EXHIBIT 10.25
(ABITIBI CONSOLIDATED) [g12243kg1224311.gif]
RESTRICTED SHARE UNIT PLAN

 

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Abitibi-Consolidated Inc.   RESTRICTED SHARE UNIT PLAN

Table of contents

         
1. PURPOSE
    1  
 
       
2. ADMINISTRATION
    1  
 
       
3. PARTICIPANTS
    1  
 
       
4. DEFINITIONS
    1  
 
       
5. GRANT OF RESTRICTED SHARE UNITS
    2  
 
       
6. EARNED AWARDS
    2  
 
       
8. TERMS OF RESTRICTED SHARE UNITS
    3  
 
       
(A) Vesting
    3  
(B) Non-transferability
    3  
(C) Termination of Employment
    3  
(D) Payment of Plan Award Value
    4  
 
       
9. CHANGES IN SHARE CAPITAL
    4  
 
       
10. AMENDMENT
    4  
 
       
11. UNFUNDED PLAN
    5  
 
       
12. TERMINATION
    5  

 

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ABITIBI-CONSOLIDATED INC.
RESTRICTED SHARE UNIT PLAN

1.   PURPOSE       The purpose of the Abitibi-Consolidated Inc. (together with
its subsidiaries, the “Company”) Restricted Share Unit Plan (the “Plan”) is to:
1) promote a greater alignment between the interests of shareholders and key
employees (Executives and high-potential / high performing Managers); 2) reward
and retain key employees of the Company; and 3) link key employees’ total direct
compensation with the long term performance of the Company.   2.  
ADMINISTRATION       The Plan shall be administered by the Human Resources and
Compensation Committee (the “Committee”) of the Board of Directors (the “Board”)
of Abitibi-Consolidated Inc. or such other committee as may be designated by the
Board. The Committee and the Board shall have the full and complete authority to
interpret and to modify the Plan, prescribe such rules and regulations, as
appropriate, and make such other determinations as it deems necessary or
desirable for the administration of the Plan. All decisions and determinations
of the Committee and the Board respecting the Plan shall be binding and
conclusive on the Plan and the Participants (as defined herein).   3.  
PARTICIPANTS       The Committee shall, in its sole discretion, designate, from
time to time, any of the key employees of the Company, as described in Section 1
hereof, (including directors but excluding directors who are not officers or
salaried employees) as participants in the Plan (the “Participants”). The
Committee may delegate to the Chief Executive Officer the authority to grant a
certain number of Restricted Share Units’ to high performing and/or high
potential non-Executive or non-officer employees of the Company selected by the
Chief Executive Officer, who shall then be treated as Participants.. No person
shall be entitled to participate in the Plan and the decision as to who shall
have the opportunity to participate in the Plan and the extent of the
participation will, subject to the terms hereof, be made by the Committee in its
sole and absolute discretion.   4.   DEFINITIONS       For purposes of this
Plan:

  (i)   “Common Shares” means the common shares in the capital of
Abitibi-Consolidated Inc., and includes any shares of Abitibi-Consolidated Inc.
into which such shares may be converted, reclassified, redesignated, subdivided,
consolidated, exchanged or otherwise changed, pursuant to a Reorganization or
otherwise;     (ii)   “Financial Performance Criterion” means such corporate
accounting or financial measure, ratio or calculation as may be selected on an
annual basis by the Committee;

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  (iii)   “Performance Period” means 3 years or another period specifically
established by the Committee and set out in the Grant Letter;     (iv)  
“Reorganization” means any (i) capital reorganization, (ii) merger,
(iii) amalgamation, (iv) offer for Common Shares, which, if successful, would
entitle the offeror to acquire all of the Common Shares, or (v) arrangement or
other scheme of reorganization;     (v)   “Ranking Schedule” means a list of
comparator companies indicating the percentage (%) of a Participant’s RSU award
that vests based on the number of comparator companies the Company beats in
terms of the selected Financial Performance Criterion;     (vi)   “Restricted
Share Unit(s)” or “RSU(s)” means a phantom unit with a value pegged to the
Common Shares’ actual stock price and which has time and financial performance
vesting restrictions tied to it that define the portion and when any given award
is actually earned by the Participant.     (vii)   “Closing Value” means the
closing price of a Common Share on the last trading day immediately prior to the
end of the Performance Period on the principal stock exchange on which the
Common Shares are traded;     (viii)   “Plan Award Value” means the dollar value
of the number of RSUs which vest multiplied by the Closing Value;

5.   GRANT OF RESTRICTED SHARE UNITS

  (a)   At the time of the grant, the Board, upon recommendation from the
Committee, shall determine the number of Restricted Share Units to be granted to
each Participant and the vesting and other terms of such grant. The Chief
Executive Officer shall determine the number of Restricted Share Units for which
the granting authority was delegated to him by the Board to be granted to each
non-Executive and/or non-officer Participant.     (b)   As soon as practical
after determining the grant of a Participant, the Committee shall cause a notice
in writing (the “Grant Letter”) to be given to the Participant. The Grant Letter
shall set out the following information: (i) the number of Restricted Share
Units granted to the Participant; (ii) the Ranking Schedule (which is subject to
adjustment, if required, per section 6(a)); (iii) the length of the Performance
Period; and (iv) any additional time vesting conditions.     (c)   All
Restricted Share Units granted under the Plan shall be subject to the terms and
conditions of the Grant Letter as well as the terms of this Plan.     (d)   The
Committee will approve a Ranking Schedule for each Performance Period.

6.   EARNED AWARDS

  (a)   At the end of each Performance Period, the Committee shall determine the
extent, if any, to which the Participant has earned his Restricted Share Units.
Such determination will be based upon the Ranking Schedule. The Committee may
modify the Financial

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      Performance Criterion at its discretion prior to the start of any given
Performance Period. The Committee may also adjust the Ranking Schedule during
the term of an award should one or more of the companies become inappropriate or
cease in its then current form during the Performance Period.     (b)   The
number of Restricted Share Units earned by the Participant will be based upon
the Ranking Schedule that is set out in the Grant Letter.

7.   AWARD PAYMENTS

  (a)   At the end of each Performance Period, the value of the Participant’s
Restricted Share Units will be equal to the number of Restricted Share Units
earned by such Participant in accordance with paragraphs 6(a) and 6(b) hereof
multiplied by the Closing Value.     (b)   The award payments will be made in
cash and/or by the delivery of Common Shares purchased by the Company on the
open market. The form of award payments shall be made by the Committee at its
sole discretion. The award payments shall be made by no later than March 15 of
the calendar year immediately following the calendar year in which the award
payment vests in accordance with Section 6(a).

8.   TERMS OF RESTRICTED SHARE UNITS

  (a)   Vesting

Awarded Restricted Share Units will vest in accordance with Section 6(a).

  (b)   Non-transferability

The Plan Award Value is payable only to the Participant or, in the event of his
death, his heirs or other legal representatives, as hereinafter provided. A
Participant shall not be entitled to transfer, assign, charge, pledge or
hypothecate, or otherwise alienate, whether by operation of law or otherwise, a
Restricted Share Unit and shall not be subject to execution, attachment or
similar process.

  (c)   Termination of Employment

Notwithstanding the foregoing provisions of this Section 8, if the employment of
any Participant shall be terminated so that he is no longer employed by the
Company, his entitlement to a payment in respect of his Restricted Share Units
shall be determined as follows:
(i) if the employment of such Participant shall terminate by termination for
cause or in the event the Participant voluntarily terminates his employment with
the Company, then all unvested RSUs as of the date of termination of employment,
shall forthwith become void and no amount shall be payable to the Participant
unless otherwise determined by the Committee.
(ii) if the employment of such Participant shall terminate by retirement or
involuntary termination leading to retirement eligibility at termination or
immediately following the severance period, then vesting of previously granted
RSUs will proceed as if the employee was actively at work.

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(iii) if the employment of such Participant shall terminate by involuntary
termination otherwise than as referred to in sub-paragraph (c)(ii) of this
paragraph, then vesting of previously awarded RSUs will proceed based on
prorated time worked in relation to the Performance Period, including the
severance period.
(iv) if the employment of such Participant shall terminate by death, then one of
the following vesting arrangements will apply:

      a- during employment: vesting based on prorated time worked in relation to
the Performance Period        
b- after retirement: vesting will continue based on time worked and the period
of retirement up to the date of death prorated over the Performance Period
       
c- after involuntary termination (including if termination is immediately
followed by retirement): vesting will continue as if actively at work, including
the severance period, no later than the date of death, prorated over the
Performance Period.

  (d)   Payment of Plan Award Value

The Company shall deduct any taxes that are required to be deducted by any
applicable law from payments to Participants. All taxes due are the full and
sole responsibility of the Participant.

9.   CHANGES IN SHARE CAPITAL       In the event of any change in the
outstanding Common Shares by reason of any stock dividend (other than an issue
of shares to shareholders pursuant to their election to receive dividends in the
form of shares in lieu of cash dividends declared payable in the ordinary course
by Abitibi-Consolidated Inc.), stock split or consolidation, or Reorganization,
the Committee shall make such substitution or adjustment to the terms of the
Restricted Share Units as it deems appropriate including, without limiting the
generality of the foregoing, appropriate provisions for the continuance or other
recognition of outstanding rights under the Plan.   10.   AMENDMENT

  (a)   The Board may at any time, and from time to time, by resolution and
without other formality amend the Plan in any respect, provided that no
amendment shall operate to affect materially any rights already acquired by a
Participant under the Plan.         Without amending the Plan the Committee may
with the consent of any Participant, approve any variation in terms of that
Participant’s Restricted Share Units.     (b)   The cost of the operation of the
Plan shall be borne by the Company.     (c)   All notices under the Plan shall
be in writing and, if to the Company, shall be delivered to the Company or sent
by first class post to their respective head or registered offices for the time
being, and if to a Participant, shall be delivered personally or sent by first
class

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      post to the Participant at the address which he shall give for the
purpose, or failing any such address to his last known place of abode. If a
notice is sent by post, service thereof shall be deemed to be effected by
properly addressing, prepaying and posting a letter containing the same to such
address and shall be deemed to be served forty-eight hours after such posting.

11.   UNFUNDED PLAN       The Plan shall be unfunded. To the extent that a
Participant holds any rights by virtue of a grant of Restricted Share Units such
rights shall be no greater than the rights of an unsecured general creditor of
the Company.   12.   TERMINATION       The Board may at any time terminate the
Plan provided that the existing rights of Participants will not thereby be
affected.

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APPENDIX 1 — Special Provisions for Senior Management Participants
1- Senior Executives and officers who have Company share ownership obligations
will receive the appropriate portion of their award in Common Shares until their
respective holding requirements have been met.
Consequently, all or a portion of a calculated earned payment (less applicable
income taxes) will be made to the Participant in the form of Common Shares which
must be held by the Participant in order to comply with his stock ownership
guidelines.
2- After the commencement of the Performance Period, the Committee may designate
additional eligible Senior Executives as Participants in the Plan (the “Mid-Term
Participants”). Mid-Term Participants’ initial grant will be prorated based on
time to be worked during the Performance Period.

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APPENDIX 2 — Financial Performance Criterion, Comparator Group and Ranking
Schedule for grant
[appropriate information from HRCC approved guidelines to be inserted for each
grant]

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