Exhibit 10.1

CHANGE OF CONTROL

SEVERANCE AGREEMENT

This CHANGE OF CONTROL SEVERANCE AGREEMENT is dated July     , 2012, by and
between HORIZON LINES, INC., a Delaware corporation (the “Company”), Horizon
Lines LLC (an Affiliate of the Company), and                     (the
“Executive”).

PURPOSE

In order to induce the Executive to remain in the employment of the Company and
its Affiliates in the event of a potential Change of Control (as defined below),
the Company desires to enter into this Change of Control Severance Agreement
(the “Agreement”) to provide the Executive with certain benefits if the
Executive’s employment is terminated in connection with or within a specified
period following the occurrence of a Change of Control.

NOW, THEREFORE, in consideration of the respective agreements of the parties
contained herein, it is agreed as follows:

SECTION 1. Definitions

For purposes of this Agreement, the following terms have the meanings set forth
below:

“Affiliate” means, with respect to any individual or entity, any other
individual or entity who, directly or indirectly through one or more
intermediaries, controls, is controlled by or is under common control with, such
individual or entity.

“Annual Base Salary” means the Executive’s annual base salary in effect
immediately before his or her Severance.

“Annual Target Bonus Opportunity” means the amount of the annual cash incentive
payable to an Executive under a Company or Affiliate annual incentive plan with
respect to a given fiscal year of the Company or Affiliate, as applicable,
expressed as a percentage of the Executive’s base salary, assuming that the
target level of performance under the plan was achieved.

“Board” means the Board of Directors of the Company.

“Cause” shall mean:

(a) the Executive’s willful and continued failure to attempt in good faith
(other than as a result of incapacity due to mental or physical impairment) to
substantially perform the duties of his or her position, and such failure is not
remedied within 30 days after receipt of written notice from the Board or the
Chief Executive Officer specifying such failure;

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

(b) the Executive’s failure to attempt in good faith to carry out, or comply
with, in any material respect any lawful and reasonable directive of the Board
or the Chief Executive Officer consistent with the duties of his or her
position, which is not remedied within 30 days after receipt of written notice
from the Board or the Chief Executive Officer specifying such failure;

(c) a material breach by the Executive of the Company’s code of ethics, which is
not remedied within 30 days after receipt of written notice from the Board or
the Chief Executive Officer specifying such failure;

(d) the Executive’s conviction, plea of no contest or plea of nolo contendere,
or imposition of unadjudicated probation for any felony (other than a traffic
violation or arising purely as a result of the Executive’s position with the
Company or an Affiliate and not in connection with any act or omission of the
Executive);

(e) the Executive’s knowing unlawful use (including being under the influence)
or possession of illegal drugs; or

(f) the Executive’s commission of a material bad faith act of fraud,
embezzlement, misappropriation, willful misconduct, gross negligence, or breach
of fiduciary duty, in each case against the Company or any Affiliate.

For the purposes of this definition, no act (or omission) that is (i) taken in
good faith and (ii) not adverse to the best interests of the Company or its
Affiliates shall be considered to be willful.

“Change of Control” shall have the same meaning as assigned to that term in the
Company’s 2009 Incentive Compensation Plan (or any successor to or replacement
of such plan).

“Code” means the Internal Revenue Code of 1986, as amended.

“Disability” means a disability within the meaning of Code section 409A(a)(2)(C)
and U.S. Treasury Regulations section 1.409A-3(i)(4) (or any successor
provision).

“Effective Date” shall mean July 25, 2012.

“Good Reason” means the occurrence of any of the following events, unless the
Executive otherwise consents in writing to such event:

(a) a material diminution in the Executive’s authority, duties or
responsibilities or the authority, duties or responsibilities of the supervisor
to whom the Executive is required to report (including without limitation in the
case of an Executive who reports directly to the Chief Executive Officer of the
Company immediately prior to a Change of Control, if, after such Change of
Control, such Executive no longer reports directly to the Chief Executive
Officer of the Company or its successor);

 

2

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

(b) a material reduction in the Executive’s annual base salary;

(c) a material reduction in the Executive’s Annual Target Bonus Opportunity as
compared to his or her average Annual Target Bonus Opportunity for the three
immediately preceding consecutive fiscal years of the Company; or

(d) requiring the Executive to relocate his or her principal place of employment
to a location more than fifty (50) miles from the Executive’s current principal
place of employment.

The Executive shall provide the Company with a written notice of resignation
within ninety (90) days following the occurrence of the event constituting Good
Reason and the Company (or its Affiliate, if applicable) shall have a period of
thirty (30) days following its receipt of such notice in which to cure such
event without such event constituting Good Reason. If the Company (or its
Affiliate, if applicable) does not cure the condition or conditions by the end
of such thirty (30) day period, the Executive may voluntarily terminate
employment within thirty (30) days after the last day of the thirty (30) day
cure period. The Executive’s voluntary termination of employment other than in
accordance with the requirements of this definition shall not constitute
termination for Good Reason.

“Release” means a general release of claims against the Company and the other
persons specified therein in the form attached hereto as Exhibit A, or in such
other form as is required to comply with applicable law.

“Release Period” means the period described in Section 3.6, no longer than 60
days, commencing on the Severance Date and ending on the expiration of the
revocation period for the Release.

“Severance” means (a) the involuntary termination of the Executive’s employment
by the Company or any Affiliate thereof, other than for Cause, death or
Disability or (b) a termination of the Executive’s employment with the Company
and its Affiliates by the Executive for Good Reason, in each case, within 24
months following the occurrence of a Change of Control.

“Severance Date” means the date on which the Executive incurs a Severance.

“Severance Period” means the twenty-four (24) consecutive-month period ending on
the second anniversary of the Severance Date.

“Treasury Regulations” means the final, temporary or proposed regulations issued
by the Treasury Department and/or Internal Revenue Service as modified in Title
26 of The United States Code of Federal Regulations. Any references made in this
Agreement to specific Treasury Regulations shall also refer to any successor or
replacement regulations thereto.

SECTION 2. Term of Agreement. The term of this Agreement (the “Term”) will
commence on the Effective Date, and will end on December 31, 2013; provided that
on December 31, 2013 and on each subsequent anniversary of that date, the Term
shall

 

3

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

automatically be extended for an additional one-year period, unless not later
than ninety (90) days prior to the end of the then-current Term, either the
Company or the Executive shall have given notice to the other party not to
extend the Term. Notwithstanding the foregoing, the Term shall be deemed to have
immediately expired without any further action, and this Agreement will
immediately terminate and be of no further effect if, prior to a Change of
Control, the Executive’s employment is terminated for any reason. Additionally,
in the event that a Change of Control occurs during the Term, then the Term
shall automatically be extended to the second anniversary of the occurrence of
the Change of Control, and may not terminate before such date except in the
event that the Executive has a termination of employment with the Company and
its Affiliates that does not constitute a Severance. In the event that the
Executive experiences a Severance during the Term, the Term shall automatically
be extended to the last day of the Severance Period.

SECTION 3. Severance Benefits

3.1 Generally. Subject to Sections 3.6, 5 and 7.2 of this Agreement, the
Executive shall be entitled to the severance payments and benefits described
below.

3.2 Payment of Accrued Obligations. The Company shall pay to the Executive upon
the Executive’s Severance a lump sum payment in cash, paid in accordance with
applicable law, as soon as practicable but no later than ten (10) days after the
Severance Date, equal to the sum of (a) the Executive’s accrued annual base
salary and any accrued vacation pay through the Severance Date, and (b) any
annual bonus earned by the Executive but not yet paid as of the Severance Date.

3.3 Severance Payment. Subject to Section 3.6, upon the Executive’s Severance
the Executive shall be entitled to receive an amount equal to two (2) times the
sum of (a) the Executive’s Annual Base Salary, plus (b) the Executive’s Annual
Target Bonus Opportunity for the Company’s (or its Affiliate, if applicable)
fiscal year in which the Severance Date occurs, payable in cash in a single lump
sum payment on the date that is sixty-one (61) days following the Severance
Date.

3.4 Equity Incentive Compensation and Outplacement Services. Subject to
Section 3.6, in addition to the benefits provided in Sections 3.3 and 3.5, the
Executive shall be entitled to the following benefits upon incurring a
Severance.

(a) The Executive shall be immediately vested in all outstanding and unvested
equity awards and such equity awards shall be nonforfeitable and payable or
exercisable, as applicable, according to the terms of such awards
(notwithstanding any other provisions of such award that provide for forfeiture
in the event of termination of employment).

(b) The Executive shall be entitled to receive outplacement services of up to
$25,000 for the period ending on the first anniversary of the Executive’s
Severance Date.

 

4

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

3.5 Welfare Benefits. Subject to Section 3.6, the Company shall pay to the
Executive upon the Executive’s Severance an amount equal to the total premiums
the Executive would be required to pay for eighteen (18) months of COBRA
continuation coverage under the Company’s health benefit plan (i.e., medical,
dental and vision coverage), determined using the COBRA premium rate in effect
for the level of coverage that the Executive has in place immediately prior to
the Severance Date (the “COBRA Payment”). The Company shall pay the COBRA
Payment in cash in a single lump sum on the date that is sixty-one (61) days
following the Severance Date. The Executive shall not be required to purchase
COBRA continuation coverage in order to receive the COBRA Payment nor shall the
Executive be required to apply the COBRA Payment to payment of applicable
premiums for COBRA continuation coverage. In addition, during the Severance
Period the Company shall permit the Executive (and his or her eligible
dependents) to participate in any optional life insurance and optional personal
accident plans of the Company for which senior executives of the Company are
eligible, to the same extent and at the same premium rates as if the Executive
had continued to be an employee of the Company during the Severance Period. The
coverage period for purposes of COBRA continuation requirements of Section 4980B
of the Code shall commence on the day immediately following the Severance Date.

3.6 Release and Restrictive Covenant Agreement. The Executive shall be eligible
to receive the payments and other benefits under this Agreement (other than
payments under Section 3.2) only if after the Severance Date (a) the Executive
first executes the Release in favor of the Company and others attached hereto as
Exhibit A, and (b) the Executive first executes the Noncompete, Nonsolicitation
and Nondisclosure Agreement attached hereto as Exhibit B, and the Release has
not been revoked by the Executive, by the sixtieth (60th) day following the
Severance Date. If the Executive does not execute and return the agreements such
that either or both agreements do not become effective (or, in the case of the
Release, is revoked) within the 60-day period immediately following the
Severance Date, the Executive shall not be entitled to any payments or benefits
under this Agreement (other than payments under Section 3.2).

3.7 Forfeiture. If the Executive is found in a judgment no longer subject to
review or appeal to have breached the obligations set forth in the Noncompete,
Nonsolicitation and Nondisclosure Agreement, then the Executive shall
immediately forfeit any amounts payable or benefits to be received and shall
promptly reimburse the Company any amounts actually paid to the Executive
pursuant to this Agreement (other than payments made pursuant to Section 3.2).

3.8 No Duplication of Benefits. Except as otherwise noted herein, during the
Term of this Agreement the compensation to be paid to the Executive hereunder
will be in lieu of any similar severance or termination compensation
(compensation based directly on the Executive’s annual salary or annual salary
and bonus) to which the Executive may be entitled under any other Company or
Affiliate severance or termination agreement, plan, program, policy, practice or
arrangement (including, without limitation, the Company’s Executive Severance
Plan and the Severance Plan for Eligible Employees of Horizon Lines, Inc. and
its Subsidiaries and Affiliates (collectively, the “Severance

 

5

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

Plans”)). The Executive affirmatively waives any rights he may have to payments
or benefits provided under the Severance Plans to the extent the Executive
receives similar payments or benefits under this Agreement. The Executive’s
entitlement to any compensation or benefits of a type not provided in this
Agreement will be determined in accordance with the Company’s or its Affiliates’
employee benefit plans and other applicable programs, policies and practices as
in effect from time to time.

3.9 No Mitigation or Offset. In the event of any termination of the
Executive’s employment, the Executive shall not be required to seek other
employment to mitigate damages, and any income earned by the Executive from
other employment or self-employment shall not be offset against any obligations
of the Company and its Affiliates to Executive under this Agreement.

SECTION 4. Golden Parachute Tax. Notwithstanding any other provisions of this
Agreement, in the event that any payment, benefit, property or right received or
to be received by Executive in connection with a Change of Control or
Executive’s termination of employment in respect of a Change of Control (whether
pursuant to the terms of this Agreement or any other plan, arrangement or
agreement with the Company or an Affiliate) (collectively, the “Total Payments”)
would be subject (in whole or part) to the tax imposed by Section 4999 of the
Code or any successor provision (the “Excise Tax”), then the payments and
benefits provided under this Agreement that are subject to the Excise Tax (the
“Parachute Payments”) and which are payable in cash shall first be reduced, and
the noncash Parachute Payments shall thereafter be reduced, to the extent
necessary so that no portion of the Total Payments is subject to the Excise Tax,
but only if (a) the net amount of such Total Payments, as so reduced (and after
subtracting the net amount of federal, state and local income taxes on such
reduced Total Payments) is greater than or equal to (b) the net amount of such
Total Payment without such reduction (but after subtracting the net amount of
federal, state and local income taxes on such Total Payments and the amount of
Excise Tax to which the Executive would be subject in respect of such unreduced
Total Payments).

SECTION 5. Death During the Severance Period. If the Executive dies during the
Severance Period, any unpaid amounts shall be paid to the Executive’s estate
within ten (10) days following the Executive’s death. The Executive’s right to
outplacement services described in Section 3.4(b) and continued participation in
the life insurance and accident plans described in Section 3.5 shall terminate
as of the date of the Executive’s death.

SECTION 6. Amendments; Waiver. This Agreement contains the entire agreement of
the parties with respect to severance payments and benefits payable in
connection with a Severance. No amendment or modification of this Agreement
shall be valid unless evidenced by a written instrument executed by the parties
hereto. No waiver by either party of any breach by the other party of any
provision or condition of this Agreement shall be deemed a waiver of any similar
or dissimilar provision or condition at the same or any prior or subsequent
time.

 

6

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

SECTION 7. General Provisions.

7.1 Except as otherwise provided herein or by law, no right or interest of the
Executive under this Agreement shall be assignable or transferable, in whole or
in part, either directly or by operation of law or otherwise, including without
limitation by execution, levy, garnishment, attachment, pledge or in any manner;
no attempted assignment or transfer thereof shall be effective; and no right or
interest of the Executive under this Agreement shall be liable for, or subject
to, any obligation or liability of such Executive. When a payment is due under
this Agreement to the Executive and the Executive is unable to care for his or
her affairs, payment may be made directly to his or her guardian or personal
representative.

7.2 If the Company or any Affiliate thereof is obligated by law or by contract
to pay severance pay, a termination indemnity, notice pay, or the like, or if
the Company or any Affiliate thereof is obligated by law or by contract to
provide advance notice of separation (“Notice Period”), then any severance pay
under this Agreement shall be reduced by the amount of any such severance pay,
termination indemnity, notice pay or the like, as applicable, and by the amount
of any compensation received during any Notice Period. If the Executive is
entitled to benefits under the Workers Adjustment Retraining Notification Act of
1988, or any similar state or local statute or ordinance (collectively the “WARN
Act”), severance pay under this Agreement shall be reduced dollar-for-dollar by
any benefits received pursuant to the WARN Act.

7.3 Neither this Agreement, nor any modification thereof, nor the creation of
any fund, trust or account, nor the payment of any benefits shall be construed
as giving the Executive, or any person whomsoever, the right to be retained in
the service of the Company or any Affiliate thereof, and the Executive shall
remain subject to discharge to the same extent as if this Agreement had never
existed.

7.4 If any provision of this Agreement shall be held invalid or unenforceable,
such invalidity or unenforceability shall not affect any other provisions
hereof, and this Agreement shall be construed and enforced as if such provisions
had not been included.

7.5 This Agreement shall inure to the benefit of and be binding upon the heirs,
executors, administrators, successors and assigns of the parties, including the
Executive, present and future, and any successor to the Company.

7.6 The headings and captions herein are provided for reference and convenience
only, shall not be considered part of this Agreement, and shall not be employed
in the construction of this Agreement.

7.7 The Agreement shall not be required to be funded unless such funding is
authorized by the Board. Regardless of whether the Agreement is funded, the
Executive shall not have any right to, or interest in, any assets of any Company
which may be applied by the Company to the payment of benefits or other rights
under this Agreement. For purposes of clarity, nothing in this Section 7.7 shall
be construed to relieve the Company or its Affiliates from their obligations to
the Executive pursuant to this Agreement.

 

7

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

7.8 All notices and other communications given or made pursuant to this
Agreement shall be in writing and shall be deemed effectively given: (a) upon
personal delivery to the party to be notified, (b) when sent by confirmed
electronic mail or facsimile if sent during normal business hours of the
recipient, and if not so confirmed, then on the next business day, (c) five
(5) days after having been sent by registered or certified mail, return receipt
requested, postage prepaid, or (d) one day after deposit with a nationally
recognized overnight courier, specifying next-day delivery, with written
verification of receipt. All communications shall be sent:

(i) To the Executive, at:

Last address in records of the Company

(ii) To the Company or Horizon Lines LLC, at:

Horizon Lines, Inc.

4064 Colony Road, Suite 200

Charlotte, NC 28211

Attention: General Counsel

Telecopy: 704-973-7010

7.9 This Agreement shall be governed, construed, interpreted and enforced in
accordance with the substantive laws of the State of North Carolina, without
reference to principles of conflicts or choice of law under which the law of any
other jurisdiction would apply.

7.10 The Company may withhold from any payments due to the Executive hereunder
such amounts as are required to be withheld under applicable federal, state and
local tax laws.

SECTION 8. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto and supersedes all prior agreements, if any,
understandings and arrangements, oral or written, between the parties hereto
with respect to severance protection in connection with a Change of Control.

SECTION 9. No Gross-Up Payments. In no event shall the Executive be entitled to
any gross-up payment with respect to any taxes incurred as a result of the
payments or benefits provided to the Executive pursuant to this Agreement.

SECTION 10. Disputes.

10.1 Except as provided in the Noncompete, Nonsolicitation and Nondisclosure
Agreement, any dispute or controversy arising under, out of, in connection with
or in relation to this Agreement shall, at the election and upon written demand
of any party to this Agreement, be finally determined and settled by arbitration
in Charlotte, North Carolina in accordance with the rules and procedures of the
American Arbitration Association, and judgment upon the award may be entered in
any court having jurisdiction thereof.

 

8

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

10.2 If, with respect to any alleged failure by the Company or Horizon Lines LLC
to comply with any of the terms of this Agreement, the Executive hires legal
counsel with respect to this Agreement or institutes any negotiations or
institutes or responds to legal action to assert or defend the validity of,
enforce his rights under, or recover damages for breach of this Agreement, and
thereafter the Company or Horizon Lines LLC is found in a judgment no longer
subject to review or appeal to have breached this Agreement in any material
respect, then the Company or Horizon Lines LLC (but not both) shall reimburse
the Executive for his actual expenses for attorneys’ fees and disbursements
within thirty (30) days following receipt of any invoice for such expenses.

SECTION 11. Section 409A of the Code.

11.1 It is intended that this Agreement shall comply with or be exempt from the
provisions of Section 409A of the Code and the Treasury Regulations relating
thereto, so as not to subject the Executive to the payment of additional taxes
and interest under Section 409A of the Code. This Agreement shall be
interpreted, operated, and administered in a manner consistent with and in
furtherance of this intent. Notwithstanding the foregoing, to the extent any
payment or benefit under this Agreement is subject to the additional taxes and
interest under Section 409A of the Code, the Executive shall be solely liable
for the payment of such taxes and interest.

11.2 Any payment required under this Agreement that is payable in installment
payments shall be deemed to be a separate payment for purposes of Section 409A
of the Code and the Treasury Regulations thereunder.

11.3 Notwithstanding any provision to the contrary in this Agreement, no payment
or distribution under this Agreement which constitutes an item of deferred
compensation under Section 409A of the Code and becomes payable by reason of the
Executive’s termination of employment with the Company or its Affiliates or an
Executive unless the Executive’s termination of employment constitutes a
“separation from service” (as such term is defined in Treasury Regulations
issued under Section 409A of the Code). In addition, no such payment or
distribution will be made to the Executive prior to the earlier of (i) the
expiration of the six (6)-month period measured from the date of the Executive’s
“separation from service” (as such term is defined in Treasury Regulations
issued under Section 409A of the Code) or (ii) the date of the Executive’s
death, if the Executive is deemed at the time of such separation from service to
be a “specified employee” within the meaning of that term under
Section 409A(a)(2) of the Code and to the extent such delayed commencement is
otherwise required in order to avoid a prohibited distribution under
Section 409A(a)(2) of the Code. All payments and benefits which had been delayed
pursuant to the immediately preceding sentence shall be paid (without interest)
to the Executive in a lump sum upon expiration of such six-month period (or if
earlier upon the Executive’s death).

[SIGNATURE PAGE FOLLOWS]

 

9

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

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

 

HORIZON LINES, INC.

 

Samuel A. Woodward

President & Chief Executive Officer

HORIZON LINES LLC

 

Samuel A. Woodward

President & Chief Executive Officer

EXECUTIVE   [NAME]

 

10

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

EXHIBIT A

RELEASE AGREEMENT

(To be signed after the Severance Date)

In return for payment of severance benefits pursuant to the Change of Control
Severance Agreement between Horizon Lines, Inc., and me (the “COC Severance
Agreement”), I hereby generally and completely release Horizon Lines, Inc.
(“Horizon Lines”), its parent and subsidiary entities (collectively the
“Company”), and its or their directors, officers, employees, shareholders,
partners, agents, attorneys, predecessors, successors, insurers, affiliates, and
assigns (collectively “Released Parties”), from any and all claims, liabilities
and obligations, both known and unknown, that arise out of or are in any way
related to events, acts, conduct, or omissions occurring prior to my signing
this Release Agreement (the “Agreement”). This general release includes, but is
not limited to: (1) all claims arising out of or in any way related to my
employment with the Company or the termination of that employment; (2) all
claims related to my compensation or benefits from the Company, including wages,
salary, bonuses, commissions, vacation pay, expense reimbursements (to the
extent permitted by applicable law), severance pay, fringe benefits, stock,
stock options, or any other ownership interests in the Company; (3) all claims
for breach of contract, wrongful termination, and breach of the implied covenant
of good faith and fair dealing; (4) all tort claims, including without
limitation claims for fraud, defamation, emotional distress, and discharge in
violation of public policy; and (5) all federal, state, and local statutory
claims, including without limitation claims for discrimination, harassment,
retaliation, attorneys’ fees, or other claims arising under the federal Civil
Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of
1990, the federal Age Discrimination in Employment Act of 1967 (as amended)
(“ADEA”), the federal Worker Adjustment and Retraining Notification Act (as
amended) and similar laws in other jurisdictions, the Employee Retirement Income
Security Act of 1974 (as amended), the Family and Medical Leave Act of 1993, and
any similar laws in other jurisdictions; provided, however, that this Release
does not waive, release or otherwise discharge any claim or cause of action
arising after the date I sign this Agreement.

This Agreement includes a release of claims of discrimination or retaliation on
the basis of workers’ compensation status, but does not include workers’
compensation claims. Excluded from this Agreement are any claims which by law
cannot be waived in a private agreement between employer and employee, including
but not limited to the right to file a charge with or participate in an
investigation conducted by the Equal Employment Opportunity Commission (“EEOC”)
or any state or local fair employment practices agency. I waive, however, any
right to any monetary recovery or other relief should the EEOC or any other
agency pursue a claim on my behalf.

I acknowledge and represent that I have not suffered any age or other
discrimination, harassment, retaliation, or wrongful treatment by any Released
Party. I also acknowledge and represent that I have not been denied any rights
including, but not limited to, rights to a leave or reinstatement from a leave
under the Family and Medical Leave Act of 1993, the Uniformed Services
Employment and Reemployment Rights Act of 1994, or any similar law of any
jurisdiction.

 

11

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

I agree that I am voluntarily executing this Agreement. I acknowledge that I am
knowingly and voluntarily waiving and releasing any rights I may have under the
ADEA, as amended by the Older Workers Benefit Protection Act of 1990, and that
the consideration given for this Release is in addition to anything of value to
which I was already entitled. I further acknowledge that I have been advised by
this writing, as required by the ADEA, that: (a) my waiver and release specified
in this paragraph does not apply to any rights or claims that may arise after
the date I sign this Agreement; (b) I have been advised to consult with an
attorney prior to signing this Agreement; (c) if a “Severance” (as defined in
the IOC Severance Agreement) involves an employment termination program, I have
received a disclosure from the Company that includes a description of the class,
unit or group of individuals covered by the program, the eligibility factors for
such program, and any time limits applicable to such program and a list of job
titles and ages of all employees selected for this group termination and ages of
those individuals in the same job classification or organizational unit who were
not selected for termination; (d) I have at least twenty-one (21) or forty-five
(45) days, depending on the circumstances of my Severance, from the date that I
receive this Release (although I may choose to sign it any time on or after my
Severance Date (as defined in the COC Severance Agreement)) to consider the
release; (e) I have seven (7) calendar days after I sign this Release to revoke
it (“Revocation Period”) by sending my revocation to the Vice President of Human
Resources in writing at 4064 Colony Road, Suite 200, Charlotte, North Carolina
28211; fax 704-973-7034.; and (f) this Agreement will not be effective until I
have signed it and returned it to the Company’s Corporate Secretary and the
Revocation Period has expired.

I UNDERSTAND THAT THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN
CLAIMS.

 

        [INSERT EXECUTIVE’S NAME]     Date

 

12

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

EXHIBIT B

NONCOMPETE, NONSOLICITATION AND NONDISCLOSURE AGREEMENT

This NONCOMPETE, NONSOLICITATION AND NONDISCLOSURE AGREEMENT is dated
                    , by and between HORIZON LINES, INC., a Delaware corporation
and [EXECUTIVE] (the “Executive”).

1. In exchange for the payments and benefits provided to [EXECUTIVE] pursuant to
the Change of Control Severance Agreement, dated July     , 2012 (the “COC
Severance Agreement”) the undersigned agrees as follows. Any capitalized terms
not defined herein shall have the meanings ascribed to them under the COC
Severance Agreement.

(a) For a one (1) year period following a Severance, the Executive shall be
prohibited from engaging in Competition with the Company, and its subsidiaries
and affiliates (collectively, the “Company”). The term “Competition” for
purposes of this Noncompete, Nonsolicitation and Nondisclosure Agreement shall
mean directly or indirectly, engaging in, holding any equity interest in, or
managing or operating any person, firm, corporation, partnership or business
(whether as director, officer, employee, agent, representative, partner,
security holder, consultant or otherwise) that engages in a Jones Act business
that competes with any business of the Company anywhere in the world; with the
exception of ownership of up to 1% of any class of securities of any publicly
traded company.

(b) During the two (2) year period following a Severance, the Executive shall
not: (i) solicit, encourage, or cause any Restricted Customer (as defined below)
to purchase any services or products from any business other than the Company
that are competitive with or a replacement for the services or products offered
by the Company; (ii) sell or provide any services or products to any Restricted
Customer that are competitive with or a replacement for the Company’s services
or products; (iii) solicit, encourage, or cause any supplier of goods or
services to the Company not to do business with or to reduce any part of its
business with the Company; (iv) make any disparaging remarks about the Company
or its business, services, products, affiliates, officers, directors or
management employees, whether in writing, verbally, or on any online forum;
and/or (v) as an employee, agent, partner, shareholder, member, investor,
director, consultant, or otherwise assist any competitor of the Company to
engage in any of the conduct described in sub-sections (i) – (iv) of this
Section.

“Restricted Customer” means: (i) any customer of the Company with whom the
Executive had contact or communications at any time during the last 12 months of
employment; (ii) any customer of the Company for whom the Executive supervised
the Company’s dealings at any time during the last 12 months of employment;
(iii) any customer of the Company about whom the Executive obtained any
Confidential Information during the last 12 months of employment; (iv) any
prospective customer of the Company with whom the Executive had contact or
communications at any time during the last 12 months of employment; and (v) any
prospective customer of the Company about whom the Executive obtained any
Confidential Information during the last 12 months of employment.

 

13

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

(c) During the two (2) year period following a Severance, the Executive shall
not, directly or indirectly: (i) hire or engage as an employee or as an
independent contractor any person employed by the Company; (ii) solicit or
encourage any employee or independent contractor to leave his or her employment
or engagement with the Company; and/or (iii) hire as an employee or engage as an
independent contractor any person who was, at any point during the last 3 months
prior to the Severance, an employee of the Company. Notwithstanding the
foregoing, the Company agrees that the following shall not be deemed a violation
of this subsection (c): (i) the Executive responding to a request for a
reference regarding any current or former employee of the Company from such
current or former employee or from a third party, by providing a reference
setting forth the Executive’s personal views about such current or former
employee, or (ii) solicitations or hirings through a general advertisement or
similar process that are not directed specifically at employees, officers,
directors, consultants or independent contractors of the Company.

(d) The Executive acknowledges that employment with the Company created a
privileged and confidential relationship, and that information concerning the
business of the Company and its customers that is not in the public domain, nor
available from sources other than the Company or its customers, including, but
not limited to, fees, rates, sales data, customer and vendor lists, customer
identities, customer accounts, web design needs, customer advertising needs and
history, customer reports, customer proposals, trade secrets, product ideas,
information and reports, formulas, algorithms, schematics, finances,
methodologies, properties, analyses, summaries, notes, compilations, studies,
methods of operation, procedures, processes, discoveries, inventions, concepts,
accounts, billing methods, pricing, data, sources of supply, business methods,
production or merchandising systems or plans, marketing, sales and business
strategies and plans, operations, and information regarding employees, software
in various states of development and related documentation, designs, drawings,
design specifications, techniques, models, data, source code, object code,
documentation, diagrams, flow charts, research, development, processes, training
materials, templates, procedures, “know-how,” tools, copyrightable materials and
other such information, as well as photo, electronic or other copies or
reproductions, in whole or in part, of any of the foregoing, stored in whatever
medium, including electronic or magnetic, (collectively, “Proprietary
Information”), is confidential and/or proprietary in nature.

The Executive agrees not to use any Proprietary Information, either directly or
indirectly, that may be acquired or developed in connection with employment with
the Company for the Executive’s own benefit or for the benefit of others. In
addition, the Executive shall not, except as directed by the Company:
(i) release, divulge, disclose, publish or communicate any Proprietary
Information to any person whatsoever at any time, or (ii) misappropriate, copy,
remove from its premises, or otherwise take documents, records, reports, or
files, whether in hardcopy or electronic format, which contain any Proprietary
Information.

 

14

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

These restrictions on use and disclosure of Proprietary Information shall not
apply to information: (i) that was generally known or available to the public
(other than by reason of any violation of this Noncompete, Nonsolicitation and
Nondisclosure Agreement (the “Agreement”)by Executive); (ii) that becomes
generally known or available to the public (other than by reason of any
violation of this Agreement) after the time of disclosure to the undersigned by
the Company or any of its representatives; (iii) which was known or available to
the Executive prior to employment with the Company; (iv) that the Company agrees
is free of such restrictions, but only if such agreement is in writing and to
the extent of such written agreement; or (v) that is required to be disclosed by
law, regulation, or the valid order of a court or other governmental body, but
only to the extent required by such law, regulation, or order, and only if the
undersigned first notifies the Company of the law, regulation, or order so as to
permit the Company an opportunity to seek relief from disclosure.

(e) The Executive agrees to return to the Company all Company files, memoranda,
documents, passwords, data, records, software, manuals, copies of the foregoing,
credit cards, keys, laptop, desk top or personal computers, cellular telephones,
modems, all in good working order and any other property of the Company or its
affiliates in the Executive’s possession.

(f) If requested by the Company, the Executive will promptly, truthfully, and
fully respond to all inquiries from the Company and its representatives
(including its auditors, and/or attorneys), without requiring service of a
subpoena, relating to any litigation or any inquiry by government agencies
regarding employment or events occurring during employment with the Company. The
Executive agrees to cooperate in good faith with the Company in connection with
any such legal and investigatory matters, including, without limitation,
attending conferences and meetings as requested by the Company, and submitting
to such interviews, depositions, or court testimony that may be requested by the
Company or by a government agency. The Company agrees that it will reimburse the
Executive for any reasonable expenses, upon presentation of reasonably detailed
receipts, incurred by the Executive in connection with any such matters. The
obligations apply during the Severance Period and continue in full force and
effect for a reasonable period thereafter.

2. The parties agree to the reasonableness of the restrictions, covenants and
forfeiture provisions (whether or not so captioned) set forth in this Agreement
and acknowledge that they have been negotiated at arms-lengths for fair and
adequate consideration, and they agree that such restrictions, covenants and
forfeiture provisions shall be legally enforceable. The Executive agrees that
the Company’s remedies at law for a breach of such restrictions, covenants or
forfeiture provisions will be inadequate and that, in connection with any such
breach, the Company will be entitled, in addition to any other available
remedies, to temporary and permanent injunctive relief without the necessity of
proving actual damage or immediate or irreparable harm or for posting a bond.
Notwithstanding the foregoing, if any court shall determine such restrictions,
covenants or forfeiture provisions to be unreasonable, the parties agree to the
reformation of such restrictions by the court to limits which it finds to be
reasonable and that the Executive will not assert that such restrictions,
covenants or forfeiture provisions should be eliminated in their entirety by
such court or that this Agreement should be null and

 

15

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

void or voidable. If the Executive is found in a judgment no longer subject to
review or appeal to have breached the obligations set forth in this Agreement,
then the Executive shall immediately forfeit any amounts payable or benefits to
be received and shall promptly reimburse the Company any amounts actually paid
to the Executive pursuant to the COC Severance Agreement (other than payments
made pursuant to Section 3.2 of the COC Severance Agreement).

3. In the event that any one or more of the provisions of this Agreement is held
to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions will not in any way be affected or
impaired thereby. Moreover, if any one or more of the provisions contained in
this Agreement are held to be excessively broad as to duration, scope, activity
or subject, such provisions will be construed by limiting and reducing them so
as to be enforceable to the maximum extent compatible with applicable law.

4. This Agreement shall be governed by the laws of the State of North Carolina,
without regard to the conflict of laws principles of any jurisdiction.

 

HORIZON LINES, INC.   By: EXECUTIVE   [INSERT EXECUTIVE’S NAME]

 

16