EX-10.1






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