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                                                                   Exhibit 10.51










                              BOWATER INCORPORATED
                             MID-TERM INCENTIVE PLAN

                        (Effective as of January 1, 2003)



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                                TABLE OF CONTENTS
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                                                                   Page No.
                                                                   --------

Section 1.  Establishment of Plan......................................1

Section 2.  Definitions................................................1

Section 3.  Administration.............................................6

Section 4.  Eligibility and Participation..............................7

Section 5.  Award Determination........................................7

Section 6.  Termination of Employment..................................9

Section 7.  Change in Control..........................................9

Section 8.  Amendment and Modification................................10

Section 9.  Miscellaneous.............................................10



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SECTION 1. ESTABLISHMENT OF PLAN

         Effective January 1, 2003, Bowater Incorporated, a Delaware corporation
(the "Company"), hereby establishes an incentive compensation plan to be known
as the "Bowater Incorporated Mid-Term Incentive Plan" (the "Plan") as set forth
in this document.

SECTION 2. DEFINITIONS

         Whenever used in the Plan, the following terms shall have the meanings
indicated:

         "Acquiring Person" shall mean the Beneficial Owner, directly or
indirectly, of Stock representing 20% or more of the combined voting power of
the Company's then outstanding securities, not including (except as provided in
clause (i) of the next sentence) securities of such Beneficial Owner acquired
pursuant to an agreement allowing the acquisition of up to and including 50% of
such voting power approved by two-thirds of the members of the Board who are
Board members before the Person becomes Beneficial Owner, directly or
indirectly, of Stock representing 5% or more of the combined voting power of the
Company's then outstanding securities. Notwithstanding the foregoing, (i)
securities acquired pursuant to an agreement described in the preceding sentence
will be included in determining whether a Beneficial Owner is an Acquiring
Person if, subsequent to the approved acquisition, the Beneficial Owner acquires
5% or more of such voting power other than pursuant to such an agreement so
approved; and (ii) a Person shall not be an Acquiring Person if such Person is
eligible to and files a Schedule 13G under the Exchange Act with respect to such
Person's status as a Beneficial Owner of all Stock of the Company of which the
Person is a Beneficial Owner.

         "Active Employee" means an Employee who is providing services to the
Company or a subsidiary and does not include an individual who is receiving
periodic severance payments. Notwithstanding any provision herein, or in any
policy or plan of the Company, to the contrary, an individual will not be an
Active Employee for any period that such individual is on an authorized or
unauthorized leave of absence from the Company, except to the extent otherwise
required by law.

         "Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under the
Exchange Act, as in effect on the Effective Date.

         "Awards" may be made under Section 5.2, Section 5.3 and/or Section 7 of
the Plan. The form of payment of the Awards may be determined by the Committee
in its discretion at any time prior to payment. The Awards may be paid in cash,
Stock or other form of equity compensation, or in any other form, or in any
combination thereof. The form of an Award need not be the same for all
Participants. Any Awards paid in the form of Stock, or any other form of equity
compensation, shall only be paid by means of the grant of such Award pursuant to
and in accordance with the terms of the applicable plan governing the issuance
of the equity


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compensation. The determination of the number of shares or amount of other
equity to be issued for any Award payable in the form of Stock or other equity
compensation shall be made by the Committee using any generally accepted
valuation method or model selected by the Committee in its sole discretion.

         "Beneficial Owner" of Stock means (i) a Person who beneficially owns
such Stock, directly or indirectly, or (ii) a Person who has the right to
acquire such Stock (whether such right is exercisable immediately or only with
the passage of time) pursuant to any agreement, arrangement or understanding
(whether or not in writing) or upon the exercise of conversion rights, exchange
rights, warrants, options or otherwise.

         "Board" means the Board of Directors of the Company.

         "Cash from Operations" is defined in Section 5.1.

         "Change in Control" shall be deemed to have occurred upon:

         (i)      the date that any Person is or becomes an Acquiring Person;

         (ii)     the date that the Company's shareholders approve a merger,
                  consolidation or reorganization of the Company with another
                  Company or other Person, unless, immediately following such
                  merger, consolidation or reorganization, (A) at least 50% of
                  the combined voting power of the outstanding securities of the
                  resulting entity would be held in the aggregate by the
                  shareholders of the Company as of the record date for such
                  approval (provided that securities held by any individual or
                  entity that is an Acquiring Person, or who would be an
                  Acquiring Person if 5% were substituted for 20% in the
                  definition of such term, shall not be counted as securities
                  held by the shareholders of the Company, but shall be counted
                  as outstanding securities for purposes of this determination),
                  or (B) at least 50% of the board of directors or similar body
                  of the resulting entity are Continuing Directors;

         (iii)    the date the Company sells or otherwise transfers all or
                  substantially all of its assets to another Company or other
                  Person, unless, immediately after such sale or transfer, (A)
                  at least 50% of the combined voting power of the
                  then-outstanding securities of the resulting entity
                  immediately following such transaction is held in the
                  aggregate by the Company's shareholders as determined
                  immediately prior to such transaction (provided that
                  securities held by any individual or entity that is an
                  Acquiring Person, or who would be an Acquiring Person if 5%
                  were substituted for 20% in the definition of such term, shall
                  not be counted as securities held by the shareholders of the
                  Company, but shall be counted as outstanding securities for
                  purposes of this determination), or (B) at least 50% of the
                  board of directors or similar body of the resulting entity are
                  Continuing Directors; or


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         (iv)     the date on which less than 50% of the total membership of the
                  Board consists of Continuing Directors.

         "Committee" means, as determined by the Board, the Human Resources and
Compensation Committee of the Board, another committee appointed by the Board to
administer the Plan, or the Board itself.

         "Company" means Bowater Incorporated, a Delaware corporation, and any
successor thereto.

         "Company Rank" is defined in Section 5.2.

         "Continuing Director" means any member of the Board who (i) was a
member of the Board prior to the date of the event that would constitute a
Change in Control, and any successor of a Continuing Director while such
successor is a member of the Board, (ii) is not an Acquiring Person or an
Affiliate or Associate of an Acquiring Person, and (iii) is recommended or
elected to succeed the Continuing Director by a majority of the Continuing
Directors.

         "Disability" shall have the meaning contained in the Company's
long-term disability plan.

         "Discretionary Award" means an Award made to a Participant pursuant to
Section 5.3.

         "Effective Date" means January 1, 2003.

         "Employee" means a full-time, salaried employee of the Company or a
subsidiary that, directly or indirectly, is at least 50% owned by the Company.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

         "Maximum Payout Percentage" means the maximum payout percentage set for
each Plan Cycle for Discretionary and Performance Awards, separately and
combined, by the Committee. For the first Plan Cycle, the Maximum Payout
Percentage for (i) Performance Awards shall be 135% and (ii) Discretionary
Awards shall be 135%, and the overall Maximum Payout Percentage for both
Performance and Discretionary Awards combined shall be 270%. For subsequent Plan
Cycles, the overall Maximum Payout Percentage for both Performance and
Discretionary Awards combined shall be 90%. Subject to such overall Maximum
Payout Percentage, the Committee shall allocate the Maximum Payout Percentage
between Performance Awards and Discretionary Awards as of the beginning of each
Plan Cycle.

         "Net Cash from Operating Activities" is defined in Section 5.1.


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         "Normal Dividends" are regular periodic dividends declared by a company
and do not include special one-time dividends declared for a particular purpose,
e.g., in lieu of stock buy-backs. The Committee has the discretion to determine
whether a particular dividend is a "Normal Dividend."

         "Normal Retirement Date" means the date defined as the "Normal
Retirement Date" in the qualified (or registered, if a Canadian plan) pension
plan applicable to the particular Participant in question.

         "Participant" means an Active Employee who is eligible to participate
in the Plan.

         "Payout percentage" is defined in Sections 5.2 and 5.3.

         "Peer Companies" means certain companies in the paper and wood products
industry. As of the Effective Date, Peer Companies shall include the following:

-   Abitibi-Consolidated Inc.             -    Norske Skog Canada Inc.
-   Boise Cascade Corporation             -    Potlatch Corporation
-   Georgia Pacific Corp.                 -    Rayonier Inc.
-   Glatfelter P. H. Co.                  -    Stora Enso Corporation
-   International Paper Company           -    UPM Kymmene Corporation
-   Louisiana-Pacific Corp.               -    Wausau-Mosinee Paper Company
-   MeadWestvaco Corporation              -    Weyerhaeuser Company

         The Committee shall review the companies designated as a Peer Company
from time to time and add or delete Peer Companies as it deems appropriate. Any
change to the list of Peer Companies shall be effective with respect to payments
made under the Plan on and after the date such change is made.

         "Peer Group Average" means the average of the Total Shareholder Return
for the Peer Companies as of the end of each Plan Cycle. The Total Shareholder
Return for the Peer Companies will be computed based on the Total Shareholder
Return for each individual Peer Company and the Peer Group Average will be
computed on a market capitalization weighted basis. If a Peer Company is
eliminated either through acquisition or dissolution, or because of any other
reason, during a Plan Cycle, it shall not be included in the computation of Peer
Group Average for that Plan Cycle. Further, if two or more Peer Companies are
combined, either through merger, consolidation, purchase and sale of assets, or
because of any other reason, they shall not be included in the computation of
Peer Group Average for that Plan Cycle.

         "Performance Award" means an Award made to a Participant pursuant to
Section 5.2.

         "Person" means any individual, firm, company, partnership, trust or
other entity.


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         "Plan" means the Bowater Incorporated Mid-Term Incentive Plan.

         "Plan Cycle" means the period over which the Company's performance
shall be measured for purposes of determining Participants' Awards under
Sections 5.2 and 5.3. The first Plan Cycle shall commence on January 1, 2003,
and end on December 31, 2005. New Plan Cycles shall begin as of each successive
January 1st and shall extend for three-year terms.

         "Price" on a particular date means the publicly reported closing price
per share on the New York Stock Exchange for that date.

         "Prorated" under Sections 4.2 and 6.1 shall mean the number of months a
Participant participates in a Plan Cycle, rounded to the nearest month, divided
by thirty-six, multiplied by the Awards under Sections 5.2 and 5.3, if any, or
Section 7, if applicable.

         "Retirement" means a Participant's termination of employment in a
retirement status entitling him to the immediate payment of benefits under the
qualified (or registered, if a Canadian plan) pension plan of the Participant's
employer in which he is participating.

         "Section" means the indicated provision of the Plan.

         "Stock" means the common stock of the Company, par value, $1.00 per
share.

         "Total Normal Dividends Paid" is defined in Section 5.1.

         "Total Shareholder Return" or "TSR" is equal to (A) the difference in
the average common stock (or common stock equivalent) price for the month of
January in the first year of a Plan Cycle, and the average common stock (or
common stock equivalent) price for the month of December in the last year of a
Plan Cycle, plus (B) all Normal Dividends paid per share during the Plan Cycle,
divided by (C) the average common stock (or common stock equivalent) price for
the month of January in the first year of a Plan Cycle. This formula shall be
adjusted as appropriate to reflect stock splits or stock dividends.

         Except where otherwise indicated by the context, any masculine term
used herein also shall include the feminine, the plural shall include the
singular, and the singular shall include the plural.

SECTION 3. ADMINISTRATION

         The Plan shall be administered by the Committee. The Committee has
delegated to the Senior Vice President - Human Resources of the Company and
other appropriate officers and employees of the Company responsibility for
day-to-day administration of the Plan.

         The Committee shall: (i) correct any defect or omission or reconcile
any inconsistency in this Plan or in any Award granted hereunder, (ii) make all
other necessary determinations, (iii)


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make any adjustments that are necessary or desirable in light of previously
unforeseen circumstances, and (iv) take all other actions necessary or advisable
for the implementation and administration of the Plan. The Committee's
determinations shall be conclusive and binding upon all parties.

SECTION 4. ELIGIBILITY AND PARTICIPATION

         4.1 General. Active Employees who are in United States salary grades 31
(or its equivalent at locations other than the United States) and above at any
time during a Plan Cycle shall be Participants in the Plan, subject to the
limitations of Sections 4.2, 6.1 and 6.2 herein. An Active Employee who is
eligible to participate in the Plan shall be so notified in writing and apprised
of the manner of determining Awards.

         4.2 Partial Plan Cycle Participation. Subject to Section 6.2 and, if
applicable, Section 6.1, in the event that an Active Employee becomes eligible
or ineligible to participate in the Plan subsequent to the commencement of a
Plan Cycle, such Participant's Awards under Sections 5.2 and 5.3 for that Plan
Cycle, if any, shall be prorated, so long as the Active Employee has
participated in the Plan Cycle for at least one year.

         4.3 No Right to Participate. Except as specifically provided in
Sections 4.1, no Employee shall at any time have a right to be selected for
participation in the Plan despite having previously participated in an incentive
plan of the Company.

SECTION 5. AWARD DETERMINATION

         5.1 Threshold Determination. No Awards shall be made for a Plan Cycle
unless the Company generates sufficient "Cash from Operations" cumulatively over
the Plan Cycle to fund the Normal Dividends paid during the Plan Cycle ("Total
Normal Dividends Paid") on the Company's common and exchangeable stock. "Cash
from Operations" is defined as "Net Cash from Operating Activities" as set forth
on the Company's annual audited "Consolidated Statement of Cash Flows." Awards
paid for a Plan Cycle shall not exceed the excess of Cash from Operations over
Total Normal Dividends Paid for that Plan Cycle. If the excess of Cash from
Operations over Total Normal Dividends Paid does not equal the value of the
Awards for a Plan Cycle, then the values of the Awards shall be limited to such
excess amount and reduced proportionately.

          5.2 Performance Awards. Subject to the conditions described in
Sections 5.1 and 6.2, at the end of a Plan Cycle, Performance Awards will be
determined for all Participants by multiplying each Participant's annual base
salary rate as of December 31st of the final year of the Plan Cycle by a payout
percentage determined based on a ranking of the Company's TSR as compared with
the Peer Group Average. The same payout percentage shall be used for all
Participants.

          For the first Plan Cycle, the following formula will apply:

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          No Performance Awards shall be granted if the Company's TSR is below
the Peer Group Average. The payout percentage shall equal 50% if the Company's
TSR is equal to the Peer Group Average and the Maximum Payout Percentage shall
be 135%. If the Company's TSR is above the Peer Group Average, then the
calculation of the payout percentage is as follows:

          First, the Company's Rank is determined by the following formula:

                Company Rank = (Company TSR - Peer Group Average)
                                   Divided by
              [(Highest Peer Company TSR - Peer Group Average)/50]
                                     Plus 50

         Then Company Rank will be used to determine the payout percentage
         according to the chart below.

            Company Rank                           Payout Percentage
            ------------                           -----------------

         50 through 89.999                  50% + [2.125 X (Company Rank - 50)]%

         90 through 100                     135%


                                    [GRAPH]


<TABLE>
<CAPTION>

                      Company
                        Rank           TSR
                      -------        ------
<S>                    <C>           <C>

       Highest TSR     100
90% of Highest TSR      90               135%
                        80            113.75%
                        70              92.5%
                        60             71.25%
      Peer Average      50                50%

</TABLE>




         The above formula may be revised for Plan Cycles beginning after the
first Plan Cycle.

         The Performance Awards shall be made to Participants as soon as
practicable after the determination of such Awards at the end of a Plan Cycle.

         5.3 Discretionary Awards. The Committee may grant Participants a
Discretionary Award for each Plan Cycle. Discretionary Awards shall be computed
by multiplying a percentage, determined by the Committee in its discretion,
between 0% and the Maximum Payout Percentage for Discretionary Awards, times
each Participant's annual base salary rate as


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of December 31st of the final year of a Plan Cycle. The same payout percentage
shall be used for all Participants. Discretionary Awards for a Plan Cycle may be
made by the Committee irrespective of whether any Performance Awards are earned
or paid for that Plan Cycle.

         Any Discretionary Awards shall be made to Participants as soon as
practicable after the computation of such Awards at the end of a Plan Cycle.

SECTION 6. TERMINATION OF EMPLOYMENT

         6.1 Termination of Employment Due to Death, Disability, Retirement or
Sale of Business Unit. In the event a Participant's employment is terminated by
reason of death, Disability, Retirement, or sale by the Company of the
subsidiary or unit employing the Participant (unless such sale is a Change in
Control, in which case Section 7 shall supersede the provisions of this
Section), Awards determined in accordance with Sections 5.2 and 5.3 or Section 7
herein shall be (i) prorated based upon the portion of the Plan Cycles occurring
prior to termination during which the Participant was an Active Employee
(provided that the Participant must have been an Active Employee for at least
one year during an applicable Plan cycle in order to receive an Award for that
Plan Cycle) and (ii) based upon the Participant's annual base salary rate as of
the date of termination.

         Awards under this Section 6.1 shall be made as soon as practicable
after the end of each applicable Plan Cycle. As with other Awards, Awards under
this Section 6.1 may be made in any form, as determined by the Committee in its
discretion.

         6.2 Continuation of Employment as Condition for Awards. As a condition
to be entitled to any Award under this Plan (except pursuant to Section 7), a
Participant must be an Active Employee as of the end of a Plan Cycle unless the
Participant's employment is terminated by reason of death, Disability,
Retirement, or sale by the Company of the subsidiary or unit employing the
Participant. However, the Committee, in its sole discretion, may grant an Award
(or a portion of an Award) for the portion of a Plan Cycle that the Participant
was a Participant, computed as determined by the Committee as soon as
practicable after the end of the Plan Cycle, even if the Participant was not an
Active Employee as of the end of the Plan Cycle, provided that in no event may
such an Award entitle the Participant to an Award amount in excess of the amount
that the Participant could have earned had he or she remained an Active Employee
for the duration of the Plan Cycle.

SECTION 7. CHANGE IN CONTROL

         Notwithstanding any other provision of the Plan, if a Change in Control
of the Company shall have occurred, the Company shall pay each Participant an
Award which equals his annual base salary rate as of the date of the Change in
Control times the Maximum Payout Percentage Award for each Plan Cycle that has
begun, subject to proration in the manner provided under provisions of Section
6.1 for Participants whose employment terminated before the Change in Control
under the circumstances described in Section 6.1, but not to the proration
provisions of


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Section 4.2. All Awards will be paid in cash within thirty (30) days of the
Change in Control. Once Awards under this Section 7 have been paid, the Plan
shall be terminated and the Participants shall have no further rights under the
Plan.

SECTION 8. AMENDMENT AND MODIFICATION

         The Committee, in its sole discretion, with notice to Participants, at
any time and from time to time, may modify or amend, in whole or in part, any or
all of the provisions of the Plan, or suspend or terminate it entirely;
provided, however, that in the event of a Change in Control no such
modification, amendment, suspension, or termination may adversely affect
Participants' rights under Section 7.

SECTION 9. MISCELLANEOUS

         9.1 Governing Law. The Plan, and all agreements hereunder, shall be
governed by and construed in accordance with the laws of the State of Delaware.

         9.2 Withholding Taxes. The Company shall have the right to deduct from
all Awards under the Plan any federal, state, provincial, or local taxes
required by law to be withheld with respect to such payments. With respect to
any Awards paid in the form of equity compensation, withholding of taxes shall
occur as provided under the applicable plan governing the issue of such equity
compensation.

         9.3 Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.

         9.4 Costs of the Plan. All costs of implementing and administering the
Plan shall be borne by the Company.

         9.5 Successors. All obligations of the Company under the Plan shall be
binding upon and inure to the benefit of any successor to the Company, whether
the existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.

         9.6 Employment Status. The Plan does not constitute a contract of
employment or continued service, and selection as a Participant will not give
the Participant the right to be retained in the employ of the Company or any
subsidiary.

         9.7 Unsecured General Creditor. Participants and their heirs,
successors and assigns shall have no legal or equitable rights, interest or
claims in any property or assets of the Company by virtue of participation in
the Plan. The Company's obligations under the Plan shall be that of an unfunded
and unsecured promise of the Company to pay money in the future.


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          9.8 Nonassignability. No Participant or any other person shall have
any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or
otherwise encumber, transfer, hypothecate or convey in advance of actual
receipt, the Awards, if any, granted hereunder, or any part thereof, which are,
and all rights to which are, expressly declared to be unassignable and
non-transferable. No part of the Awards granted shall, prior to actual payment,
be subject to seizure or sequestration for the payment of any debts, judgment,
alimony or separate maintenance owed by a Participant or any other person, nor
be transferable by operation of law in the event of a Participant's or any other
person's bankruptcy or insolvency.

         EXECUTED on behalf of the Company as of January 1, 2003.

                           BOWATER INCORPORATED


                           By: /s/ James T. Wright
                               ---------------------------------------------
                                    James T. Wright
                                    Senior Vice President - Human Resources


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