

Ownership by the Executive for investment purposes only of less than 2% of the outstanding shares of capital stock or class of debt securities of any Person with one or more classes of its capital stock listed on a national securities exchange or actively traded in the over-the-counter market shall not constitute a breach of the foregoing covenant. The covenant contained in this Section 10 shall survive the termination or expiration of the Employment Period and any termination of this Agreement.

(b) As used herein, the term “Competing Business” means any transportation or other business that the Company or any of its Affiliates has engaged in at any time during the Employment Period in any city or county in any country, state or province of the United States, Canada or Mexico, including any such business directly or indirectly engaged in providing any of the following:

(i) intermodal marketing or rail or intermodal brokerage services (whether in connection with domestic or international shipments or customers), car fleet management services, and railcar brokerage and management services;

(ii) highway brokerage services, including full trailer load, less than trailer load, trailer fleet management and depot operations services;

(iii) international freight transportation services, including ocean forwarding, custom house brokerage, ocean carrier services (including NVOCC operations), import/export air forwarding services, and special project services;

(iv) dry van trucking services, port and rail depot cartage services (whether in connection with domestic or international shipments or customers), and local and regional trucking services (including full truckload and less-than-truckload motor carrier services);

(v) freight consolidation and handling services, including third party warehouse, cross dock, consolidation, deconsolidation and distribution services;

(vi) comprehensive transportation management programs and services to third party customers, including supply chain and traffic management services, carrier rate and contract management services, logistics optimization planning, and vendor bid optimization; and

(vii) intermodal rail equipment (including double-stack rail car, container and chassis) supply and management services, including doublestack transportation services.

Section 11. Inventions Assignment. During the Employment Period, the Executive shall promptly disclose, grant and assign to the Company for its and its Affiliates’ sole use and benefit any and all inventions, improvements, technical information and suggestions reasonably relating to the business of the Company and its Affiliates (collectively, the “Inventions”) that the Executive may develop or acquire during the Employment Period (whether or not during usual

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working hours), together with all patent applications, letters patent, copyrights and reissues thereof that may at any time be granted for or with respect to the Inventions. In connection with the previous sentence, the Executive shall, at the expense of the Company, including a reasonable payment based on the Executive’s last per diem earnings with the Company for the time involved if (a) the Executive is not then in the Company’s employ, or (b) if the Executive is not then receiving severance payments pursuant to Section 8(b) above, or (c) if the Executive has not otherwise received one or more severance payments with respect to such period (whether on a lump sum, pre-paid, or accelerated basis or otherwise), (i) promptly execute and deliver such applications, assignments, descriptions and other instruments as may be necessary or proper in the opinion of the Company to vest title to the Inventions and any patent applications, patents, copyrights, reissues or other proprietary rights related thereto in the Company and to enable it to obtain and maintain the entire right and title thereto throughout the world, and (ii) render such reasonable assistance to the Company as may be required in the prosecution of applications for said patents, copyrights, reissues or other proprietary rights, in the prosecution or defense of interferences or infringements that may be declared involving any said applications, patents, copyrights or other proprietary rights and in any litigation in which the Company may be involved relating to the Inventions. The covenant contained in this Section 11 shall survive the termination or expiration of the Employment Period and any termination of this Agreement.

Section 12. Assistance in Litigation. At the request and expense of the Company (including a reasonable payment, based on the Executive’s last per diem earnings, for the time involved if (a) the Executive is not then in the Company’s employ, or (b) if the Executive is not then receiving severance payments from the Company pursuant to Section 8(b)(ii), or (c) if the Executive has not otherwise received one or more severance payments from the Company with respect to such period (whether on a lump sum, pre-paid or accelerated basis or otherwise)) and upon reasonable notice, the Executive shall, at all times during and after the Employment Period, furnish such information and assistance to each of the Company and its Affiliates as the Company may reasonably require in connection with any issue, claim or litigation in which the Company or any of its Affiliates may be involved. If such a request for assistance occurs after the expiration of the Employment Period, then the Executive will only be required to render such assistance to the Company and its Affiliates to the extent that the Executive can do so without materially adversely affecting the Executive’s other business obligations. The covenant contained in this Section 12 shall survive the termination or expiration of the Employment Period and any termination of this Agreement.

Section 13. Expenses; Taxes. Each party hereto shall bear his or its own expenses incurred in connection with this Agreement (including legal, accounting and any other third party fees, costs and expenses and all federal, state, local and other taxes and related charges incurred by such party). All references herein to remuneration, compensation and other consideration payable by the Company or any of its Affiliates hereunder to or for the benefit of the Executive or his heirs, representatives, or estate are to the gross amounts thereof before reductions, set-off, or deduction for taxes and other charges referred to below, and all such remuneration, compensation and other consideration shall be paid net of and after reduction, set-off and deduction for any and all applicable withholding, F.I.C.A., employment and other similar federal, state and local taxes and contributions required by law to be withheld by the Company or any such Affiliate.

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Section 14. Representation. The Executive hereby represents and warrants to the Company that (a) the execution, delivery and performance of this Agreement by the Executive do not breach, violate or cause a default under any agreement, contract or instrument to which the Executive is a party or any judgment, order or decree to which the Executive is subject, and (b) the Executive is not a party to or bound by any employment agreement, consulting agreement, noncompetition agreement, confidentiality agreement or similar agreement with any other Person other than (i) the Separation Agreement dated November 5, 2009, between the Executive, Ozburn-Hessey Logistics LLC and OHH Acquisition Corporation (a true and correct copy of which has been provided to the Company) and (ii) the Employment Agreement dated August 13, 2007, between the Executive, Ozburn-Hessey Logistics LLC and OHH Acquisition Corporation (only portions of which have been provided to the Company).

Section 15. Entire Agreement; Amendment and Waiver. This Agreement contains the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes any and all prior and contemporaneous agreements and understandings between the Executive and the Company or any predecessor of the Company, or any of their respective Affiliates, with respect to the subject matter hereof. Other than this Agreement, there are no other agreements or understandings continuing in effect relating to the subject matter hereof. No waiver, amendment or modification of any provision of this Agreement shall be effective unless in writing and signed by each party hereto. No waiver by any party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights or remedies arising by virtue of any such prior or subsequent occurrence.

Section 16. Notices.

(a) All notices or other communications pursuant to or contemplated by this Agreement shall be in writing and shall be deemed to be sufficient if delivered personally, telecopied, sent by nationally-recognized, overnight courier or mailed by registered or certified mail (return receipt requested), postage prepaid, to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

(i) if to the Company, to it:

Pacer International, Inc.

6805 Perimeter Drive

Dublin, Ohio 43016

Attention: Vice President, Human Resources

Telephone No.: (614) 923-1400

Facsimile No.: (614) 717-4165

with copy to:

Pacer International, Inc.

One Independent Drive, Suite 1250

Jacksonville, Florida 32202

Attention: General Counsel

Telephone No.: (904) 485-1001

Facsimile No.: (904) 485-1019

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(ii) if to the Executive, to him or at his last known address contained in the records of the Company.

(b) All such notices and other communications shall be deemed to have been given and received (i) in the case of personal delivery, on the date of such delivery, (ii) in the case of delivery by telecopy, on the date of such delivery (if sent on a business day where sent, or if sent on other than a business day where sent, on the next business day where sent after the date sent), (iii) in the case of delivery by nationally-recognized, overnight courier, on the next business day where sent following dispatch, and (iv) in the case of mailing, on the third business day where sent next following such mailing. In this Agreement, the term “business day” means, as to any location, any day that is not a Saturday, a Sunday or a day on which banking institutions in such location are authorized or required to be closed.

Section 17. Severability. It is the desire and intent of the parties that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any provision of this Agreement is determined to be partially or wholly invalid, illegal or unenforceable in any jurisdiction, then such provision shall, as to such jurisdiction, be modified or restricted to the extent necessary to make such provision valid, binding and enforceable, or if such provision cannot be so modified or restricted, then such provision shall, as to such jurisdiction, be deemed to be excised from this Agreement; provided, however, that the legality, binding effect and enforceability of the remaining provisions of this Agreement, to the extent the economic benefits conferred upon the parties by virtue of this Agreement remain substantially unimpaired, shall not be affected or impaired in any manner, and any such invalidity, illegality or unenforceability with respect to such provision in such jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

Section 18. Remedies. The Executive acknowledges and agrees that the provisions of this Agreement (including Section 9, Section 10, Section 11, and Section 12) are of a special and unique nature, the loss of which cannot be adequately compensated for in damages by an action at law, and that the breach or threatened breach of any provision of this Agreement (including Section 9, Section 10, Section 11, and Section 12) would cause the Company irreparable harm. The Executive further acknowledges and agrees that in the event of a breach or threatened breach of any of the covenants contained in this Agreement (including Section 9, Section 10, Section 11, and Section 12), the Company shall be entitled to immediate relief enjoining the same in any court or before any judicial body having jurisdiction over such a claim. All rights and remedies provided for in this Agreement are cumulative, are in addition to any other rights and remedies provided for by law, and may, to the extent permitted by law, be exercised concurrently or separately. The exercise of any one right or remedy shall not be deemed to be an election of such right or remedy or to preclude the exercise or pursuit of any other right or remedy.

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Section 19. Benefits of Agreement; Assignment. The terms and provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, assigns, representatives, heirs and estates, as applicable. This Agreement shall not be assignable by the Executive without the prior written consent of the Company (acting with approval its Board of Directors). Except as expressly provided in this Agreement, this Agreement shall not confer any rights or remedies upon any Person other than the parties hereto and their respective successors, permitted assigns, representatives, heirs and estates, as applicable.

Section 20. Governing Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF OHIO, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF OHIO, OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF OHIO TO BE APPLIED.

Section 21. Jury Trial Waiver. THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER THIS AGREEMENT OR ANY DOCUMENTS RELATED TO THE SUBJECT MATTER HEREOF. EXECUTIVE UNDERSTANDS THAT THE WAIVER OF THE RIGHT TO A TRIAL BY JURY IS AN IMPORTANT RIGHT WHICH EMPLOYEE HEREBY FOREGOES.

Section 22. Jurisdiction and Venue; Service of Process.

(a) The parties hereto agree that all disputes among them arising out of, connected with, related to, or incidental to the relationship established between them in connection with this Agreement shall be resolved exclusively by state or federal courts located in Franklin County, Ohio and any appellate court from any thereof, or by an arbitrator located in Franklin County, Ohio in such cases where both parties hereto have expressly agreed to binding arbitration.

(b) Each of the parties hereto hereby irrevocably and unconditionally submits, for himself or itself and his or its property, to the exclusive jurisdiction of any Ohio state court or federal court of the United States of America sitting in Franklin County, Ohio, and any appellate court from any thereof, in any suit, action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereunder or thereunder or for recognition or enforcement of any judgment relating thereto, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such suit, action or proceeding may be heard and determined in any such Ohio state court or, to the extent permitted by law, in any such federal court. Each of the parties hereto agrees that a final judgment in any such suit, action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

(c) Each of the parties hereto hereby irrevocably and unconditionally waives, to the fullest extent he or it may legally and effectively do so, any objection that he or it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereunder or thereunder in any Ohio state or federal court of the United States of America sitting in Franklin County, Ohio. Each of the parties hereto hereby irrevocably waives, to the fullest extent he or it may legally and effectively do so, the defense of an inconvenient forum to the maintenance of such suit, action or proceeding in any such court.

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(d) Each of the parties hereto hereby agrees that the mailing by certified or registered mail, return receipt requested, of any process required by any such court shall constitute valid and lawful service of process against them, without the necessity for service by any other means provided by law.

Section 23. Independence of Covenants and Representations and Warranties. All covenants hereunder shall be given independent effect so that if a certain action or condition constitutes a default under a certain covenant, the fact that such action or condition is permitted by another covenant shall not affect the occurrence of such default, unless expressly permitted under an exception to such initial covenant. In addition, all representations and warranties hereunder shall be given independent effect so that if a particular representation or warranty proves to be incorrect or is breached, the fact that another representation or warranty concerning the same or similar subject matter is correct or is not breached shall not affect the incorrectness of or a breach of a representation and warranty hereunder.

Section 24. Interpretation and Construction; Defined Terms.

(a) The term “Agreement” means this Employment Agreement and any and all schedules, annexes and exhibits that may be attached hereto, as the same may from time to time be amended, modified, supplemented or restated in accordance with the terms hereof. The use in this Agreement of the word “including” means “including, without limitation.” The words “herein,” “hereof,” “hereunder,” “hereby,” “hereto,” “hereinafter,” and other words of similar import refer to this Agreement as a whole, and not to any particular article, section, subsection, paragraph, subparagraph or clause contained in, or any schedule, annex or exhibit that may be attached to, this Agreement. All references to articles, sections, subsections, paragraphs, subparagraphs, clauses, schedules, annexes and exhibits mean such provisions of this Agreement and the schedules, annexes and exhibits that may be attached to this Agreement, except where otherwise stated. The title of and the article, section, paragraph, schedule, annex and exhibit headings in this Agreement are for convenience of reference only and shall not govern or affect the interpretation of any of the terms or provisions of this Agreement. The use herein of the masculine, feminine or neuter forms also shall denote the other forms, as in each case the context may require. Where specific language is used to clarify by example a general statement contained herein, such specific language shall not be deemed to modify, limit or restrict in any manner the construction of the general statement to which it relates. The language used in this Agreement has been chosen by the parties to express their mutual intent, and no rule of strict construction shall be applied against any party. Accounting terms used but not otherwise defined herein shall have the meanings given to them under GAAP. Unless otherwise provided herein, the measure of one month or year for purposes of this Agreement shall be that date of the following month or year corresponding to the starting date, except that, if no corresponding date exists, the measure shall be the next day of the following month or year (e.g., one month following February 8 is March 8, and one month following March 31 is May 1).

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(b) The term “Affiliate” means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with such Person, where “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

(c) The term “Person” shall be construed as broadly as possible and shall include an individual or natural person, a partnership (including a limited liability partnership), a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, a business, and any other entity, including a governmental entity such as a domestic or foreign government or political subdivision thereof, whether on a federal, state, provincial or local level and whether legislative, executive, judicial in nature, including any agency, authority, board, bureau, commission, court, department or other instrumentality thereof.

Section 25. Counterparts and Facsimile Execution. This Agreement may be executed in two or more counterparts, and each such counterpart shall be an original instrument, but all such counterparts taken together shall be considered one and the same agreement, effective when one or more counterparts have been signed by each party and delivered to the other parties, it being understood that all parties need not sign the same counterpart. Any signed counterpart delivered by facsimile shall be deemed for all purposes to constitute such party’s good and valid execution and delivery of this Agreement.

Section 26. Further Assurances. Executive hereby agrees, in consideration of the Company’s covenants and agreements set forth herein, that contemporaneous with Executive’s (or his heirs’, beneficiaries’ or estate’s in the event of his death) acceptance of amounts payable under Section 8, Executive shall for himself, his heirs, beneficiaries, estate, successors and assigns, enter into such other documents, agreements and instruments reasonably requested by the Company, including a separate settlement agreement prepared by the Company with those provisions deemed appropriate by the Company, including a release of the Company and its Affiliates from, and a waiver of, all claims (including those related to alleged wrongful discharge or alleged employment discrimination under any federal, state or local statute or regulation) and confirmation of the confidentiality, non-competition and other covenants of this Agreement that survive termination of employment. Executive hereby agrees that Executive shall forfeit all rights to payments and benefits hereunder unless any Company property is returned pursuant to Section 8(d) and all documents, agreements and instruments specified in the previous sentence are signed, delivered and not revoked within sixty (60) days following the date of Executive’s separation from service within the meaning of Section 409A. If such property is so returned and such documents, agreements, and instruments are so signed, delivered and not revoked, then such payments or benefits shall be made or commence upon the sixtieth (60 ^th) day following Executive’s separation from service. The first such cash payment shall include payment of all amounts that otherwise would have been due prior thereto under the terms of this Agreement had such payments commenced immediately upon Executive’s separation from service, and any payments made thereafter shall continue as provided herein.

Section 27. Section 409A. The provisions of this Agreement are intended and shall be interpreted and administered so as to not result in the imposition of additional tax or interest under Section 409A where applicable. Without limiting the foregoing, this Agreement shall not be amended in a manner so as to result in the imposition of such tax or interest, any reference to “termination of employment” or similar term shall mean an event that constitutes a “separation

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from service” within the meaning of Section 409A, and any reimbursement of expenses shall occur no later than the end of the calendar year following the calendar year in which is the expense is incurred (or such earlier date as applies under the Company’s business expense reimbursement policy).

[Remainder of page intentionally left blank.]

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IN WITNESS WHEREOF, the parties have executed and delivered this Employment Agreement effective as of the date first written above.

THE COMPANY:
PACER INTERNATIONAL, INC.
By:	/s/ Dan Avramovich
Name:	Daniel W. Avramovich
Title:	Chief Executive Officer
THE EXECUTIVE:
/s/ John J. Hafferty
John J. Hafferty

EX-10.3

Exhibit 10.3

Separation Agreement and Release of Claims

This Settlement Agreement (the “Agreement”) is between Pacer International, Inc. and Marc L. Jensen (“you”) and memorializes our mutual agreement and understanding in connection with the termination of your employment with Pacer International, Inc. (“Pacer”), and its Affiliates (as defined in Section 19 below) (collectively, the “Company”) and settlement and release of potential claims as noted below. This Agreement shall become effective as set forth in Section 4 below. Accordingly, in consideration of the mutual covenants and agreements contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Pacer and you hereby agree as follows:

B.1.1. Termination of Employment. This Agreement shall constitute the parties’ acknowledgment of the termination of your employment with Pacer and its Affiliates, including any and all positions held by you as a director or officer of Pacer or any of its Affiliates and any and all positions held by you as administrator or trustee of any employee benefit plan or related trust maintained or created by or on behalf of Pacer or any of its Affiliates, in all cases effective as of March 31, 2010 (the “Termination Effective Date”). Upon the Termination Effective Date, Pacer shall pay to you (a) any unpaid portion of your base salary for service through the Termination Effective Date, (b) a lump sum amount for all accrued but unused vacation and personal leave time during your employment, and (c) reimbursement for any expenses incurred on or before the Termination Effective Date for which you have not already been reimbursed, in accordance with the Company’s travel and entertainment policy.

B.1.2. Payments Upon Termination of Employment.

After the Termination Effective Date and eight (8) full days following the execution of this Agreement, and provided that you have not revoked this Agreement, the Company will make the following payments to you so long as you are not in breach or violation of, or noncompliance with, any provision of this Agreement and do not engage in any activity or conduct proscribed by Sections 6 through 10 inclusive (regardless of the extent to which such Sections may be enforced under applicable law):

an aggregate amount equal to $91,875 payable in bi-weekly installments over a period of six (6) months following the Termination Effective Date as is generally the Company’s policy for payment of executive compensation; and

premiums due for continued group health insurance coverage through the Company under COBRA, subject to your timely election to continue COBRA coverage, through September 30, 2010 or such earlier date on which you become covered by substitute group health insurance.

7. Without limiting any other provision of this Agreement, if you die on or after the Termination Effective Date, your heirs, beneficiaries or estate, as their respective interests may appear (but without duplication), shall be entitled to receive or continue to receive those amounts that would otherwise have been due and payable to you pursuant to this Section 2.

B.1.3. Release.

For and in consideration of the covenants and agreements of the Company in this Agreement, which are greater than those to which you would be entitled under any offer letter, the Employment Agreement dated as of March 1, 2008, between you and Pacer, as amended (the “Employment Agreement”) or Company severance policy, as well as for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and as a material inducement to the Company to enter into this Agreement, you hereby knowingly and voluntarily release, acquit and forever discharge Pacer and its Affiliates and their respective shareholders, predecessors, successors, assigns, agents, directors, officers, employees, attorneys, representatives and Affiliates, and all Persons (as defined in Section 19) acting by, through, under or in concert with any of them (collectively, the “Releasees”), from any and all charges, complaints, claims, liabilities, obligations, promises, agreements, controversies, damages, actions, causes of action, suits, rights, demands, costs, losses, debts and expenses of any nature whatsoever, known or unknown, suspected or unsuspected, which, from the beginning of time up to and including the date of this Agreement, exist, have existed or may hereafter exist or arise, based on facts occurring on or prior to the date hereof, in connection with the letter offering employment, the Employment Agreement, the letter dated March 1, 2008 regarding enhanced severance after a change in control, any stock options, any bonus plans or awards, and other equity incentives granted to you, your employment or the termination of your employment with Pacer or any of its Affiliates, which you or any of your heirs, executors, administrators, legal representatives, successors-in-interest and/or assigns ever had, now have or at any time hereafter may have, own or hold against any of the Releasees (collectively, the “Released Claims”); provided, however, that the Released Claims do not include (a) rights that cannot by law be released by private agreement or (b) any of your rights or claims, whenever arising, to be indemnified by Pacer or any of its Affiliates under and to the extent of the applicable terms and provisions of Pacer’s or such Affiliate’s charter, certificate or articles of incorporation, or by-laws.

By executing this Agreement, (i) you hereby represent that (x) you have complied with all Company policies and procedures during the Employment Period and (y) you have not filed or permitted to be filed with any court, governmental or administrative agency, or arbitration tribunal, any of the Released Claims; (ii) you hereby waive all Released Claims against the Releasees arising under foreign, federal, state, provincial and local laws, including but not limited to any laws relating to securities, contracts, torts, labor, employment, civil rights, anti-discrimination and other laws and any other restrictions on Pacer’s and its Affiliates’ rights with respect to the termination, for whatever reason, of the employment of its employees, including the Age Discrimination in Employment Act, the Americans With Disabilities Act and Title VII of the Civil Rights Act (and any state or local analogs thereto), as well as any right that you may have ever had or may now have to commence a Released Claim against the Releasees involving any matter relating to your employment relationship with Pacer or any of its Affiliates, the letter offering employment to you, the Employment Agreement, any stock option or other equity incentive agreements or the termination of your employment; (iii) you hereby represent that you have not transferred or assigned to any other person any of the Released Claims; and (iv) you further covenant and agree not to bring or knowingly participate in any Released Claim or to encourage or permit any such Released Claim to be filed by any other Person on your behalf. Notwithstanding the foregoing, nothing in this Agreement precludes you from (A) filing a charge, including a challenge to the validity of this Agreement, with the Equal Employment Opportunity Commission (“EEOC”) or comparable state or municipal fair employment agency or the National Labor Relations Board (“NLRB”) or (B) participating in any investigation or proceeding conducted by the EEOC or such state or municipal agency or the NLRB or (C) enforcing this Agreement. Nevertheless, through the execution of this Agreement, you acknowledge and agree

that you have waived the right to recover on any claims in any legal proceeding brought by you or on your behalf, other than a claim to enforce this Agreement. You agree further that you will pay Pacer for all costs incurred by Pacer because of a breach of these covenants, including reasonable attorneys’ fees and expenses incurred in defending against any claim brought by you. This provision shall not be enforced to the extent it would be inconsistent with federal regulations regarding the ADEA and Older Workers Benefit Protection Act. In the event of a successful challenge by you to the waiver related to a federal claim of age discrimination in this Agreement, and success on the merits of such a federal age discrimination claim, a federal court may order that the monies paid to you pursuant to this Agreement be repaid or setoff against any recovery but only up to the amount of any recovery by you.

You fully understand that, if any fact with respect to any matter covered by this Agreement is found after the execution of this Agreement to be other than or different from the facts now believed by you to be true, you expressly accept and assume that this Agreement and all releases and waivers herein shall be and remain effective, notwithstanding such difference in facts.

You hereby expressly waive the benefit of Civil Code Section 1542, which is set forth below; and specifically agree that this release shall extend to claims arising out of transactions prior to the date of this Agreement, which Pacer or you do not know or expect to exist in such party’s respective favor at this time. Civil Code Section 1542 provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

Neither this Agreement nor the consideration provided under it nor compliance with it shall be construed as an admission by Pacer, its Affiliates or by you of any liability or violation of any law, statute, duty, contract, covenant or order.

B.1.4. ADEA Waiver, Waiting and Revocation Periods.

You expressly acknowledge that (i) you have been advised and instructed that you have the right to consult an attorney and that you should review the terms of this Agreement with counsel of your own selection; (ii) you have been advised that your waiver and release does not apply to any rights or claims for age discrimination that may arise after the execution date of this Agreement; (iii) you have been advised that you have up to forty-five (45) days within which to consider the terms of this Agreement and seven (7) days thereafter to revoke your signature as set forth below; (iv) you have had ample time to study this Agreement and to consult with an attorney, (v) you have carefully read and fully understand all of the terms of this Agreement and are fully aware of the Agreement’s contents and legal effects, including the waiver of Civil Code Section 1542; (vi) you execute this Agreement voluntarily, without coercion or duress, and of your own free will, (vii) you understand that you are, through this Agreement, releasing the Releasees (as defined in Section 3(a) above) from any and all claims you may have against the Releasees, and (viii) you understand that this Agreement is final and binding. You expressly acknowledge and agree that this Agreement constitutes a knowing and voluntary waiver of rights under the Older Workers Benefit Protection Act. You understand that by signing this Agreement prior to the expiration of forty-five (45) days, you waive your right to consider the Agreement for the entire forty-five (45) day period.

You understand and agree that this Agreement is revocable by you for seven (7) days following the signing of this Agreement by you, and that this Agreement shall not become effective or enforceable until that period has expired without revocation. This Agreement automatically becomes enforceable and effective on the eighth (8^th) day after the latest date this Agreement is signed by the parties. This Agreement may be revoked by you by a writing sent to the Company at the address specified in Section 16, by certified mail post-marked no later than the seventh (7^th) day after the Agreement is signed by you (unless that day is a Sunday or a holiday, in which event the period is extended to the next day there is mail service).

B.1.5. Company Property. You hereby represent and agree that, on or prior to the Termination Effective Date or as promptly thereafter as practicable, you will surrender to the Company all handbooks, manuals, keys, badges, computers, cell phones, printers, access cards, credit cards and charge cards of or belonging to or issued in the name of the Company, all membership cards for memberships maintained by or in the name of the Company, all passwords, access codes, all Confidential Information (as defined in Section 7(b)), all documents, records, and files (including all copies thereof, regardless of the form or media in which the same exist or are stored) in your possession and belonging or relating to the Company, and any other personal property in your possession belonging to the Company. The foregoing requirements shall be in addition to, and not by way of limitation of, any other provision of this Agreement.

B.1.6. Nondisclosure of Provisions. Except as otherwise compelled by legal or judicial process, you will maintain the confidentiality of, and you will not disclose to any Person, any of the terms or provisions of this Agreement, except for such disclosures (i) to the Equal Employment Opportunity Commission or comparable state or municipal fair employment agency or (ii) to your attorney, accountant, tax preparer or other professional financial or legal adviser, or other legal representative, in each case who is in a confidential relationship with you and has been advised of your obligations hereunder and whom you shall cause to comply with this nondisclosure provision, in each case only on a need-to-know basis in connection with such Person’s services rendered to you or on your behalf.

B.1.7. Confidential Information.

From and after the date hereof, you shall not at any time use or disclose, divulge, furnish or make accessible to any Person any Confidential Information (as defined in Section 7(b)) heretofore acquired or acquired during your employment by the Company for any reason or purpose whatsoever (provided that nothing contained herein shall be deemed to prohibit or restrict your right or ability to disclose, divulge, furnish or make accessible any Confidential Information (i) to any officer, director, employee, Affiliate or representative of the Company, or (ii) as required by law or judicial process after giving the Company prompt notice of receipt of any such legal or judicial requirement and reasonable opportunity to seek a protective order in respect thereof), nor shall you make or allow use of any Confidential Information for your own purposes or benefit or for the purposes or benefit of any other Person except Pacer and its Affiliates. The foregoing obligations are in addition to, and do not replace or modify your common law duties owed to Pacer, nor do they replace or modify Pacer’s common law and criminal law rights. Further, these rights and obligations, as well as your duty to return Pacer property, are binding whether or not you sign this Agreement.

For purposes of this Agreement, the term “Confidential Information” means (i) the Intellectual Property Rights (as defined in Section 7(c)) of Pacer and its Affiliates and (ii) all other information of a proprietary or confidential nature relating to Pacer or any Affiliate thereof, or the business or assets of Pacer or any such Affiliate, including: books and records; agent and

independent contractor lists and related information; customer lists and related information; vendor lists and related information; supplier lists and related information; employee and personnel lists, policies and related information; contract terms and conditions (including those with customers, suppliers, vendors, independent contractors and agents, and present and former employees); terms and conditions of permits, orders, judgments and decrees; wholesale, retail and distribution channels; pricing information, cost information, and pricing and cost structures and strategies; marketing, product development and business development plans and strategies; management reports; financial statements, reports, schedules and other information; accounting policies, practices and related information; business plans, strategic plans and initiatives, forecasts, budgets and projections; and shareholder, board of directors and committee meeting minutes and related information (in each case whether or not any such information is marked or denoted as confidential); provided, however, that Confidential Information shall not include (A) information that is generally available to the public on the date hereof, or which becomes generally available to the public after the date hereof without action by you, or (B) information that you receive from a third party who does not have any independent obligation to Pacer or any of its Affiliates to keep such information confidential and which you do not know (or reasonably could not have known) is confidential to the Company or any of its Affiliates.

As used herein, the term “Intellectual Property Rights” means all industrial and intellectual property rights, including the following (whether patentable or not): patents, patent applications, and patent rights; trademarks, trademark applications, trade names; service marks and service mark applications; trade dress, logos and designs, and the goodwill associated with the foregoing; copyrights and copyright applications; certificates of public convenience and necessity, franchises and licenses; trade secrets, know-how, proprietary processes and formulae, inventions, improvements, devices and discoveries; development tools; marketing materials; instructions; Confidential Information; and all documentation and media constituting, describing or relating to the foregoing, including manuals, memoranda and records.

B.1.8. Nonsolicitation Covenant.

You acknowledge and agree that you have received significant benefits from your employment with the Company, including compensation and other consideration inuring to your benefit, as well as introductions to, personal experience with, training in and knowledge of Pacer and its Affiliates, the industries in which they engage, and third parties with whom they conduct business. Accordingly, in consideration of the foregoing, and the payments made and to be made to you in connection with your employment relationship with the Company and under this Agreement, you agree that you will not during from April 1, 2010 through September 30, 2010 (the “Nonsolicitation Period”) for any reason:

take any action to solicit, encourage or induce any customer, vendor, agent or contractor doing business with Pacer or any of its Affiliates to terminate or alter in any manner adverse to Pacer and its Affiliates his, her or its business, commercial, agency or other relationship with Pacer or such Affiliate;

take any action to solicit, encourage or induce any officer, director or employee, or any exclusive agent or contractor, of Pacer or any of its Affiliates:

(i) to terminate or alter in any manner adverse to Pacer and its Affiliates his, her or its business, commercial, employment, agency or other relationship with Pacer or such Affiliate (including any action to hire, retain, engage or employ or attempt to hire, retain, engage or employ, any officer, director or employee, or any exclusive agent or contractor, of Pacer or any of its Affiliates);

(ii) to become an officer, director, employee, agent or contractor of you, your Affiliates or any other Person where such position or relationship would interfere with such officer’s, director’s, employee’s, agent’s or contractor’s position or relationship with Pacer or any of its Affiliates; or

(iii) to engage directly or indirectly in any Competitive Business; or

engage in or participate in, directly or indirectly, any business conducted under any name that shall be the same as or similar to the name of the Company or any of its Affiliates or any trade name used by any of them.

Your ownership for investment purposes only of less than 2% of the outstanding shares of capital stock or class of debt securities of any Person with one or more classes of its capital stock listed on a national securities exchange or actively traded in the over-the-counter market shall not constitute a breach of the foregoing covenant.

1.8.1.2. (b) As used herein, the term “Competitive Business” means any transportation or other business that the Company or any of its Affiliates has engaged in at any time during the period of your employment in any city or county in any country, state or province of the United States, Canada or Mexico, including any such business directly or indirectly engaged in providing any of the following:

intermodal marketing or rail or intermodal brokerage services (whether in connection with domestic or international shipments or customers);

highway brokerage services, including full trailer load, less than trailer load, trailer fleet management and depot operations services;

international freight transportation services, including ocean forwarding, custom house brokerage, ocean carrier services (including NVOCC operations), import/export air forwarding services, and special project services;

dry van trucking services, port and rail depot cartage services (whether in connection with domestic or international shipments or customers), and local and regional trucking services (including full truckload and less-than-truckload motor carrier services);

freight consolidation and handling services, including third party warehouse, cross dock, consolidation, deconsolidation and distribution services;

comprehensive transportation management programs and services to third party customers, including supply chain and traffic management services, carrier rate and contract management services, logistics optimization planning, and vendor bid optimization; and

intermodal rail equipment (including double-stack rail car, container and chassis) supply and management services, including doublestack transportation services.

B.1.9. Non-Disparagement. You will not make any public or private statement or take any action that is, or that is intended to be, slanderous, libelous, derogatory, harmful, damaging, detrimental or otherwise adverse to Pacer or its Affiliates or their respective officers, directors or employees, or their respective businesses, operations, prospects, affairs, or reputations among their respective customers, vendors, lenders, investors, analysts, competitors, employees, agents, consultants, contractors and representatives; provided, however, that the foregoing is not intended to limit your ability to answer truthfully any questions of fact (as opposed to questions as to your opinion or belief) that may be put to you under oath in any litigation, arbitration or governmental investigative proceeding.

B.1.10. Transition and Litigation Assistance. If requested by Pacer and for a reasonable time after notice of termination, you agree to cooperate with Pacer in connection with the transition of any matters on which you were working to other personnel within Pacer. At the request and expense of the Company upon reasonable notice (including, for the time involved after six months have elapsed from the Termination Effective Date, a reasonable payment based on your per diem earnings on the Termination Effective Date and to the extent that you can render such assistance without materially adversely affecting your other business obligations), you shall furnish such information and assistance to Pacer and its Affiliates as the Company may reasonably require in connection with any issue, claim or litigation in which Pacer or any of its Affiliates may be involved.

B.1.11. Remedies. You acknowledge and agree that the provisions of this Agreement (including Sections 6 through 10 inclusive) are of a special and unique nature, the loss of which cannot be adequately compensated for in damages by an action at law, and that the breach or threatened breach of any of these provisions would cause the Company irreparable harm. Accordingly, you agree that in the event of a breach or threatened breach of any of the covenants contained in this Agreement (including Sections 6 through 10 inclusive), the Company shall be entitled to (1) immediate relief enjoining such breach or threatened breach in any court or before any judicial body having jurisdiction over such a claim, and you waive any requirement that the Company post a bond or other security or prove that monetary damages are inadequate, and (2) a refund of a portion of the severance pay amounts paid after the date that such breach commenced. All rights and remedies provided for in this Agreement are cumulative, are in addition to any other rights and remedies provided for by law, and may, to the extent permitted by law, be exercised concurrently or separately. The exercise of any one right or remedy shall not be deemed to be an election of such right or remedy or to preclude the exercise or pursuit of any other right or remedy.

B.1.12. Severability. It is the desire and intent of the parties that the provisions of this Agreement shall be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any provision of this Agreement is determined to be partially or wholly invalid, illegal or unenforceable in any jurisdiction, then such provision shall, as to such jurisdiction, be modified or restricted to the extent necessary to make such provision valid, binding and enforceable, or if such provision

cannot be so modified or restricted, then such provision shall, as to such jurisdiction, be deemed to be excised from this Agreement; provided, however, that the legality, binding effect and enforceability of the remaining provisions of this Agreement, to the extent the economic benefits conferred on the parties by virtue of this Agreement remain substantially unimpaired, shall not be affected or impaired in any manner, and any such invalidity, illegality or unenforceability with respect to such provisions shall not invalidate or render unenforceable such provision in any other jurisdiction.

B.1.13. Expenses; Taxes. Each party hereto shall bear his or its own expenses incurred in connection with this Agreement (including legal, accounting and any other third party fees, costs and expenses and all federal, state, local and other taxes and related charges incurred by such party). All references herein to remuneration, compensation and other consideration payable by Pacer or any of its Affiliates hereunder to or for the benefit of you or your heirs, representatives, or estate are to the gross amounts thereof before reductions, set-off, or deduction for taxes and other charges referred to below, and all such remuneration, compensation and other consideration shall be paid net of and after reduction, set-off and deduction for any and all applicable withholding, F.I.C.A., employment and other similar federal, state and local taxes and contributions required by law to be withheld by Pacer or any such Affiliate.

B.1.14. Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the domestic laws of the State of California applicable to contracts made and to be wholly performed in such State, without giving effect to any choice or conflict of law provision or rule (whether of the State of California or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of California.

B.1.15. Binding Effect. The terms and provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, assigns, representatives, heirs and estates, as applicable. This Agreement shall not be assignable by you without the prior written consent of Pacer (acting with approval of its Board of Directors). Except as expressly provided in this Agreement, this Agreement shall not confer any rights or remedies upon any Person other than the parties hereto and their respective successors, permitted assigns, representatives, heirs and estates, as applicable.

B.1.16. Notices. (a) All notices or other communications pursuant to this Agreement shall be in writing and shall be deemed to be sufficient if delivered personally, sent by nationally-recognized, overnight courier or mailed by registered or certified mail (return receipt requested), postage prepaid, to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

if to the Company, to:

Pacer International, Inc.

One Independent Drive, Suite 1250

Jacksonville, FL 32202

Attention: General Counsel

if to you, to your last address shown in the Company’s personnel records:

1.16.1.1. (b) All such notices and other communications shall be deemed to have been given and received (i) in the case of personal delivery, on the date of such delivery, (ii) in the case of delivery by nationally-recognized, overnight courier, on the next business day where sent following dispatch, and (iii) in the case of mailing, on the third business day where sent next following such mailing. In this Agreement, the term “business day” means, as to any location, any day that is not a Saturday, a Sunday or a day on which banking institutions in such location are authorized or required to be closed.

B.1.17. Entire Agreement; Amendment and Waiver. This Agreement embodies the entire agreement and understanding by and between the parties hereto with respect to the subject matter hereof and supersedes and preempts any and all prior and contemporaneous understandings, agreements, arrangements, representations or communications (whether written or oral) by or between the parties relating to the subject matter hereof. You acknowledge that the unvested portion of the restricted stock granted to you are null and void and of no further force or effect on and as of the Termination Effective Date. Other than this Agreement and the restricted stock agreement, there are no other understandings, agreements, arrangements, representations or communications continuing in effect relating to the subject matter hereof. You are not signing this Agreement in reliance upon any promise, representation or warranty not expressly contained in this Agreement. Any oral representations regarding this Agreement shall have no force or effect. No waiver, amendment or modification of any provision of this Agreement shall be effective unless in writing and signed by each party hereto. No failure or delay by any party in exercising any right, power or remedy under this Agreement shall operate as a waiver thereof or of any other right, power or remedy. The waiver by any party hereto of a breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of any other or subsequent breach by such other party.

B.1.18. Counterparts and Facsimile or Imaged Execution. This Agreement may be executed in two or more counterparts, and each such counterpart shall be an original instrument, but all such counterparts taken together shall be considered one and the same agreement, effective when one or more counterparts have been signed by each party and delivered to the other parties, it being understood that all parties need not sign the same counterpart. Any signed counterpart delivered by facsimile or imaged document shall be deemed for all purposes to constitute such party’s good and valid execution and delivery of this Agreement.

B.1.19. Other Construction and Interpretation Provisions. The use in this Agreement of the term “including” means “including, without limitation.” The words “herein”, “hereof”, “hereunder”, “hereby”, “hereto”, “hereinafter”, and other words of similar import refer to this Agreement as a whole, and not to any particular article, section, subsection, paragraph, subparagraph or clause contained in this Agreement. All references to articles, sections, subsections, clauses, paragraphs, schedules and attachments mean such provisions of this Agreement, except where otherwise stated. The section headings in this Agreement are for convenience only and shall not control or affect the meaning of any provision of this Agreement. The use herein of the masculine, feminine or neuter forms shall also denote the other forms, as in each case the context may require. If, and wherever, specific language is used to clarify by example a general statement contained herein, such specific language shall not be deemed to modify, limit or restrict in any manner the construction of the general statement to which it relates. The language used in this Agreement has been chosen by the parties to express their mutual intent, and no rule of strict construction shall be applied against any party. Unless

otherwise provided herein, the measure of one month or year for purposes of this Agreement shall be that date of the following month or year corresponding to the starting date, except that, if no corresponding date exists, the measure shall be the next day of the following month or year (e.g., one month following February 8 is March 8, and one month following March 31 is May 1). The term “Affiliate” means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with such Person, where “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by contract or otherwise. The term “Person” shall be construed as broadly as possible and shall include an individual or natural person, a partnership (including a limited liability partnership), a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, a business, and any other entity, including a governmental entity such as a domestic or foreign government or political subdivision thereof, whether on a federal, state, provincial or local level and whether legislative, executive, judicial in nature, including any agency, authority, board, bureau, commission, court, department or other instrumentality thereof.

B.1.20. Jury Trial Waiver. THE PARTIES WISH THAT APPLICABLE LAWS APPLY TO THE RESOLUTION OF ANY DISPUTES ARISING UNDER THIS AGREEMENT AND THE SUBJECT MATTER HEREOF, AND THAT THEIR DISPUTES BE RESOLVED BY AN EXPERIENCED PERSON APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND APPLICABLE LAWS, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER THIS AGREEMENT OR ANY DOCUMENTS RELATED HERETO. YOU UNDERSTAND THAT THE WAIVER OF THE RIGHT TO A TRIAL BY JURY IS AN IMPORTANT RIGHT WHICH YOU HEREBY FOREGO.

B.1.21. Jurisdiction and Venue; Service of Process. The parties hereto (i) agree that all disputes among them arising out of, connected with, related to, or incidental to this Agreement shall be resolved exclusively by state or federal courts located in Contra Costa County, California, or any appellate court from any thereof, or by an arbitrator located in Contra Costa County, California, in such cases where both parties hereto have expressly agreed to binding arbitration, (ii) irrevocably submit to the jurisdiction of such courts and waive any objection to venue or defense of an inconvenient forum for any proceeding in any such court, and (iii) agree that the mailing by certified or registered mail, return receipt requested, of any process required by any such court shall constitute valid and lawful service of process against them, without the necessity for service by any other means provided by law.

Please acknowledge your acceptance of and agreement with the foregoing terms by signing the enclosed counterpart of this letter agreement in the space provided below and returning it to the Company at the address stated in Section 16 above.

PACER INTERNATIONAL, INC.
By:	/s/ Pamela L. Quezada
Name:	Pamela L. Quezada
Title:	Assistant Vice President

Accepted and agreed to:

/s/ Marc L. Jensen

Marc L. Jensen

EX-10.4

Exhibit 10.4

Separation Agreement and Release of Claims

This Settlement Agreement (the “Agreement”) is between Pacer International, Inc. and Brian C. Kane (“you”) and memorializes our mutual agreement and understanding in connection with the termination of your employment with Pacer International, Inc. (“Pacer”), and its Affiliates (as defined in Section 19 below) (collectively, the “Company”) and settlement and release of potential claims as noted below. This Agreement shall become effective as set forth in Section 4 below. Accordingly, in consideration of the mutual covenants and agreements contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Pacer and you hereby agree as follows:

B.1.22. Termination of Employment. This Agreement shall constitute the parties’ acknowledgment of the termination of your employment with Pacer and its Affiliates, including any and all positions held by you as a director or officer of Pacer or any of its Affiliates and any and all positions held by you as administrator or trustee of any employee benefit plan or related trust maintained or created by or on behalf of Pacer or any of its Affiliates, in all cases effective as of June 2, 2010 (the “Termination Effective Date”). From March 29, 2010 through the Termination Effective Date, you will serve as an employee of the Company and will provide such assistance in the transition of your responsibilities for the Company and handle such other tasks as assigned to you by the Chief Executive Officer or the Chief Financial Officer. Upon the Termination Effective Date, Pacer shall (a) pay to you any unpaid portion of your base salary for service through the Termination Effective Date, (b) a lump sum amount for all accrued but unused vacation and personal leave time during your employment, and (c) reimbursement for any expenses incurred on or before the Termination Effective Date for which you have not already been reimbursed, subject to and in accordance with the Company’s travel and entertainment policy and provided that such expenses have been previously approved by the Chief Executive Officer.

B.1.23. Payments upon Termination of Employment.

B.1.23.1. After the later to occur of the Termination Effective Date or eight (8) full days following the execution of this Agreement, and provided that you have not revoked this Agreement, the Company will make the following payments to you so long as you are not in breach or violation of, or noncompliance with, any provision of this Agreement and do not engage in any activity or conduct proscribed by Sections 6 through 10 inclusive (regardless of the extent to which such Sections may be enforced under applicable law):

an aggregate amount equal to $300,000 payable in bi-weekly installments over a period of twelve (12) months following the Termination Effective Date in such manner and at such times as is generally the Company’s policy for payment of executive compensation;

a pro rata bonus (or portion thereof) for the period from January 1, 2010, through the Termination Effective Date, if any bonus is awarded and payable to you under and in accordance with the Company’s 2010 performance bonus plan as adopted by Pacer’s Board, to be paid if, when and as provided in such bonus plan (it being understood that the award of any such bonus (or portion thereof) is subject to company-wide, business unit, and/or functional group specific performance criteria and your individual performance assessment for such pro-rated period); and

premiums due for continued group health insurance coverage through the Company under COBRA through June 30, 2011 or such earlier date on which you become covered by substitute group health insurance, subject to your timely election to continue COBRA coverage.

8. Without limiting any other provision of this Agreement, if you die on or after the Termination Effective Date, your heirs, beneficiaries or estate, as their respective interests may appear (but without duplication), shall be entitled to receive or continue to receive those amounts that would otherwise have been due and payable to you pursuant to this Section 2.

B.1.24. Release.

B.1.24.1. For and in consideration of the covenants and agreements of the Company in this Agreement, which are greater than those to which you would be entitled under any offer letter extended to you by the Company or any of its predecessors (the “Offer Letter”), the Amended and Restated Employment Agreement dated as of February 16, 2009, between you and Pacer, as amended (the “Employment Agreement”), any other agreements between you and the Company or Company severance policy, as well as for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and as a material inducement to the Company to enter into this Agreement, you hereby knowingly and voluntarily waive, release, acquit and forever discharge Pacer and its Affiliates and their respective shareholders, predecessors, successors, assigns, agents, directors, officers, employees, attorneys, representatives and Affiliates, and all Persons (as defined in Section 19) acting by, through, under or in concert with any of them (collectively, the “Releasees”), from any and all charges, complaints, claims, liabilities, obligations, promises, agreements, controversies, damages, actions, causes of action, suits, rights, demands, costs, losses, debts and expenses of any nature whatsoever, known or unknown, suspected or unsuspected, which, from the beginning of time up to and including the date of this Agreement, exist, have existed or may hereafter exist or arise, based on facts occurring on or prior to the date hereof, including without limitation any of the foregoing arising or existing under or in connection with

any Offer Letter, the Employment Agreement, the letter dated February 19, 2008 regarding enhanced severance after a change in control, any stock options, restricted stock, any bonus plans or awards, and other equity incentives or awards granted to you, your employment or the termination of your employment with Pacer or any of its Affiliates, and

any foreign, federal, state, provincial and local laws, including but not limited to any laws relating to securities, contracts, torts, labor, employment, civil rights, anti-discrimination and other laws and any other restrictions on

Pacer’s and its Affiliates’ rights with respect to the termination, for whatever reason, of the employment of its employees, including the Age Discrimination in Employment Act, Title VII of the Civil Rights Act, the Americans with Disabilities Act of 1990; the Employee Retirement Income Security Act of 1974 and the Worker Adjustment and Retraining Notification Act (and any state or local analogs thereto), which you or any of your heirs, executors, administrators, legal representatives, successors-in-interest and/or assigns ever had, now have or at any time hereafter may have, own or hold against any of the Releasees (collectively, the “Released Claims”); provided, however, that the Released Claims do not include (A) rights that cannot by law be released by private agreement or (B) any of your rights or claims, whenever arising, to be indemnified by Pacer or any of its Affiliates under and to the extent of the applicable terms and provisions of Pacer’s or such Affiliate’s charter, certificate or articles of incorporation, or by-laws.

B.1.24.2. By executing this Agreement, (i) you hereby represent that (x) you have complied with all Company policies and procedures during the Employment Period and (y) you have not filed or permitted to be filed with any court, governmental or administrative agency, or arbitration tribunal, any of the Released Claims; (ii) you hereby waive any right that you may have ever had or may now have to commence a Released Claim against the Releasees; (iii) you hereby represent that you have not transferred or assigned to any other person any of the Released Claims; and (iv) you further covenant and agree not to bring or knowingly participate in any Released Claim or to encourage or permit any such Released Claim to be filed by any other Person on your behalf. Notwithstanding the foregoing, nothing in this Agreement precludes you from (A) filing a charge, including a challenge to the validity of this Agreement, with the Equal Employment Opportunity Commission (“EEOC”) or comparable state or municipal fair employment agency or the National Labor Relations Board (“NLRB”) or (B) participating in any investigation or proceeding conducted by the EEOC or such state or municipal agency or the NLRB or (C) enforcing this Agreement. Nevertheless, through the execution of this Agreement, you acknowledge and agree that you have waived the right to recover on any claims in any legal proceeding brought by you or on your behalf, other than a claim to enforce this Agreement. You agree further that you will pay Pacer for all costs incurred by Pacer because of your breach of any of these covenants, including reasonable attorneys’ fees and expenses incurred in defending against any claim brought by you in contravention of this provision. This provision shall not be enforced to the extent it would be inconsistent with federal regulations regarding the ADEA and Older Workers Benefit Protection Act. In the event of a successful challenge by you to the waiver related to a federal claim of age discrimination in this Agreement, and success on the merits of such a federal age discrimination claim, a federal court may order that the monies paid to you pursuant to this Agreement be repaid or setoff against any recovery but only up to the amount of any recovery by you.

B.1.24.3.

You fully understand that, if any fact with respect to any matter covered by this Agreement is found after the execution of this Agreement to be other than or different from the facts now believed by you to be true, you expressly accept and assume that this Agreement and all releases and waivers herein shall be and remain effective, notwithstanding such difference in facts. You understand and acknowledge the significance and consequences of this Agreement and of the waivers and release contained in this Agreement, and expressly consent that this Agreement shall be given full force and effect according to each and all of its express terms and provisions, including those relating to unknown and unsuspected claims, demands, obligations and causes of action, if any.

B.1.24.4.

Neither this Agreement nor the consideration provided under it nor compliance with it shall be construed as an admission by Pacer, its Affiliates or by you of any liability or violation of any law, statute, duty, contract, covenant or order.

B.1.25. ADEA Waiver, Waiting and Revocation Periods.

B.1.25.1.

You expressly acknowledge that (i) you have been advised and instructed that you have the right to consult an attorney and that you should review the terms of this Agreement with counsel of your own selection; (ii) you have been advised that your waiver and release does not apply to any rights or claims for age discrimination that may arise after the execution date of this Agreement; (iii) you have been advised that you have up to forty-five (45) days within which to consider the terms of this Agreement and seven (7) days thereafter to revoke your signature as set forth below; (iv) you have had ample time to study this Agreement and to consult with an attorney; (v) you have carefully read and fully understand all of the terms of this Agreement and are fully aware of the Agreement’s contents and legal effects; (vi) you execute this Agreement voluntarily, without coercion or duress, and of your own free will; (vii) you understand that you are, through this Agreement, releasing the Releasees (as defined in Section 3(a) above) from any and all claims you may have against the Releasees; and (viii) you understand that this Agreement is final and binding. You expressly acknowledge and agree that this Agreement constitutes a knowing and voluntary waiver of rights under the Older Workers Benefit Protection Act. You understand that by signing this Agreement prior to the expiration of forty-five (45) days, you waive your right to consider the Agreement for the entire forty-five (45) day period.

B.1.25.2.

You understand and agree that this Agreement is revocable by you for seven (7) days following the signing of this Agreement by you, and that this Agreement shall not become effective or enforceable until that period has expired without revocation. This Agreement automatically becomes enforceable and effective on the eighth (8th)

day after the latest date this Agreement is signed by the parties. This Agreement may be revoked by you by a writing sent to the Company at the address specified in Section 16, by certified mail post-marked no later than the seventh (7^th) day after the Agreement is signed by you (unless that day is a Sunday or a holiday, in which event the period is extended to the next day there is mail service).

B.1.26. Company Property. You hereby represent and agree that, on or prior to the Termination Effective Date or as promptly thereafter as practicable, you will surrender to the Company all handbooks, manuals, keys, badges, computers, cell phones, printers, access cards, credit cards and charge cards of or belonging to or issued in the name of the Company, all membership cards for memberships maintained by or in the name of the Company, all passwords, access codes, all Confidential Information (as defined in Section 7(b)), all documents, records, and files (including all copies thereof, regardless of the form or media in which the same exist or are stored) in your possession and belonging or relating to the Company, and any other personal property in your possession belonging to the Company. The foregoing requirements shall be in addition to, and not by way of limitation of, any other provision of this Agreement.

B.1.27. Nondisclosure of Provisions. Except as otherwise compelled by legal or judicial process, you will maintain the confidentiality of, and you will not disclose to any Person, any of the terms or provisions of this Agreement, except for such disclosures (i) to the Equal Employment Opportunity Commission or comparable state or municipal fair employment agency or (ii) to your attorney, accountant, tax preparer or other professional financial or legal adviser, or other legal representative, in each case who is in a confidential relationship with you and has been advised of your obligations hereunder and whom you shall cause to comply with this nondisclosure provision, in each case only on a need-to-know basis in connection with such Person’s services rendered to you or on your behalf.

B.1.28. Confidential Information.

B.1.28.1. From and after the date hereof, you shall not at any time use or disclose, divulge, furnish or make accessible to any Person any Confidential Information (as defined in Section 7(b)) heretofore acquired or acquired during your employment by the Company for any reason or purpose whatsoever (provided that nothing contained herein shall be deemed to prohibit or restrict your right or ability to disclose, divulge, furnish or make accessible any Confidential Information (i) to any officer, director, employee, Affiliate or representative of the Company, or (ii) as required by law or judicial process after giving the Company prompt notice of receipt of any such legal or judicial requirement and reasonable opportunity to seek a protective order in respect thereof), nor shall you make or allow use of any Confidential Information for your own purposes or benefit or for the purposes or benefit of any other Person except Pacer and its Affiliates. The foregoing obligations are in addition to, and do not replace or modify your common law duties owed to Pacer, nor do they replace or modify Pacer’s common law and criminal law rights. Further, these rights and obligations, as well as your duty to return Pacer property, are binding whether or not you sign this Agreement.

B.1.28.2.

For purposes of this Agreement, the term “Confidential Information” means (i) the Intellectual Property Rights (as defined in Section 7(c)) of Pacer and its Affiliates and (ii) all other information of a proprietary or confidential nature relating to Pacer or any Affiliate thereof, or the business or assets of Pacer or any such Affiliate, including: books and records; agent and independent contractor lists and related information; customer lists and related information; vendor lists and related information; supplier lists and related information; employee and personnel lists, policies and related information; contract terms and conditions (including those with customers, suppliers, vendors, independent contractors and agents, and present and former employees); terms and conditions of permits, orders, judgments and decrees; wholesale, retail and distribution channels; pricing information, cost information, and pricing and cost structures and strategies; marketing, product development and business development plans and strategies; management reports; financial statements, reports, schedules and other information; accounting policies, practices and related information; business plans, strategic plans and initiatives, forecasts, budgets and projections; and shareholder, board of directors and committee meeting minutes and related information (in each case whether or not any such information is marked or denoted as confidential); provided, however, that Confidential Information shall not include (A) information that is generally available to the public on the date hereof, or which becomes generally available to the public after the date hereof without action by you, or (B) information that you receive from a third party who does not have any independent obligation to Pacer or any of its Affiliates to keep such information confidential and which you do not know (or reasonably could not have known) is confidential to the Company or any of its Affiliates.

B.1.28.3.

As used herein, the term “Intellectual Property Rights” means all industrial and intellectual property rights, including the following (whether patentable or not): patents, patent applications, and patent rights; trademarks, trademark applications, trade names; service marks and service mark applications; trade dress, logos and designs, and the goodwill associated with the foregoing; copyrights and copyright applications; certificates of public convenience and necessity, franchises and licenses; trade secrets, know-how, proprietary processes and formulae, inventions, improvements, devices and discoveries; development tools; marketing materials; instructions; Confidential Information; and all documentation and media constituting, describing or relating to the foregoing, including manuals, memoranda and records.

B.1.29. Noncompetition Covenant.

9. You acknowledge and agree that you have received significant and substantial benefits from your employment with the Company, including the remuneration, compensation and other consideration inuring to your benefit, as well as introductions to, personal experience with, training in and knowledge of Pacer and its Affiliates, the industries in which they engage, and third parties with whom they conduct business. Accordingly, in consideration of the foregoing, and the payments made and to be made to you in connection with your employment relationship with the Company and under this Agreement, you agree that you will not during the twelve (12) month period beginning on the Termination Effective Date (the “Noncompetition Period”), for any reason:

in any city or county in any state or province of the United States, Canada or Mexico where Pacer or any of its Affiliates conducts business during the Non-Competition Period, directly or indirectly engage or participate in any Competing Business (as defined in Section 8(b) below) (whether as an officer, director, employee, partner, consultant, holder of an equity or debt investment, lender or in any other manner, or capacity, including by the rendering of services or advice to any Person), or lend your name (or any part or variant thereof) to, any Competing Business;

deal, directly or indirectly, with any customers, vendors, agents or contractors doing business with Pacer or any of its Affiliates, or with any officer, director, employee of Pacer or any of its Affiliates, in each case in any manner that is or could reasonably be expected to be competitive with Pacer or any of its Affiliates;

take any action to solicit, encourage or induce any customer, vendor, agent or contractor doing business with Pacer or any of its Affiliates, or any officer, director, employee or agent of Pacer or any of its Affiliates:

(i) to terminate or alter in any manner adverse to Pacer and its Affiliates its business, commercial, employment, agency or other relationship with Pacer or such Affiliate (including any action to do business or attempt to do business with, or to hire, retain, engage or employ or attempt to hire, retain, engage or employ, any customer, vendor, agent or contractor, or any officer, director or employee, of Pacer or any of its Affiliates);

(ii) to become a customer, vendor, agent or contractor, or an officer, director or employee, of you, your Affiliates or any other Person; or

(iii) to engage in any Competing Business; or

engage in or participate in, directly or indirectly, any business conducted under any name that shall be the same as or similar to the name of Pacer or any of its Affiliates or any trade name used by any of them.

Ownership by you for investment purposes only of less than 2% of the outstanding shares of capital stock or class of debt securities of any Person with one or more classes of its capital stock listed on a national securities exchange or actively traded in the over-the-counter market shall not constitute a breach of the foregoing covenant.

B.1.29.2. As used herein, the term “Competing Business” means any transportation or other business that Pacer or any of its Affiliates has engaged in at any time during the Employment Period in any city or county in any country, state or province of the United States, Canada or Mexico, including any such business directly or indirectly engaged in providing any of the following:

intermodal marketing or rail or intermodal brokerage services (whether in connection with domestic or international shipments or customers), car fleet management services, and railcar brokerage and management services;

highway brokerage services, including full trailer load, less than trailer load, trailer fleet management and depot operations services;

international freight transportation services, including ocean forwarding, custom house brokerage, ocean carrier services (including NVOCC operations), import/export air forwarding services, and special project services;

dry van trucking services, port and rail depot cartage services (whether in connection with domestic or international shipments or customers), and local and regional trucking services (including full truckload and less-than-truckload motor carrier services);

freight consolidation and handling services, including third party warehouse, cross dock, consolidation, deconsolidation and distribution services;

comprehensive transportation management programs and services to third party customers, including supply chain and traffic management services, carrier rate and contract management services, logistics optimization planning, and vendor bid optimization; or

intermodal rail equipment (including double-stack rail car, container and chassis) supply and management services, including doublestack transportation services.

B.1.30. Non-Disparagement. You will not make any public or private statement or take any action that is, or that is intended to be, slanderous, libelous, derogatory, harmful, damaging, detrimental or otherwise adverse to Pacer or its Affiliates or their respective officers, directors or employees, or their respective businesses, operations, prospects, affairs, or reputations among their respective customers, vendors, lenders, investors, analysts, competitors, employees, agents, consultants, contractors and representatives; provided, however, that the foregoing is not intended to limit your ability to answer truthfully any questions of fact (as opposed to questions as to your opinion or belief) that may be put to you under oath in any litigation, arbitration or governmental investigative proceeding.

B.1.31. Transition and Litigation Assistance. If requested by Pacer and for a reasonable time after termination, you agree to cooperate with Pacer in connection with the transition of any matters on which you were working to other personnel within Pacer. At the request and expense of the Company upon reasonable notice (including, for the time involved after twelve months have elapsed from the Termination Effective Date, a reasonable payment based on your per diem earnings on the Termination Effective Date and to the extent that you can render such assistance without materially adversely affecting your other business obligations to your employer or other third party), you shall furnish such information and assistance to Pacer and its Affiliates as the Company may reasonably require in connection with any issue, claim or litigation in which Pacer or any of its Affiliates may be involved.

B.1.32. Remedies. You acknowledge and agree that the provisions of this Agreement (including Sections 6 through 10 inclusive) are of a special and unique nature, the loss of which cannot be adequately compensated for in damages by an action at law, and that the breach or threatened breach of any of these provisions would cause the Company irreparable harm. Accordingly, you agree that in the event of a breach or threatened breach of any of the covenants contained in this Agreement (including Sections 6 through 10 inclusive), the Company shall be entitled to (1) immediate relief enjoining such breach or threatened breach in any court or before any judicial body having jurisdiction over such a claim, and you waive any requirement that the Company post a bond or other security or prove that monetary damages are inadequate, and (2) a refund of a portion of the severance pay amounts paid after the date that such breach commenced. All rights and remedies provided for in this Agreement are cumulative, are in addition to any other rights and remedies provided for by law, and may, to the extent permitted by law, be exercised concurrently or separately. The exercise of any one right or remedy shall not be deemed to be an election of such right or remedy or to preclude the exercise or pursuit of any other right or remedy.

B.1.33. Severability. It is the desire and intent of the parties that the provisions of this Agreement shall be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any provision of this Agreement is determined to be partially or wholly invalid, illegal or unenforceable in any jurisdiction, then such provision shall, as to such jurisdiction, be modified or restricted to the extent necessary to make such provision valid, binding and enforceable, or if such provision cannot be so modified or restricted, then such provision shall, as to such jurisdiction, be deemed to be excised from this Agreement; provided, however, that the legality, binding effect and enforceability of the remaining provisions of this Agreement, to the extent the economic benefits conferred on the parties by virtue of this Agreement remain substantially unimpaired, shall not be affected or impaired in any manner, and any such invalidity, illegality or unenforceability with respect to such provisions shall not invalidate or render unenforceable such provision in any other jurisdiction.

B.1.34. Expenses; Taxes. Each party hereto shall bear his or its own expenses incurred in connection with this Agreement (including legal, accounting and any other third party fees, costs and expenses and all federal, state, local and other taxes and related charges incurred by such party). All references herein to remuneration, compensation and other consideration payable by Pacer or any of its Affiliates hereunder to or for the benefit of you or your heirs, representatives, or estate are to the gross amounts thereof before reductions, set-off, or deduction for taxes and other charges referred to below, and all such remuneration, compensation and other consideration shall be paid net of and after reduction, set-off and deduction for any and all applicable withholding, F.I.C.A., employment and other similar federal, state and local taxes and contributions required by law to be withheld by Pacer or any such Affiliate.

B.1.35. Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the domestic laws of the State of Ohio applicable to contracts made and to be wholly performed in such State, without giving effect to any choice or conflict of law provision or rule (whether of the State of Ohio or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Ohio.

B.1.36. Binding Effect. The terms and provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, assigns, representatives, heirs and estates, as applicable. This Agreement shall not be assignable by you without the prior written consent of Pacer (acting with approval of its Board of Directors). Except as expressly provided in this Agreement, this Agreement shall not confer any rights or remedies upon any Person other than the parties hereto and their respective successors, permitted assigns, representatives, heirs and estates, as applicable.

B.1.37. Notices. (a) All notices or other communications pursuant to this Agreement shall be in writing and shall be deemed to be sufficient if delivered personally, sent by nationally-recognized, overnight courier or mailed by registered or certified mail (return receipt requested), postage prepaid, to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

if to the Company, to:

Pacer International, Inc.

One Independent Drive, Suite 1250

Jacksonville, FL 32202

Attention: General Counsel

if to you, to your last address shown in the Company’s personnel records:

1.37.1.1. (b) All such notices and other communications shall be deemed to have been given and received (i) in the case of personal delivery, on the date of such delivery, (ii) in the case of delivery by nationally-recognized, overnight courier, on the next business day where sent following dispatch, and (iii) in the case of mailing, on the third business day where sent next following such mailing. In this Agreement, the term “business day” means, as to any location, any day that is not a Saturday, a Sunday or a day on which banking institutions in such location are authorized or required to be closed.

B.1.38. Entire Agreement; Amendment and Waiver. This Agreement embodies the entire agreement and understanding by and between the parties hereto with respect to the subject matter hereof and supersedes and preempts any and all prior and contemporaneous understandings, agreements, arrangements, representations or communications (whether written or oral) by or between the parties relating to the subject matter hereof. You acknowledge that the unvested portion of the restricted stock granted to you are null and void and of no further force or effect on and as of the Termination Effective Date. Other than this Agreement and the restricted stock agreement, there are no other understandings, agreements, arrangements, representations or communications continuing in effect relating to the subject matter hereof. You are not signing this Agreement in reliance upon any promise, representation or warranty not expressly contained in this Agreement. Any oral representations regarding this Agreement shall have no force or effect. No waiver, amendment or modification of any provision of this Agreement shall be effective unless in writing and signed by each party hereto. No failure or delay by any party in exercising any right, power or remedy under this Agreement shall operate as a waiver thereof or of any other right, power or remedy. The waiver by any party hereto of a breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of any other or subsequent breach by such other party.

B.1.39. Counterparts and Facsimile or Imaged Execution. This Agreement may be executed in two or more counterparts, and each such counterpart shall be an original instrument, but all such counterparts taken together shall be considered one and the same agreement, effective when one or more counterparts have been signed by each party and delivered to the other parties, it being understood that all parties need not sign the same counterpart. Any signed counterpart delivered by facsimile or imaged document shall be deemed for all purposes to constitute such party’s good and valid execution and delivery of this Agreement.

B.1.40. Other Construction and Interpretation Provisions. The use in this Agreement of the term “including” means “including, without limitation.” The words “herein”, “hereof”, “hereunder”, “hereby”, “hereto”, “hereinafter”, and other words of similar import refer to this Agreement as a whole, and not to any particular article, section, subsection, paragraph, subparagraph or clause contained in this Agreement. All references to articles, sections, subsections, clauses, paragraphs, schedules and attachments mean such provisions of this Agreement, except where otherwise stated. The section headings in this Agreement are for convenience only and shall not control or affect the meaning of any provision of this Agreement. The use herein of the masculine, feminine or neuter forms shall also denote the other forms, as in each case the context may require. If, and wherever, specific language is used to clarify by example a general statement contained herein, such specific language shall not be deemed to modify, limit or restrict in any manner the construction of the general statement to which it relates. The language used in this Agreement has been chosen by the parties to express their mutual intent, and no rule of strict construction shall be applied against any party. Unless otherwise provided herein, the measure of one month or year for purposes of this Agreement shall be that date of the following month or year corresponding to the starting date, except that, if no corresponding date exists, the measure shall be the next day of the following month or year (e.g., one month following February 8 is March 8, and one month following March 31 is May 1). The term “Affiliate” means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with such Person, where “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by contract or otherwise. The term “Person” shall be construed as broadly as possible and shall include an individual or natural person, a partnership (including a limited liability partnership), a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, a business, and any other entity, including a governmental entity such as a domestic or foreign government or political subdivision thereof, whether on a federal, state, provincial or local level and whether legislative, executive, judicial in nature, including any agency, authority, board, bureau, commission, court, department or other instrumentality thereof.

B.1.41. Jury Trial Waiver. THE PARTIES WISH THAT APPLICABLE LAWS APPLY TO THE RESOLUTION OF ANY DISPUTES ARISING UNDER THIS AGREEMENT AND THE SUBJECT MATTER HEREOF, AND THAT THEIR DISPUTES BE RESOLVED BY AN EXPERIENCED PERSON APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND APPLICABLE LAWS, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER THIS AGREEMENT OR ANY DOCUMENTS RELATED HERETO. YOU UNDERSTAND THAT THE WAIVER OF THE RIGHT TO A TRIAL BY JURY IS AN IMPORTANT RIGHT WHICH YOU HEREBY FOREGO.

B.1.42. Jurisdiction and Venue; Service of Process. The parties hereto (i) agree that all disputes among them arising out of, connected with, related to, or incidental to this Agreement shall be resolved exclusively by state or federal courts located in Franklin County, Ohio, or any appellate court from any thereof, or by an arbitrator located in Franklin County, Ohio, in such cases where both parties hereto have expressly agreed to binding arbitration, (ii) irrevocably submit to the jurisdiction of such courts and waive any objection to venue or defense of an inconvenient forum for any proceeding in any such court, and (iii) agree that the mailing by certified or registered mail, return receipt requested, of any process required by any such court shall constitute valid and lawful service of process against them, without the necessity for service by any other means provided by law.

Please acknowledge your acceptance of and agreement with the foregoing terms by signing the enclosed counterpart of this letter agreement in the space provided below and returning it to the Company at the address stated in Section 16 above.

PACER INTERNATIONAL, INC.
By:	/s/    Michael F. Killea
Name:	Michael F. Killea
Title:	Executive Vice President

Accepted and agreed to:

/s/    Brian C. Kane

Brian C. Kane

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer Pursuant to

Rules 13a-14(a) and 15d-14(a) under the Securities

Exchange Act of 1934, as amended

I, Daniel W. Avramovich, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Pacer International, 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 reasonable 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 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: May 7, 2010

/s/ Daniel W. Avramovich

Daniel W. Avramovich

Chairman and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer Pursuant to

Rules 13a-14(a) and 15d-14(a) under the Securities

Exchange Act of 1934, as amended

I, John J. Hafferty, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Pacer International, 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 reasonable 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 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: May 7, 2010

/s/ John J. Hafferty

John J. Hafferty

Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Pacer International, Inc. (the “Company”) on Form 10-Q for the fiscal quarter ended March 31, 2010, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Daniel W. Avramovich, Chief Executive Officer of the Company, and John J. Hafferty, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Daniel W. Avramovich

Daniel W. Avramovich

Chief Executive Officer

May 7, 2010

/s/ John J. Hafferty

John J. Hafferty

Chief Financial Officer

May 7, 2010

A signed original of this written statement required by Section 906 has been provided to Pacer International, Inc. and will be retained by Pacer International, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.