Exhibit 10.3
First Amendment to the
Bowater Incorporated
Outside Directors’ Stock-Based Deferred Fee Plan
Effective as of May 11, 2005
     WHEREAS, Bowater Incorporated (the “Corporation”) established the Bowater
Incorporated Outside Directors’ Stock-Based Deferred Fee Plan (the “Plan”),
effective as of May 11, 2005;
     WHEREAS, Section 19 of the Plan permits the Board to amend the Plan; and
     WHEREAS, the Board desires to amend the Plan to (1) reflect that Outside
Directors who elected to remain in the Bowater Incorporated Retirement Plan for
Outside Directors shall be ineligible to participate in the Plan, and
(2) provide for the crediting of stock units that represent the value of
retirement benefits previously accrued for participants under the Retirement
Plan for Outside Directors, which benefits were frozen under that plan effective
May 11, 2005.
     NOW, THEREFORE, the Plan is amended, effective as of the dates set forth
below, in the following respects:
     1. Effective as of May 11, 2005, Paragraph 3 is amended, in its entirety to
read as follows:
     “3. Eligibility. Participation in the Plan shall be extended to Outside
Directors except any Outside Director who elected to remain a participant in the
Bowater Incorporated Retirement Plan for Outside Directors (‘Retirement Plan’)
pursuant to the terms of the Retirement Plan.”
     2. Effective as of August 31, 2006, new subsection (b) is added to
Paragraph 7 to read as follows and subsequent subsections are re-numbered
accordingly:

  “(b)   Each Outside Director whose benefits under the Bowater Incorporated
Retirement Plan for Outside Directors (the ‘Retirement Plan’) were frozen as of
May 11, 2005 pursuant to the Retirement Plan’s terms shall have the present
value of his Retirement Plan benefit converted into Stock Units and credited to
his Deferred Retainer Account as of August 31, 2006. The number of Stock Units
to be credited to each Outside Director’s Deferred Retainer Account shall be
determined by (i) calculating the present value of such individual’s frozen
retirement benefit as of August 31, 2006 using a 7% interest rate, the 1994
Group Annuity Mortality Table blended 50% for males and 50% for females and an
assumed retirement age of 72, and (ii) dividing such resulting value by the Fair
Market Value of a Share of stock on August 31, 2006.”

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[signature page follows]

 

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     IN WITNESS WHEREOF, the Board has caused this First Amendment to the Plan
to be executed by a duly authorized officer this 10th day of October, 2006.

         
 
  BOWATER INCORPORATED
 
       
 
  By:   /s/ James T. Wright
 
       
 
      James T. Wright
Executive Vice President — Human Resources