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                                  EXHIBIT 10.8

                              AMENDED AND RESTATED
                              EMPLOYMENT AGREEMENT

MEMORANDUM OF AGREEMENT made effective as of the 20th day of November, 2000.

BETWEEN:

                  MERCER INTERNATIONAL INC., a Massachusetts business trust
                  organized under the laws of the State of Washington with an
                  office at Giesshubelstrasse 15, 8045 Zurich, Switzerland

                  (hereinafter referred to as the "Corporation")

                                                               OF THE FIRST PART

AND:

                  JIMMY S.H. LEE, Businessman

                  (hereinafter referred to as the "Executive")

                                                              OF THE SECOND PART

WHEREAS:

A.       The Corporation recognizes the valuable services that the Executive has
         provided and is continuing to provide to the Corporation and its
         subsidiaries and believes that it is reasonable and fair to the
         Corporation that the Executive receive fair treatment, in particular,
         in the event of a Change of Control (as hereinafter defined);

B.       The Corporation recognizes that the Executive has acquired outstanding
         and special skills relating to the business of the Corporation and its
         subsidiaries and desires, in the best interests of the Corporation, to
         have the Executive continue employment with the Corporation, including
         up to and after such a Change of Control;

C.       The Executive is willing to remain in the employment of the Corporation
         but desires assurance that in the event of any such Change of Control
         the Executive will continue employment with the Corporation, including
         during the period up to and after such Change of Control, and will
         continue to have the responsibility and status that the Executive has
         earned; and

D.       Both the Corporation and the Executive wish formally to agree to the
         terms and conditions of the Executive's employment and the terms and
         conditions that will, in certain circumstances hereinafter set forth,
         govern in the event of a termination of the employment of the Executive
         by the Corporation.


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NOW THEREFORE in consideration of the premises hereof and of the mutual
covenants and agreements hereinafter set forth and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
each of the parties hereto, the parties hereby covenant and agree as follows:


                                    ARTICLE I
                                    RECITALS

1.1  RECITALS. The parties hereby represent and warrant that the above recitals
     are true and correct.

                                   ARTICLE II
                                 INTERPRETATION

2.1  HEADINGS. The headings of the Articles, Sections and subsections herein are
     inserted for convenience of reference only and shall not affect the meaning
     or construction hereof.

2.2  DEFINITIONS. For the purposes of this Agreement, the following terms shall
     have the following meanings, respectively:

     (a)  "Accrued Benefits" has the meaning ascribed to such term in subsection
          4.1(b)(iv) hereof;

     (b)  "Agreement" means this Amended and Restated Employment Agreement and
          all schedules and amendments hereto;

     (c)  "Annual Bonus" has the meaning ascribed to such term in Section 3.6(a)
          hereof;

     (d)  "Banking Day" means a day on which banks are open for business in
          Geneva, Switzerland;

     (e)  "BBA" means the British Bankers' Association;

     (f)  "BBA Libor" means the twelve (12) month United States Dollar
          denominated London Inter-Bank Offered Rate fixed daily by the BBA;

     (g)  "Base Salary" has the meaning ascribed to such term in Section 3.6(a)
          hereof;

     (h)  "Board" means the board of Trustees of the Corporation;

     (i)  "Change of Control" means the occurrence of any of the following
          events:

          (i)  The receipt by the Corporation of a Schedule 13D or other
               statement filed under Section 13(d) of the Exchange Act
               indicating that any "person" (as such term is used in Sections
               13(d) and 14(d) of the Exchange Act): (a) has become the
               "beneficial owner" (as defined in Rule 13d-3 under the Exchange
               Act), directly or indirectly, of securities of the Corporation
               representing more than 20% of the Common Shares; or (b) has sole
               and/or shared voting, or dispositive, power over more than 20% of
               the Common Shares; or

          (ii) A change in the composition of the Board occurring within a
               two-year period prior to such change, as a result of which fewer
               than a majority of the Trustees are Incumbent Trustees.
               "Incumbent Trustees" shall mean Trustees who are either: (a)
               Trustees of the Corporation as of the Effective Date; or (b)
               elected, or nominated for election, to the Board with the
               affirmative votes of at least a majority of the Trustees who had
               been Trustees two (2) years prior to such change and who were
               still in office at the time of such election or nomination; or

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         (iii) The solicitation of a dissident proxy, or any proxy not approved
               by the Incumbent Trustees, the purpose of which is to change the
               composition of the Board with the result, or potential result,
               that fewer than a majority of the Trustees will be Incumbent
               Trustees; or

          (iv) The consummation of a merger, amalgamation or consolidation of
               the Corporation with or into another entity or any other
               corporate reorganization, if more than 50% of the combined voting
               power of the continuing or surviving entity's securities
               outstanding immediately after such merger, amalgamation,
               consolidation or reorganization are owned by persons who were not
               stockholders of the Corporation immediately prior to such merger,
               amalgamation, consolidation or reorganization; or

          (v)  The commencement by an entity, person or group (other than the
               Corporation or a wholly owned subsidiary of the Corporation) of a
               tender offer, an exchange offer or any other offer or bid for
               more than 20% of the Common Shares; or

          (vi) The consummation of a sale, transfer or disposition by the
               Corporation of all or substantially all of the assets of the
               Corporation; or

          (vii) The commencement of any proceeding by or against the Corporation
               seeking to adjudicate it a bankrupt or insolvent, or seeking
               liquidation, winding-up, reorganization, arrangement, adjustment,
               protection, relief or composition of the Corporation or its
               debts, under any law relating to bankruptcy, insolvency or
               reorganization or relief of debtors, or seeking the entry of an
               order for relief or for the appointment of a receiver, trustee,
               custodian or other similar official for it or for any substantial
               part of its property; or

        (viii) The approval by the shareholders of the Corporation of a plan
               of complete liquidation or dissolution of the Corporation.

          In the case of the occurrence of any of the events set forth in
          subsection 2.2.(i)(vii), a Change of Control shall be deemed to occur
          immediately prior to the occurrence of any such events. An event shall
          not constitute a Change of Control if its sole purpose is to change
          the jurisdiction of the Corporation's organization or to create a
          holding company, partnership or trust that will be owned in
          substantially the same proportions by the persons who held the
          Corporation's securities immediately before such event. Additionally,
          a Change of Control will not be deemed to have occurred, with respect
          to the Executive, if the Executive is part of a purchasing group that
          consummates the Change of Control event;

     (j)  "Common Shares" means the issued and outstanding shares of beneficial
          interest of the Corporation;

     (k)  "Compensation Committee" means the independent committee of the Board
          consisting of two or more Trustees, not employed by the Corporation
          and each of whom is a Disinterested Trustee (as defined in the Plan),
          which committee is responsible for making any and all decisions to
          award Stock Options under the Plan to officers of the Corporation, in
          the event the Corporation does not have a Compensation Committee all
          references herein to Compensation Committee shall be deemed to refer
          to the Board as a whole;

     (l)  "Date of Termination" means the date of termination of the Executive's
          employment with the Corporation;

     (m)  "Disability" shall mean the Executive's failure to substantially
          perform his material duties for the Corporation on a full-time basis
          for twelve (12) consecutive months as a result of physical or mental
          incapacity;

     (n)  "Disability Termination" has the meaning ascribed thereto in Section
          4.1 hereof;

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     (o)  "Effective Date" means the date first above written;

     (p)  "Exchange Act" means the SECURITIES EXCHANGE ACT OF 1934, as amended;

     (q)  "Good Reason" means, without the express written consent of the
          Executive, the occurrence of any of the following events:

          (i)  Any material reduction or diminution (except temporarily during
               any period of physical or mental incapacity or disability of the
               Executive) in the Executive's titles, status or positions, any
               material reduction or diminution in the Executive's authority,
               duties or responsibilities with the Corporation (including any
               position or duties as a Trustee of the Corporation and the
               failure to re-elect the Executive as a Trustee and to the Board),
               it being acknowledged that, in the event any entity becomes the
               owner, directly, indirectly, beneficially or otherwise of more
               than 20% of the Common Shares, it shall be Good Reason if the
               Executive is not the Chief Executive Officer of such entity;

          (ii) A breach by the Corporation of any material provision of this
               Agreement, including, but not limited to, a breach of the
               obligations of the Corporation under Sections 3.2, 3.6, 6.1, 7.6
               and 7.9 (other than a reduction in the Executive's Base Salary
               that does not exceed an aggregate of ten percent (10%) of the
               Executive's then current Base Salary and which reduction applies,
               in equal percentages, to all senior officers of the Corporation)
               or any failure to timely pay any part of the Executive's
               compensation hereunder, including, without limitation, the
               Executive's Base Salary, Annual Bonus and any other bonuses
               payable to him or to materially provide, in the aggregate, the
               level of benefits contemplated herein;

         (iii) The failure of the Corporation to obtain and deliver to the
               Executive a written agreement, in the form satisfactory to the
               Executive, to be entered into with any successor, assignee or
               transferee of the Corporation to assume and agree to perform this
               Agreement in accordance with Section 7.11 hereof;

          (iv) Any failure by or of the Corporation to continue in effect any
               benefit, bonus, profit sharing, incentive, remuneration,
               compensation, stock ownership, stock purchase, stock option, life
               insurance, disability, pension or retirement plans in which the
               Executive is participating or entitled to participate, or the
               Corporation takes, or fails to take, any action that materially
               adversely affects the Executive's participation in, or reduces
               his rights or benefits, under or pursuant to such plans, or the
               Corporation fails to increase or improve such rights or benefits
               on a basis consistent with practices in effect prior to such
               failure, or with practices implemented subsequent to a Change of
               Control, with respect to senior officers of the Corporation;

          (v)  The relocation of the Executive by the Corporation to a place
               other than the location at which he performed his duties for the
               Corporation immediately prior to such relocation, except for
               required travel on the Corporation's business to an extent
               substantially consistent with the Executive's business
               obligations to the Corporation;

          (vi) Any failure by the Corporation to provide the Executive with the
               number of paid vacation days to which he is entitled, as set
               forth herein, or the Corporation failing to increase such paid
               vacation days on a basis consistent with practices in effect
               prior to such failure, or with practices implemented subsequent
               to a Change of Control, with respect to the senior officers of
               the Corporation; and

         (vii) The Corporation taking any action to deprive the Executive of
               any material fringe benefit enjoyed by him immediately prior to
               such deprivation or the Corporation failing to increase or
               improve such material fringe benefits on a basis consistent with
               practices in

<PAGE>


               effect prior to such deprivation, or with practices implemented
               subsequent to a Change of Control, with respect to senior
               officers of the Corporation;

     (r)  "Incumbent Trustees" has the meaning ascribed thereto in Section
          2.2(i)(ii);

     (s)  "Just Cause" means the occurrence of any of the following events:

          (i)  Serious misconduct, dishonesty or disloyalty of the Executive
               directly related to the performance of his duties for the
               Corporation which results from a willful act or omission or from
               gross negligence and which is materially injurious to the
               operations, financial condition or business reputation of the
               Corporation;

          (ii) Willful and continued failure by the Executive to substantially
               perform his duties under this Agreement (other than any such
               failure resulting from his incapacity due to physical or mental
               disability or impairment); or

         (iii) Any other material breach of this Agreement by the Executive.

          For purposes of this Agreement, no act, or failure to act, by the
          Executive shall be "willful" unless it is done, or omitted to be done,
          in bad faith and without a reasonable belief that the act or omission
          was in the best interests of the Corporation;

     (t)  "Libor" means BBA Libor or if no such published rate is then
          available, the rate of interest calculated by the Executive, as being
          the arithmetic average (rounded up, if necessary, to the nearest full
          multiple of 1/16 of one percent) at which, in accordance with normal
          practice, leading banks in the London interbank market would be
          prepared to offer to other leading banks in the London interbank
          market for delivery on such date and for the applicable period based
          on the number of days comprised therein, deposits in United States
          Dollars of amounts comparable to the amount payable or the balance
          outstanding thereof during such period, at or prior to 11:00 a.m.
          G.M.T. on the second Banking Day prior to such date;

     (u)  "Market Price" means on any date, the average market price of the
          Common Shares calculated as the simple average of the closing price of
          the Common Shares as quoted through NASDAQ on each of the 10 business
          days preceding such date on which a closing price was quoted;

     (v)  "NASDAQ" means the National Association of Stock Dealers Automated
          Quotation System;

     (w)  "Plan" has the meaning ascribed to such term in Section 3.6(b)(i)
          hereof;

     (x)  "Prorated Bonus" has the meaning ascribed to such term in subsection
          4.1(c) hereof;

     (y)  "SEC" means the United States Securities and Exchange Commission;

     (z)  "Securities Act" means the SECURITIES ACT OF 1933, as amended;

     (aa) "Stock Options" has the meaning ascribed to such term in Section
          3.6(b)(i) hereof; and

     (bb) "Trustees" means the trustees of the Corporation, and "Trustee" means
          any one of them.

                                   ARTICLE III
                  TERMS AND CONDITIONS OF CONTINUING EMPLOYMENT

3.1  EMPLOYMENT. The parties acknowledge and agree that the Executive is
     employed by the Corporation and will, from the Effective Date, continue to
     be employed by the Corporation and will serve the Corporation as the
     President and Chief Executive Officer, and in such other related senior
     capacity as the Board may from

<PAGE>


     time to time reasonably require. The Executive shall report to the Board
     and shall have such authority as the Board may from time to time delegate
     to the Executive. The Executive's duties shall include those duties set
     forth in Schedule A hereto and any other duties consistent with the
     Executive's position in the Corporation.

3.2  APPOINTMENT AS TRUSTEE. During the term of this Agreement, the Corporation
     agrees to nominate the Executive to the position of Trustee and Chairman of
     the Board and support the Executive in seeking office as a Trustee and
     Chairman of the Board.

3.3  ORDERS OF BOARD. The Executive shall always act in accordance with any
     reasonable decision of and obey and carry out all lawful and reasonable
     orders given to him by the Board.

3.4  TIME AND ENERGY. Unless prevented by ill health, or physical or mental
     disability or impairment, the Executive shall, during the term hereof,
     devote sufficient business time, care and attention to the business of the
     Corporation in order to properly discharge his duties hereunder. It is
     acknowledged and agreed that the Executive is currently, and will continue
     to act as, a director, trustee, officer, shareholder or investor in other
     businesses, ventures, entities, institutions and organizations during the
     term of this Agreement and may devote time, care and attention thereto so
     long as his doing so does not materially adversely affect the ability of
     the Executive to devote sufficient time and energy to properly discharge
     his duties hereunder.

3.5  FAITHFUL SERVICE. The Executive shall well and faithfully serve the
     Corporation and use his reasonable efforts to promote the interests thereof
     and shall not use for his own purposes, or for any purposes other than
     those of the Corporation, any non-public information he may acquire with
     respect to the business, affairs and operations of the Corporation.

3.6  COMPENSATION. During the term of this Agreement, and any extension thereof,
     the Corporation shall pay and provide the Executive the following:

     (a)  CASH COMPENSATION. As compensation for his services to the
          Corporation, the Executive shall receive a base salary (the "Base
          Salary") and in addition to the Base Salary shall be eligible to
          receive in respect of each calendar year (or portion thereof)
          additional variable cash compensation, in an amount determined in
          accordance with any bonus, profit sharing or short term incentive
          compensation program which may be established by the Board either for
          the Executive or for senior officers of the Corporation (the "Annual
          Bonus"). As of the Effective Date, the Executive's annualized Base
          Salary shall be $240,000. During the term of this Agreement the Board
          shall review the Executive's Base Salary and Annual Bonus then in
          effect at least annually to ensure that such amounts are competitive
          with awards granted to similarly situated executives of publicly held
          companies comparable to the Corporation and shall increase such
          amounts as the Board may approve. The Board shall not reduce the
          Executive's Base Salary except as set forth herein. The Board may
          reduce the Executive's Base Salary provided such reduction in the
          Executive's Base Salary does not exceed an aggregate total of ten
          percent (10%) of the Executive's Base Salary in effect as of the
          Effective Date and which reduction applies, in equal percentages, to
          all senior officers of the Corporation. The Executive's Base Salary
          and Annual Bonus shall be payable in accordance with the Corporation's
          normal payroll practices, as applicable. No increase in the
          Executive's Base Salary and Annual Bonus shall be used to offset or
          otherwise reduce any obligations of the Corporation to the Executive
          hereunder or otherwise.

     (b)  EQUITY COMPENSATION.

          (i)  STOCK OPTIONS. The Corporation has granted to the Executive
               non-qualified stock options (the "Stock Options") under the
               Corporation's Amended and Restated 1992 Non-Qualified Stock
               Option Plan (the "Plan") to purchase a total of 1,685,000 Common
               Shares. The Stock Options shall expire at the close of business
               on the first day following the tenth (10th) anniversary of the
               date of their grant. In the case of termination by the
               Corporation without Just Cause, voluntary termination by the
               Executive for Good Reason, retirement, death or a Disability
               Termination, the Stock Options and any other

<PAGE>


               options or equity grants by the Corporation then held by the
               Executive shall remain exercisable until the earlier of one (1)
               year from the Date of Termination or the expiration of such Stock
               Options or other options or equity grants. Subject to the
               accelerated vesting, and other terms and provisions, set forth in
               this Agreement, the Stock Options shall vest and become
               exercisable as set forth in certain written stock option
               agreements entered into between the Executive and the Corporation
               (the "Option Agreements"). As of the Effective Date, 778,333 of
               the 1,685,000 Stock Options granted to the Executive have vested
               and 906,667 of such Stock Options are unvested. Of such 906,667
               unvested Stock Options, 453,333 are scheduled to vest on January
               19, 2001 and 453,334 are scheduled to vest on January 19, 2002,
               conditioned upon the Executive's continued employment with the
               Corporation as of each such vesting date. The Compensation
               Committee may issue additional Stock Options to the Executive as
               incentive compensation determined in accordance with the Plan or
               any other bonus or incentive compensation programs which may be
               established by the Board either for the Executive or senior
               officers of the Corporation. The determination as to the amounts
               of any awards available to the Executive under the Plan and such
               programs shall be reviewed at least annually by the Board or the
               Compensation Committee, as applicable, to ensure that such
               amounts are competitive with awards granted to similarly situated
               executives of publicly held companies comparable to the
               Corporation.

          (ii) TAX LIABILITY. In the event the Executive incurs any withholding
               tax liability in connection with the exercise of the Executive's
               Stock Options, or any other rights or options to acquire Common
               Shares, the Executive may elect to satisfy his resulting
               withholding tax obligation by having the Corporation retain that
               number of such Common Shares or other stock or equity awards
               having a fair market value equal to such withholding tax
               obligation.

         (iii) ONGOING AWARDS. The Board shall ensure, and shall take the
               necessary action to ensure, that the Executive fully participates
               in the Corporation's annual Stock Option and any other long-term
               incentive programs which may be established by the Board for
               senior officers of the Corporation at levels commensurate with
               his position.

     (c)  EMPLOYEE BENEFITS. The Executive shall, to the extent eligible, be
          entitled to participate at a level commensurate with his position in
          all of the Corporation's employee benefit, welfare and retirement
          plans and programs, as well as equity plans, provided by the
          Corporation to its senior officers in accordance with the terms
          thereof as in effect from time to time.

     (d)  PERQUISITES. The Corporation shall provide the Executive, at the
          Corporation's cost, with all perquisites which other senior officers
          of the Corporation are entitled to receive and such other perquisites
          which are suitable to the character of the Executive's position with
          the Corporation and adequate for the performance of his duties
          hereunder. To the extent legally permissible under applicable laws,
          the Corporation shall not treat such amounts as income to the
          Executive.

     (e)  BUSINESS AND ENTERTAINMENT EXPENSES. Upon submission of appropriate
          documentation in accordance with its policies in effect from time to
          time, the Corporation shall pay or reimburse the Executive for all
          business expenses which the Executive incurs in the performance of his
          duties under this Agreement, including, but not limited to, travel,
          entertainment, professional dues and subscriptions, and all dues,
          fees, and expenses associated with membership in various professional,
          business, and civic associations and societies in which the Executive
          participates in accordance with the Corporation's policies in effect
          from time to time.

     (f)  FLEXIBLE TIME OFF. The Executive shall be entitled to paid time off in
          accordance with the standard written policies of the Corporation with
          regard to its senior officers, but in no event less than twenty (20)
          days per calendar year not including, and in addition to, weekends and
          statutory holidays.

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     (g)  LOAN TO EXERCISE OPTIONS. The Executive shall be entitled to, from
          time to time, request the Corporation to, and the Corporation shall,
          lend to the Executive, for the purpose of exercising his Stock
          Options, the amount requested by the Executive from time to time to
          exercise his Stock Options in an aggregate principal amount not to
          exceed the total amount required by the Executive to exercise all his
          Stock Options then outstanding and capable of being exercised at the
          time of such request (the "Stock Option Loan") against delivery by the
          Executive of a promissory note payable to the Corporation in
          substantially the form attached hereto as Schedule B. The Corporation
          shall make the Stock Option Loan available to the Executive on a
          non-recourse basis secured by the Common Shares purchased by the
          Executive with the proceeds thereof. The Executive shall provide
          written notice to the Corporation setting forth the amount of the
          requested Stock Option Loan, the number of Common Shares the Executive
          intends to purchase through the exercise of his Stock Options and the
          intended date of such exercise. Upon receipt of such notice, the
          Corporation shall provide the Stock Option Loan to the Executive, by
          certified cheque, bank draft or wire transfer, on or prior to the date
          set forth in such notice for the intended exercise of the Executive's
          Stock Options, or on such other date and time as agreed to by the
          Executive.

     (h)  LOAN AND PURCHASE OF COMMON SHARES. The Executive shall be entitled
          to, from time to time, request the Corporation to, and the Corporation
          shall, lend to the Executive, for the purpose of purchasing Common
          Shares through NASDAQ, pursuant to a private placement or otherwise on
          a private basis, the amount, in an aggregate principal amount not to
          exceed $10,000,000, requested by the Executive from time to time to
          purchase such Common Shares (the "Market Purchase Loan") against
          delivery by the Executive of a promissory note payable to the
          Corporation in substantially the form attached as Schedule B hereto.
          The Corporation shall make the Market Purchase Loan available to the
          Executive on a non-recourse basis secured by the Common Shares
          purchased by the Executive with the proceeds thereof. The Executive
          shall provide written notice to the Corporation setting forth the
          amount of the requested Market Purchase Loan, the estimated number of
          Common Shares the Executive intends to purchase with such proceeds and
          the intended date of such purchase. Upon receipt of such notice, the
          Corporation shall provide the Market Purchase Loan to the Executive,
          by certified cheque, bank draft or wire transfer, on or prior to the
          date set forth in such notice for the intended purchase of Common
          Shares by the Executive, or on such other date and time as agreed to
          by the Executive.

     (i)  DEMAND REGISTRATION RIGHTS.

          (i)  REQUEST FOR REGISTRATION. Subject to subsection 3.6(i)(ii) of
               this Agreement, the Executive shall be entitled to make a written
               request ("Demand Registration Request") to the Corporation for
               registration with the SEC under and in accordance with the
               provisions of the Securities Act of all or part of the Common
               Shares owned by the Executive (a "Demand Registration") (which
               Demand Registration Request shall specify the intended number of
               Common Shares to be disposed of by the Executive and the intended
               method of disposition thereof); provided, that the Corporation
               may, if the Board so determines in the exercise of its
               reasonable, good faith judgment that due to a pending or
               contemplated acquisition or disposition or public offering or
               other similar occurrence it would be inadvisable to effect such
               Demand Registration at such time, defer such Demand Registration
               for a single period not to exceed one hundred eighty (180) days;
               provided, however, in the event that the Corporation proposes to
               register shares of beneficial interest of the Corporation under
               the Securities Act, whether or not for sale for its own account,
               during such single period, the Corporation shall, as part of or
               in conjunction with such registration, register the Common Shares
               set forth in the Executive's Demand Registration Request. Within
               ten (10) days after receipt of such request, the Corporation will
               use its best efforts to effect the registration under the
               Securities Act of the Common Shares which the Corporation has
               been so requested to register by the Executive.

          (ii) NUMBER OF DEMAND REGISTRATIONS. At any time on or after the
               Effective Date, the Executive shall be entitled to make one
               Demand Registration Request at any time;

<PAGE>


               provided that (i) the Corporation shall not be obligated to
               effect more than one Demand Registration and (ii) the Executive
               shall not be entitled to make a Demand Registration Request
               during any period during which (A) all of the Common Shares may
               be freely transferred at the same time pursuant to Rule 144
               promulgated under the Securities Act, or (B) all of the Common
               Shares have been properly registered on a registration statement
               under the Securities Act, such registration statement is
               effective under the Securities Act and all of the Common Shares
               may be freely transferable pursuant to such registration
               statement.

         (iii) EFFECTIVE REGISTRATION AND EXPENSES. A registration will not
               count as a Demand Registration until it has become effective
               (unless the Executive withdraws the Common Shares, in which case
               such demand will count as a Demand Registration unless the
               Executive agrees to pay all the expenses of such registration).
               The Corporation shall be solely responsible for any and all costs
               and expenses of all registrations and qualifications under the
               Securities Act, and of all other actions the Corporation is
               required to take in order to effect the registration of Common
               Shares under the Securities Act whether pursuant to this
               Agreement or otherwise.

          (iv) PRIORITY ON DEMAND REGISTRATIONS. If the offering of the
               Executive's Common Shares pursuant to such Demand Registration is
               in the form of an underwritten offering and the managing
               underwriter or underwriters of such offering advise the
               Corporation and the Executive in writing that in their opinion
               the number of Common Shares requested to be included in such
               offering is sufficiently large to adversely affect the success of
               such offering, the Corporation will include in such registration
               the aggregate number of Common Shares which in the opinion of
               such managing underwriter or underwriters can be sold without any
               such adverse effect, and such amount shall be allocated in the
               following order of priority: (i) first, any Common Shares that
               the Corporation or any other holder proposes to sell; and (ii)
               second, the Common Shares of the Executive subject to any such
               Demand Registration.

3.7  SHARES IN LIEU OF CASH. Subject to receipt of all necessary regulatory
     approvals including, but not limited to, any approvals under any securities
     legislation and the rules and regulations of NASDAQ, if any, the Executive
     may, at his sole option, exercisable by notice in writing to the
     Corporation at least seven (7) business days prior to the commencement of
     each period in respect of which such election is made, elect to have all or
     a portion of his Base Salary and/or Annual Bonus paid by way of delivery of
     Common Shares of the Corporation having a fair market value as at the day
     prior to the date of issue to the Executive equal to the Base Salary and/or
     Annual Bonus or a portion thereof elected to be so paid.

3.8  TERM. This Agreement shall remain in force for a minimum period of
     thirty-six (36) months from the Effective Date and such term shall renew
     automatically for one (1) additional month for each month that the same
     remains in effect such that the outstanding term of this Agreement shall at
     all times remain at thirty-six (36) months until such time as the
     Corporation serves notice that it shall terminate this Agreement effective
     thirty-six (36) months from the last day in the month in which such notice
     shall be given in writing to the Executive, such notice to be delivered to
     the Executive at the offices of the Corporation.

3.9  AMOUNTS PAYABLE CONSIDERED DEBT. All amounts payable by the Corporation
     under this Agreement shall constitute a debt owing by the Corporation to
     the Executive.

                                   ARTICLE IV
                 OBLIGATIONS OF THE CORPORATION UPON TERMINATION

4.1  DEATH OR DISABILITY. The Corporation may terminate the Executive's
     employment in the event the Executive has been unable to perform his
     material duties hereunder because of Disability by giving the Executive
     notice of such termination while such Disability continues (a "Disability
     Termination"). The Executive's employment shall automatically terminate on
     the Executive's death. In the event the

<PAGE>


     Executive's employment with the Corporation terminates during the term of
     this Agreement by reason of the Executive's death or as a result of a
     Disability Termination, then upon and immediately effective the Date of
     Termination:

     (a)  the Executive shall be fully and immediately vested in his unvested
          Stock Options, and any other options or equity awards granted by the
          Corporation to the Executive, that are unvested on the Date of
          Termination so that such Stock Options, options and equity awards are
          fully and immediately exercisable by the Executive;

     (b)  the Corporation shall promptly pay and provide the Executive (or in
          the event of the Executive's death, the Executive's estate):

          (i)  any unpaid Base Salary and any outstanding and accrued regular
               and special vacation pay through the Date of Termination;

          (ii) any unpaid Annual Bonus and other bonuses accrued with respect to
               the fiscal year ending on or preceding the Date of Termination;

         (iii) reimbursement for any unreimbursed expenses incurred through to
               the Date of Termination; and

          (iv) all other payments, benefits or fringe benefits to which the
               Executive may be entitled subject to and in accordance with the
               terms of any applicable compensation arrangement or benefit,
               equity or fringe benefit plan or program or grant, and amounts
               which may become due under this Agreement (the payments referred
               to herein in subsections 4.1(b)(i) to 4.1(b)(iv) shall,
               collectively, be referred to as "Accrued Benefits"); and

     (c)  the Corporation shall pay to the Executive (or in the event of the
          Executive's death, the Executive's estate) at the time other senior
          executives are paid under any cash bonus or long term incentive plan,
          a PRO RATA Annual Bonus equal to the amount the Executive would have
          received if his employment continued (without any discretionary
          cutback) multiplied by a fraction where the numerator is the number of
          days in each respective bonus period prior to the Executive's
          termination and the denominator is the number of days in the bonus
          period (the "Prorated Bonus").

4.2  TERMINATION FOR JUST CAUSE. The Corporation may terminate the Executive's
     employment for Just Cause. In the event that the Executive's employment
     with the Corporation is terminated during the term of this Agreement by the
     Corporation for Just Cause, the Executive shall not be entitled to any
     additional payments or benefits hereunder, other than the Accrued Benefits
     (including, but not limited to, any then vested Stock Options or other
     options or equity grants) and the Prorated Bonus which the Corporation
     shall pay or provide to the Executive immediately upon the Date of
     Termination.

     Notwithstanding the foregoing, no event shall constitute or be deemed the
     basis for termination of the Executive's employment for Just Cause unless
     the Executive is terminated therefor within sixty (60) days after such
     event is known to the Chairman of the Corporation, or, if the Executive is
     the Chairman, known to a majority of the Board (other than the Executive)
     and the Executive shall not be deemed to have been terminated for Just
     Cause without:

     (a)  advance written notice received by the Executive not less than thirty
          (30) days prior to the Date of Termination setting forth the
          Corporation's intention to consider terminating the Executive and
          including a statement of the proposed Date of Termination, the
          specific detailed basis for such consideration of termination for Just
          Cause and demanding that the Executive remedy the event, conduct,
          condition, act or omission that is the basis for such consideration of
          termination for Just Cause set forth in such notice (the "Just Cause
          Event") within thirty (30) days of receipt of such notice by the
          Executive;

<PAGE>


     (b)  an opportunity for the Executive, together with his counsel, to be
          heard before the Board at least ten (10) days after the giving of such
          notice and prior to the proposed Date of Termination;

     (c)  the failure on the part of the Executive to remedy the Just Cause
          Event within thirty (30) days from receipt of such notice, or any
          extension thereof granted by the Board, or the failure on the part of
          the Executive to take all reasonable steps to that end during such
          thirty (30) day period, or any extension thereof;

     (d)  a duly adopted resolution of the Board stating that in accordance with
          the provisions of the next to the last sentence of this Section 4.2
          that the actions of the Executive constituted Just Cause and the basis
          thereof; and

     (e)  a written determination provided by the Board setting forth the acts
          and omissions that form the basis of such termination of employment.
          Any determination by the Board hereunder shall be made by the
          affirmative vote of at least a two-thirds (2/3) majority of all of the
          members of the Board (other than the Executive). Any purported
          termination of employment of the Executive by the Corporation which
          does not meet each and every substantive and procedural requirement of
          this Section 4.2 shall be treated for all purposes under this
          Agreement as a termination of employment without Just Cause.

4.3  VOLUNTARY TERMINATION FOR GOOD REASON; INVOLUNTARY TERMINATION OTHER THAN
     FOR JUST CAUSE. The Executive may terminate his employment with the
     Corporation for Good Reason at any time within one hundred eighty (180)
     days after the occurrence of the Good Reason event by written notice to the
     Corporation. If the Executive's employment with the Corporation is
     voluntarily terminated by the Executive for "Good Reason" or is
     involuntarily terminated by the Corporation other than for "Just Cause",
     then the Corporation shall pay or provide the Executive with the following:

     (a)  any Accrued Benefits;

     (b)  a severance amount equal to three (3) times the sum of: (A) the
          Executive's then Base Salary; and (B) the higher of (x) the
          Executive's then current Annual Bonus and (y) the highest variable pay
          and incentive bonus received by the Executive from the Corporation for
          the five (5) fiscal years last ending prior to such termination, which
          severance amount is payable in substantially equal installments over
          twelve (12) months in accordance with the Corporation's standard
          payroll practice; provided, however, that:

          (i)  in the event of a Change of Control following such termination,
               the unpaid portion of such severance amount, if any, shall be
               paid to the Executive in full in a single lump sum cash payment
               immediately following such Change of Control; and

          (ii) if such termination occurs in contemplation of, at the time of,
               or within three (3) years after a Change of Control, the
               Executive shall instead be entitled to a lump sum cash payment
               immediately following such termination equal to three (3) times
               the sum of: (A) the Executive's then Base Salary; and (B) the
               higher of (x) the Executive's then current Annual Bonus and (y)
               the highest variable pay and annual incentive bonus received by
               the Executive for the five (5) fiscal years last ending prior to
               such termination; and

     (c)  the Executive shall be fully and immediately vested in his unvested
          Stock Options and any other options or equity awards granted by the
          Corporation to the Executive so that such Stock Options, options and
          equity awards are fully and immediately exercisable by the Executive.

4.4  WITHOUT GOOD REASON. The Executive may terminate his employment at any time
     without Good Reason by written notice to the Corporation. In the event that
     the Executive's employment with the Corporation is terminated during the
     term of this Agreement by the Executive without Good Reason, the Executive
     shall not be entitled to any additional payments or benefits hereunder,
     other than Accrued Benefits (including,

<PAGE>


     but not limited to, any then vested Stock Options, or other options or
     equity grants) and the Prorated Bonus which the Corporation shall pay or
     provide to the Executive immediately upon the Date of Termination.

4.5  MITIGATION AND OFFSET. In the event of the termination of the Executive's
     employment under this Agreement;

     (a)  The Executive shall be under no obligation to seek other employment or
          otherwise mitigate the value of any compensation or benefits
          contemplated by this Agreement, nor shall any such compensation or
          benefits be reduced in any respect in the event that the Executive
          shall secure, or shall not reasonably pursue, alternative employment
          or earnings or benefits that the Executive may receive from any other
          source;

     (b)  The amounts payable by the Corporation hereunder shall not be subject
          to setoff, offset, counterclaim, recoupment, defence or other right
          which the Corporation may have against the Executive or others; and

     (c)  The Executive may, at his sole option, set-off or offset any amounts
          payable by the Executive to the Corporation, including, but not
          limited to, the outstanding balance of any Stock Option Loan and/or
          Market Purchase Loan of the Executive, against any amounts payable by
          the Corporation to the Executive under this Agreement.

4.6  CHANGE OF CONTROL VESTING ACCELERATION. In the event of a "Change of
     Control", immediately effective the date of such Change of Control, the
     Executive shall be fully and immediately vested in his unvested Stock
     Options, and any other options or equity awards granted by the Corporation
     to the Executive, that are unvested on the Date of Termination so that such
     Stock Options, and other options and equity awards are fully and
     immediately exercisable by the Executive.

4.7  PURCHASE OF SHARES BY THE CORPORATION. The Executive shall be entitled, at
     his option, exercisable upon written notice to the Corporation within a
     period of 365 days following the earlier of the Date of Termination or the
     date of Change of Control, to sell to the Corporation, and the Corporation
     agrees to purchase from the Executive, all, or any part, of the Common
     Shares in the Corporation that he holds at the Date of Termination or the
     date of Change of Control hereof at a price equal to the Market Price of
     such securities as at the date such notice is given to the Corporation,
     which date shall be deemed to be the date of the acquisition of such
     securities by the Corporation and the date of sale of such securities by
     the Executive hereunder. The Corporation shall, immediately upon receipt of
     such notice (the "Initial Purchase Date") pay the purchase price, by
     certified cheque, bank draft or wire transfer, for all the securities in
     the Corporation the certificates of which are tendered in transferable form
     by the Executive in accordance with this Section (the "Tendered
     Securities") unless to do so would result in a breach by the Corporation of
     its constating documents or governing legislation respecting the purchase
     by the Corporation of its own securities (the "Solvency Requirements") or
     would result in the Corporation contravening any applicable federal, state,
     or provincial securities legislation. The Corporation shall, upon request
     from the Executive to do so, make application or join in an application by
     the Executive to the applicable securities commissions and use its best
     efforts to obtain requisite approvals or exemptions in order to fulfil its
     obligations under this Section as soon as possible after the receipt of the
     aforesaid notice of sale from the Executive. In the event that the
     Corporation is unable, without breaching the Solvency Requirements and
     without contravening applicable securities legislation to purchase all the
     Tendered Securities on the Initial Purchase Date, the Corporation shall, as
     soon thereafter as it is legally able to do so, purchase (on a PRO RATA
     basis) as many of such Tendered Securities and shares in the Corporation
     tendered by persons, including the Executive, with rights identical to
     those afforded the Executive by this Section as the Corporation may
     purchase while complying with the Solvency Requirements and applicable
     securities legislation, until such time as either:

     (a)  the Corporation has purchased pursuant to this Section all the Common
          Shares in the Corporation that the Executive held at the Date of
          Termination hereof or such lesser number as the Executive may at his
          option elect at any time or from time to time to sell to the
          Corporation hereunder; or

<PAGE>


     (b)  the Executive has elected not to sell to the Corporation pursuant to
          this Section any, or as many, Common Shares in the Corporation as the
          Corporation is, at the time of such election, capable of purchasing
          from the Executive pursuant to the provisions of this Section.

     Following either such event the Executive shall have no further rights
     pursuant to this Section.


                                    ARTICLE V
                           FURTHER EXECUTIVE BENEFITS

5.1  HOUSING. If, at the Date of Termination, the Executive was residing in a
     home provided to him by the Corporation, pursuant to a lease or rental
     agreement, or other arrangement, between the Corporation and a third party
     the Executive may elect, at any time during the sixty (60) days following
     the Date of Termination, and the Corporation will permit the Executive, to
     assume, or take the assignment of, any such lease or rental agreement, or
     other arrangement, respecting such housing in accordance with the terms of
     any such lease or rental agreement, or other arrangement, in force between
     the Corporation and the party leasing or renting such housing to the
     Corporation prior to the Date of Termination.

5.2  OUT OF POCKET AND RELOCATION EXPENSES. Upon termination, the Corporation
     shall pay additional reasonable expenses that shall be incurred by the
     Executive in connection with the Executive obtaining alternative full-time
     employment, including the costs associated with relocation by the Executive
     to obtain such alternative employment.


                                   ARTICLE VI
                                 INDEMNIFICATION

6.1  INDEMNIFICATION. The Corporation hereby covenants and agrees that if the
     Executive is made a party, or is threatened to be made a party, to any
     action, suit or proceeding, whether civil, criminal, administrative or
     investigative of any nature whatsoever (a "Proceeding"), by reason of, or
     as a result of, the fact that he is or was a Trustee, officer or employee
     of the Corporation or is or was serving at the request of the Corporation
     as a trustee, director, officer, member, employee or agent of another
     corporation, partnership, joint venture, trust or other enterprise,
     including service with respect to employee benefit plans, whether or not
     the basis of such Proceeding is the Executive's alleged action in an
     official capacity while serving as a Trustee, director, officer, member,
     employee or agent of the Corporation, the Executive shall be indemnified
     and held harmless by the Corporation to the fullest extent legally
     permitted or authorized by the Corporation's constating documents or, if
     greater, by applicable federal, state or provincial legislation, against
     all costs, expenses, liability and losses of any nature whatsoever
     (including, without limitation, attorney's fees, judgments, fines,
     interest, taxes or penalties and amounts paid or to be paid in settlement)
     reasonably incurred or suffered by the Executive in connection therewith
     (collectively, the "Indemnification Amounts"), and such indemnification
     shall continue as to the Executive even if he has ceased to be a officer,
     Trustee, director, member, employee or agent of the Corporation or other
     entity and shall inure to the benefit of the Executive's heirs, executors
     and administrators. The Corporation shall advance to the Executive the
     Indemnification Amounts incurred, or reasonably estimated to be incurred,
     by him immediately upon receipt by the Corporation of a written request for
     such advance.

6.2  STANDARD OF CONDUCT. Neither the failure of the Corporation or the Board to
     have made a determination prior to the commencement of any proceeding
     concerning payment of amounts claimed by the Executive under Section 6.1
     hereof that indemnification of the Executive is proper because he has met
     the applicable standard of conduct, nor a determination by the Corporation
     or the Board that the Executive has not met such applicable standard of
     conduct, shall create a presumption that the Executive has not met the
     applicable standard of conduct.


<PAGE>

                                   ARTICLE VII
                                     GENERAL

7.1  NO PROHIBITION ON EMPLOYMENT. The Executive shall not be prohibited in any
     manner whatsoever from obtaining employment with or otherwise forming or
     participating in a business competitive to the business of the Corporation
     after termination of employment with the Corporation.

7.2  RESIGNATION OF POSITIONS. The Executive agrees that after termination of
     his employment with the Corporation he will tender his resignation from any
     position he may hold as an officer, director or Trustee of the Corporation
     or any of its affiliated or associated companies if so requested by the
     Board.

7.3  RIGHTS AND OBLIGATIONS SURVIVE. The respective rights and obligations of
     the parties hereunder shall survive any termination of the Executive's
     employment to the extent necessary to preserve such rights and obligations.
     For greater certainty, notwithstanding anything to the contrary in this
     Agreement, the parties hereto acknowledge and agree that Sections 4.1, 4.2,
     4.3, 4.5, 4.6, 4.7, 5.1, 5.2, 6.1, 7.3, 7.6, 7.8, 7.9, 7.14, 7.15 and 7.17
     shall survive the termination of the Executive's employment with the
     Corporation and remain in full force and effect.

7.4  BENEFICIARIES. The Executive shall be entitled, to the extent permitted
     under any applicable law, to select and change a beneficiary or
     beneficiaries to receive any compensation or benefit payable hereunder
     following the Executive's death by giving the Corporation written notice
     thereof. In the event of the Executive's death or a judicial determination
     of his incompetence, reference in this Agreement to the Executive shall be
     deemed, where appropriate, to refer to his beneficiary, estate or other
     legal representative.

7.5  TAX GROSS-UP. Anything in this Agreement to the contrary notwithstanding,
     in the event it shall be determined that any payment, award, benefit or
     distribution by the Corporation to or for the benefit of the Executive, his
     beneficiaries, heirs, successors and assigns (the "Taxable Benefit") would
     be subject to any excise or withholding tax as a result of payment upon
     termination of the Executive's employment, or any interest or penalties are
     incurred by the Executive with respect to such excise or withholding tax,
     the Executive shall be entitled to receive an additional payment (a
     "Gross-Up Payment") in an amount such that after payment by the Executive
     of all taxes (including any interest or penalties imposed with respect to
     such taxes) imposed upon the Taxable Benefit and/or the Gross-Up Payment,
     the Executive retains an amount of the Gross-Up Payment equal to the excise
     or withholding taxes (together with any such interest and penalties imposed
     with respect to such taxes) imposed upon the Taxable Benefit and Gross-Up
     Payment.

7.6  LEGAL, ACCOUNTING AND PROFESSIONAL EXPENSES. The Corporation shall pay, to
     the full extent permitted by law, all legal, accounting and other
     professional fees and related expenses the Executive, the Executive's legal
     representatives or the Executive's family may reasonably incur in
     connection with the negotiation and preparation of this Agreement, any
     contest (regardless of the outcome thereof) by the Corporation, the
     Executive or others of the validity or enforceability of, interpretation
     of, or liability under, any provision of this Agreement or as a result of
     any action by the Executive, the Executive's legal representatives or the
     Executive's family (regardless of the outcome thereof) to enforce his or
     their rights under this Agreement, plus interest, compounded quarterly, on
     the total unpaid amount determined to be payable under this Agreement, such
     interest to be calculated at a rate equal to 2% in excess of LIBOR in
     effect from time to time during the period of such non-payment. The
     Corporation shall advance to the Executive such fees and expenses incurred,
     or reasonably estimated to be incurred, by him in connection with such
     negotiation and preparation, contest or action within seven (7) days after
     receipt by the Corporation of a written request for such advance.

7.7  FAIR AND REASONABLE PROVISIONS. The Corporation and Executive acknowledge
     and agree that the provisions of this Agreement regarding further payments
     of the Executive's Base Salary, Annual Bonus and other bonuses, and the
     exercisability and vesting of his Stock Options, and other options or
     equity grants, constitute fair and reasonable provisions for the
     consequences of such termination, do not constitute a penalty, and such
     payments and benefits shall not be limited or reduced by amounts the
     Executive might

<PAGE>


     earn or be able to earn from any other employment or ventures during the
     remainder of the agreed term of this Agreement.

7.8  LUMP SUM PAYMENT. Except as otherwise specifically provided in this
     Agreement, the Corporation shall pay the Executive any lump sum payment due
     to him under this Agreement within seven (7) business days of the Date of
     Termination. Any payments due to the Executive under this Agreement that
     are not paid within such time shall accrue interest, compounded quarterly,
     on the total unpaid amount payable under this Agreement, such interest to
     be calculated at a rate equal to 2% in excess of Libor then in effect from
     time to time during the period of such non-payment. No payments due to the
     Executive under this Agreement may be offset by the Corporation by amounts
     due to the Corporation from the Executive.

7.9  LIABILITY INSURANCE. The Corporation shall use its best efforts to obtain
     and continue coverage of the Executive under trustees and officers
     liability insurance both during and, while potential liability exists,
     after the Executive's employment with the Corporation in the same amount
     and to the same extent, if any, as the Corporation covers its other
     Trustees, officers and directors.

7.10 NO DEROGATION OF RIGHTS. Nothing herein derogates from any rights the
     Executive may have under applicable law.

7.11 ASSIGNABILITY. This Agreement shall be binding upon and inure to the
     benefit of the parties hereto and their respective successors, heirs (in
     the case of the Executive) and assigns. No rights or obligations of the
     Corporation under this Agreement may be assigned or transferred by the
     Corporation except that such rights or obligations may be assigned or
     transferred pursuant to a merger, amalgamation, reorganization, continuance
     or consolidation in which the Corporation is not the continuing entity, or
     the sale or liquidation of all or substantially all of the assets of the
     Corporation, provided that the assignee or transferee is the successor to
     all or substantially all of the assets of the Corporation and such assignee
     or transferee assumes the liabilities, obligations and duties of the
     Corporation, as contained in this Agreement, either contractually or as a
     matter of law. The Corporation further agrees that, in the event of a sale
     of assets or liquidation as described in the preceding sentence, it shall
     take whatever action it legally can in order to cause such assignee or
     transferee to expressly assume the liabilities, obligations and duties of
     the Corporation hereunder. No rights or obligations of the Executive under
     this Agreement may be assigned or transferred by the Executive other than:
     (a) his rights to compensation and benefits, in whole or in part, which may
     be transferred by the Executive to (i) a corporation owned or controlled by
     the Executive or members of the Executive's family, (ii) a trust, the
     beneficiaries of which are the Executive or members of the Executive's
     family, (iii) a charity, a foundation or trust established for charitable
     purposes, or which may be transferred by the Executive's will or the
     operation of law; (b) to a corporation through which the Executive shall
     provide the services required of him hereunder; and (c) as provided in
     Section 7.4 hereof.

7.12 AUTHORIZATION. The Corporation represents and warrants that it is fully
     authorized and empowered to enter into this Agreement and perform its
     obligations hereunder, which performance will not violate any agreement
     between the Corporation and any other person, firm or organization nor
     breach any provisions of its constating documents or governing legislation.

7.13 AMENDMENT OR WAIVER. No provision in this Agreement may be amended unless
     such amendment is agreed to in writing and signed by the Executive and an
     authorized officer of the Corporation. No waiver by either party hereto of
     any breach by the other party hereto of any condition or provision
     contained in this Agreement to be performed by such other party shall be
     deemed a waiver of a similar or dissimilar condition or provision at the
     same or any prior or subsequent time. Any waiver must be in writing and
     signed by the Executive or an authorized officer of the Corporation, as the
     case may be.

7.14 INTERPRETATION OF PLAN AND OPTION AGREEMENTS. In the event of a conflict
     between, or inconsistency with, any, or any part, of the terms or
     provisions of this Agreement and the terms or provisions of the Plan or the
     Option Agreements, as the case may be, the terms and provisions of this
     Agreement shall be deemed to govern, supersede, and take precedence over
     such inconsistent or conflicting terms and provisions contained in the Plan
     and the Option Agreements, as the case may be.

<PAGE>


7.15 GOVERNING LAW AND VENUE. This Agreement shall be construed and interpreted
     in accordance with the laws of England. Each of the parties hereby
     irrevocably attorns to the non-exclusive jurisdiction of the Courts of
     London, England with respect to any matters arising out of this Agreement.

7.16 NOTICES. Any notice required or permitted to be given under this Agreement
     shall be in writing and shall be properly given if delivered or mailed by
     prepaid registered mail addressed as follows:

     (a)  in the case of the Corporation:

          Mercer International Inc.
          Giesshubelstrasse 15,
          8045 Zurich, Switzerland

     (b)  in the case of the Executive:

          to the last address of the Executive in the records of the Corporation
          and its subsidiaries or to such other address as the parties may from
          time to time specify by notice given in accordance herewith.

          Any notice so given shall be conclusively deemed to have been given or
          made on the day of delivery, if delivered, or if mailed as aforesaid,
          upon the date shown on the postal return receipt as the date upon
          which the envelope containing such notice was actually received by the
          addressee.

7.17 SEVERABILITY. If any provision contained herein is determined to be void or
     unenforceable for any reason, in whole or in part, it shall not be deemed
     to affect or impair the validity of any other provision contained herein
     and the remaining provisions shall remain in full force and effect to the
     fullest extent permissible by law.

7.18 ENTIRE AGREEMENT. Other than the Trustee's Indemnity Agreement between the
     Executive and the Corporation of event date herewith (the "Indemnity
     Agreement"), this Amended and Restated Employment Agreement contains the
     entire understanding and agreement between the parties concerning the
     subject matter hereof and supersedes all prior agreements, understandings,
     discussions, negotiations and undertakings, whether written or oral,
     between the parties with respect thereto. For greater certainty,
     notwithstanding anything to the contrary in this Agreement, the parties
     hereto acknowledge and agree that nothing contained herein is intended to
     modify, abridge, limit or affect any of the rights or obligations of the
     parties hereto contained in the Indemnity Agreement.

7.19 CURRENCY. Unless otherwise specified herein all references to dollar or
     dollars are references to United States dollars.

7.20 FURTHER ASSURANCES. Each of the Executive and the Corporation will do,
     execute and deliver, or will cause to be done, executed and delivered, all
     such further acts, documents and things as the Executive or the Corporation
     may require for the purposes of giving effect to this Agreement.

7.21 COUNTERPARTS/FACSIMILE EXECUTION. This Agreement may be executed in several
     parts in the same form and such parts as so executed shall together
     constitute one original document, and such parts, if more than one, shall
     be read together and construed as if all the signing parties had executed
     one copy of the said Agreement.

<PAGE>


7.22 AMENDMENT AND RESTATEMENT. This Amended and Restated Employment Agreement
     is hereby amended, ratified and confirmed by each of the parties hereto and
     shall amend and restate in its entirety the employment agreement made
     between the parties dated July 1, 1994 which is hereby terminated and null
     and void.

IN WITNESS WHEREOF the parties have executed this Agreement as of the date first
above written.

MERCER INTERNATIONAL INC.

By:  ___________________________________________

Name: __________________________________________

Title: _________________________________________

SIGNED, SEALED and DELIVERED           )
by JIMMY S.H. LEE                      )
in the presence of:                    )
                                       )
______________________________         )        __________________________
Witness                                )        JIMMY S.H. LEE
                                       )
______________________________         )
Address                                )
                                       )
______________________________         )
                                       )
______________________________         )
Occupation

<PAGE>

                                   SCHEDULE A

EXECUTIVE'S DUTIES

Management of all matters relating to the operations of the Corporation,
including:

1.   Performance of the duties of President of the Corporation and Trustee of
     the Corporation normally associated with the office of Chief Executive
     Officer;

2.   Supervision of investor relations and corporate information dissemination;

3.   Participation in the development of policies and programs for review and
     approval by the Board;

4.   The review and assessment of business opportunities presented to the
     Corporation;

5.   Preparation of business plans as required from time to time for review and
     approval by the Board;

6.   Monitoring and control of the operations of the Corporation; and

7.   Performance of such other duties consistent with the Executive's position
     which the Board shall, from time to time, reasonably direct.

<PAGE>


                                   SCHEDULE B

                                 PROMISSORY NOTE

$___________________________                                 ____________, 20___

FOR VALUE RECEIVED, Jimmy S. H. Lee, (the "Borrower"), hereby promises to pay to
Mercer International Inc., a Massachusetts business trust organized under the
laws of the State of Washington (the "Holder"), or its registered assigns, the
principal sum _______ in lawful money of the United States of America (the
"Principal Amount") as adjusted from time to time in accordance with the terms
of this Promissory Note, on ______________ (_________________), together with
interest accrued thereon through the date of payment; provided, however, that
(A) with respect to each of the Common Shares, as that term is defined in the
Amended and Restated Employment Agreement dated November 20, 2000 between
Borrower and Holder (the "Employment Agreement"), acquired by the Borrower with
the proceeds of the Principal Amount pursuant to Sections 3.6(g) and/or 3.6(h)
of the Employment Agreement that Borrower subsequently sells in an arms-length
transaction to an unrelated third-party (a "Sale"), Borrower promises to pay to
Holder, or any registered assigns, within thirty (30) days of the closing of
such Sale, as partial payment of the Principal Amount, an amount equal to the
per share consideration received by Borrower as a result such Sale and (B)
Borrower promises to pay to Holder, or any registered assigns, any then unpaid
Principal Amount together with interest accrued thereon through the date of
payment no later than the earlier of: (i) on or prior to the first (1st)
anniversary following the date that Borrower's employment with Holder terminates
as a result of a termination by Holder for Just Cause pursuant to Section 4.2 of
the Employment Agreement or a termination by Borrower without Good Reason
pursuant to Section 4.4 of the Employment Agreement or (ii) on or prior to the
second (2nd) anniversary following the date that Borrower's employment with the
Holder terminates as a result of a termination by Holder other than for Just
Cause pursuant to Section 4.3 of the Employment Agreement, a termination by
Borrower for Good Reason pursuant to Section 4.3 of the Employment Agreement,
the Borrower suffering a Disability pursuant to Section 4.1 of the Employment
Agreement or the Borrower's death pursuant to Section 4.1 of the Employment
Agreement.

This Promissory Note shall bear interest on the outstanding principal balance
hereunder at the rate equal to LIBOR (as defined in the Employment Agreement) in
effect during the period any principal balance hereunder remains outstanding.
Interest shall be calculated on the basis of a 365-day year for the actual
number of days elapsed and shall be payable at maturity. Interest accrued but
unpaid during any Yearly Period shall become part of the Principal Amount
effective at 11:59 P.M G.M.T. on the last day of such Yearly Period. As used
herein, the term "Yearly Period" means each successive twelve-month period,
beginning on the date of this Agreement and ending on the first anniversary of
the date of this Agreement and continuing to each successive anniversary
thereafter, during which the Principal Amount remains outstanding.

All payments hereunder shall be made in immediately available funds in lawful
money of the United States of America.

Except as set forth in the next two sentences, the obligations of Borrower and
the rights of Holder under this Promissory Note shall be absolute and shall not
be subject to any counterclaim, set-off, deduction or defense. This Promissory
Note represents a non-recourse obligation of Borrower. If for any reason
Borrower fails to pay the full amount due hereunder, the liability of Borrower
to Holder, and the sole recourse of Holder against Borrower, shall be limited to
_____________________ Common Shares pledged to Holder in accordance with the
next paragraph.

Borrower hereby pledges to Holder on the date of this Agreement, _______________
Common Shares of Holder acquired by Borrower pursuant to Sections 3.6(g) and
3.6(h) of the Employment Agreement to secure the satisfaction by Borrower of all
his obligations to Holder under this Promissory Note.

All or any portion of the Principal amount evidenced by this Promissory Note may
be prepaid at any time without premium or penalty.

In the event of default under this Promissory Note, Holder shall have all rights
and remedies provided at law and in equity.


<PAGE>


No interest or other amount shall be payable in excess of the maximum
permissible rate under applicable law.

This Promissory Note may not be changed, modified or terminated orally, other
than by an agreement in writing signed by the party sought to be charged.

This Promissory Note shall be governed by, and construed in accordance with, the
laws of England. Each of Holder and Borrower irrevocably attorns to the
non-exclusive jurisdiction of the Courts of London, England with respect to any
matter arising out of this Promissory Note.

This Promissory Note shall be binding upon the successors and assigns of
Borrower and shall inure to the benefit of Holder and its successors and
assigns. Transfer of this Promissory Note may be effected only by surrender of
this Promissory Note to Borrower whereupon Borrower shall reissue this
Promissory Note to Holder's transferee as a successor registered Holder.


                                                       _________________________
                                                       Jimmy S. H. Lee