8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 20, 2005

HORIZON LINES, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	333-123073	74-3123672
(State or Other Jurisdiction of Organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

4064 Colony Road, Suite 200

Charlotte, North Carolina 28211

(Address of Principal Executive Offices, including Zip Code)

(704) 973-7000

(Registrant’s telephone number, including area code)

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).

ITEM 8.01 OTHER EVENTS

VESTING IN FULL OF RESTRICTED COMMON STOCK

On October 18, 2005, the Board of Directors (the “Board”) of Horizon Lines, Inc. (the “Company”) approved the vesting in full of all of the 1,724,620 shares of the Company’s common stock, par value $.01 per share (the “Common Stock”), that were issued and sold by the Company on January 14, 2005 to certain employees of the Company and its subsidiaries. The Board’s approval of the vesting in full of these shares was made subject to the rights of the Company with respect to these shares under the respective restricted stock agreements dated as of January 14, 2005 pursuant to which these shares were issued and sold. The Company will record a non-cash compensation charge of $6.9 million during its fiscal quarter ending December 25, 2005 with respect to the vesting in full of all of these 1,724,620 shares.

These 1,724,620 shares of Common Stock were issued and sold by the Company on January 14, 2005 to the following executive officers and other employees of the Company and its subsidiaries, in the following share amounts:

Executive Officers	Number of Shares
Charles G. Raymond President and Chief Executive Officer, Director	689,861
John V. Keenan Senior Vice President and Chief Operating Officer	258,695
M. Mark Urbania Senior Vice President-Finance Administration, Chief Financial Officer and Assistant Secretary	258,695
Karen H. Richards Vice President, Sales and Marketing, of Horizon Lines	43,123
Kenneth L. Privratsky Vice President and General Manager, Alaska, of Horizon Lines	86,224
Robert S. Zuckerman Vice President, General Counsel, and Secretary	43,123
Brian W. Taylor Vice President and General Manager, Hawaii and Guam, of Horizon Lines	86,224
Gabriel M. Serra Vice President and General Manager, Puerto Rico, of Horizon Lines	86,224
Other Employees	Number of Shares
Marvin Buchanan	25,865
Daniel R. Downes	25,865
R. Kevin Gill	25,865
Ricky A. Kessler	25,865
Mar F. Labrador	25,865
Dennis R. McCarthy	43,123

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MERIT AWARDS

On October 18, 2005, the Board approved the grant by Horizon Lines, LLC, an indirect wholly owned subsidiary of the Company (“Horizon Lines”), of merit awards, in the aggregate amount of $2,500,000 and payable in cash, to certain employees of Horizon Lines. These merit awards have been paid by Horizon Lines. The employees that received these merit awards included three of the Company’s named executive officers in the Company’s Prospectus dated September 26, 2005 (the “Final Prospectus”), as filed with the Securities and Exchange Commission on September 28, 2005, in the following amounts: Mr. Raymond: $800,000; Mr. Keenan: $600,000; and Mr. Urbania: $600,000.

ISSUANCE AND SALE OF ADDITIONAL SHARES TO UNDERWRITERS

On October 14, 2005, the Company issued and sold an additional 1,875,000 shares (the “Additional IPO Shares”) of its Common Stock to the underwriters of its initial public offering at a net price of $9.30 per share, representing the initial public offering price to the public of $10.00 per share, less the underwriters’ discount of 7% per share. The Additional IPO Shares were issued and sold pursuant to the exercise in full by the underwriters of their option to purchase additional shares from the Company granted to them with respect to the initial public offering. The net proceeds to the Company from the sale of these shares were $17,437,500 (net of underwriter discounts and commissions).

PRESS RELEASES

On September 27, 2005, the Company issued a press release announcing the initial public offering of 12,500,000 shares of its Common Stock at a price to the public of $10.00 per share. A copy of this press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

On October 3, 2005, the Company issued a press release announcing the closing on September 30, 2005 of the initial public offering of 12,500,000 shares of its Common Stock at a price to the public of $10.00 per share. A copy of this press release is attached as Exhibit 99.2 to this Current Report on Form 8-K.

On October 12, 2005, the Company issued a press release announcing the release date for the results of its 2005 third quarter and the time of a related investor conference call on such date. A copy of this press release is attached as Exhibit 99.3 to this Current Report on Form 8-K.

AMENDED AND RESTATED PUT/CALL AGREEMENT

On September 20, 2005, the Company, Charles G. Raymond, John V. Keenan, M. Mark Urbania, Gabriel M. Serra, Brian W. Taylor, Kenneth L. Privratsky, Karen H. Richards, Mark R. Blankenship, Joe Raymond, and Sam Raymond entered into the Amended and Restated Put/Call Agreement dated as of September 20, 2005 (the “Amended and Restated Put/Call Agreement”), pursuant to which the Put/Call Agreement dated as of July 7, 2004, among such parties, was amended and restated. A copy of the Amended and Restated Put/Call Agreement is attached as Exhibit 99.3 to this Current Report on Form 8-K.

AMENDED AND RESTATED EQUITY INCENTIVE PLAN

On September 20, 2005, the Board adopted (and the requisite stockholders of the Company approved) the Horizon Lines, Inc. Amended and Restated Equity Incentive Plan (the “Amended and Restated Plan”), which superseded and replaced the Horizon Lines, Inc. Equity Incentive Plan, under which no securities had been previously issued or granted. Under the Amended and Restated Plan, the Company may issue up to an aggregate of 3,088,668 shares of Common Stock (which amount is after giving effect to the reclassification of the outstanding shares of the Stock that occurred on September 21, 2005), subject to adjustment from time to time in accordance with the terms thereof. A copy of the Amended and Restated Plan is attached as Exhibit 99.4 to this Current Report on Form 8-K.

HORIZON LINES HOLDING CORP. STOCK OPTION PLAN

On September 20, 2005, the Board of Directors of Horizon Lines Holding Corp. (“HLHC”), an indirect wholly owned subsidiary of the Company, adopted (and the Company’s Board of Directors and requisite stockholders approved) an amendment (the “Amendment”) to the Horizon Lines Holding Corp. Stock Option Plan, as then in effect (the “HLHC Option Plan”). A copy of the Amendment is attached as Exhibit 99.5 to this Current Report on Form 8-K.

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As set forth in the Company’s Final Prospectus, on September 26, 2005, all options outstanding under the HLHC Option Plan, as amended by the Amendment, were exercised and all of the resulting shares of common stock of HLHC were exchanged for shares of capital stock of the Company pursuant to the provisions of the Amended and Restated Put/Call Agreement. As of the date hereof, all of the outstanding shares of the capital stock of HLHC are wholly owned, on an indirect basis, by the Company and no options are outstanding or issuable under the HLHC Option Plan, as amended by the Amendment.

OPTION GRANTS

On September 27, 2005, the Compensation Committee of the Board approved the grant by the Company, pursuant to the Amended and Restated Plan, of options (the “Options”) to certain employees of the Company and its subsidiaries to purchase an aggregate of 705,100 shares of its Common Stock at a price of $10.00 per share. No Option is currently vested or exercisable. Options for 87,500 shares in the aggregate of the Company’s Common Stock are scheduled to vest and become fully exercisable on September 27, 2006 (the “1-Year Options”) and Options for 617,600 shares in the aggregate of the Company’s Common Stock are scheduled to vest and become fully exercisable on September 27, 2010 (the “3-Year Options”).

The employees of the Company and its subsidiaries that were granted Options included the executive officers of the Company in the amounts set forth below:

Executive Officer	Number of 1-Year Option Shares	Number of 3-Year Option Shares
Charles G. Raymond President and Chief Executive Officer, Director	30,626	124,000
John V. Keenan Chief Operating Officer	13,125	54,800
M. Mark Urbania Senior Vice President-Finance Administration, Chief Financial Officer and Assistant Secretary	13,125	54,800
Karen H. Richards Vice President, Sales and Marketing, of Horizon Lines	2,188	28,800
Kenneth L. Privratsky Vice President and General Manager, Alaska, of Horizon Lines	4,375	37,800
Robert S. Zuckerman Vice President, General Counsel and Secretary	2,188	12,400
Brian W. Taylor Vice President and General Manager, Hawaii and Guam, of Horizon Lines	4,375	37,800
Gabriel M. Serra Vice President and General Manager, Puerto Rico, of Horizon Lines	4,375	37,800
Michael T. Avara Treasurer and Vice President, Treasurer and Investor Relations, of Horizon Lines	N/A	12,400

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SAFE HARBOR STATEMENT

This Current Report on Form 8-K contains forward-looking statements. Forward-looking statements are those that do not relate solely to historical fact. They include, but are not limited to, any statement that may predict, forecast, indicate or imply future results, performance, achievements or events. Words such as, but not limited to, “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “targets,” “projects,” “likely,” “will,” “would,” “could” and similar expressions or phrases identify forward-looking statements.

All forward-looking statements involve risks and uncertainties. The occurrence of the events described, and the achievement of the expected results, depend on many events, some or all of which are not predictable or within our control. Actual results may differ materially from expected results.

In light of these risks and uncertainties, expected results or other anticipated events or circumstances discussed in this Current Report on Form 8-K might not occur. We undertake no obligation, and specifically decline any obligation, to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

(c) Exhibits

Exhibit No.	Description
99.1*	Press release, dated September 26, 2005, announcing the initial public offering of 12,500,000 shares of common stock of Horizon Lines, Inc.
99.2*	Press release, dated October 3, 2005, announcing the closing of the initial public offering of 12,500,000 shares of common stock of Horizon Lines, Inc.
99.3*	Press release, dated October 12, 2005, announcing the release date for the results for its 2005 third quarter and the time of a related investor conference call on such date.
99.4*	Amended and Restated Put/Call Agreement.
99.5*	Amended and Restated Equity Incentive Plan.
99.6*	Amendment to the Horizon Lines Holding Corp. Stock Option Plan.

* Filed herewith.

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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 hereunto duly authorized.

	HORIZON LINES, INC.
	(Registrant)
Date: October 21, 2005	By:	/S/    M. MARK URBANIA
		M. Mark Urbania
		Senior Vice President, Chief Financial Officer
		and Assistant Secretary

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EXHIBIT INDEX

Exhibit No.	Description
99.1*	Press release, dated September 26, 2005, announcing the initial public offering of 12,500,000 shares of common stock of Horizon Lines, Inc.
99.2*	Press release, dated October 3, 2005, announcing the closing of the initial public offering of 12,500,000 shares of common stock of Horizon Lines, Inc.
99.3*	Press release, dated October 12, 2005, announcing the release date for the results for its 2005 third quarter and the time of a related investor conference call on such date.
99.4*	Amended and Restated Put/Call Agreement.
99.5*	Amended and Restated Equity Incentive Plan.
99.6*	Amendment to the Horizon Lines Holding Corp. Stock Option Plan.

* Filed herewith.

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EX-99.1

Exhibit 99.1

“Horizon Lines, Inc. Announces Initial Public Offering”

Charlotte, North Carolina, September 26, 2005 — Horizon Lines, Inc. announced today the initial public offering of 12,500,000 shares of its common stock, all of which are being issued and sold by Horizon Lines, at a price of $10.00 per share. Horizon Lines has also granted the underwriters a 30-day option to purchase up to 1,875,000 additional shares from Horizon Lines to cover over-allotments, if any.

The offering is being made through an underwriting syndicate led by Goldman, Sachs & Co. and UBS Investment Bank who are acting as joint book-running managers of the offering. The co-managers are Bear, Stearns & Co. Inc., Deutsche Bank Securities Inc. and J.P. Morgan Securities Inc.

The offering is being made only by means of a prospectus. When available, copies of the final prospectus relating to the offering may be obtained from the prospectus departments of Goldman, Sachs & Co. at 85 Broad Street, New York NY 10004, (Tel: 212-902-1171), UBS Securities LLC at 299 Park Avenue, 25th Floor, New York, NY 10171 (Tel: 212-821-3000), Bear, Stearns & Co. Inc. at 383 Madison Avenue, New York, NY 10179 (Tel: 212-272-2000), Deutsche Bank Securities Inc. at 1251 Avenue of the Americas, 25th Floor, New York, NY 10020 (Fax: 212-468-5333), or J.P. Morgan Securities Inc. at One Chase Manhattan Plaza, Floor 5B, New York, NY 10018 (Tel: 212-552-5164).

A registration statement relating to these securities has been filed with and declared effective by the Securities and Exchange Commission. This press release does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

Media Contact: Michael Avara, Horizon Lines, Inc., 704-973-7000, mavara@horizonlines.com

EX-99.2

Exhibit 99.2

“Horizon Lines, Inc. Announces Closing of Initial Public Offering”

Charlotte, North Carolina, October 3, 2005 — Horizon Lines, Inc. (NYSE: HRZ) announced today the closing on September 30, 2005 of the initial public offering of 12,500,000 shares of its common stock at a price to the public of $10.00 per share. All shares were sold by Horizon Lines. Horizon Lines has also granted the underwriters an option to purchase up to an additional 1,875,000 shares.

Net proceeds to Horizon Lines from the offering were $110,500,000.

Goldman, Sachs & Co. and UBS Investment Bank were the joint book-running managers of the offering. Bear, Stearns & Co. Inc., Deutsche Bank Securities Inc. and J.P. Morgan Securities Inc. were the co-managers.

A copy of the final prospectus related to the offering may be obtained from the prospectus departments of Goldman, Sachs & Co. at 85 Broad Street, New York NY 10004, (Tel: 212-902-1171), UBS Securities LLC at 299 Park Avenue, 25th Floor, New York, NY 10171 (Tel: 212-821-3000), Bear, Stearns & Co. Inc. at 383 Madison Avenue, New York, NY 10179 (Tel: 212-272-2000), Deutsche Bank Securities Inc. at 1251 Avenue of the Americas, 25th Floor, New York, NY 10020 (Fax: 212-468-5333), or J.P. Morgan Securities Inc. at One Chase Manhattan Plaza, Floor 5B, New York, NY 10018 (Tel: 212-552-5164).

A registration statement relating to these securities has been filed with and declared effective by the Securities and Exchange Commission. This press release does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

Horizon Lines’ application to list its shares on the New York Stock Exchange (NYSE) includes additional information upon which the NYSE relied to list the company. This information is available to the public upon request.

Media Contact: Michael Avara, Horizon Lines, Inc., 704-973-7000, mavara@horizonlines.com

EX-99.3

Exhibit 99.3

Horizon Lines to Conduct Conference Call for Third Quarter

Earnings Release

Wednesday October 12, 5:31 pm ET

CHARLOTTE, N.C., Oct. 12 /PRNewswire-FirstCall/ — Horizon Lines, Inc. (NYSE: HRZ – News) announced today that it will release results for its 2005 third quarter before the opening of the market on Wednesday, November 2, 2005. In conjunction with this release, Horizon Lines will host a conference call, which will be simultaneously broadcast live over the Internet, beginning at 11:00 a.m., Eastern Time, on such date.

During the conference call, Charles G. Raymond, Chairman, President and Chief Executive Officer, M. Mark Urbania, Senior Vice President and Chief Financial Officer and John V. Keenan, Senior Vice President and Chief Operating Officer, will review financial results for the 2005 third quarter and discuss business developments during the quarter.

Those interested in participating in the call may do so by dialing 1-800-240-5318 and asking for the Horizon Lines Earnings Call. Presentation materials and a live audio webcast will be accessible at Horizon Lines’ website at www.horizonlines.com.

In order to access the live audio webcast of the conference call, please budget at least 15 minutes before the start of the conference call to visit Horizon Lines’ website and download and install any necessary audio software for the webcast. A replay of the conference call will be accessible by dialing 1-800-405-2236 (access code: 11041505), beginning approximately two hours after the call ends, through November 9, 2005. In addition, an archive of the webcast will be accessible at Horizon Lines’ website, beginning approximately two hours after the call ends, through November 16, 2005.

Horizon Lines is the nation’s leading Jones Act container shipping and integrated logistics company. It accounts for approximately 37% of total U.S. marine container shipments from the continental U.S. to the three non-contiguous Jones Act markets, Alaska, Hawaii and Puerto Rico, and to Guam.

Source: Horizon Lines, Inc.

EX-99.4

Exhibit 99.4

AMENDED AND RESTATED

PUT/CALL AGREEMENT

by and among

HORIZON LINES, INC.

and the

OPTIONHOLDERS

signatory hereto

Dated as of September 20, 2005

AMENDED AND RESTATED PUT/CALL AGREEMENT

AMENDED AND RESTATED PUT/CALL AGREEMENT dated as of September 20, 2005 (this “Agreement”), among HORIZON LINES, INC., a Delaware corporation formerly known as H-Lines Holding Corp. (“Horizon”), and each of the optionholders signatory hereto (each, an “Optionholder”).

On July 7, 2004, Horizon and the Optionholders entered into a certain Put/Call Agreement dated as of July 7, 2004 (the “Original Put/Call Agreement”).

On September 16, 2005, the Board of Directors of Horizon resolved that the stockholders of Horizon consider the adoption and approval of a certain Certificate of Amendment of the Certificate of Incorporation of Horizon (the “Charter Amendment”), pursuant to which each previously authorized share of Common Stock, par value $.01 per share (“Horizon Common Stock”), of Horizon that is issued and outstanding, immediately before the filing of the Charter Amendment with the Secretary of State of the State of Delaware (the “Delaware Secretary”), be automatically, upon the filing of the Charter Amendment with the Delaware Secretary, and, without any act on the part of Horizon, the holder of such share or any other person or entity, changed into and reclassified (the “Reclassification”) into 22.7085016309 shares (such number of Shares, the “Reclassification Multiple”) of Common Stock.

Horizon and the Optionholders now desire to amend and restate the Original Put/Call Agreement to take into account the Reclassification, effective upon the satisfaction of all of the following conditions precedent (collectively, the “Conditions Precedent”): (i) the approval and adoption by the stockholders of the Corporation of the Charter Amendment in accordance the General Corporation Law of the State of Delaware (the “Requisite Stockholder Approval”), (ii) the filing of the Charter Amendment with the Delaware Secretary (the “Charter Amendment Filing”), and (iii) the execution and delivery of this Agreement by Horizon and all of the Optionholders.

NOW, THEREFORE, the parties hereto hereby agree as follows:

1. Effectiveness. This Agreement shall become effective on the date (the “Effective Date”) on which all of the Conditions Precedent have been first satisfied; provided, however, that this Agreement shall not become effective, and the effectiveness of the Original Agreement shall be unaffected by this Agreement, if any of the Conditions Precedent remain unsatisfied as of the 30-day anniversary of the date of this Agreement.

2. Certain Definitions. Capitalized terms used and not otherwise defined in this Agreement shall have the meanings ascribed to them in the Amended and Restated Agreement and Plan of Merger dated July 7, 2004, among Horizon, H-Lines Subcorp., a Delaware corporation (“HLHC”), and TC Group, L.L.C., a Delaware limited liability company, as amended, supplemented or otherwise modified from time to time.

3. Outstanding HLHC Options. Horizon and each Optionholder hereby agree that, as of the date hereof, such Optionholder (i) holds options (the “HLHC Options”) granted by

HLHC prior to July 7, 2005 that are exercisable, assuming that such options are exercised in their entirety solely in exchange for a payment of cash, in the aggregate for the total number of shares of the Common Stock, par value $.01 per share, of HLHC (“HLHC Common Stock”) set forth in the second column on Annex I hereto opposite the name of such Optionholder on Annex I and (ii) such Optionholder does not hold any other shares of capital stock or securities issued by HLHC.

4. Put Right; Call Right.

(a) Put Right. Each Optionholder hereby has the right and option (but not the obligation) to require Horizon to assign and transfer, at any time and from time to time, all or any portion of the shares of HLHC Common Stock issued by HLHC on or after the date hereof upon the exercise of the HLHC Options (such shares issued upon such exercise, the “HLHC Shares”) held by such Optionholder in exchange for the issuance by Horizon to such Optionholder of shares of Series A Redeemable Preferred Stock, par value $0.01 per share, of Horizon (the “Horizon Series A Preferred Stock”) and shares of Horizon Common Stock (such shares of Horizon Series A Preferred Stock and Horizon Common Stock so issued, collectively, the “Horizon Shares”) in the quantities determined in accordance with Section 4(e) (such right and option of Optionholder, the “Put Right”).

(b) Call Right. Horizon shall have the right and option (but not the obligation) to require each Optionholder to assign and transfer, at any time and from time to time, to Horizon all or any portion of the HLHC Shares held by such Optionholder in exchange for the issuance and delivery by Horizon to such Optionholder of Horizon Shares in the quantities determined in accordance with Section 4(e) (such right and option of Horizon, the “Call Right”).

(c) Dividend Payments. Upon the exercise of the Put Right or Call Right with respect to any HLHC Shares of an Optionholder, in addition to the Horizon Shares to be received by such Optionholder in exchange for the HLHC Shares to be delivered in respect thereof pursuant to Section 4(a) or 4(b), such Optionholder shall receive from Horizon any dividends or distributions with respect to such Horizon Shares that would have been received by such Optionholder if such Optionholder had exercised the Put Right or Call Right with respect to all of such HLHC Shares on the date hereof and held of record all of the Horizon Shares issued upon the exercise of such Put Right or Call Right from the date hereof up to the date of the exercise of such Put Right or Call Right (the “Past Dividend Payments”).

(d) Notice.

(i) An Optionholder may exercise its Put Right by providing a written notice to Horizon that states (x) that such Optionholder thereby exercises its Put Right as of the effective date specified in such notice, and (y) the number of HLHC Shares that are to be exchanged upon such exercise; provided, that (a) such effective date shall be a Business Day (or, if not a Business Day, the Business Day thereafter), and (b) in the absence of the inclusion of a valid effective date in such notice, such effective date shall be the date of receipt by Horizon of such written notice.

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(ii) Horizon may exercise its Call Right with respect to any Optionholder by providing a written notice to such Optionholder that states (x) that Horizon thereby exercises its Put Right as of the effective date specified in such notice, and (y) the number of HLHC Shares that are to be exchanged upon such exercise; provided, that (a) such effective date shall be a Business Day (or, if not a Business Day, the Business Day thereafter), and (b) in the absence of the inclusion of a valid effective date in such notice, such effective date shall be the date of receipt by Horizon of such written notice.

(e) Calculation of Horizon Shares Issuable. Upon an exercise of either a Put Right or Call Right, the Horizon Shares which shall be issued by Horizon to the applicable Optionholder in exchange for the HLHC Shares specified to be assigned and transferred by such Optionholder to Horizon in such exercise shall consist of (i) that number of shares of Horizon Common Stock (rounded to the nearest whole share) equal to (x) the number of such HLHC Shares multiplied by $497.03 (being the Cash Per Fully-Diluted Common Share), divided by (y) $158, multiplied by (z) the Reclassification Multiplier and (ii) that number of shares of Horizon Series A Preferred Stock (rounded to the nearest whole share) equal to (x) the number of such HLHC Shares multiplied by $497.03, divided by (y) $158, multiplied by (z) 15.

(f) Reservation of Shares and Agreement to be Bound. Horizon shall at all times keep reserved such number of shares of Horizon Common Stock and Horizon Series A Preferred Stock into which all the HLHC Shares held by the Optionholders at such time could be exchanged assuming all the Roll-Over Options were exercised in their entirety, solely in exchange for a payment of cash, and all of the Put Rights or Call Rights were then exercised in their entirety.

(g) Closing.

(i) The closing of each exchange of HLHC Shares for Horizon Shares pursuant to an exercise of either a Put Right or Call Right in accordance with this Section (each, a “Closing”) shall take place at the offices of Schulte Roth & Zabel LLP, 919 Third Avenue, New York, New York 10022, on the exercise date (the “Closing Date”) for such exercise of such Put Right or Call Right, as determined in accordance with Section 4(d) above.

(ii) At each Closing with respect to any exchange of HLHC Shares for Horizon Shares pursuant to an exercise of either a Put Right or Call Right, (A) Horizon shall (1) issue and deliver to the voting trustee under the Horizon Voting Trust Agreement (as defined below) certificates representing the Horizon Shares to be issued by Horizon to such Optionholder pursuant to this Agreement and (2) deliver to such Optionholder cash in an amount equal to the sum of the Past Dividend Payment Dividends with respect to such Horizon Shares (without any accompanying interest thereon), (B) the applicable Optionholder (or the voting trustee under the HLHC Voting Trust Agreement (as defined below)) shall deliver to Horizon the certificates representing the HLHC Shares to be exchanged therefor, duly endorsed for transfer or accompanied by duly executed stock powers, (C) the applicable Optionholder shall deliver to Horizon such other documents, instruments and writings as may be required to be delivered by such Optionholder in accordance with this Agreement or as may be reasonably requested by Horizon, and (D) Horizon shall deliver to the applicable Optionholder such other documents, instruments and writings as may be required to be delivered by Horizon in accordance with this Agreement or as may be reasonably requested by such Optionholder.

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5. Representations, Warranties and Covenants of Each Optionholder.

(a) Each Optionholder, on behalf of itself only, makes the following representations and warranties:

(i) Such Optionholder has and is, and will be, acquiring HLHC Shares and Horizon Shares for investment for its own account and not with a view to, or for resale in connection with, the distribution or other disposition thereof in violation of the Securities Act of 1933, as amended (the “Securities Act”). Such Optionholder agrees that it will not, directly or indirectly, offer, transfer, sell, pledge, hypothecate or otherwise dispose of any HLHC Shares or Horizon Shares (or solicit any offers to buy, purchase, or otherwise acquire or take a pledge of any HLHC Shares or Horizon Shares), except in compliance with the Securities Act, the rules and regulations promulgated thereunder, applicable state securities laws, the provisions of this Agreement, the Stockholders Agreement dated as of July 7, 2004, among Horizon, the Optionholders and the other parties thereto, as amended by the First Amendment to Stockholders Agreement dated as of October 15, 2004, and as further amended, supplemented or otherwise modified from time to time (the “Stockholders Agreement”), the Voting Trust Agreement dated as of July 7, 2004, between HLHC and the Optionholders, as amended, supplemented or otherwise modified from time to time (the “HLHC Voting Trust Agreement”), and the Amended and Restated Voting Trust Agreement dated as of October 15, 2005, among Horizon, the Optionholders and the other parties thereto, as amended, supplemented or otherwise modified from time to time (the “Horizon Voting Trust Agreement”). No other person or entity will have any interest, beneficial or otherwise, in the HLHC Shares or Horizon Shares acquired by such Optionholder except as provided under the Stockholders Agreement, the HLHC Voting Trust Agreement, and the Horizon Voting Trust Agreement (collectively, the “Existing Agreements”).

(ii) Such Optionholder acknowledges that it has been advised that (a) neither the HLHC Shares nor the Horizon Shares are registered under the Securities Act, and neither HLHC nor Horizon has any obligation to effectuate any such registration (except, in the case of the Horizon Shares, pursuant to the Stockholders Agreement in accordance with the terms and conditions therein), (b) the HLHC Shares and Horizon Shares must be held indefinitely and such Optionholder must continue to bear the economic risk of its investment in the HLHC Shares and Horizon Shares unless they are subsequently registered under the Securities Act or an exemption from such registration is available, (c) Rule 144 promulgated under the Securities Act is not presently available with respect to the sale of any securities of HLHC or Horizon, and neither HLHC nor Horizon has any obligation nor any intention to make such Rule available, (d) when and if any HLHC Shares or Horizon Shares may be disposed of without registration in reliance on Rule 144, the amounts that may be disposed of may be limited in accordance with the terms and conditions of such Rule, (e) if the Rule 144 exemption is not available, public sale without registration of the HLHC Shares or Horizon Shares will require compliance with Regulation D or some other exemption under the Securities Act, (f) restrictive legends will be placed on the certificates representing the HLHC Shares and Horizon Shares, and (g) a notation will be made in the appropriate records of HLHC and Horizon indicating that the HLHC Shares and Horizon Shares are subject to restrictions on transfer and, if either HLHC or

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Horizon should at some time in the future engage the services of a stock transfer agent, appropriate stop-transfer restrictions will be issued to such transfer agent with respect to the HLHC Shares and Horizon Shares.

(iii) Such Optionholder (a) can afford to hold HLHC Shares and Horizon Shares for an indefinite period and to suffer the complete loss of its investment in HLHC Shares and Horizon Shares, and (b) understands and has taken cognizance of all the risk factors related to its acquisition of HLHC Shares and Horizon Shares.

(iv) Such Optionholder’s knowledge and experience in financial and business matters is such that it is capable of evaluating the merits and risks of acquiring HLHC Shares and Horizon Shares.

(v) Such Optionholder will, subject to the provisions of the HLHC Voting Trust Agreement, be entitled to become the record owner and beneficial owner of the HLHC Shares issued upon the exercise of such Optionholder’s HLHC Options, and, subject to the provisions of the HLHC Voting Trust Agreement, such Optionholder will hold such HLHC Shares, and upon the exercise of a Put Right or Call Right with respect to any HLHC Shares of such Optionholder, such Optionholder shall assign and transfer such HLHC Shares to Horizon free and clear of all security interests, liens, claims, pledges, options, rights of first refusal, contracts, limitations on such Optionholder’s voting rights, charges and other encumbrances of any nature whatsoever, except for the Call Right as contemplated by this Agreement and as contemplated by the certificate of incorporation of Horizon, as in effect from time to time, or the Existing Agreements.

(b) Each Optionholder, on behalf of itself only, (i) hereby acknowledges that such Optionholder is a party to the Existing Agreements, that the HLHC Shares issued upon the exercise of such Optionholder’s HLHC Options will be subject to the provisions of the HLHC Voting Trust Agreement (including, without limitation, the voting trust established thereunder), and that the Horizon Shares issued to such Optionholder pursuant to this Agreement shall be subject to the provisions of the Horizon Voting Trust Agreement (including, without limitation, the voting trust continued thereunder) and of the Stockholders Agreement, (ii) hereby acknowledges that, if Horizon or HLHC desires to register any HLHC Shares or Horizon Shares pursuant to a Registration Statement on Form S-8, any Horizon Shares or HLHC Shares acquired by such Optionholder may become subject to a “stock purchase plan” in order to facilitate such registration, provided that the terms of such stock purchase plan are consistent with the provisions of this Agreement and (iii) hereby agrees, if requested by Horizon or HLHC, to approve the terms of such stock purchase plan as it may be established at such time.

(c) Each Optionholder, on behalf of itself only, hereby covenants that if any HLHC Shares or Horizon Shares are disposed of by such Optionholder (i) in reliance upon Rule 144 under the Securities Act, such Optionholder shall deliver to HLHC or Horizon, as applicable, at or prior to the time of such disposition an executed copy of Form 144 (if required by Rule 144) and such other documentation as either HLHC or Horizon, as applicable, may reasonably require in connection with such disposition or (ii) in reliance on Rule 144 or pursuant to another exemption from registration under the Securities Act, such Optionholder shall deliver to HLHC or Horizon, as applicable, a legal opinion, reasonably satisfactory to HLHC or Horizon, as to the availability of and compliance with such exemption.

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6. Representations and Warranties of Horizon. Horizon hereby represents and warrants to each Optionholder that the Horizon Shares issuable by Horizon (if any) to such Optionholder pursuant to this Agreement (i) have been reserved for such issuance, (ii) upon the occurrence of the Effective Date, shall be duly authorized, and (iii) upon the issuance and delivery thereof pursuant to this Agreement shall be validly issued and fully paid and non-assessable.

7. Further Action. Each party hereto agrees to execute and deliver any instrument and take any action that may reasonably be requested by any other party for the purpose of effectuating the provisions of this Agreement.

8. Stock Legends.

(a) Each party to this Agreement acknowledges and agrees that each certificate issued by HLHC that represents HLHC Shares shall (unless otherwise permitted by the provisions of this Section 8(a)) be stamped or otherwise imprinted with a legend in substantially the following form (in addition to any other legends and other restrictions as Horizon or HLHC may deem necessary or advisable, including, without limitation, restrictions under the certificate of incorporation of HLHC, as in effect from time to time, or any applicable maritime laws or agreements):

“ THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN AMENDED AND RESTATED PUT/CALL AGREEMENT, DATED AS OF SEPTEMBER 20, 2005, WHICH CONTAINS PROVISIONS REGARDING RESTRICTIONS ON THE TRANSFER OF SUCH SECURITIES AND OTHER MATTERS. A COPY OF SUCH AGREEMENT IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF HORIZON LINES HOLDING CORP. “

Horizon agrees to cause HLHC to remove the legend set forth above (or a legend in substantially the form thereof) from a certificate representing HLHC Shares (i) upon the assignment and transfer of such HLHC Shares to Horizon pursuant to this Agreement or (ii) otherwise upon Horizon’s determination, in its sole discretion, to do so.

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(b) Each party to this Agreement acknowledges and agrees that each certificate issued that represents Horizon Shares issued and delivered by Horizon pursuant to this Agreement shall (unless otherwise permitted by the provisions of this Section 8(b)) be stamped or otherwise imprinted with a legend in substantially the following form (in addition to any other legends and other restrictions as Horizon may deem necessary or advisable, including, without limitation, restrictions under the certificate of incorporation of Horizon, as in effect from time to time, or any applicable maritime laws or agreements):

“ THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE.”

Horizon agrees to remove the legend set forth above (or a legend in substantially the form thereof) from a certificate representing Horizon Shares if either (i) such Horizon Shares are sold pursuant to an effective registration statement under the Securities Act, (ii) there is delivered to Horizon an opinion of counsel experienced in such matters, in form and substance reasonably satisfactory to Horizon, that such Horizon Shares need no longer be subject to restrictions on resale under the Securities Act, or (iii) otherwise upon Horizon’s determination, in its sole discretion, to do so.

9. Miscellaneous Provisions.

(a) Assignability; Binding Effect. Except as otherwise provided in this Section, no right under this Agreement shall be assignable and any attempted assignment in violation of this provision shall be void. No Optionholder shall sell, transfer, pledge, assign, hypothecate or otherwise dispose of any HLHC Options or HLHC Shares to any Person (other than Horizon), in each case if such Person is not already a party to this Agreement as an Optionholder hereunder, unless and until such Person executes and delivers to Horizon a joinder agreement, in form and substance reasonably acceptable to Horizon, pursuant to which such Person will thereupon become a party to, and be bound by and obligated to comply with the terms and provisions of, (i) this Agreement, as an Optionholder hereunder, (ii) the HLHC Voting Trust Agreement, in the event HLHC Options are so sold, transferred, pledged, assigned, hypothecated or otherwise transferred, (iii) the Stockholders Agreement, as a “Stockholder” thereunder, and (iv) the Horizon Voting Trust Agreement, as a “Stockholder” thereunder. Horizon shall have the right to assign its rights and obligations hereunder to any successor entity (including, without limitation, any entity acquiring substantially all of the assets of Horizon),

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whereupon references herein to Horizon shall be deemed to be to such successor. This Agreement, and the rights and obligations of the parties hereunder, shall be binding upon and inure to the benefit of any and all successors, permitted assigns, personal representatives and all other legal representatives, in whatsoever capacity, by operation of law or otherwise, of the parties hereto, in each case with the same force and effect as if the foregoing persons were named herein as parties hereto.

(b) Notices. Any notice or other communication required or which may be given hereunder shall be in writing and shall be delivered personally, telecopied with confirmed receipt, sent by certified, registered, or express mail, postage prepaid, or sent by a national next-day delivery service to the parties at the following addresses or at such other addresses as shall be specified by the parties by like notice, and shall be deemed given when so delivered personally or telecopied, or if mailed, two business days after the date of mailing, or, if by national next-day delivery service, on the day after delivery to such service as follows:

(i)	If to Horizon:
	Horizon Lines, Inc.
	4064 Colony Road, Suite 200
	Charlotte, N.C. 28211
	Fax.: (704) 973-7010
	Attn: General Counsel
	with copies (which shall not constitute notice) to:
	Castle Harlan, Inc.
	150 East 58th Street
	New York, New York 10155
	Fax: (212) 207-8042
	Attn: Marcel Fournier
	Howard Weiss
	and
	Schulte Roth & Zabel LLP
	919 Third Avenue
	New York, New York 10022
	Fax: (212) 593-5955
	Attn: André Weiss
(ii)	If to an Optionholder, to such Optionholder at its address set forth on the books and records of Horizon.

(c) Applicable Law; Consent. This Agreement and the validity and performance of the terms hereof shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of law or choice of law. The parties hereto hereby agree that all actions or proceedings arising directly or indirectly from or in

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connection with this Agreement shall be litigated only in the Supreme Court of the State of New York or the United States District Court for the Southern District of New York located in New York County, New York. To the extent permitted by applicable law, the parties hereto consent to the jurisdiction and venue of the foregoing courts and consent that any process or notice of motion or other application to either of said courts or a judge thereof may be served inside or outside the State of New York or the Southern District of New York by registered mail, return receipt requested, directed to such party at its address set forth in this Agreement (and service so made shall be deemed complete five days after the same has been posted as aforesaid) or by personal service or in such other manner as may be permissible under the rules of said courts.

(d) Entire Agreement; Amendments and Waivers. This Agreement sets forth the entire understanding of the parties with respect to the subject matter hereof and supersedes any and all other agreements with respect to the subject matter hereof, including, but not limited to, the Original Agreement. The failure of any party to seek redress for the violation of or to insist upon the strict performance of any term of this Agreement shall not constitute a waiver of such term and such party shall be entitled to enforce such term without regard to such forbearance. This Agreement may be amended only by the written consent of Horizon and those Optionholders that hold in the aggregate at least 55% of the total number of HLHC Shares issuable upon the exercise of the HLHC Options in their entirety, assuming that such options were exercised solely in exchange for a payment of cash, provided that any such amendment that would materially and disproportionately adversely affect the rights of any particular Optionholder (the “Affected Optionholder”), in its capacity as an Optionholder, in relation to the other Optionholders, in their capacities as Optionholders, shall not be effective as to such Affected Optionholder without such Affected Optionholder’s written consent, and each party hereto may take any action herein prohibited or omit to take action herein required to be performed by it, and any breach of or compliance with any covenant, agreement, warranty or representation may be waived, only by the written waiver of the party whom such action or inaction may negatively affect, but, in any case, such consent or waiver shall only be effective in the specific instance and for the specific purpose for which given.

(e) Headings; Gender. The headings in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretations of the 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.

(f) Severability. If any term, provision, covenant or restriction of this Agreement, or any part thereof, is held by a court of competent jurisdiction or any foreign federal, state, county or local government or any other governmental, regulatory or administrative agency or authority to be invalid, void, unenforceable or against public policy for any reason, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

(g) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument, and it shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart.

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(h) Specific Performance. Each of the parties hereto acknowledges and agrees that in the event of any breach of this Agreement, the non-breaching party would be irreparably harmed and could not be made whole by monetary damages. It is accordingly agreed that the parties hereto shall and do hereby waive the defense in any action for specific performance that a remedy at law would be adequate and that the parties hereto, in addition to any other remedy to which they may be entitled at law or in equity, shall be entitled to compel specific performance of this Agreement in any action instituted in the Supreme Court of the State of New York or the United States District Court for the Southern District of New York, or, in the event such courts shall not have jurisdiction of such action, in any court of the United States or any state thereof having subject matter jurisdiction of such action.

(i) Survival of Covenants. All covenants, agreements, representations and warranties made herein or in any other document referred to herein or delivered to a party pursuant hereto or in connection herewith shall survive the execution and delivery to such party of this Agreement and of the Horizon Shares.

[Remainder of page intentionally left blank]

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

HORIZON LINES, INC.
By:	/s/    ROBERT S. ZUCKERMAN
Name:	Robert S. Zuckerman
Title:	General Counsel and Secretary

[Signature Page to Amended and Restated Put/Call Agreement]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered.

/s/    MARK R. BLANKENSHIP

Mark R. Blankenship

[Signature Page to Amended and Restated Put/Call Agreement]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered.

/s/    JOHN V. KEENAN

John V. Keenan

[Signature Page to Amended and Restated Put/Call Agreement]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered.

/s/    KENNETH L. PRIVRATSKY

Kenneth L. Privratsky

[Signature Page to Amended and Restated Put/Call Agreement]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered.

/s/    CHARLES G. RAYMOND

Charles G. Raymond

[Signature Page to Amended and Restated Put/Call Agreement]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered.

/s/    JOE RAYMOND

Joe Raymond

[Signature Page to Amended and Restated Put/Call Agreement]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered.

/s/    SAM RAYMOND

Sam Raymond

[Signature Page to Amended and Restated Put/Call Agreement]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered.

/s/    KAREN H. RICHARDS

Karen H. Richards

[Signature Page to Amended and Restated Put/Call Agreement]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered.

/s/    GABRIEL M. SERRA

Gabriel M. Serra

[Signature Page to Amended and Restated Put/Call Agreement]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered.

/S/    BRIAN W. TAYLOR

Brian W. Taylor

[Signature Page to Amended and Restated Put/Call Agreement]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered.

/s/    M. MARK URBANIA

M. Mark Urbania

[Signature Page to Amended and Restated Put/Call Agreement]

ANNEX I

Name of Optionholder	Number of HLHC Shares Issuable Upon the Cash Exercise of HLHC Options Held by Optionholder
Mark R. Blankenship	397.01
John V. Keenan	2,256.11
Kenneth L. Privratsky	1,410.24
Charles G. Raymond	3,866.88
Joe Raymond	967.42
Sam Raymond	1,057.63
Karen H. Richards	515.76
Gabriel M. Serra	1,691.73
Brian W. Taylor	1,744.78
M. Mark Urbania	1,593.67

EX-99.5

Exhibit 99.5

HORIZON LINES, INC.

AMENDED AND RESTATED

EQUITY INCENTIVE PLAN

1. Purpose. The purpose of the Horizon Lines, Inc. Amended and Restated Equity Incentive Plan is to attract, motivate and retain eligible individuals who are important to the success of Horizon Lines, Inc. and to provide equity grants to non-employee directors of Horizon Lines, Inc.

2. Definitions. When used herein, the following terms shall have the following meanings.

“Administrator” means the Board, or a committee of the Board, duly appointed to administer the Plan and shall be composed to meet the requirements of Section 162(m) of the Code and the requirements established by the securities exchange or system on which the Shares are traded or listed if such requirements are applicable; provided, however, that with respect to the participation of non-employee directors of the Company in the Plan, the term “Administrator” means the Board.

“Affiliate” means, with respect to any specified Person, a Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, such specified Person (it being understood that a Person shall be deemed to “control” another Person, for purposes of this definition, if such Person directly or indirectly has the power to direct or cause the direction of the management and policies of such other Person, whether through holding beneficial ownership interests in such other Person, through contracts or otherwise). For purposes of an individual, an Affiliate of such individual shall also mean any family member of such individual or a Person owned 10% or more by such individual.

“Award” means, individually or collectively, a grant under this Plan of Nonqualified Stock Options, Incentive Stock Options, Restricted Stock or Restricted Share Units.

“Award Agreement” means an agreement entered into by the Company and each Participant setting forth the terms and provisions applicable to an Award.

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

“Castle Harlan Group” means CHP IV, CHI and any other accounts or funds managed by CHI or any Affiliate of CHI, other than the Company and its Subsidiaries

“Cause” means, with respect to a Participant who is an employee of the Company or any Subsidiary thereof, (a) the Participant’s continued failure for a period of 90 days, including the ten (10) business day notice and cure period set forth in the next sentence, to substantially perform the Participant’s duties, (b) the Participant’s failure to follow the lawful directions of the board of directors of the Company or any Subsidiary thereof by whom the Participant is then

employed, either directly or indirectly through its Chairman, if any, or such Participant’s supervisor, (c) material, willful acts of dishonesty, theft or fraud by the Participant resulting or intending to result in personal gain or enrichment at the expense of the Company or any of its Subsidiaries, (d) the Participant’s conviction, plea of no contest or plea of no contendere, or the imposition of unadjudicated probation on the Participant, for any felony involving moral turpitude that is reasonably expected to be detrimental to the reputation, business or operations of the Company or any of its Subsidiaries or any member of their respective boards of directors or similar governing bodies, (e) the Participant’s violation of any written policy of the Company or any of its Subsidiaries, including, but not limited to, employment manuals, rules and regulations of the Company or any of its Subsidiaries by whom the Participant is then employed, which adversely affects the Company or any of its Subsidiaries by whom the Participant is then employed or could reasonably be expected to adversely affect the Company or any of its Subsidiaries by whom the Participant is then employed, (f) the Participant engaging in any act that is intended, or may reasonably be expected to harm the reputation, business or operations of the Company or any of its Subsidiaries by whom the Participant is then employed or any member of their respective boards of directors or similar governing bodies, or (g) any other material breach by the Participant of such Participant’s Award Agreement or any other agreement with the Company or any of its Subsidiaries that the Participant signs in such Participant’s personal capacity, including, but not limited to, any non-competition and confidentiality agreement. Prior to a termination for “Cause,” the Participant shall be entitled to written notice from the Company and ten (10) business days to cure the deficiency leading to the Cause determination, if such deficiency is curable. Notwithstanding the foregoing and without limiting the foregoing in any way, for the avoidance of doubt, the Participant shall receive written notice and ten (10) business days to cure a deficiency under subsections (a) and (b) hereof. Notwithstanding the foregoing, to the extent that the Participant is subject to an employment agreement with the Company and/or one of its Subsidiaries that contains a definition of cause, “Cause” under the Plan shall be as defined in such employment agreement.

“Cause” means, with respect to a Participant who is a consultant of the Company or any Subsidiary thereof, (a) the Participant’s continued failure for a period of 90 days, including the ten (10) business day notice and cure period set forth in the next sentence, to substantially perform the Participant’s duties, (b) the Participant’s material, willful acts of dishonesty, theft or fraud resulting or intending to result in personal gain or enrichment at the expense of the Company or any of its Subsidiaries, (c) the Participant’s conviction, plea of no contest or plea of no contendere, or the imposition of unadjudicated probation on the Participant, for any felony involving moral turpitude, (d) the Participant engaging in any act that is intended, or may reasonably be expected to harm the reputation, business or operations of the Company or any of its Subsidiaries for whom the Participant is then providing services, or (e) any other material breach by the Participant of such Participant’s Award Agreement or any other agreement with the Company or any of its Subsidiaries that the Participant signs in such Participant’s personal capacity, including, but not limited to, any non-competition and confidentiality agreement. Prior to a termination for “Cause,” the Participant shall be entitled to written notice from the Company and ten (10) business days to cure the deficiency leading to the Cause determination, if such deficiency is curable. Notwithstanding the foregoing and without limiting the foregoing in any way, for the avoidance of doubt, the Participant shall receive written notice and ten (10) business days to cure a deficiency under subsection (a) hereof. Notwithstanding the foregoing, to the extent that the Participant is

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subject to a consulting agreement with the Company and/or one of its Subsidiaries that contains a definition of cause, “Cause” under the Plan shall be as defined in such consulting agreement.

“Cause” means, with respect to a Participant who is a non-employee director of the Company, the removal of the Participant for cause during such Participant’s existing term as a director in accordance with the Company Charter or bylaws of the Company or the certificate of incorporation, bylaws, or limited liability company agreement of a Subsidiary of the Company.

“CHI” means Castle Harlan, Inc., a Delaware corporation.

“CHP IV” means Castle Harlan Partners IV, L.P., a Delaware limited partnership.

“Code” means the Internal Revenue Code of 1986, as amended, or any successor statute thereto.

“Common Stock” means the Common Stock of the Company, par value $.01 per share.

“Company” means Horizon Lines, Inc., a Delaware corporation and its successors.

“Company Charter” means the certificate of incorporation of the Company, as the same exists or may hereafter be amended or otherwise supplemented from time to time, and including any certificates of designation filed with the Secretary of State of the State of Delaware from time to time in accordance with the terms thereof.

“Disability” means, with respect to a Participant who is an employee or consultant of the Company or a Subsidiary thereof, a determination by the Company, in accordance with applicable law that, as a result of a physical or mental injury or illness, the Participant is unable to perform the essential functions of the Participant’s job with or without reasonable accommodation. Notwithstanding the foregoing, to the extent that the Participant is subject to an employment agreement with the Company and/or one of its Subsidiaries that contains a definition of disability, “Disability” under the Plan shall be as defined in such employment agreement or if the Participant is not subject to an employment agreement with the Company and/or one of its Subsidiaries and such Participant is covered by a disability policy covering employees of the Company and/or the relevant Subsidiary by whom the Participant is then employed, then “Disability” shall be defined as such term is defined in such policy.

“Disability” means, with respect to a Participant who is a non-employee director of the Company, a physical or mental injury or illness which prevents the Participant from fulfilling the Participant’s duties as director with or without reasonable accommodation.

“Effective Date” means the date set forth in Section 22 hereof.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

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“Fair Market Value” means, on any day, with respect to Shares which are (a) listed on a United States securities exchange, the last sales price of such stock on such day on the largest United States securities exchange on which such stock shall have traded on such day, or if such day is not a day on which a United States securities exchange is open for trading, on the immediately preceding day on which such securities exchange was open, (b) not listed on a United States securities exchange but are included in The NASDAQ Stock Market System (including The NASDAQ National Market), the last sales price on such system of such stock on such day, or if such day is not a trading day, on the immediately preceding trading day, or (c) neither listed on a United States securities exchange nor included in The NASDAQ Stock Market System, the fair market value of such stock as determined by the Board, in its sole discretion. Notwithstanding anything contained in this Plan to the contrary, in the case of a determination of the Fair Market Value of a share of Common Stock as of a date which is the first day on which price quotations for the Common Stock are reported on a United States securities exchange, the Fair Market Value of a share of Common Stock on such date shall be the price per share at which shares of Common Stock are initially offered for sale to the public by the Company’s underwriters in the Company’s initial public offering of shares of Common Stock pursuant to the Company’s Registration Statement on Form S-1 (Reg. No. 333-123073) filed with the Securities and Exchange Commission on March 2, 2005, as amended from time to time.

“Grant Date” means the date on which an Option under the Plan is granted to a Participant.

“Incentive Stock Option” means an Option that is designated by the Administrator as an incentive stock option and qualifies as such within the meaning of Section 422 of the Code and is granted by the Administrator to a Participant.

“Key Employee” means an employee who owns more than 10% of the total combined voting power of all classes of capital stock of the Company, determined at the time an Option is proposed to be granted.

“Nonqualified Stock Option” means an Option, which is not an Incentive Stock Option, granted by the Administrator to a Participant.

“Option” means a right granted under the Plan to a Participant to purchase a stated number of Shares as an Incentive Stock Option or Nonqualified Stock Option.

“Option Period” means the period within which an Option may be exercised pursuant to the Plan.

“Participant” means any employee or consultant of the Company or any Subsidiary thereof, or any non-employee director of the Company, who is selected to participate in the Plan in accordance with Section 4 hereof.

“Period of Restriction” means the period, if any, specified in an Award Agreement during which the transfer of Shares of Restricted Stock or Restricted Share Units is limited in some way (based on the passage of time, the achievement of a performance target, if applicable, or upon the occurrence of other events as determined by the Administrator, at its discretion), and the Common Stock is subject to a substantial risk of forfeiture, as provided in Section 7 or Section 8 herein.

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“Person” means any individual, partnership, firm, trust, corporation, limited liability company or other similar entity. When two or more Persons act as a partnership, limited partnership, syndicate or other group for the purpose of acquiring, holding or disposing of Shares of the Company, such partnership, limited partnership, syndicate or group shall be deemed a “Person.”

“Plan” means the Horizon Lines, Inc. Amended and Restated Equity Incentive Plan, as amended from time to time. The Horizon Lines, Inc. Equity Incentive Plan is hereby superseded and replaced in its entirety by this Plan.

“Plan Year” means the fiscal year of the Company.

“Public Offering” shall mean a public offering of equity interests of the Company or any of its Subsidiaries or any of their successors.

“Restricted Share Unit” means an Award for Shares granted to a Participant pursuant to Section 8 herein.

“Restricted Stock” means an Award of Shares granted to a Participant pursuant to Section 7 herein.

“Shares” means the shares of the Common Stock.

“Subsidiary” means any Person more than 50% of the outstanding voting or equity securities of which, or any partnership, joint venture or other entity more than 50% of the total equity or other economic interest of which, is directly or indirectly owned by another Person.

3. Administration. The Plan shall be administered by the Administrator. Subject to the provisions of the Plan, the Administrator shall have the authority to:

(a) select the Participants;

(b) determine the number of Shares covered by any Award granted to a Participant and other terms of an Award, including, but not limited to, the exercise price and vesting schedule of an Award; provided, however, that no Award shall be granted after the expiration of the period of ten (10) years from the Effective Date;

(c) determine whether each Award shall be a grant of an Incentive Stock Option, a Nonqualified Stock Option, Restricted Stock or Restricted Share Unit; and

(d) establish from time to time regulations for the administration of the Plan, interpret the Plan, delegate in writing administrative matters to committees

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of the Board or to other persons, and make such other determinations and take such other action, as it deems necessary or advisable for the administration of the Plan.

All decisions, actions and interpretations of the Administrator shall be final, conclusive and binding upon all parties.

4. Participation. Participants in the Plan shall be limited to those employees and consultants of the Company or any Subsidiary thereof, and those non-employee directors of the Company, who have been notified in writing by the Administrator that they have been selected by the Administrator to participate in the Plan.

5. Shares Subject to the Plan. Awards may be granted by the Administrator to Participants from time to time. The Shares issued with respect to Awards granted under the Plan may be authorized and unissued Shares, or, if applicable and done pursuant to applicable law or regulation, Shares purchased on the open market by the Company (at such time or times and in such manner as it may determine). The Company shall be under no obligation to acquire Common Stock for distribution to optionholders before payment in Shares is due. If any Award granted under the Plan shall be canceled or shall expire without the Shares covered by such Award being purchased by the applicable Award holder thereunder, new Awards may thereafter be granted covering such Shares.

The maximum aggregate number of Shares available to be granted under the Plan is equal to 3,088,668 Shares (after giving effect to the pending reclassification of the outstanding shares of the Company’s Common Stock, to occur on September 21, 2005) and such Shares shall be reserved from the Company’s authorized and unissued share capital for Awards granted under the Plan (subject to adjustment as provided in Section 11).

6. Terms and Conditions of Options. Each Option granted under the Plan shall be evidenced by an Award Agreement, which shall contain such terms and conditions as the Administrator may deem appropriate. The provisions of separate Award Agreements need not be identical, but each Award Agreement shall include (through incorporation of provisions hereof by reference in the Award Agreement or otherwise) the substance of each of the following provisions:

(a) Option Period. Each Option agreement shall specify that the Option thereunder is granted for a period of ten (10) years, or such shorter period as the Administrator may determine, from the date of grant and shall provide that the Option shall expire on such ten (10) year anniversary, or shorter period, as the case may be (unless earlier exercised or terminated pursuant to its terms); provided, however, that any Incentive Stock Option granted to a Key Employee shall specify that the Incentive Stock Option is granted for a period of five (5) years from the date of grant and shall expire on such five (5) year anniversary.

(b) Option Price. The Option price per Share shall be the Fair Market Value at the time the Option is granted; provided, however, that the Option price

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per Share for any Incentive Stock Option granted to a Key Employee shall equal 110% of the Fair Market Value at the time the Incentive Stock Option is granted.

(c) Vesting. The Administrator, in its sole discretion shall determine the vesting provisions applicable to the Options under the Plan, and such vesting provisions, including, but not limited to, time-based and/or performance-based vesting, shall be set forth in the Award Agreement. The vesting provisions in individual Award Agreements may vary. The Administrator reserves the right, in its sole discretion, to waive or reduce the vesting requirements applicable to any Options at any time.

(d) Limitation on Amount of Incentive Stock Options Granted. Options shall be treated as Incentive Stock Options only to the extent that the aggregate Fair Market Value of Stock with respect to which Incentive Stock Options are exercisable for the first time by any optionholder during any calendar year (whether under the terms of the Plan or any other stock option plan of the Company or of its parent or any corporate Subsidiary) is $100,000 or less. To the extent that such aggregate Fair Market Value exceeds $100,000, the Options shall be treated as Nonqualified Stock Options. Fair Market Value shall be determined as of the time the Option with respect to such Stock is granted.

(e) Limitations on Granting of Options. The Administrator shall have the authority and discretion to grant to an eligible employee either Incentive Stock Options or Nonqualified Stock Options or both, but shall clearly designate the nature of each Option at the time of grant in the Option agreement. A Participant who is a consultant or non-employee director may only receive Nonqualified Stock Options.

(f) Payment of Option Price Upon Exercise. The option price of the Shares as to which an Option shall be exercised shall be paid to the Company at the time of exercise in cash or such other method approved by the Administrator.

(g) Termination of Employment or Relationship. Unless otherwise determined by the Administrator, in its sole discretion or as otherwise set forth in an Award Agreement:

(i) In the event of (x) the termination of a Participant’s employment relationship with the Company or any Subsidiary thereof by the Company or any Subsidiary thereof for Cause (within the meaning of clause (a) or (e) of the definition thereof applicable to employees), or (y) the termination of a Participant’s consulting relationship with the Company or any Subsidiary thereof by the Company or any Subsidiary thereof for Cause (within the meaning of clause (a) of the definition thereof applicable to consultants), (i)

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any unvested portion of the Participant’s Option shall terminate on the date of termination and (ii) the Participant may exercise any portion of the Participant’s Option that was vested and exercisable on the date of his or her termination or relationship until the 30^th day following the date of the termination of such employment or consulting relationship, and any portion of such Option not exercised within such period shall be forfeited.

(ii) in the event of (x) the termination of a Participant’s employment relationship with the Company or any Subsidiary thereof by the Company or any Subsidiary thereof for Cause (other than within the meaning of clause (a) or (e) of the definition thereof applicable to employees), (y) the termination of a Participant’s consulting relationship with the Company or any Subsidiary thereof by the Company or any Subsidiary thereof for Cause (other than within the meaning of clause (a) of the definition thereof applicable to consultants), or (z) in the case of a Participant who is a non-employee director of the Company, the termination of Participant’s status as a director of the Company for Cause, the Participant’s Option (whether or not vested) shall terminate on the date of such termination.

(iii) With respect to a Participant who is an employee or consultant of the Company or any Subsidiary thereof, in the event of (x) the termination by the Company or any Subsidiary thereof (other than for Cause) of the Participant’s employment or consulting relationship with the Company or any Subsidiary thereof or (y) the resignation of the Participant for any reason as an employee of, or consultant to, the Company or any Subsidiary thereof, including, but not limited to, on account of retirement (other than on account of death or Disability), (i) any unvested portion of the Participant’s Option shall terminate and (ii) the Participant may exercise for a period of time ending on the earlier of (x) 3 months after the date of termination and (y) the expiration of the Option Period, any portion of the Participant’s Option that was vested and exercisable on the date of his or her termination of employment or relationship, and any portion of such Option not exercised within such period shall be forfeited.

(iv) With respect to a Participant who is a non-employee director of the Company, in the event of the termination (other than for Cause) of the Participant as a director of the Company or the resignation by the Participant as a director of the Company (other than on account of death or Disability), (i) any unvested portion of the Participant’s Option shall terminate and (ii) the Participant may exercise for a period of time ending on the earlier of (a) 3 months after the date of termination and (b) the expiration of the Option

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Period, any portion of the Participant’s Option that was vested and exercisable on the date of his or her termination of relationship, and any portion of such Option not exercised within such period shall be forfeited.

(v) In the event of the termination of the Participant’s employment or consulting relationship with the Company or any Subsidiary thereof, or, in the case of a Participant who is a non-employee director of the Company, the termination of the Participant’s status as a director of the Company, on account of the Participant’s death or Disability, (i) any unvested portion of the Participant’s Option shall terminate and (ii) the Participant (or his or her personal representative) may exercise for a period of time ending on the earlier of (x) one year from the date of such termination or (y) the expiration of the Option Period, any portion of the Participant’s Option that was vested and exercisable on the date of such termination, and any portion of such Option not exercised within such period shall be forfeited.

(h) Company Repurchase Right.

(i) Unless otherwise provided in an Award Agreement, in the event of (x) the termination of a Participant’s employment relationship with the Company or any Subsidiary thereof by the Company or any Subsidiary thereof for Cause (within the meaning of clause (a) or (e) of the definition thereof applicable to employees), or (y) the termination of a Participant’s consulting relationship with the Company or any Subsidiary thereof by the Company or any Subsidiary thereof for Cause (within the meaning of clause (a) of the definition thereof applicable to consultants), the Company shall have the right, but not the obligation, to purchase from the Participant and to cause the Participant to sell the number of Shares equal to the Shares issued to Participant in connection with the exercise of an Option for an aggregate amount equal to the Fair Market Value of the Shares on the date of such termination. Any amount payable to the Participant under this Section 6(h)(i) shall be payable in cash upon the closing of the repurchase of the Shares.

(ii) Unless otherwise provided in an Award Agreement, in the event of (x) the termination of a Participant’s employment relationship with the Company or any Subsidiary thereof by the Company or any Subsidiary thereof for Cause (other than within the meaning of clause (a) or (e) of the definition thereof applicable to employees), (y) the termination of a Participant’s consulting relationship with the Company or any Subsidiary thereof by the Company or any Subsidiary thereof for Cause (other than within the meaning of

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clause (a) of the definition thereof applicable to consultants), or (z) the termination of the status of a Participant as a director of the Company and, prior to such termination, the Participant was a non-employee director of the Company, the Company shall have the right, but not the obligation, to purchase from the Participant and to cause the Participant to sell the number of Shares equal to the Shares issued to Participant in connection with the exercise of an Option for an aggregate amount equal to the lower of (i) the Fair Market Value of the Shares on the date of such termination and (ii) the price paid by the Participant for the Shares. Any amount payable to the Participant under this Section 6(h)(ii) shall be payable in cash upon the closing of the repurchase of the Shares.

(i) Transferability of Options. No Option granted under the Plan and no right arising under such Option shall be transferable other than by will or by the applicable laws of descent and distribution. During the lifetime of the Participant an Option shall be exercisable only by such Participant. Any Option exercisable at the date of the Participant’s death and transferred by will or by the applicable laws of descent and distribution shall be exercisable in accordance with the terms of such Option by the executor or administrator, as the case may be, of the Participant’s estate (each, a “Designated Beneficiary”) for a period provided in paragraph (g)(iv) above or such longer period as the Administrator may determine, and shall then terminate.

(j) Investment Representation. Each Award Agreement may contain an undertaking that, upon demand by the Administrator for such a representation, the Participant or his or her Designated Beneficiary, as the case may be, shall deliver to the Administrator at the time of any exercise of an Option a written representation that the Shares to be acquired upon such exercise are to be acquired for such Participant’s or Designated Beneficiary’s own account and not with a view to, or for resale in connection with, any distribution. Upon such demand, delivery of such representation prior to the delivery of any Shares issued upon exercise of an Option shall be a condition precedent to the right of the Participant or his or her Designated Beneficiary to purchase any Shares.

(k) Optionholders to Have No Rights as Stockholders. No optionholder shall have any rights as a stockholder with respect to any Shares subject to such optionholder’s Option prior to the exercise of any Option.

(l) Other Option Provisions. The form of Award Agreement applicable to Options authorized by the Plan may contain such other provisions, consistent with this Plan, as the Administrator may, from time to time, determine, including, without limitation, covenants of the optionholders to comply, from and after the exercise of Options, with the provisions of the Company Charter that by their terms are applicable to holders of shares of any class or series of capital stock of the Company as a condition to acquiring and holding title to or a beneficial interest in such shares.

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(m) Notification of Sales of Common Stock. Any optionholder who disposes of Shares acquired upon the exercise of an Incentive Stock Option either (a) within two (2) years from the date of the grant of the Incentive Stock Option under which the Common Stock was acquired or (b) within one (1) year after the transfer of such Shares to the optionholder, shall notify the Company of such disposition and of the amount realized upon such disposition.

(n) Incentive Stock Option $100,000 Limitation. To the extent that the aggregate Fair Market Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Participant during any calendar year (under all plans of the Company and its Subsidiaries) exceeds one hundred thousand dollars ($100,000), the Options or portions thereof which exceed such limit (according to the order in which they were granted) shall be treated as Nonqualified Stock Options.

7. Restricted Stock.

(a) Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the Administrator, at any time and from time to time, may grant Awards of Restricted Stock to Participants in such amounts as the Administrator shall determine.

(b) Restricted Stock Agreement. Each Award applicable to Restricted Stock shall be evidenced by an Award Agreement that shall specify the restrictions, including restrictions creating a substantial risk of forfeiture, the Period(s) of Restriction, the number of Shares of Restricted Stock granted, and such other provisions as the Administrator shall determine. Restrictions on Restricted Stock shall lapse, or the Restricted Stock shall vest, at such time(s) and in such manner and subject to such conditions as the Administrator shall in each instance determine, which need not be the same for each Award or for each Participant.

(c) Transferability. Except as provided in this Section 7, the Shares of Restricted Stock granted herein may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the end of the applicable Period of Restriction established by the Administrator and specified in the applicable Award Agreement, or upon earlier satisfaction of any other conditions, as specified by the Administrator in its sole discretion and set forth in the Award Agreement. All rights with respect to the Restricted Stock granted to a Participant under the Plan shall be available during his or her lifetime only to such Participant, or in the event of the Participant’s legal incapacity, to the Participant’s legal guardian or representative.

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(d) Other Restrictions. The Administrator shall impose such other conditions and/or restrictions on any Shares of Restricted Stock granted pursuant to the Plan as it may deem advisable and as set forth in an Award Agreement including, without limitation, a requirement that Participants pay a stipulated purchase price for each Share of Restricted Stock, time-based and/or performance-based restrictions on vesting, if applicable, covenants of the Participants to comply with the provisions of the Company Charter that by their terms are applicable to holders of shares of any class or series of capital stock of the Company as a condition to acquiring and holding title to or a beneficial interest in such shares, and/or restrictions under applicable Federal or state securities laws.

(e) Certificates. The Company or its designee shall retain the certificates representing Shares of Restricted Stock in the Company’s possession until such time as all conditions and/or restrictions applicable to such Shares have been satisfied.

(f) Last Day of Period of Restriction. Except as otherwise provided in this Section 7 or an Award Agreement, Shares of Restricted Stock covered by each Restricted Stock grant made under the Plan shall become freely transferable by the Participant after the last day of the applicable Period of Restriction.

(g) Voting Rights. During the Period of Restriction, Participants holding Shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares.

(h) Dividends and Other Distributions. During the Period of Restriction, Participants holding Shares of Restricted Stock granted hereunder may be credited with regular cash dividends, if any, paid with respect to the underlying Shares while they are so held. The Administrator may apply any restrictions to the dividends that the Administrator deems appropriate.

(i) Termination of Employment or Relationship with the Company. Each Award Agreement shall set forth the extent to which the Participant shall have the right to retain unvested Restricted Shares following termination of the Participant’s employment or consulting relationship with the Company or any Subsidiary thereof or the termination of the Participant’s status as a director of the Company. Such provisions shall be determined in the sole discretion of the Administrator, shall be included in the Award Agreement entered into with each Participant, need not be uniform among all Shares of Restricted Stock issued pursuant to the Plan, and may reflect distinctions based on the reasons for termination of the Participant’s employment or consulting relationship with the Company or any Subsidiary thereof or the termination of the Participant’s status as a director of the Company.

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8. Restricted Share Units.

(a) Grant of Restricted Share Units. Subject to the terms and provisions of the Plan, the Administrator, at any time and from time to time, may grant Awards of Restricted Share Units to Participants in such amounts as the Administrator shall determine.

(b) Restricted Share Unit Agreement. Each Award applicable to Restricted Share Units shall be evidenced by an Award Agreement that shall specify the restrictions, including restrictions creating a substantial risk of forfeiture, the Period(s) of Restriction, the number of Restricted Share Units, and such other provisions as the Administrator shall determine. Restrictions on Restricted Share Units shall lapse or the Restricted Share Units shall vest at such time(s) and in such manner and subject to such conditions as the Administrator shall in each instance determine, which need not be the same for each Award or for each Participant.

(c) Transferability. Except as provided in this Section 8, the Restricted Share Units granted herein may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated. All rights with respect to the Restricted Share Units granted to a Participant under the Plan shall be available during his or her lifetime only to such Participant, or in the event of the Participant’s legal incapacity, to the Participant’s legal guardian or representative.

(d) Other Restrictions. The Administrator shall impose such other conditions and/or restrictions on any Restricted Share Units granted pursuant to the Plan as it may deem advisable and as set forth in an Award Agreement including, without limitation, a requirement that Participants pay a stipulated purchase price for each Restricted Share Unit, time-based and/or performance-based restrictions on vesting, if applicable, covenants of the Participants to comply with the provisions of the Company Charter that by their terms are applicable to holders of shares of any class or series of capital stock of the Company as a condition to acquiring and holding title to or a beneficial interest in such shares, and/or restrictions under applicable Federal or state securities laws.

(e) Rights as a Stockholder. Until the Restricted Share Units have vested (the Period of Restriction has lapsed) and Shares are issued in connection with the Restriction Share Units, the Participant shall have no rights as a stockholder of the Company (including, but not limited to, voting or dividend rights).

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(f) Last Day of Period of Restriction. Except as otherwise provided in this Section 8 or an Award Agreement, Shares issued in connection with Restricted Share Units granted under the Plan shall become freely transferable by the Participant after the last day of the applicable Period of Restriction.

(g) Termination of Employment or Relationship with the Company. Each Award Agreement shall set forth the extent to which the Participant shall have the right to retain unvested Restricted Share Units following termination of the Participant’s employment or consulting relationship with the Company or any Subsidiary thereof or the termination of the Participant’s status as a director of the Company. Such provisions shall be determined in the sole discretion of the Administrator, shall be included in the Award Agreement entered into with each Participant, need not be uniform among all Restricted Share Units issued pursuant to the Plan, and may reflect distinctions based on the reasons for termination of the Participant’s employment or consulting relationship with the Company or any Subsidiary thereof or the termination of the Participant’s status as a director of the Company.

9. Going Private Transaction. Notwithstanding any provision of the Plan to the contrary, unless otherwise determined by the Administrator, in its sole discretion or as otherwise set forth in an Award Agreement, if there should be a Going Private Transaction (as defined below), the Company shall give each Participant written notice of such Going Private Transaction as promptly as practicable prior to the effective date thereof and (i) any unvested Awards as of the date of the Going Private Transaction shall become vested and immediately exercisable as of the effective date of such Going Private Transaction and (ii) the Administrator may determine, in its sole discretion, the treatment of any Awards which are exercisable or vested at the time of the Going Private Transaction or become exercisable or vested pursuant to this Section 9.

For purposes of the Plan, a “Going Private Transaction” means any transaction or series of transactions which (a) causes any class of equity securities of the Company which is subject to Section 12(g) or Section 15(d) of the Exchange Act, to be held of record by less than 300 persons; or (b) causes any class of equity securities of the Company which is either listed on a national securities exchange or authorized to be quoted in an inter-dealer quotation system of a registered national securities association to be neither listed on any national securities exchange nor authorized to be quoted on an inter-dealer quotation system of a registered national securities association.

10. Citizenship Restriction. If the Participant is not a citizen of the United States by birth, naturalization or as otherwise authorized by applicable law, and if, in the reasonable determination of the Administrator, the Participant’s purchase of shares of Common Stock upon the exercise of any Option on the closing date for such exercise would result in beneficial ownership (as defined below) by Non-U.S. Citizens (as defined below) of shares of such class of capital stock of the Company in the aggregate in excess of the Permitted Percentage (as defined below) for such class, then, unless otherwise specified in the applicable Award Agreement for

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such Option, the Administrator, upon written notice to the Participant, may, in its sole discretion, elect that (a) all or a portion of such Option, as determined by the Administrator in its sole discretion, shall be deemed not to have been exercised with respect to the shares of Common Stock to be purchased on such closing date and (b) the Participant’s right to exercise such Option, in whole or in part (as determined by the Administrator), shall be suspended until the first date, during the remaining term of such Option, on which the Participant’s purchase of shares of Common Stock upon such exercise of such Option would not result in beneficial ownership by Non-U.S. Citizens of shares of such class of capital stock of the Company in the aggregate in excess of the Permitted Percentage for such class. For purposes of this Section 10, the terms “beneficial ownership,” “Non-U.S. Citizen,” and “Permitted Percentage” shall have the meanings ascribed to them in the Company’s certificate of incorporation, as in effect from time to time.

11. Adjustments in Event of Change in Common Stock. In the event of any change in the Common Stock by reason of any Stock dividend, recapitalization, reorganization, merger, consolidation, split-up, combination or exchange of Shares, or of any similar change affecting the Common Stock, the number and kind of Shares which thereafter may be optioned and sold under the Plan and the number and kind of Shares subject to Award in outstanding Award Agreements and the purchase price per share thereof, if any, may be appropriately adjusted consistent with such change in such manner as the Board may deem equitable to prevent substantial dilution or enlargement of the rights granted to, or available for, Participants in the Plan. Without limiting the generality of the foregoing, if the Common Stock is recapitalized into multiple classes of Common Stock, the kind of Shares subject to Award shall be those common Shares intended for broad general ownership rather than any class of special super-voting or other control stock.

12. Plan and Awards Not to Confer Rights with Respect to Continuance of Employment or Relationship. Neither the Plan nor any action taken thereunder shall be construed as giving any Participant any right to continue such Participant’s relationship with the Company or a Subsidiary thereof, nor shall it give any employee the right to be retained in the employ of the Company or a Subsidiary thereof, or interfere in any way with the right of the Company or a Subsidiary thereof to terminate any Participant’s employment or relationship, as the case may be, at any time with or without Cause.

13. No Claim or Right Under the Plan. No employee or consultant of the Company or any of its Subsidiaries, and no non-employee director of the Company, shall at any time have the right to be selected as a Participant in the Plan nor, having been selected as a Participant and granted an Award, to be granted any additional Award.

14. Listing and Qualification of Shares. The Plan, the grant and exercise of Awards thereunder, and the obligation of the Company to sell and deliver Shares under such Awards, shall be subject to all applicable Federal or state laws, rules and regulations and to such approvals by any government or regulatory agency as may be required. The Company, in its discretion, may postpone the issuance or delivery of Shares upon any exercise of an Award until completion of any stock exchange listing, or other qualification of such Shares under any state or Federal law, rule or regulation as the Company may consider appropriate, and may require any Award holder to make such representations and furnish such information as it may consider appropriate in connection with the issuance or delivery of the Shares in compliance with

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applicable laws, rules and regulations. Certificates representing Shares acquired by the exercise of an Award may bear such legend as the Company may consider appropriate under the circumstances.

15. Taxes. The Company may make such provisions and take such steps as it may deem necessary or appropriate for the withholding of all federal, state, local and other taxes required by law to be withheld with respect to Awards under the Plan including, but not limited to (a) reducing the number of Shares otherwise deliverable, based upon their Fair Market Value on the date of exercise, to permit deduction of the amount of any such withholding taxes from the amount otherwise payable under the Plan, (b) deducting the amount of any such withholding taxes from any other amount then or thereafter payable to a Participant, or (c) requiring a Participant, beneficiary or legal representative to pay to the Company the amount required to be withheld or to execute such documents as the Company deems necessary or desirable to enable it to satisfy its withholding obligations as a condition of releasing the Share.

16. No Liability of Administrator. No member of the Administrator shall be personally liable by reason of any contract or other instrument executed by such member or on his or her behalf in his or her capacity as a member of the Administrator nor for any mistake of judgment made in good faith or actions taken by such person as a member of the Administrator in good faith, and the Company shall indemnify and hold harmless each employee, officer or director of the Company to whom any duty or power relating to the administration or interpretation of the Plan may be allocated or delegated, against any cost or expense (including counsel fees) or liability (including any sum paid in settlement of a claim with the approval of the Board) arising out of any act or omission to act in connection with the Plan unless such act arises out of the member’s own fraud or bad faith.

17. Amendment or Termination. The Administrator may, with prospective or retroactive effect, amend, suspend or terminate the Plan or any portion thereof at any time and for any reason; provided, however, that no amendment or other action that requires stockholder approval in order for the Plan to continue to comply with any applicable law, rule or regulation shall be effective unless such amendment or other action shall be approved by the requisite vote of stockholders of the Company entitled to vote thereon and no repricing of outstanding Awards under the Plan shall occur without stockholder approval. The Plan and all compensation derived therefrom are intended not to constitute compensation deferred under a nonqualified deferred compensation plan as contemplated in Section 409A of the Code. Accordingly, notwithstanding any other provision of the Plan, the provisions of the Plan will be interpreted consistent with the preceding sentence, and the Administrator may modify the Plan to the extent it deems advisable to prevent the application of Section 409A of the Code.

18. Compliance with Section 162(m) of the Code. At all times when Section 162(m) of the Code is applicable, all Awards granted under the Plan shall comply with the requirements of Section 162(m) of the Code; provided, however, that in the event the Administrator determines that such compliance is not desired with respect to any Award of Restricted Stock or Restricted Share Units, compliance with Section 162(m) of the Code will not be required for such Award. In addition, in the event that changes are made to Section 162(m) of the Code to permit greater flexibility with respect to any Award or Awards available under the Plan, the Administrator may, subject to Section 17, make any adjustments it deems appropriate.

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19. Captions. The captions preceding the sections of the Plan have been inserted solely as a matter of convenience and shall not in any manner define or limit the scope or intent of any provision of the Plan.

20. Governing Law. The Plan and all rights thereunder shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed entirely within such State.

21. Severability. In the event that any provision of the Plan shall be held illegal or invalid for any reason, such illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.

22. Effective Date. The Plan shall become effective upon the date it is adopted by the Board.

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EX-99.6

Exhibit 99.6

AMENDMENT TO

CARLYLE-HORIZON HOLDINGS CORP.

STOCK OPTION PLAN

On this 20th day of September, 2005, the Board of Directors of Horizon Lines Holding Corp., a Delaware corporation formerly known as Carlyle-Horizon Holdings Corp., adopted the following resolutions to amend the Carlyle-Horizon Holdings Corp. Stock Option Plan, as heretofore amended (the “Plan”):

RESOLVED, that Section 5.3(c)(ii) of the Plan is hereby replaced by the following text:

“(ii) Such other method that is either set forth in such Optionee’s Stock Option Agreement or is approved by the Board or the Committee; or”

FURTHER RESOLVED, that Section 5.3(c) of the Plan, as heretofore amended, is hereby further amended by adding a new clause (iii) at the end thereof, which shall read as follows:

“(iii) With the consent of the Board or the Committee, any combination of the consideration listed in this subsection (c);”

The effective date of the foregoing amendments is September 20, 2005.

In all other respects, the Plan remains unchanged.

/s/ Robert S. Zuckerman

Robert S. Zuckerman

Secretary