Exhibit 10.1
FORM OF TIME-VESTED
RESTRICTED STOCK AWARD
TO BE PRINTED ON COMPANY LETTERHEAD
March ____, 2009
[Name]
[Street]
[City, State]
Dear [Employee’s Name]:
     Horizon Lines, Inc. (the “Company”) has designated you to be a recipient of
shares of common stock of the Company, par value $.01 per share (the “Company
Stock”), subject to the restrictions and other terms set forth in this letter
agreement (the “Agreement”) and in the Horizon Lines, Inc. Amended and Restated
Equity Incentive Plan (the “Plan”).
     The grant of these shares is made pursuant to the Plan. The Plan is
administered by the Compensation Committee (the “Committee”) appointed by the
Board of Directors of the Company. The terms of the Plan are incorporated into
this letter and in the case of any conflict between the Plan and this letter,
the terms of the Plan shall control. A copy of the Plan is attached to this
letter.
     1. Grant. In consideration of your agreements contained in this letter, the
Company hereby grants you _________ shares of Company Stock (the “Restricted
Shares”) as of March 18, 2009 (the “Grant Date”), the date on which the
Committee met and approved the granting of this award. The Restricted Shares are
subject to service-based restrictions as set forth below. Until these
restrictions lapse, the Restricted Shares are forfeitable and nontransferable.
     2. Vesting. The Restricted Shares shall vest, and become freely
transferable, as follows:
     (a) 100% of the Restricted Shares will vest and become freely transferable
on March 18, 2012 (the “Vesting Date”).
     (b) You must be continuously employed by the Company (or any Subsidiary)
from the Grant Date until the Vesting Date for any Restricted Shares to vest. If
your employment with the Company (and its Subsidiaries, as applicable)
terminates prior to the Vesting Date for any reason, any rights you may have
with regard to unvested Restricted Shares shall be forfeited at that time,
notwithstanding

 

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

 

your return to active employment with the Company or any Subsidiary prior to the
Vesting Date.
     (c) Notwithstanding anything in this Section 2 to the contrary, if, prior
to the Vesting Date, (i) your employment with the Company (or any Subsidiary)
terminates due to your voluntary retirement, and (ii) your age plus your number
of years of service with the Company (or any Subsidiary) equals or exceeds 75, a
portion of the Restricted Shares will vest and become freely transferable as of
the Vesting Date. The vested portion shall be determined by multiplying the
total number of Restricted Shares by a fraction, the numerator of which is the
number of days from the Grant Date through the date of your retirement and the
denominator of which is the number of days from the Grant Date through the
Vesting Date.
     3. Dividends.
     (a) During the period beginning with the Grant Date and ending with the
Vesting Date (or the earlier forfeiture of your Restricted Shares), you will
have the right to receive dividends on the Restricted Shares to the extent
dividends are paid by the Company on its authorized and issued shares of Company
Stock to its shareholders of record. These dividends, if any, will be paid at
the same rate and at the same time as such dividends are paid by the Company on
its authorized and issued shares. However, these dividends, if any, will be paid
into a non-interest bearing account to be held until you shall have met the
requirements for the vesting of the Restricted Shares as provided in Section 2
above, at which time the accumulated dividends attributable to the Restricted
Shares that have vested and become transferable on the Vesting Date shall be
paid to you in a single lump sum distribution within 90 days following the
Vesting Date. Any dividends attributable to Restricted Shares that do not vest
as of the Vesting Date shall be forfeited.
     (b) The Company’s obligation under this Section 3 shall be an unfunded and
unsecured promise to pay. The Company shall not be obligated under any
circumstances to fund its financial obligations under this Section 3 prior to
the date any dividends become payable pursuant to the terms of this Agreement.
All dividends held in the non-interest bearing account described in subsection
(a) will remain general assets of the Company subject to the claims of its
general creditors. This Agreement does not give to you any ownership interest in
any assets of the Company, and all rights of ownership in the accumulated
dividends are and remain in the Company. Your right to receive payment of
accumulated dividends attributable to vested Restricted Shares shall be solely
those of an unsecured general creditor of the Company.
     4. Power of Attorney. You hereby appoint the Corporate Secretary of the
Company as your attorney in fact, with full power of substitution, and authorize
him or her to provide instructions to the Company’s registrar and transfer agent
for Company Stock as the Company may deem necessary or proper to comply with the
intent and purposes of this letter

2

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

 

and the Plan, including, upon the occurrence of a forfeiture pursuant to
Section 2 above, to notify the registrar and transfer agent of the forfeiture of
such shares, together with instructions to cancel the shares forfeited. The
registrar and transfer agent shall be entitled to rely upon any notices and
instructions delivered by your attorney in fact under the terms of the Plan and
this letter.
     5. Book Entry Form; Delivery of Shares. The Company shall, as soon as
administratively feasible after your execution of this letter, direct the
Company’s transfer agent for Company Stock to make a book entry record showing
ownership for the Restricted Shares in your name, subject to the terms and
conditions of the Plan and this letter. As soon as practicable following the
date on which the Restricted Shares become nonforfeitable and fully transferable
pursuant to Section 2 above, the Company will issue appropriate instructions to
that effect to the transfer agent for Company Stock.
     6. Rights as a Shareholder. Subject to the provisions of this letter, you
generally will have all of the rights of a holder of Company Stock with respect
to all of the Restricted Shares awarded to you under this letter from and after
the Grant Date until the shares either vest or are forfeited, including the
right to vote such shares and to receive dividends or other distributions paid
thereon, as provided in Section 3.
     7. Transfer Restrictions. You may not sell, assign, transfer, pledge,
hypothecate or encumber your right to receive Restricted Shares under this
letter prior to the time such Restricted Shares become fully vested in
accordance with this letter.
     8. Fractional Shares. A fractional share of Company Stock will not be
issued and any fractional shares will be disregarded.
     9. Adjustments. 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
the receipt of consideration by the Company, the number and kind of your
unvested Restricted Shares shall be proportionately adjusted by the Committee,
whose determination shall be binding.
     10. Notices. Any notice to be given under the terms of this letter shall be
addressed to the Corporate Secretary at Horizon Lines, Inc., Attn. Corporate
Secretary, 4064 Colony Road, Suite 200, Charlotte, NC 28211. Any notice to be
given to you shall be given to you and shall be addressed to you at your last
known address at the time notice is sent. Notices shall be deemed to have been
duly given if mailed first class, postage prepaid, addressed as above.
     11. Applicable Withholding Taxes.
     (a) No Restricted Shares that have become vested and fully transferable
pursuant to Section 2 above shall be delivered to you until you have paid to the

3

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

 

Company the amount that must be withheld with respect to those Restricted Shares
under federal, state and local income and employment tax laws (the “Applicable
Withholding Taxes”) or you and the Company have made satisfactory arrangements
for the payment of such taxes. As an alternative to making a cash payment to
satisfy the Applicable Withholding Taxes, the Committee may in its discretion
(i) permit you to deliver shares of Company Stock which you already own (valued
at their Fair Market Value as of the delivery date) in whole or partial
satisfaction of such taxes or (ii) have the Company retain that number of
Restricted Shares (valued at their Fair Market Value as of the delivery date)
that would satisfy the Applicable Withholding Taxes.
     (b) The Company shall withhold Applicable Withholding Taxes with respect to
accumulated dividends directly from the amount of accumulated dividends payable
to you pursuant to Section 3.
     12. Applicable Securities Laws. The Company may delay delivery of
Restricted Shares that have become vested and fully transferable pursuant to
Section 2 above until (i) the admission of such shares to listing on any stock
exchange on which the Company Stock may then be listed, (ii) receipt of any
required representation by you or completion of any registration or other
qualification of such shares under any state or federal law or regulation that
the Company’s counsel shall determine as necessary or advisable, and
(iii) receipt by the Company of advice by counsel that all applicable legal
requirements have been complied with. Additionally, you may be required to
execute a customary written indication of your investment intent and such other
agreements the Company deems necessary or appropriate to comply with applicable
securities laws.
     13. Acceptance of Restricted Shares. By signing below, you indicate your
acceptance of these Restricted Shares and your agreement to the terms and
conditions set forth in this letter agreement, which, together with the terms of
the Plan, shall become the Company’s Restricted Stock Award Agreement with you.
You also hereby acknowledge receipt of a copy of the Plan and agree to all of
the terms and conditions of the Plan, as it may be amended from time to time.
Unless the Company otherwise agrees in writing, this letter will not be
effective as a Restricted Stock Award Agreement if you do not sign and return a
copy.
     14. Compliance with Section 409A of the Code. It is intended that this
Agreement comply with Section 409A of the Code and Treasury Regulations
thereunder to the extent it is subject to Section 409A, and other guidance and
transition rules issued thereunder (“Section 409A”), and this Agreement will be
interpreted and operated consistently with that intent. If the Company
determines that any provisions of this Agreement do not comply with the
requirements of Section 409A of the Code, the Company has the authority to amend
this Agreement to the extent necessary (including retroactively) in order to
preserve compliance with said Section 409A. The Company also has express
discretionary authority to take such other actions as may be permissible to
correct any failures to comply in operation with the requirements of
Section 409A. Neither the Company nor you have any discretion to accelerate the
timing or schedule of any benefit payment under this Agreement that is subject
to Section 409A, except as specifically provided herein or as may be permitted
pursuant to Section 409A.

4

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

 

     IN WITNESS WHEREOF, the Company has caused this Restricted Stock Award
Agreement to be signed, as of this ___ date of March, 2009.

              HORIZON LINES, INC.               By:                   Its:      
                  Agreed and Accepted:                             [Name of
Grant Recipient]                             [Date]        

5