EXHIBIT 10.27
CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT, made as of the 1st day of January, 2011, by and between
AbitibiBowater Inc., a Delaware corporation having a mailing address of 1155
Metcalfe Street, Suite 800, Montreal, Quebec H3B 5H2 (the “Corporation”), and
Richard Garneau (the “Executive”).
     WHEREAS, the Executive is the President and Chief Executive Officer of the
Corporation; and
     WHEREAS the Corporation and the Executive have entered into an Executive
Employment Agreement as of the 1st day of January 2011 setting forth the terms
of the Executive’s employment (the “Employment Agreement”); and
     WHEREAS, the Executive is considered by the Board of Directors of the
Corporation (the “Board”) to be a valued member of management of the Corporation
who has outstanding skills and abilities and an extensive background in the
Corporation’s business; and
     WHEREAS, the uncertainty attendant to a Change in Control of the
Corporation may result in the departure or distraction of management personnel,
including the Executive, to the detriment of the Corporation; and
     WHEREAS, the Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of members of the
Corporation’s management, including the Executive, to their assigned duties in
the event of a Change in Control of the Corporation; and
     WHEREAS, this Agreement is entered into as part of the Executive’s
compensation as provided in the Employment Agreement and to maintain or increase
the profitability of the Corporation; and
     WHEREAS except where otherwise provided herein, defined terms as used
herein have the meanings set forth in the Employment Agreement.
     NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the parties hereto agree as follows:
1. DEFINITIONS
     The following terms shall have the meanings assigned to them below:

  (a)   “Base Amount” shall mean the Executive’s Annual Base Salary at the rate
in effect on the Termination Date.     (b)   “Beneficial Owner” of securities
shall mean (i) a Person who beneficially owns such securities, directly or
indirectly, or (ii) a Person who has the right to acquire such securities
(whether such right is exercisable immediately or only with the passage of time)
pursuant to any agreement, arrangement or understanding

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      (whether or not in writing) or upon the exercise of conversion rights,
exchange rights, warrants, options or otherwise.

  (c)   “Incentive Amount” shall mean an amount equal to the lesser of (i) the
average of the last two Incentive Awards paid to the Executive prior to the
Termination Date, or (ii) 125% of the Executive’s target incentive (expressed in
dollars) for the year in which the Termination Date occurs.     (d)   “Change in
Control” means any of the following:

  (i)   the acquisition, directly or indirectly and by any means whatsoever, by
any person, or by a group of persons acting jointly or in concert, of that
number of Voting Shares which is equal to or greater than 50% of the total
issued and outstanding Voting Shares immediately after such acquisition;    
(ii)   the election or appointment by any holder of Voting Shares, or by any
group of holders of Voting Shares acting jointly or in concert, of a number of
members of the Board of Directors of the Corporation equal to or greater than
one half (50%) of the members of the Board of Directors;     (iii)   any
transaction or series of transactions, whether by way of reconstruction,
reorganization, consolidation, amalgamation, arrangement, merger, transfer, sale
or otherwise, whereby assets of the Corporation become the property of any other
person (other than a subsidiary of the Corporation) if such assets which become
the property of any other person have a fair market value (net of the fair
market value of any then existing liabilities of the Corporation assumed by such
other person as part of the same transaction) equal to 50% or more of the Market
Capitalization of the Corporation immediately before such transaction; or    
(iv)   the completion of any transaction or the first of a series of
transactions which would have the same or similar effect as any transaction or
series of transactions referred to in paragraphs (i), (ii) and (iii) above.

  (e)   “Disability” shall mean a physical or mental condition that is defined
as a disability in the Corporation’s long term disability insurance plan
covering the Executive immediately prior to the Change in Control.     (f)  
“Employer Contributions” shall mean an amount equal to the maximum contributions
the Corporation could have made (regardless of actual circumstances) on the
Executive’s behalf under the DC Program for the fiscal year in which the
Executive’s Termination Date occurs.     (g)   “Good Reason” shall mean:

  (i)   a material change in the Executive’s status, title, position or
responsibilities (including in reporting line relationships) that represents a
substantial adverse change from the Executive’s status, title, position or

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      responsibilities as in effect immediately preceding the date of a Change
in Control or at any time within twenty-four (24) months thereafter; the
assignment to the Executive of any duties or responsibilities that are
materially inconsistent with the Executive’s status, title, position or
responsibilities as in effect immediately preceding the date of a Change in
Control or at any time within twenty-four (24) months thereafter; or any removal
of the Executive from or failure to reappoint or reelect the Executive to any
material office or position held immediately preceding the date of a Change in
Control; or at any time within twenty-four (24) months thereafter.

  (ii)   a material reduction in compensation and benefits, in the aggregate,
(in terms of benefit levels and/or reward opportunities which opportunities will
be evaluated in light of the performance requirements therefor) to those
provided for under the employee compensation and benefit plans, programs and
practices in which the Executive was participating immediately preceding the
date of the Change in Control or at any time within twenty-four (24) months
thereafter;     (iii)   a material reduction of the Executive’s Annual Base
Salary as in effect immediately preceding the date of the Change in Control or
any time within twenty-four (24) months thereafter;     (iv)   a failure by the
Corporation to obtain from any Successor its assent to this Agreement
contemplated by Section 10 hereof; or     (v)   a material change in the
geographic location at which the Executive is to perform services on behalf of
the Corporation from the location immediately prior to the Change in Control.

  (h)   “Market Capitalization of the Corporation” at any time means the product
of (i) the number of outstanding Common Shares of the Corporation at that time,
and (ii) the average of the closing prices for the Common Shares of the
Corporation on the principal securities exchange (in terms of volume of trading)
on which the Common Shares of the Corporation are listed at that time for each
of the last 10 business days prior to such time on which the Common Shares of
the Corporation traded on such securities exchange.     (i)   “Notice of
Termination” shall mean a notice sent by either the Executive or the Corporation
to the other party terminating the Executive’s employment as of a certain date
and setting forth the reasons therefor.     (j)   “Successor” shall mean the
direct or indirect successor by purchase, merger, consolidation or otherwise, to
all or substantially all of the business and/or assets of the Corporation.    
(k)   “Termination Date” shall mean (i) in the case of the Executive’s death,
the date of death, (ii) in the case of a termination by the Executive in
accordance with

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      Section 3, the last day of employment as set forth in the Notice of
Termination given by the Executive, (iii) in the case of a termination by the
Corporation for Cause, a date not less than thirty (30) days after receipt of
the Notice of Termination by the Executive, (iv) in the case of a termination by
the Corporation due to the Executive’s Disability, the date not less than thirty
(30) days after receipt of the Notice of Termination by the Executive, provided
that the Executive shall not have returned to the full-time performance of
duties within thirty (30) days after such receipt, and (v) in all other cases,
the date specified in the Notice of Termination or if no Notice of Termination
is sent, the last day of the Executive’s active employment (an Executive
receiving periodic severance pay is no longer considered employed for the
purposes of this Agreement).

2. TERM OF AGREEMENT
     This Agreement shall commence as of the date hereof and terminate on the
occurrence of any of the following events: (i) the date of death of the
Executive; (ii) voluntary resignation by the Executive from the Corporation
otherwise than in response to a Good Reason; (iii) the giving of notice by the
Corporation in the event of Disability; (iv) termination for Cause;
(v) termination of employment of the Executive at any time when there has been
no Change in Control or more than two years after the immediately preceding
Change in Control; (vi) termination of this Agreement by the Corporation in
accordance with Section 12 or (vii) satisfaction by the Corporation of its
obligations under Section 4 of this Agreement in the event of termination of the
Executive in the circumstances contemplated by Section 4. The specific date of
termination shall be as set forth in the definition of Termination Date.
     For greater certainty, Section 4 applies with respect to each separate
Change in Control until the Agreement has been terminated. In addition, with
respect to a particular Change in Control, Section 4 expires twenty-four
(24) months following such Change in Control unless this Agreement is otherwise
terminated.
3. EXECUTIVE’S RIGHT OF TERMINATION
     After a Change in Control and for twenty-four (24) months thereafter, the
Executive shall have the right to terminate employment for Good Reason as set
forth below. If the Executive’s employment is terminated in accordance with the
provision of this Section 3, the Executive shall be entitled to the compensation
and benefits described in Section 4 below. In order to resign for Good Reason,
the Executive must notify the Corporation in writing not more than thirty
(30) days after the occurrence of one or more events asserted to constitute Good
Reason, describing such event or events in reasonable detail (a “Good Reason
Notice”). If the Corporation fails to cure all events identified in the Good
Reason Notice within thirty (30) days after receiving the Good Reason Notice by
restoring the Executive to the position he would have been in had the event not
occurred (including payment of any lost compensation or benefits), the Executive
may resign for Good Reason by submitting a Notice of Termination not more than
one hundred eighty (180) days after the end of such thirty (30) day period. For
avoidance of doubt, the failure of the Executive to notify the Corporation of an
event constituting Good Reason, or to resign as a result of such event having
occurred and not having been cured, shall not constitute a waiver of any of the
Executive’s other rights with respect to such event, including without
limitation the right to

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maintain an action for breach of contract, or preclude the Executive from
resigning for Good Reason upon the subsequent occurrence of any of the events
described above, including an event of the same type.
4. COMPENSATION UPON CHANGE IN CONTROL FOLLOWED BY CERTAIN TERMINATIONS
     If the Executive’s employment with the Corporation shall be terminated
within twenty-four (24) months following a Change in Control (i) by the
Corporation for any reason other than for Cause or Disability, or (ii) by the
Executive for Good Reason pursuant to Section 3 (each, a “Qualifying
Termination”), the Executive shall be entitled to the compensation and benefits
set forth in this Section 4. If either a Notice of Termination is given by the
Corporation, or an event constituting the basis for the Executive’s resignation
for Good Reason occurs (and is not subsequently cured within thirty (30) days as
described above) prior to the end of such twenty-four (24) month period, the
Executive’s termination shall be considered to have terminated within such
twenty-four (24) month period regardless of the actual Termination Date.
     If a Qualifying Termination occurs, the Executive shall be entitled to the
following as of the applicable Termination Date:

  (a)   A single lump sum, paid as soon as practicable, but in no event later
than sixty (60) days after the Executive’s Termination Date, equal to the sum of
the following less applicable withholding taxes:

  (i)   an amount equal to the Base Amount multiplied by three;     (ii)   an
amount equal to the Incentive Amount multiplied by three;     (iii)   an amount
equal to the Employer Contributions multiplied by three; and     (iv)   a cash
payment of $20,000 in lieu of individual outplacement services.

      The payment of severance hereunder is intended to meet the short-term
deferral exception under Section 409A of the US Internal Revenue Code of 1986,
as amended (the “Code”), and shall be interpreted and administered consistent
with this intent, to the extent applicable.     (b)   As of the Executive’s
Termination Date, the Executive (and the Executive’s spouse or surviving spouse
and dependents) will be provided health care (including medical, prescription
drug and dental) and life insurance coverage provided by the Corporation to
executives as of the date of the Change in Control for the earlier of thirty-six
(36) months after the Termination Date or the date on which the Executive is
covered by a subsequent employers’ health care and life insurance programs. The
amount of premiums that the Executive is required to pay for such coverage shall
not exceed the amount paid by executives who are active employees on the
Termination Date and thereafter. If and to the extent that the benefits
described in this paragraph cannot be provided under the Corporation’s plans or
programs, the lump sum payment described in subsection

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      (a) shall be increased by an amount calculated so that the amount of such
payment, after payment of all applicable income taxes, equals the present value
of the difference between the full premium cost without employer subsidy of the
lost benefits and the amount of premium the Executive would have been required
to pay.

5. EQUITY AWARDS
     Notwithstanding anything in the applicable equity plan or any award
agreement to the contrary, if, upon a Change in Control, the Executive holds
options for the purchase of shares, or restricted shares or restricted share
units (“Equity Awards”), all Equity Awards so held shall, unless the Executive
breaches the terms of Article 6 of the Employment Agreement (as qualified by
Section 14 of this Agreement in the event of a Qualifying Termination),
(i) immediately vest to the extent they have not already vested at such date and
(ii) continue to be held, in all cases, notwithstanding the terms of the Equity
Award plans, on the same terms and conditions as if the Executive continued to
be employed by the Corporation.
6. DISABILITY
     In the event of Disability of the Executive, the Agreement may be
terminated by the Corporation on thirty days’ notice. Notwithstanding anything
contained in this Section 6, the Executive shall be entitled to all benefits
provided under any disability and pension plans of the Corporation applicable to
the Executive at the date of Disability.
7. NO MITIGATION REQUIRED
     The Executive shall not be required to mitigate the amount of any payment
provided for in this Agreement, nor shall any payment or benefit provided for in
this Agreement be offset by any compensation earned by the Executive as the
result of employment by another employer, by retirement benefits, or otherwise.
8. EXECUTIVE’S EXPENSES
     The Corporation shall pay or reimburse the Executive for all costs,
including reasonable attorney’s, accountants’ and actuary’s fees and expenses,
incurred by the Executive (i) to confirm the Executive’s rights to and amounts
of payments hereunder, (ii) to contest or dispute any termination of the
Executive’s employment following a Change in Control or seek to obtain or
enforce any right or benefit provided by this Agreement in litigation or
arbitration, or (iii) in connection with any audit by a taxing authority related
to any payment or benefit hereunder, or any subsequent contest or litigation
relating to the tax treatment of such payment or benefit. Notwithstanding the
foregoing, if the Executive does not prevail in a lawsuit or arbitration
pertaining to this Agreement, the Executive shall repay to the Corporation all
fees and expenses relating to such proceeding that have been previously paid by
the Corporation.
9. CODE SECTION 280G
     Notwithstanding anything in this Agreement to the contrary, if the
aggregate amount of the benefits and payments under this Agreement, and other
payments and benefits which the

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Executive has the right to receive from the Corporation (including the value of
any equity rights which become vested upon a Change in Control) (the “Total
Payments”) would constitute a “parachute payment” as defined in Section 280G of
the US Internal Revenue Code of 1986, as amended, such that the Executive would
be subject to the excise tax under Code Section 4999 of the Code, then the
Accounting Firm (defined below in this Section 9) shall determine which of the
following has a greater aggregate value for the Executive, which greater value
shall be paid to the Executive:

  (a)   The after-tax amount that would be retained by the Executive (after
taking into account all required income taxes payable by the Executive and the
amount of any excise taxes that would be payable by the Executive under Code
Section 4999 (the “Excise Taxes”)) if the Executive were to receive the Total
Payments, or     (b)   The after-tax amount that would be retained by the
Executive (after taking into account all federal, state and local income taxes
payable by the Executive) if the Executive were to receive the Total Payments
reduced to the largest amount that would result in no portion of the Total
Payments being subject to Excise Taxes (the “Reduced Payments”).

     If the Total Payments are payable to the Executive, the Corporation shall
not reimburse the Executive for any Excise Taxes imposed on the Executive or
provide any such other compensation (whether through a tax gross-up or
otherwise) to mitigate the effects of the Excise Taxes. If the Executive is to
receive Reduced Payments, the Total Payments payable will be reduced or
eliminated in the following order: (1) cash payments, (2) taxable benefits,
(3) nontaxable benefits and (4) accelerated vesting of equity awards.
     The determination of whether the Executive will receive the Total Payments
or the Reduced Payments, and the calculation of the amount of the Reduced
Payments, if applicable, shall be performed by a nationally recognized certified
public accounting firm selected by the Corporation (the “Accounting Firm”). In
the event that the Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting the Change of Control, the Corporation may
appoint another nationally recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall
be borne solely by the Corporation.
10. BINDING AGREEMENT
     This Agreement shall inure to the benefit of and be enforceable by the
Executive, and the Executive’s heirs, executors, administrators, successors and
assigns. This Agreement shall be binding upon the Corporation, its Successors
and assigns. The Corporation shall require any Successor to assume and agree to
perform this Agreement in accordance with its terms. The Corporation shall
obtain such assumption and agreement prior to the effectiveness of any such
succession.

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11. SOLE SEVERANCE; OTHER BENEFITS
     If the Executive receives the payments and benefits due under Section 4,
such payments and benefits shall be in lieu of any other severance amounts to
which the Executive may be entitled under any other severance arrangement,
including under any employment agreement, severance pay plan, or applicable
legislation entitling the Executive to severance benefits. For greater
certainty, the payments under Section 4 are in satisfaction of the Executive’s
entitlement to a retiring allowance. However, the parties acknowledge that the
benefits paid hereunder are only exclusive as to other severance payments and
that the Executive may be entitled to other benefits or payments triggered by a
Change in Control under certain other of the Corporation’s benefit or
compensation arrangements, including, without limitation, any long term
incentive plans or equity incentive award plans.
12. AMENDMENTS; WAIVERS
     Except as otherwise provided below, no provision of this Agreement may be
modified, waived or discharged, except in a writing specifically referring to
such provision and signed by the party against which enforcement of such
modification, waiver or discharge is sought. No waiver by either party hereto of
the breach of any condition or provision of this Agreement shall be deemed a
waiver of any other condition or provision at the same or any other time.
Notwithstanding the foregoing, the Board or a committee thereof may amend (or
terminate) this Agreement if (a) the Board or such committee reasonably and in
good faith determines that such amendment is necessary either (i) to comply with
the requirements of any law or regulation applicable to the Corporation or
(ii) to conform the Agreement to prevailing corporate practices for companies
comparable to the Corporation, provided any such amendment or termination is not
adopted less than ninety (90) days prior to or after a Change in Control,
(b) the same amendment is made to all other Change in Control Agreements between
the Corporation and similarly situated executives, and (c) the Executive is
notified in writing of the amendment and the reason for its adoption not more
than thirty (30) days after it is adopted.
13. VALIDITY
     The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
14. CONTINUANCE IN EFFECT
     In the event of a Qualifying Termination, the Executive’s covenants
pursuant to Sections 6.3 (Non-Competition), 6.4 (Non-Solicitation of Customers),
6.5 (Non-Solicitation of Employees), 6.6 (Non-Interference with Suppliers) and
6.10 (Merger Transactions) of the Employment Agreement shall extinguish on the
Date of Termination. Except as expressly provided for in the preceding sentence
and for greater certainty, notwithstanding any Termination of the Executive, the
provisions of the Employment Agreement shall continue in full force and effect
in accordance with their terms, including, without limitation, (i) the
provisions of Article 6, (ii) rights to indemnification and insurance under the
Indemnification Agreement, Charter, By-Laws and directors’ and officers’
insurance policies maintained by

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the Corporation and (iii) rights to which the Executive is entitled by virtue of
his participation in the employee benefits plans, policies and arrangements of
the Corporation, all in accordance with the terms of the relevant plans and
agreements.
15. GENERAL
     The provisions of Sections 7.2, 7.3, 7.4, 7.5, 7.6, 7.7, 7.8, 7.9 and 7.10
of the Employment Agreement are hereby incorporated by reference as if herein
recited at length.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day and year first above written.

              ABITIBIBOWATER INC.   THE EXECUTIVE
Per:
      Per:    
 
           
 
  /s/ Sarah Nash       /s/ Richard Garneau
 
           
 
  Sarah Nash       Richard Garneau
 
  Chair of the Human Resources and Compensation/Nominating and Governance
Committee