EXHIBIT 10.1
AGREEMENT
     THIS AGREEMENT (this “Agreement”), is made and entered into as of the 10th
day of May, 2006, effective as the 1st day of May, 2006, by and between BOWATER
INCORPORATED, a Delaware corporation (the “Company”), and ARNOLD M. NEMIROW (the
“Executive”).
W I T N E S S E T H:
     WHEREAS, the Executive retired as the President and Chief Executive Officer
of the Company effective as of April 30, 2006, and in accordance with the
requirements of Section 4.15 of the Company’s By-Laws, resigned from the Board
of Directors of the Company effective as of his retirement; and
     WHEREAS, at its meeting scheduled for May 10, 2006, the Board of Directors
of the Company will re-elect the Executive as a Class II director of the Company
and appoint him Chairman of the Board of Directors of the Company; and
     WHEREAS, the Executive and the Company have negotiated and agreed on the
compensation and benefits to be provided to the Executive for his continued
service as Chairman and for his continued consulting services for a limited
period thereafter and desire to set forth their agreement in writing.
     NOW, THEREFORE, the parties hereby agree as follows:
     1. Continued Services.
     (a) The Executive shall serve as the non-executive Chairman of the Board of
Directors of the Company from May 10, 2006 through the end of the Company’s
current fiscal year on December 31, 2006 (the “Board Service Period”), at which
time he will resign as Chairman and as a member of the Board of Directors of the
Company.
     (b) During the twenty-four (24) month period beginning January 1, 2007 and
ending December 31, 2008 (the “Consulting Period”), the Executive shall function
in an advisory and consulting capacity to the Company and shall assume and
perform such advisory and consulting responsibilities and duties regarding major
management matters and shareholder and governmental relations as may be
requested by the Chief Executive Officer of the Company during normal business
hours after reasonable notice from the Company.
     2. Fees and Other Benefits.
     (a) The Company shall pay the Executive $50,000 per month for his services
during the Board Service Period and the Consulting Period. The monthly fees
shall be in lieu of all other compensation and fees otherwise payable by the
Company to its non-employee directors. The Executive’s right to receive such
monthly fees shall terminate in the event the Executive’s death or disability
prior to the expiration of the Consulting Period.
     (b) The Company shall promptly reimburse the Executive for reasonable
business expenses incurred during the Board Service Period and the Consulting
Period in performing services hereunder, including all expenses of travel and
living expenses while away from home on business or at the request of and in the
service of the Company, provided that such expenses are incurred and accounted
for in accordance with the policies and procedures established by the Company.
In addition, during the Board Service Period, the Company shall reimburse the

 

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Executive for the cost of maintaining an off-site office in the Greenville,
South Carolina area and secretarial and administrative support.
     (c) The Amended and Restated Change in Control Agreement between the
Company and the Executive dated as of June 9, 2000 (the “CIC Agreement”) is
amended to provide that in the event the Company enters into a definitive
agreement or executes a letter of intent during the Board Service Period and the
transactions contemplated by such definitive agreement or letter of intent
result in a “Change in Control” of the Company (as defined in the CIC
Agreement), then upon the occurrence of such Change in Control (whether before
or after the Board Service Period), the Executive shall be entitled to receive,
in lieu of any amounts or benefits described in Section 4 of the CIC Agreement,
an amount equal to three (3) times the annualized fee ($600,000) paid to him
during the Board Service Period (a total of $ 1.8 million). The provisions of
Section 5 of the CIC Agreement shall remain in full force and effect with
respect to any amounts paid to the Executive in connection with a Change in
Control of the Company, including any amounts paid to him pursuant to this
Paragraph 2(c).
     3. Non-Competition. During the Board Service Period and the Consulting
Period, the Executive shall not directly or indirectly engage in Competition (as
defined below) with the Company; provided, that it shall not be a violation of
this Paragraph 3 for the Executive to become the registered or beneficial owner
of up to 5% of any class of the capital stock of a competing corporation
registered under the Securities Exchange Act of 1934, as amended, provided that
the Executive does not actively participate in the business of such corporation
until such time as this covenant expires. For purposes of this Agreement,
“Competition” by the Executive shall mean the Executive’s engaging in, or
otherwise directly or indirectly being employed by or acting as a consultant or
lender to, or being a director, officer, employee, principal, agent, stockholder
(other than as specifically provided for herein), member, owner or partner of,
or permitting his name to be used in connection with the activities of any other
business or organization that produces newsprint, coated mechanical or specialty
papers, bleached kraft pulp or lumber products in the United States or Canada.
     4. Confidential Information. The Executive shall hold in a fiduciary
capacity for the benefit of the Company all trade secrets, confidential
information, and knowledge or data relating to the Company and its businesses,
which were obtained by the Executive during the Executive’s employment by the
Company or during the term of this Agreement. The Executive shall not, without
the prior written consent of the Company or as may otherwise be required by law
or legal process, communicate or divulge any such trade secrets, information,
knowledge or data to anyone other than the Company and those designated by the
Company.
     5. Termination. In the event the Executive (i) engages in an act of
material dishonesty, fraud, embezzlement, or breach of trust against the Company
or an act which he knew to be in violation of his duties to the Company
(including the unauthorized disclosure of confidential information) or
(ii) materially breaches this Agreement and such breach is not remedied within
10 days after written notice thereof by the Company, the Company shall be
entitled to terminate this Agreement and the consulting relationship established
hereby, immediately upon the giving of written notice to the Executive of such
termination specifying the grounds thereof. After the effective date of
termination under this Paragraph 5, the Company shall have no further
obligations under this Agreement, except to pay the amounts due the Executive
hereunder as of such effective date.

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     6. Release of the Company. The Executive covenants and agrees that the
Executive hereby irrevocably and unconditionally releases, acquits and forever
discharges the Company, as well as each of the Company’s officers, directors,
employees, subsidiaries, and agents (the Company and the Company’s officers,
directors, employees, subsidiaries and agents being collectively referred to
herein as the “Releasees”), or any of them, from any and all charges,
complaints, claims, liabilities, obligations, promises, demands, costs, losses,
debts, and expenses (including attorneys’ fees and costs actually incurred), of
any nature whatsoever, in law or equity, arising out of the Executive’s
employment with the Company or his retirement from such employment (other than
any claim arising out of the breach by the Company of the terms of this
Agreement), including, without limitation, all claims asserted or that could be
asserted by the Executive against the Company in any litigation arising from
summonses and complaints filed in federal, state or municipal court asserting
any claim arising from any alleged violation by the Releasees of any federal,
state, or local statutes, ordinances, or common law which the Executive now has,
owns, or holds, or claims to have, own, or hold, or which the Executive had,
owned, or held, or claimed to have, own or hold at any time before execution of
this Agreement, against any or all of the Releasees. Notwithstanding the
foregoing, the Executive specifically does not release any(i) claim that may
arise from the Company’s breach of this Agreement or (ii) any claims for the
payment or provision of any and all benefits or payments under any of the
Company’s employee benefit plans and programs in which the Executive
participated during his employment by the Company or as a retiree of the
Company, including all rights under the Company’s tax-qualified 401(k),
compensatory and pension plans, non-qualified benefit restoration and
supplemental plans and post-retirement medical plan, insurance and similar
benefits.
     7. Independent Contractor. In performing services under this Agreement, the
Executive shall be acting as an independent contractor and not as an employee or
agent, and the Executive shall not be considered an employee, of the Company
within the meaning or the application of any federal, state or local laws or
regulations, nor shall the Executive be entitled to seek compensation, exercise
any right or seek any benefits accruing to regular employees of the Company. The
Executive understands and agrees that the Company will not withhold from the
fees payable to the Executive hereunder any sums for income tax, unemployment
insurance, social security or any other withholding pursuant to any law or
requirement of any governmental body and all of such withholdings and taxes are
the Executive’s sole responsibility. The Executive shall not have any right,
power or authority to create, and shall not represent to any person that he has
the power to create any obligation, express or implied, on the Company’s behalf
without the express prior written consent of the Company.
     8. Notices. Any notice or other communications to be given hereunder shall
be deemed to have been given or delivered when delivered by hand to the
individuals named below or when deposited in the United States mail, registered
or certified, with proper postage and registration or certification fees
prepaid, addressed to the parties as follows (or to such other address as one
party shall give the other in the manner provided herein).
     If to the Company, to:

     
 
  Bowater Incorporated
 
  55 East Camperdown Way
 
  Post Office Box 1028
 
  Greenville, South Carolina 29602-1028

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  Attention: General Counsel

     If to the Executive, to the most recent address on the Company’s employment
records for the Executive.
     9. Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the substantive laws of the
State of Delaware without regard to the choice of law provisions thereof.
     10. 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.
     11. Entire Agreement. This Agreement constitutes the entire agreement
between the parties pertaining to the subject matter contained herein and
supersedes any and all prior and contemporaneous agreements, representations,
promises, inducements and understandings of the parties. This written Agreement
cannot be varied, contradicted or supplemented by evidence of any prior or
contemporaneous oral or written agreements. Moreover, this written Agreement may
not be later modified except by a further writing signed by a duly authorized
officer of the Company and the Executive.
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.

                /s/ Arnold M. Nemirow               Arnold M. Nemirow  
 
              BOWATER INCORPORATED  
 
         
 
  By:   /s/ Togo D. West, Jr.  
 
         
 
  Name:   Togo D. West, Jr.  
 
  Title:   Chairman — Human Resources and Compensation  
 
     
Committee
 

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