EXHIBIT 10.11
ABITIBIBOWATER INC. 2010 EQUITY INCENTIVE PLAN
DIRECTOR DEFERRED STOCK UNIT AGREEMENT
     THIS DEFERRED STOCK UNIT AGREEMENT, dated as of the third trading day after
the date the Company’s 2010 Form 10-K is filed with the Securities and Exchange
Commission (the “Date of Grant”) is made by and between AbitibiBowater Inc., a
Delaware corporation (the “Company”), and _______________ (“Participant”).
     WHEREAS, the Company has adopted the AbitibiBowater Inc. 2010 Equity
Incentive Plan (the “Plan”) pursuant to which deferred stock units (“DSUs”) may
be granted in respect of shares of the Company’s common stock, par value $0.001
per share (“Stock”); and
     WHEREAS, the Participant serves as a member of the Board of Directors of
the Company (“Director”) and the Board of Directors has determined that, subject
to the terms set forth herein, a portion of each Director’s compensation should
be made in the form of a DSU award to more closely align their interests with
those of the Company and its stockholders.
     NOW, THEREFORE, for and in consideration of the premises and the covenants
of the parties contained in this Agreement, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto,
for themselves, their successors and assigns, hereby agree as follows:
     1. Grant of Deferred Stock Unit.
     (a) Grant. The Company hereby grants to Participant                  DSUs,
on the terms and conditions set forth in this Agreement and as otherwise
provided in the Plan (the “Initial Grant”). Each DSU represents the right to
receive payment in respect of one share of Stock as of the Settlement Date
(defined in Section 2(b)) to the extent the Participant is vested in such DSU as
of the Settlement Date, subject to the terms of this Agreement and the Plan.
     (b) Incorporation by Reference, Etc. The provisions of the Plan are hereby
incorporated herein by reference. Except as otherwise expressly set forth
herein, this Agreement shall be construed in accordance with the provisions of
the Plan and any interpretations, amendments, rules and regulations promulgated
by the Human Resources and Compensation/Nominating and Governance Committee (the
“Committee”) from time to time pursuant to the Plan. Any capitalized terms not
otherwise defined in this Agreement shall have the definitions set forth in the
Plan. The Committee shall have final authority to interpret and construe the
Plan and this Agreement and to make any and all determinations under them, and
its decision shall be binding and conclusive upon the Participant and his legal
representative in respect of any questions arising under the Plan or this
Agreement.
     (c) Acceptance of Agreement. Unless the Participant notifies the Director,
Corporate Compensation in writing within 14 days after the Date of Grant that
the Participant does not wish to accept this Agreement, the Participant will be
deemed to have accepted this Agreement and will be bound by the terms of the
Agreement and the Plan. Any such notice may be given to the Director, Corporate
Compensation at the Company’s principal executive office.

 

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     2. Terms and Conditions.
     (a) Vesting. Subject to the Participant’s continued service as a Director,
twenty five percent (25%) of the DSUs (rounded to the nearest whole DSU) shall
vest on the last day of each calendar quarter of the year of the Date of Grant
(each such date, a “Vesting Date”).
     (b) Settlement. The obligation to make payments and distributions with
respect to DSUs (the “settlement”) shall be satisfied through the issuance of
one share of Stock for each vested DSU, and the settlement of the DSUs may be
subject to such conditions, restrictions and contingencies as the Committee
shall determine. Vested DSUs shall be settled as soon as practicable after the
earliest of the Participant’s (i) termination of service as a Director, (ii)
death or (iii) Disability (the “Settlement Date”). If vested DSUs are settled
upon the Participant’s termination of service as a Director, the Settlement Date
will be December 15 (or, if necessary, the next business day) of the calendar
year following the calendar year in which the Participant’s termination occurs,
unless the Participant provides advance written notice of at least five business
days to the Director, Corporate Compensation specifying an earlier Settlement
Date (but no earlier than the termination of service date). The foregoing
election shall only apply if the Participant is not subject to Section 409A of
the Internal Revenue Code (“Section 409A”). For a Participant who is subject to
Section 409A, if vested DSUs are settled upon the Participant’s termination of
service as a Director, the Settlement Date will be as soon as administratively
feasible following the Director’s termination of service. For Participants
subject to Code Section 409A, in no event shall settlement occur no later than
the last day of the calendar year in which the Settlement Date occurs, or if
later, the 15th day of the third month following the Settlement Date. For
purposes of this Agreement and the extent applicable to the Participant, the
term “termination of service” shall be interpreted to comply with Section 409A.
To the extent payments are made during the periods permitted under Section 409A
(including any applicable periods before or after the specified payment dates
set forth in this Section 2(b)), the Company shall be deemed to have satisfied
its obligations under the Plan and shall be deemed not to be in breach of its
payment obligations hereunder.
     (c) Dividend Equivalents and Voting Rights. The Participant will from time
to time be credited with additional DSUs (including a fractional DSU), the
number of which will be determined by dividing:
          (i) The product obtained by multiplying the amount of each dividend
(including extraordinary dividend if so determined by the Company) declared and
paid by the Company on the Stock on a per share basis on or after the Date of
Grant and before the Settlement Date by the number of DSUs recorded in
Participant’s account on the record date for payment of any such dividend, by
          (ii) The Fair Market Value of one (1) share of Stock on the dividend
payment date for such dividend.
     Subject to the Participant’s continued service as a Director, the
additional DSUs shall vest and be settled at the same time and on the same
proportion as the Initial Grant. No additional DSUs shall be accrued for the
benefit of Participant with respect to record dates

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occurring prior to, or with respect to record dates occurring on or after the
date, if any, on which Participant has forfeited the DSUs.
     3. Termination of Service with Company. Notwithstanding any provision of
Section 2 to the contrary, the following vesting and forfeiture provisions shall
apply to the Participant’s vested but unsettled and unvested DSUs.
     (a) Retirement and Involuntary Termination. If the Participant’s service as
a Director terminates as a result of “Retirement” or a failure to be re-elected
as a Director (other than due to death or Disability), then the Participant
shall become vested in a prorated number of DSUs. For purposes of the preceding,
the prorated portion of the DSUs that is vested as of the Participant’s date of
termination, including the portion of the DSUs then already vested, shall be the
total number of granted and credited DSUs multiplied by a fraction, the
numerator of which shall be the number of full months elapsed from January 1 of
the calendar year of the Date of Grant through the date of the Participant’s
termination of service as a Director and the denominator of which shall be 12.
The term “Retirement” shall mean mandatory retirement at age 72 (or such other
age as required by Company’s By-Laws and/or Board of Directors Corporate
Governance Principles).
     (b) Death. If the Participant dies during his period of service as a
Director, then, in addition to the DSUs vested as of the date of death under
Section 2(a), the DSUs scheduled to vest on the next scheduled Vesting Date
shall also vest on the date of death.
     (c) Disability. If the Participant becomes Disabled, then, in addition to
the DSUs then vested under Section 2(a), the DSUs scheduled to vest on the next
scheduled Vesting Date shall also vest upon the Participant’s Disability.
     (d) Termination by the Company for Cause. If the Participant’s service as a
Director terminates for Cause, then all outstanding DSUs, whether vested but
unsettled or unvested, shall immediately terminate.
     (e) Other Termination. If the Participant’s service as a Director
terminates other than as described in the foregoing provisions of this
Section 3, including resignation from the Board of Directors before Retirement,
then the Participant shall remain vested in all previously vested DSUs, whether
settled or unsettled, but all unvested DSUs shall immediately terminate.
     Notwithstanding anything contained to the contrary in this Section 3, in no
event shall any DSUs be settled prior to the applicable Vesting Date except if
otherwise determined by the Board of Directors and if permitted under Code
Section 409A (to the extent applicable to the Participant).
     4. Compliance with Legal Requirements. The granting and settlement of the
DSUs, and any other obligations of the Company under this Agreement, shall be
subject to all applicable federal, provincial, state, local and foreign laws,
rules and regulations and to such approvals by any regulatory or governmental
agency as may be required.

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     (a) Transferability. Unless otherwise provided by the Committee in writing,
the DSUs shall not be transferable by Participant other than by will or the laws
of descent and distribution.
     (b) No Rights as Stockholder. The Participant shall not be deemed for any
purpose to be the owner of any shares of Stock subject to DSUs and shall have no
voting rights with respect to the DSUs.
     (c) Tax Withholding. All distributions under the Plan are subject to
withholding of all applicable federal, state, provincial, local and foreign
taxes, which obligations shall be satisfied through (i) the issuance by the
Company of net shares of Stock, or (ii) the sale by the Company of the number of
shares of Stock necessary satisfy such obligations.
     5. Miscellaneous.
     (a) Waiver. Any right of the Company contained in this Agreement may be
waived in writing by the Committee. No waiver of any right hereunder by any
party shall operate as a waiver of any other right, or as a waiver of the same
right with respect to any subsequent occasion for its exercise, or as a waiver
of any right to damages. No waiver by any party of any breach of this Agreement
shall be held to constitute a waiver of any other breach or a waiver of the
continuation of the same breach.
     (b) Notices. Any written notices provided for in this Agreement or the Plan
shall be in writing and shall be deemed sufficiently given if either hand
delivered or if sent by fax or overnight courier, or by postage paid first class
mail. Notices sent by mail shall be deemed received three business days after
mailing but in no event later than the date of actual receipt. Notices shall be
directed, if to the Participant, at the Participant’s address indicated by the
Company’s records, or if to the Company, to the attention of the Director,
Corporate Compensation at the Company’s principal executive office.
     (c) Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, and each other provision of this Agreement shall be
severable and enforceable to the extent permitted by law.
     (d) No Rights to Continued Service. Nothing contained in this Agreement
shall be construed as giving the Participant any right to be retained in any
position as a consultant or director of the Company or its Affiliates or shall
interfere with or restrict in any way the right of the Company or its
Affiliates, which is hereby expressly reserved, to remove, terminate or
discharge the Participant at any time for any reason whatsoever.
     (e) Beneficiary of Non-Québec Participant. The Participant, other than a
Participant residing in the Province of Québec, may file with the Committee a
written designation of a beneficiary on such form as may be prescribed by the
Committee and may, from time to time, amend or revoke such designation. Any
notice should be made to the attention of the Director, Corporate Compensation
at the Company’s principal executive office. If no designated beneficiary
survives the Participant, the Participant’s estate shall be deemed to be
Participant’s beneficiary.

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     (f) Beneficiary of Québec Participant. The Participant residing in the
Province of Québec may only designate a beneficiary by will. Upon the death of
the Participant residing in the Province of Québec, the Company shall settle the
DSUs pursuant to Section 2(b) of this Agreement to the liquidator, administrator
or executor of the estate of the Participant.
     (g) Successors. The terms of this Agreement shall be binding upon and inure
to the benefit of the Company and its successors and assigns, and of the
Participant and the beneficiaries, executors, administrators, heirs and
successors of the Participant.
     (h) Entire Agreement. This Agreement and the Plan contain the entire
agreement and understanding of the parties hereto with respect to the subject
matter contained herein and supersede all prior communications, representations
and negotiations in respect thereto. No change, modification or waiver of any
provision of this Agreement shall be valid unless the same be in writing and
signed by the parties hereto, except for any changes permitted without consent
under Section 9 of the Plan.
     (i) Governing Law. This Agreement shall be construed and interpreted in
accordance with the laws of the State of Delaware without regard to principles
of conflicts of law thereof, or principles of conflicts of laws of any other
jurisdiction which could cause the application of the laws of any jurisdiction
other than the State of Delaware.
     (j) Headings. The headings of the Sections hereof are provided for
convenience only and are not to serve as a basis for interpretation or
construction, and shall not constitute a part, of this Agreement.
          IN WITNESS WHEREOF, the Company has executed this Agreement as of the
day first written above.

                  ABITIBIBOWATER, INC.    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:  
 
   
 
     
 
   

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