Exhibit 10.3

RESTRICTED STOCK UNIT AGREEMENT

RESTRICTED STOCK UNIT AGREEMENT (this “Agreement”), dated as of July 25, 2012
(the “Grant Date”), by and between                     (the “Participant”) and
Horizon Lines, Inc., a Delaware corporation (the “Company”), is made pursuant to
and subject to the provisions of the Company’s 2012 Incentive Compensation Plan
(the “Plan”). The Plan, as it may be amended from time to time, is incorporated
herein by reference. All terms used herein that are defined in the Plan shall
have the meanings given to them in the Plan.

1. Grant of Restricted Stock Units. Pursuant to the provisions of the Plan and
this Restricted Stock Unit Agreement (the “Agreement”), the Company hereby
grants to the Participant one-hundred and fifty thousand (150,000) restricted
stock units (the “RSUs”) subject to the terms and conditions of the Plan and
subject further to the restrictions, terms and conditions herein set forth.

2. Vesting. The RSUs shall vest and cease to be subject to any restrictions in
accordance with the provisions of this Section 2.

 

  (a) Time-Based RSUs. The RSUs shall vest in accordance with the following
schedule:

 

  (i) Twenty percent (20%) of the RSUs will vest if the Participant is
continuously a member of the Board from the Grant Date to March 31, 2013;

 

  (ii) Forty percent (40%) of the RSUs will vest if the Participant is
continuously a member of the Board from the Grant Date to March 31, 2014; and

 

  (iii) Forty percent (40%) of the RSUs will vest if the Participant is
continuously a member of the Board from the Grant Date to March 31, 2015.

Except as specifically provided in this Agreement, unvested RSUs shall be
forfeited upon Participant’s termination of service as a member of the Board.

 

  (b) Additional Vesting Events. Notwithstanding the foregoing, all outstanding
and unvested RSUs shall become vested and no longer subject to restriction
immediately prior to a Change of Control.

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3. Settlement of RSUs.

 

  (a) Each vested RSU shall be settled by lump sum delivery of shares of Company
Stock within thirty (30) days following termination of the Participant’s service
as a member of the Board or, if a Change of Control occurs before the
Participant’s termination of service as a member of the Board, immediately prior
to the occurrence of such Change of Control.

 

  (b) The lump sum delivery to the Participant shall consist of one share of
Company Stock for each vested RSU and cash equal to the amount of dividend
equivalents credited to the RSU (if any). The Company shall cause to be
delivered to the Participant one or more unlegended, freely-transferable stock
certificates in respect of the shares of Company Stock issued upon settlement of
vested RSUs.

 

  (c) No fractional shares of Company Stock will be issued pursuant to this
Agreement. The Company will pay the Participant an amount in cash equal to the
value of any fractional share of Company Stock that would have been issued to
the Participant. Such cash payment shall be made at the same time as the other
cash payments required pursuant to this Section 3.

4. Dividend Equivalent Rights. The RSUs do not provide the Participant with the
rights of a shareholder of Company Stock. However, the Participant shall
accumulate dividend equivalent rights on all RSUs in an amount equal to the cash
dividends paid with respect to a share of Company Stock on each date prior to
payment of the Participant’s RSUs that a cash dividend is paid on the Company
Stock. The dividend equivalent rights shall be held by the Company as a
bookkeeping account and shall be subject to the same terms and conditions
(including vesting terms) as the corresponding RSUs and shall accumulate and be
paid in the form of a single cash lump-sum payment if and when payment for the
corresponding RSUs is made.

5. No Ownership. Other than the right to receive dividend equivalents, the
Participant shall not have any rights of a stockholder with respect to the RSUs
(including, without limitation, voting rights) until shares of Company Stock
have been distributed to the Participant in connection with the Participant’s
vested RSUs.

6. Nontransferability of the RSUs. The RSUs and any interest therein may not be
sold, assigned, transferred, pledged, hypothecated or otherwise disposed of,
except by will or the laws of descent and distribution and subject to the
conditions set forth in this Agreement. Any attempt to transfer RSUs in
contravention of this section is void ab initio. The RSUs shall not be subject
to execution, attachment or other process.

7. Other Restrictions.

 

  (a) The RSUs shall be subject to the terms of any compensation recoupment
policy now in effect or subsequently adopted by the Board. The terms of any such
compensation recoupment policy shall be made a part of this Agreement.

 

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  (b) The Participant acknowledges that the Participant is subject to the
Company’s policies regarding compliance with securities laws (as in effect from
time to time), and, pursuant to these policies, if the Participant is on the
Company’s insider list, the Participant shall be required to obtain
pre-clearance from the Company’s General Counsel prior to purchasing or selling
any of the Company’s securities, including any shares issued upon vesting of the
RSUs, and may be prohibited from selling such shares other than during an open
trading window. The Participant further acknowledges that, in its discretion,
the Company may prohibit the Participant from selling such shares even during an
open trading window if the Company has concerns over the potential for insider
trading.

8. Equitable Adjustment. If the number of outstanding shares of Company Stock is
increased or decreased as a result of a Stock dividend, stock split or
combination of shares, recapitalization, merger in which the Company is the
surviving corporation, or other change in the Company’s capitalization without
receipt of consideration by the Company, the number and kind of the RSUs shall
be proportionally adjusted by the Committee, as contemplated by the Plan, whose
determination shall be binding.

9. Taxes. The parties may in their discretion provide for voluntary withholding
of taxes in connection with the RSUs. The amount withheld shall not exceed the
amount of Applicable Withholding Taxes that would have been required to have
been withheld if the Participant were performing services for the Company as an
employee. The parties may provide for payment of such voluntary tax withholding
by having the Company retain that number of shares of Common Stock (valued at
their fair market value as of the date of retention) that would satisfy all or a
specified portion of such voluntarily withheld taxes.

10. No Right to Continued Board Service. Nothing contained in this Agreement
shall be deemed to confer upon the Participant any right to continue to serve as
a member of the Board.

11. Miscellaneous.

 

  (a) Governing Law/Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of North Carolina without
reference to principles of conflict of laws.

 

  (b) Notices. Any notice required or permitted under this Agreement shall be
deemed given when delivered in accordance with the notice provisions of the
Plan.

 

  (c) Failure to Enforce Not a Waiver. The failure of either party hereto to
enforce at any time any provision of this Agreement shall in no way be construed
to be a waiver of such provision or of any other provision hereof.

 

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  (d) Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be an original but all of which together shall represent one
and the same agreement.

 

  (e) Modifications; Entire Agreement; Headings. This Agreement cannot be
changed or terminated orally. This Agreement and the Plan contain the entire
agreement between the parties relating to the subject matter hereof. The section
headings herein are intended for reference only and shall not affect the
interpretation hereof.

12. Internal Revenue Code Section 409A.

 

  (a) It is intended that any amounts payable under this Agreement shall either
be exempt from or comply with Section 409A of the Code (including the Treasury
regulations and other published guidance relating thereto) (“Code Section 409A”)
so as not to subject the Participant to payment of any interest or additional
tax imposed under Code Section 409A, and shall be consistently interpreted in
accordance with such intent. To the extent that any amount payable under this
Agreement would trigger the additional tax, penalty or interest imposed by Code
Section 409A, this Agreement shall be modified to avoid such additional tax,
penalty or interest yet preserve (to the nearest extent reasonably possible) the
intended benefit payable to the Participant. No provision of this Agreement
shall be interpreted or construed to transfer any liability for failure to
comply with the requirements of Section 409A from Participant or any other
individual to the Company or any of their respective affiliates, employees or
agents.

 

  (b) To the extent a payment or benefit under this Agreement is nonqualified
deferred compensation subject to Code Section 409A, a termination of service by
the Participant shall not be deemed to have occurred for purposes of any
provision of this Agreement providing for the payment of any amounts upon or
following a termination of service unless such termination is also a “separation
from service” within the meaning of Code Section 409A and, for purposes of any
such provision of this Agreement, references to a “termination,” “termination of
service” or like terms shall mean “separation from service” within the meaning
of Code Section 409A.

[SIGNATURE PAGE FOLLOWS]

 

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

 

HORIZON LINES, INC. By:      

Jeffrey A. Brodsky

Chairman, Board of Directors

PARTICIPANT   [NAME]

 

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