exv10w79






EXHIBIT 10.79




Your

retirement

program




Defined contribution program




Executive employees in Canada



Effective January 1, 2009



 









 








INTRODUCTION



This booklet summarizes the defined contribution retirement program for executive employees of
AbitibiBowater in Canada, effective January 1, 2009.



The defined contribution retirement program (or “retirement program”) is a competitive program that
enables you to save for retirement. It is comprised of two plans: the defined contribution plan (or
“DC Plan”) and the defined contribution supplemental executive retirement plan (or “DC SERP”). The
DC Plan is subject to a tax limit while the supplemental plan allows you to receive the pension
benefits you accrue based on your entire earnings.



The DC Plan is a registered plan, which means that it is funded and follows pension legislation. In
fact, the Company sponsors two defined contribution plans: the Defined Contribution Pension Plan
for Non-Unionized Employees of Abitibi-Consolidated Inc., which originally came into effect on
January 1, 2002, and the DC Retirement Plan (2003) for Non-Unionized Employees of Bowater, which
originally came into effect on January 1, 2003. The provisions of both plans have been harmonized
as of January 1, 2009, and are referred to in this booklet as “the DC Plan”.



Under the DC Plan, your contributions, along with the Company’s matching contributions, accumulate
in an account in your name, and are allocated among the investment funds of your choice. The
account balance varies over time with these contributions and the related investment return
(positive or negative). The plan offers a range of investment funds to meet your needs and your
financial goals.



The DC SERP is an unfunded plan that is paid through the Company’s operating expenses, and is not
governed by pension legislation. The goal of the DC SERP is to provide benefits to highly
compensated employees whose retirement savings would otherwise be limited in the DC Plan by the
Canadian Income Tax Act maximum. In other words, it supplements your benefit under the DC Plan.



For a quick overview of the program’s provisions, you can consult page 3 of this booklet. More
detailed explanations are provided in the sections that follow. However, please note that the
official documents and applicable legislation prevail at all times.



For information on your retirement benefits for your years of service before January 1, 2009,
please refer to your previous communication materials on the program.



If you have any questions, please contact the head of the Pension and Benefits Department located
at the head office.






 









 








WHAT’S INSIDE




	 	 	 	 	 
	Overview
	 	 	3	 
	 
	 	 	 	 
	Eligibility
	 	 	5	 
	 
	 	 	 	 
	Contributions
	 	 	5	 
	 
	 	 	 	 
	Eligible Earnings
	 	 	6	 
	Tax limits
	 	 	6	 
	Contributions: Example 1
	 	 	6	 
	Contributions: Example 2
	 	 	6	 
	Withdrawal of contributions
	 	 	7	 
	 
	 	 	 	 
	Vesting
	 	 	7	 
	 
	 	 	 	 
	DC Plan
	 	 	7	 
	DC SERP
	 	 	7	 
	 
	 	 	 	 
	How your money grows
	 	 	8	 
	 
	 	 	 	 
	DC Plan
	 	 	8	 
	DC SERP
	 	 	9	 
	 
	 	 	 	 
	Termination or retirement
	 	 	10	 
	 
	 	 	 	 
	DC Plan
	 	 	10	 
	DC SERP
	 	 	11	 
	 
	 	 	 	 
	Death benefits
	 	 	12	 
	 
	 	 	 	 
	DC Plan
	 	 	12	 
	DC SERP
	 	 	12	 
	 
	 	 	 	 
	Other key events
	 	 	13	 
	 
	 	 	 	 
	Disability
	 	 	13	 
	Maternity, paternity or parental leave (including adoption)
	 	 	13	 
	Marriage breakdown
	 	 	13	 
	 
	 	 	 	 
	Non-compete / confidentiality provisions
	 	 	14	 
	DC SERP
	 	 	14	 
	 
	 	 	 	 
	Plan administration
	 	 	14	 
	 
	 	 	 	 
	DC Plan
	 	 	14	 
	DC SERP
	 	 	15	 
	Consulting the plan text
	 	 	16	 
	 
	 	 	 	 
	Other information
	 	 	17	 
	 
	 	 	 	 
	Beneficiary designation
	 	 	17	 
	Benefits from other Company pension plans
	 	 	17	 
	DC SERP funding
	 	 	17	 
	Fiscal year
	 	 	18	 
	Reimbursements for special cases
	 	 	18	 
	Transfers from other plans
	 	 	18	 
	 
	 	 	 	 
	Appendix — Definitions
	 	 	19	 






 









 





OVERVIEW



Here is an overview of the provisions of the retirement program (DC Plan and DC SERP) for
service starting January 1, 2009. Please refer to the corresponding sections of this booklet for
details.




	 	 	 
	ELIGIBILITY

	 	You participate in the retirement program if you are employed in a position corresponding to salary
grade 29 (Level 29) or above, you are listed on the Canadian payroll, and you are not accumulating
benefits in the defined benefit SERP sponsored by the Company.
	 
	 	 
	CONTRIBUTIONS

	 	You are required to make contributions of 5% of your eligible earnings, up to the US Compensation Limit.
	 
	 	 
	 

	 	The Company makes contributions of 10.5% of your eligible earnings, and an additional contribution
(based on your salary grade), that is equal to:
	 
	 	 
	 

	 	v   10% for salary grade 33 and above and direct reports to the CEO (for a total of 20.5%); or

	 
	 

	 	v   12% for the CEO (for a total of 22.5%).

	 
	 	 
	 

	 	Your eligible earnings include your base salary as well as your paid bonus under the annual incentive
plan. Your paid bonus excludes any special bonuses unless authorized by the Company.
	 
	 	 
	VESTING

	 	DC Plan
	 
	 	 
	 

	 	You are immediately fully vested in your DC account.
	 
	 	 
	 

	 	DC SERP
	 
	 	 
	 

	 	Vesting is gradual and depends on your age. You become fully vested upon an involuntary termination
without cause or upon death.
	 
	 	 
	NON-COMPETE / CONFIDENTIALITY
PROVISIONS

	 	Your right to receive any money from the DC SERP is subject to the respect of the terms of the
non-compete / confidentiality provisions stipulated under the DC SERP plan text.
	 
	 	 
	HOW YOUR MONEY GROWS

	 	DC Plan

Contributions in the DC Plan accumulate in an account in your name, and are allocated among the
investment funds of your choice. The account balance varies over time with these contributions and the
related investment return (positive or negative). The DC Plan offers a range of investment funds to
meet your needs and your financial goals.
	 
	 	 
	 

	 	DC SERP
	 
	 	 
	 

	 	You do not have investment options for the DC SERP. Each year, the Company will credit your DC SERP
account with interest at a rate equal to the average rate of return on the balanced funds offered in
the DC Plan during the year. However, in the year of termination of employment, interest will be
credited as if the contributions for the year were made at mid-year.






 









 






	 	 	 
	TERMINATION OF
EMPLOYMENT OR
RETIREMENT

	 	DC Plan

v   If your employment terminates, you can transfer your account
balance to a locked-in retirement savings vehicle on a tax-sheltered
basis.

	 
	 	 
	 

	 	v   Upon retirement, your income will depend on the following
factors:



   -  Your account balance at retirement (your contributions, the Company’s
contributions and your investment income);



   -  Your age when you start receiving your retirement income; and




   -  The authorized retirement income vehicle chosen, which could be a life
annuity, a life income fund (LIF) or a locked-in retirement income fund
(LRIF). LIFs and LRIFs are similar to investment accounts from which you
make withdrawals each year, subject to minimums and maximums established
by law.

	 
	 	 
	 

	 	If you choose to purchase an annuity with your account balance, the
interest rates prevailing on the market at the time you buy the annuity
will affect the amount of retirement income that the annuity will
provide for you.

	 
	 	 
	 

	 	DC SERP
	 
	 	 
	 

	 	After you leave the Company, your vested DC SERP is paid in cash, less
applicable taxes. It is paid out in two equal payments after you leave
the company (after six months and 12 months respectively).
	 
	 	 
	DEATH BENEFITS

	 	DC Plan
	 
	 	 
	 

	 	v   If you die before transferring your DC account out of the Plan,
your spouse or beneficiary will receive your account balance.

	 
	 	 
	 

	 	v   If you die after transferring your DC account out of the Plan,
your spouse or beneficiary will receive the amounts payable under the
terms of the locked-in retirement savings vehicle or authorized
retirement income vehicle that you chose.

	 
	 	 
	 

	 	DC SERP
	 
	 	 
	 

	 	v   If you die before leaving the Company, your spouse or
beneficiary will receive a lump-sum payment equal to 100% of your DC
SERP account in cash, less applicable taxes.

	 
	 	 
	 

	 	v   If you die after leaving the Company, but before having received
the amount to which you were entitled when you left the Company, your
spouse or beneficiary will receive any remaining payment that you would
have been entitled to receive had you not died. This amount is paid in
cash, less applicable taxes.







 









 





ELIGIBILITY



You participate in the retirement program as of January 1, 2009, if you are employed in a
position corresponding to salary grade 29 (Level 29) or above, you are listed on the Canadian
payroll,, and are not accruing benefits in the defined benefit SERP sponsored by the Company. Any
executive who is hired into or appointed to a position corresponding to salary grade 29 or above
after January 1, 2009, will automatically become a participant in the retirement program.



You will cease to be eligible for any contributions as of the date you are no longer actively
employed in a position corresponding to salary grade 29 or above. If you move to a position
corresponding to salary grade 28 or below, you will be covered under the plan for non-unionized
employees in Canada.



CONTRIBUTIONS



Contributions are allocated to two plans under the retirement program:





	v	 	the DC Plan (for total employee and Company contributions up to Canadian Income Tax Act limits); and
	 
	v	 	the DC SERP (for Company contributions in excess of Canadian Income Tax Act limits).




Your contributions to the retirement program are equal to 5% of your eligible earnings, up to the
US Compensation Limit. The US Compensation Limit is set by the US Internal Revenue Service and is
equal to $245,000 for the year 2009; it is expected to rise annually in future years. These
contributions are allocated to the DC Plan. Your contributions are made by payroll deductions and
are deposited in your DC Plan according to the timeframes required by law.



The contributions are shown in the following table:




	 	 	 	 	 
	 	 	 	 	THE COMPANY
	CONTRIBUTIONS	 	YOU CONTRIBUTE	 	CONTRIBUTES
	BASIC

	 	5% of your
eligible earnings*
	 	10.5% of your
eligible earnings
	 
	 	 	 	 
	ADDITIONAL
	 	 	 	 
	v   For executives
at salary grade 33 and
above and direct reports
to the CEO


	 	None
	 	10% of your
eligible earnings
	 
	 	 	 	 
	v   For the CEO


	 	None
	 	12% of your
eligible earnings








 




			
	*	 	Up to the US Compensation Limit




Company contributions are first deposited in the DC Plan, up to Canadian Income Tax Act
limits. Any amount that exceeds Canadian Income Tax Act limits is then allocated to the DC SERP in
a personal notional account set up by the Company.








 









 







Eligible earnings



Your eligible earnings include your base salary as well as your paid bonus under the annual
incentive plan. Your paid bonus excludes any special bonuses unless authorized by the Company.



Tax limits



The sum of your contributions and the Company’s contributions to the DC Plan is subject to the
limit prescribed under the Canadian Income Tax Act. In 2009, contributions to the DC Plan are
limited to $22,000. This amount is expected to rise annually after 2009.



Contributions: Example 1



Let’s say that Richard is a Grade 31 executive and receives $300,000 in eligible earnings
(base salary and eligible bonuses) in 2009. This is how his retirement program contributions would
be allocated for that year:




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	HOW THE CONTRIBUTIONS ARE	 
	 	 	TOTAL	 	 	ALLOCATED	 
	 	 	CONTRIBUTIONS	 	 	DC PLAN	 	 	DC SERP	 
	Richard’s contributions
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	5% x $245,000
(earnings, up to US
Compensation Limit)
	 = 	$	12,250	 	 	$	12,250	 	 	$	0	 
	Company contributions
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	10.5% x $300,000
	 = 	$	31,500	 	 	$	9,750	 	 	$	21,750	 
	TOTAL CONTRIBUTIONS
	 = 	$	43,750	 	 	$	22,000	*	 	$	21,750	 








 




			
	*	 	Canadian Income Tax Act limit (this amount is expected to rise annually after 2009).




Contributions: Example 2



Let’s say that John is a Grade 29 executive and receives $200,000 in eligible earnings (base
salary and eligible bonuses) in 2009. This is how his retirement program contributions would be
allocated for that year:




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	HOW THE CONTRIBUTIONS ARE
	 	 	TOTAL	 	 	ALLOCATED
	 	 	CONTRIBUTIONS	 	 	DC PLAN	 	 	DC SERP	 
	John’s contributions
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	5% x $200,000
	 = 	$	10,000	 	 	$	10,000	 	 	$	0	 
	Company contributions
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	10.5% x $200,000
	 = 	$	21,000	 	 	$	12,000	 	 	$	9,000	 
	TOTAL CONTRIBUTIONS
	 = 	$	31,000	 	 	$	22,000	*	 	$	9,000	 








 




			
	*	 	Canadian Income Tax Act limit (this amount is expected to rise annually after 2009).




 









 









Withdrawal of contributions



No amount can be withdrawn from your DC account or received from the DC SERP as long as you
are employed by the Company.



VESTING 



DC Plan



You are immediately 100% vested in your DC Plan account. In other words, your DC Plan account
balance belongs to you entirely as of your first day of membership in the plan.



DC SERP



If you leave the Company voluntarily, the amount you receive from the DC SERP will depend on
your age when you leave. The vesting schedule for the DC SERP is as follows:




	 	 	 	 	 	 
	VESTED %	 	ATTAINED AGE	 
	50
	%	 	Prior to 55
	70
	%	 	55
	80
	%	 	56
	90
	%	 	57
	100
	%	 	58





If you terminate employment after age 55 but before age 58, the specific vesting percentage
will be interpolated and rounded to the closest month of age.




Accelerated vesting




Immediate vesting upon termination without cause



If you are involuntarily terminated for any reason other than “with cause,” you will
immediately become 100% vested in your DC SERP balance. For purposes of the DC SERP, “cause” means
the definition, if any, in your employment agreement or other individual agreement you may have
with the Company. If you do not have an agreement, “cause” will be determined by the Company in
its sole discretion.



If your employment is terminated with cause by the Company, you will lose your DC SERP balance.




Immediate vesting upon death



If your employment terminates due to death, you will be fully vested in your DC SERP balance.









 









 







HOW YOUR MONEY GROWS



DC Plan



The DC Plan offers a variety of investment funds through Sun Life Financial, the DC plan
service provider. A range of funds has been pre-selected in terms of their risk-return balance.
However, you choose how to allocate your and the Company’s contributions among these funds.



You make your own decisions on how to invest your contributions and those of the Company. There are
several factors to consider when determining which investments are right for you. Some of these
factors are your age, investment horizon, retirement goals, level of risk tolerance, investment
knowledge, personal situation, net worth and liquidity requirements.



The gains and losses generated by your investment choices are reflected on your account balance.
They have a direct impact on the amount that you will have at your disposal when you retire.
Therefore, it is important to determine your investment strategy carefully and review it from time
to time to meet your changing needs over the years.



To plan your retirement, it is important to familiarize yourself with these investment funds and
choose those that are consistent with your goals. Please refer to the information kit from Sun Life
Financial for more detailed information on the investment funds and the tools available to you. To
make informed decisions, you may also want to seek independent financial advice.



Investment gains (or losses) are not taxable while the funds remain in the plan.




Investment decision responsibility



The Company assumes no responsibility for the investment decisions made by plan members, or
the resulting investment return (positive or negative). However, the pension committees (see Plan
Administration for more details) will monitor the investment funds offered under the DC Plan to
assess their general performance and their risk-return ratio.




Making changes to your investment allocations



You can change your investment instructions at any time for future contributions. You can
transfer amounts between funds anytime at no cost to you, subject to a market value adjustment in
the case of guaranteed funds, where applicable.



Please note that to prevent short-term trading, Sun Life Financial may charge a 2% fee to plan
members who initiate an inter-fund transfer into a fund followed by a subsequent inter-fund
transfer out of the same fund within 30 calendar days.







 









 








Information on your DC account



You can access your DC account balance through Sun Life Financial’s automated telephone
system, Customer Care Service Centre, or through its Plan Member Services web site. By entering
your personal Access ID, you can obtain the following information:





	 	v	 	your account balance;
	 
	 	v	 	interest rates and fund performance information;
	 
	 	v	 	accumulated contributions in your account;
	 
	 	v	 	information on investment options.




In addition, Sun Life Financial will send you a statement of account specifying the transactions
entered since the last statement, your investments and your account balance.



You can access the Sun Life Financial web site and customer care centre at:





	 	v	 	www.sunlife.ca/member (to access your accounts, you will need a personal Access ID and Password);
	 
	 	v	 	1-866-733-8612.





Administration and investment fees



The funds offered under the DC Plan are managed by professional institutional investment
managers. As with any other investment fund, you pay investment management fees based on the type
of fund you select. Investment fees are charged for the work investment managers do on your behalf.
However, these fees are generally lower than those you may incur when investing on an individual
basis.



In addition, Sun Life Financial charges a small fund-operating expense based on the overall assets
held in each fund.



The Company will pay a portion of the applicable administration fees. Details on administrative and
investment management fees can be found on Sun Life Financial’s web site.



DC SERP



The plan administrator (see Plan Administration) will establish a notional account to reflect
your DC SERP balance. The accounts are established solely for the purpose of tracking contributions
and adjustments for income or losses. The accounts will not be used to segregate actual assets.
Unlike your DC Plan account, your account under the DC SERP does not entitle you to ownership of
any actual assets until funds are ultimately distributed to you.



Company contributions will be credited to your account. Your account balance from the previous
year, if any, will be credited with interest each year at a rate equal to the average rate of
return on the balanced funds offered in the DC Plan during the year. Interest on contributions will
be allocated to your account on an annual basis.



Each year, you will receive a statement of your notional account reflecting all contributions and
investment returns (positive or negative) accrued during the prior year.







 









 







TERMINATION OR RETIREMENT



DC Plan




Termination



If your employment terminates, you are entitled to your full DC account balance, which
includes your contributions, the Company’s contributions and your investment income.



When you leave the Company, your contributions, those made by the Company and your investment
income can be transferred to a locked-in retirement savings vehicle on a tax-sheltered basis. You
can also keep your account in the Company plan. You will, however, need to transfer it to an
authorized retirement income vehicle when you want to receive a retirement income.



You will not be able to make withdrawals from your DC account (your account is locked in), except
for special situations prescribed by pension legislation (see Other information — Reimbursements
for special cases). The locked-in retirement account (LIRA) is the most common locked-in retirement
savings vehicle.




Retirement



To receive a retirement income, you must transfer your account balance to an authorized
retirement income vehicle. The most common vehicles are a lifetime annuity purchased from an
insurance company of your choice and a life income fund (LIF) established with a financial
institution of your choice.



The amount of your retirement income will depend on the following factors:





	 	v	 	The total amount of your contributions and the Company’s contributions;
	 
	 	v	 	Your investment return (positive or negative). The higher your investment
return, the higher your capital will be to provide for a retirement income;
	 
	 	v	 	Your age when you start receiving your retirement income.




If you opt for an annuity, the following factors also apply:





	 	v	 	The annuity purchase price, including interest rates in effect when you
purchase the annuity. The higher the interest rates, the higher your annuity will be;
	 
	 	v	 	The form of annuity payment. If you have a spouse when you buy an annuity, you
are required by law to purchase a 60% joint and survivor annuity. Under this form of
payment, 60% of your annuity continues to your spouse for life upon your death. If your
spouse waives the survivor annuity in writing, you may opt for another form of payment,
such as a lifetime annuity with a 10-year or 15-year guarantee.




 









 











Authorized retirement income vehicles



According to current laws, you have the following retirement income options:





	 	v	 	A life income fund (LIF) with a financial institution;
	 
	 	v	 	A locked-in retirement income fund (LRIF) with a financial institution (in
Newfoundland and Labrador only); and
	 
	 	v	 	A life annuity purchased from an insurance company.




If you are under age 71 and you do not wish to start receiving your retirement income immediately,
you can transfer your account balance to a locked-in retirement account (LIRA).



These retirement income vehicles are described in more detail in the Appendix. Note that this
decision only needs to be made at retirement.



DC SERP



After you leave the Company, your vested DC SERP account (see Vesting) is paid in cash, less
applicable taxes. It is paid out in two equal payments after you leave the Company (after six
months and 12 months respectively). If you die before payment is completed, any remaining payment
will be made to your spouse or beneficiary in a lump sum, less applicable taxes.




Right of offset



The Company will have the right to offset any amounts payable to you under the DC SERP by any
amount necessary to reimburse the Company for liabilities or obligations you have to the Company,
including any amounts misappropriated by you.







 









 







DEATH BENEFITS



DC Plan




Death BEFORE retirement



If you die before retirement, your spouse or beneficiary will receive your DC account balance.
Payment of the death benefit varies by province and depends on whether the payment is made to your
spouse or another beneficiary.




Death benefit payable to your spouse




          In Newfoundland and Labrador, your spouse has the following options:





	 	v	 	If you die before age 55: tax-free transfer to an RRSP or cash payment,
less applicable income taxes;
	 
	 	v	 	If you die at age 55 or after: transfer to a locked-in retirement savings
vehicle.






In New Brunswick, Nova Scotia, Ontario and Quebec, your spouse may transfer the value of
your account to an RRSP (on a tax-free basis) or receive a cash payment, less applicable
income taxes.



Death benefit payable to another beneficiary




          The account balance is paid in cash, less applicable income taxes.




Death DURING retirement



If you die during retirement, your spouse, at the time you retire, or your beneficiary, will
receive the sums payable under the authorized retirement income vehicle you chose. If such vehicle
is an annuity, death benefits will be paid according to the form of payment provided by the annuity
contract.



DC SERP




Death BEFORE termination of employment



If you die before leaving the Company, your spouse or beneficiary will receive 100% of your DC
SERP account in cash, less applicable taxes.




Death AFTER termination of employment



If you die after leaving the Company, but before having received the amount to which you were
entitled when you left the Company, your spouse or beneficiary will receive any remaining payment
that you would have been entitled to receive had you not died. This amount is paid in cash, less
applicable taxes.



Your DC SERP beneficiary is the same person designated as your DC Plan beneficiary.








 









 







OTHER KEY EVENTS 



Disability



If you become disabled after December 31, 2008, and are entitled to benefits under the
Company’s short-term disability plan, you and the Company will continue to contribute to the DC
Plan and DC SERP during this period. Contributions will be based on your eligible earnings before
the start of your disability leave.



If you become disabled after December 31, 2008, and are entitled to benefits under the Company’s
long-term disability plan, the Company will continue to make contributions to your plans, as well
as the contributions you were making the day before the start of your disability leave.
Contributions will be based on your eligible earnings before the start of your disability leave.



Maternity, paternity or parental leave (including adoption)



You may continue to contribute to the DC Plan during a maternity, paternity or parental leave
based on your earnings before the start of your leave. If you contribute to the plans during your
leave, the Company will also contribute.



Marriage breakdown




DC Plan



In the event of marriage breakdown, your DC account balance may be split between you and your
spouse, depending on the legislation in your province. We recommend you seek legal advice in such
situations.




DC SERP



The notional account accrued in the DC SERP is not split between spouses. At retirement, the
notional account is paid as if no split of the DC plan has occurred.






 









 







NON-COMPETE / CONFIDENTIALITY PROVISIONS



DC SERP



You will lose your right to receive any money from the DC SERP if it is found that you have
not respected the terms of the non-compete provisions (for two years following termination of
employment) or confidentiality provisions (no limit) stipulated under the DC SERP plan text. The
Company also reserves the right to seek reimbursement (with interest) of any amount paid under the
DC SERP if it is found that you have not respected the above conditions.




Non-compete provision



During your employment with the Company or during a period of two years following your
termination of employment or retirement, you must not, directly or indirectly, without the consent
of the Company:





	v	 	Engage in or become interested as a principal, agent,
officer, employee, manager, advisor, financial backer,
shareholder (except as a passive investor in a public
corporation) or in any other capacity whatsoever in a North
American business that may be fairly regarded as being in
competition with the business of the Company;
	 
	v	 	Assist financially or in any manner whatsoever any
person, firm, association or corporation, whether as
principal, agent, officer, employee, manager, advisor,
financial backer, shareholder (except as a passive investor
in a public corporation) or in any capacity whatsoever to
enter into, develop, carry on or maintain a North American
business that may fairly be regarded as being in competition
with the business of the Company.





Confidentiality provision



During your employment with the Company or at any time thereafter, you must not disclose any
information of a confidential or proprietary nature concerning the Company, its subsidiaries and
affiliates and their respective operations, assets, finances, business and affairs, or use such
information for personal advantage. However, nothing in this provision prevents you from disclosing
information that is publicly available or that is required to be disclosed under appropriate
statutes, rules or law or legal process. In the event of doubt regarding the confidentiality of any
information, you must verify the confidential nature of the information with the Company.



PLAN ADMINISTRATION



DC Plan



The Company sponsors two defined contribution plans: the Defined Contribution Pension Plan for
Non-Unionized Employees of Abitibi-Consolidated Inc. and the DC Retirement Plan (2003) for
Non-Unionized Employees of Bowater. Each of these plans is administered by a pension committee.








 









 







Each pension committee is made up of a number of individuals who have the right to vote, and are
nominated as follows:





	 	v	 	Up to 5 individuals are designated by the Company;
	 
	 	v	 	1 individual is designated by active members at the annual meeting (or,
failing such designation, by the Company);
	 
	 	v	 	1 individual is designated by non-active members at the annual meeting (or,
failing such designation, by the Company); and
	 
	 	v	 	1 independent individual, who is neither a plan member nor Company
representative, is designated by the Company.




The group formed by the active members and the group formed by the non-active members may also each
designate an additional non-voting pension committee member at the annual meeting.



The committees delegate the administrative duties of the plans to experts.



The following employers participate in the DC Plan:





	 	v	 	For the Defined Contribution Pension Plan for Non-Unionized Employees of
Abitibi-Consolidated Inc.:






	 	–	 	Abitibi Consolidated Inc.; and
	 
	 	–	 	Abitibi-Consolidated Company of Canada.






	 	v	 	For the DC Retirement Plan (2003) for Non-Unionized Employees of Bowater:






	 	–	 	Bowater Canadian Forest Products Inc.;
	 
	 	–	 	Bowater Maritimes Inc.; and
	 
	 	–	 	Bowater Mersey Paper Company Ltd.




DC SERP



Except with respect to certain portions of claims administration and amendment authority, the
Company has appointed the Senior Vice President – Human Resources to serve as the plan
administrator until the Company decides that another individual or committee should serve as plan
administrator. The plan administrator oversees the administration of the DC SERP and has complete
authority to determine the rights and benefits and all claims, demands and actions arising out of
the provisions of the DC SERP document.



Among other duties and responsibilities, the plan administrator, in its discretion, interprets and
construes the DC SERP document’s terms, identifies the class of eligible individuals, and decides
any matters brought under the DC SERP. The plan administrator’s interpretation of the DC SERP
document’s terms and its decisions under the DC SERP are final, conclusive and binding on all
participants and any beneficiary or other person claiming under or through any participant, in the
absence of clear and convincing evidence that the plan administrator acted arbitrarily or
capriciously. Benefits under the DC SERP will be paid only if the plan administrator decides that
the individual is entitled to them. When making a determination or calculation, the plan
administrator will rely on information furnished by you, your beneficiary and the Company.








 









 







The plan administrator may establish rules and procedures to administer the DC SERP. In addition,
the plan administrator may appoint such officers or agents, and may delegate such powers and duties
and shall follow such claims and appeal procedures with respect to the DC SERP as it may establish.
The plan administrator or individuals acting on its behalf shall receive reimbursement for any
reasonable business expense incurred in the performance of his or her duties.



If the plan administrator is a participant in the DC SERP, the plan administrator will not vote or
act on any matter relating solely to himself or herself.



Consulting the text of the retirement program



The official text of the retirement program for your participating employer may be examined at
the following address: Pension and Benefits Department, 1155 Metcalfe Street, Suite 800, Montreal,
Quebec, H3B 5H2. If you are not located in the Montreal area, a copy of the plan text may be
obtained, at no charge, upon written request to the same address.







 









 







OTHER INFORMATION



Beneficiary designation



For the DC Plan, provincial pension laws provide that your spouse is the sole beneficiary of
the benefits payable upon your death. However, your spouse can waive this right, except in New
Brunswick, Newfoundland and Labrador and Nova Scotia (with respect to pre-retirement death
benefits), before the payment of your death benefits. To do so, your spouse must complete a waiver
form and forward it to your pension committee.



If your spouse waives this right, you can designate any other beneficiary of your choice. Note that
waiving rights to death benefits does not reduce a spouse’s rights to an eventual split of benefits
upon a marriage breakdown.



The spouse can also cancel the waiver before your death (for pre-retirement death benefits) or
before the payment of your retirement benefits (post-retirement death benefits). In such a case,
any beneficiary designation you may have made would be without effect.



Please refer to the definition of spouse in each province for more information (see Appendix).



If you do not have a spouse, you can designate the beneficiary of your choice. If you make no
designation, benefits payable upon your death will be paid to your estate.



Benefits from other Company pension plans



If you have accrued benefits under other pension plans of the Company for prior service, these
benefits will be paid according to the provisions of those plans.



DC SERP funding



The DC SERP is considered “unfunded” for tax purposes and constitutes a promise by the Company
to make payments as provided under the DC SERP. As such, you and your beneficiaries will have the
status of general unsecured creditors of the Company. Nothing in the DC SERP or this booklet shall
be construed to give you or any other person rights to any specific assets of the Company or of any
other person.



The Company may authorize a trust to hold the assets on behalf of the DC SERP. Even in such a case,
the assets will remain subject to the claims of creditors of the Company and the DC SERP will
retain its status as an unfunded plan for tax purposes.




Restriction against assignment



DC SERP benefits, payments or proceeds will not be subject to any claim of any creditor of you
or your beneficiary and will not be subject to attachment or garnishment or other legal process.
You may not assign, pledge or encumber your account or any benefits payable to you under the DC
SERP.








 









 








Receipt and release



Any distribution made from the DC SERP will be in full satisfaction of all claims against the
Company, the plan administrator and a trustee (if any) under the DC SERP. The plan administrator
may require you to execute a receipt or release to such effect as a condition to your distribution.




No right of employment



Nothing in the DC SERP gives you any right to be employed or to continue in the employ of the
Company, or to limit the Company’s right to terminate your employment at any time, or to modify any
of your compensation.



Fiscal year



The fiscal year of the retirement program runs from January 1 to December 31.



Reimbursements for special cases




Small amounts



For the DC Plan, if the amount payable upon your termination of employment or retirement is
small, it is not locked in. In that case, you can receive it in cash, less applicable income taxes,
or transfer it to a personal RRSP.



Quebec members who stopped residing in Canada



You can receive the value of your benefits from the DC Plan in cash, less applicable income taxes, if:





	 	v	 	You are considered a Quebec member; and
	 
	 	v	 	Your employment ended or you are retired; and
	 
	 	v	 	You stopped residing in Canada at least two years before the reimbursement date.




Transfers from other plans



If you have transferred locked-in funds into the DC Plan from another plan, these funds will
continue to grow according to your investment instructions. No transfers are allowed to the DC
SERP.









While the Company intends to continue the retirement program,

it reserves the right to modify or terminate this arrangement at any time.








 









 




APPENDIX – DEFINITIONS



Life annuity



A life annuity purchased from an insurance company provides a monthly amount payable for the
rest of your life. Once you have purchased an annuity, you generally cannot transfer it to another
insurer, nor convert it into another authorized retirement income vehicle.



The amount of your annuity will depend, among other things, on the following factors:





	 	v	 	The funds at your disposal to purchase an annuity;
	 
	 	v	 	Your age at the time you purchase the annuity and the date payments begin,
because the insurance company estimates your life expectancy, that is, the number of years
during which the annuity may be paid to you; and
	 
	 	v	 	The annuity purchase rates prevailing on the market at the time you buy the
annuity.




Your annuity may include various guarantees. The following table presents some examples. However,
note that the provincial laws require that all annuities purchased with locked-in funds (like your
DC Plan) must allow for the payment of part of the annuity to the spouse upon the retiree’s death.
This is what is called a joint and survivor annuity. A written waiver will be required if you wish
to provide a survivor benefit to someone other than your spouse.




	 	 	 
	LIFE ANNUITY

	 	The annuity is payable for the rest of your life. No benefits are payable upon your death.
	 
	 	 
	GUARANTEED LIFE ANNUITY

	 	The annuity is payable for the rest of your life. A minimum number of payments are guaranteed, for
example 60 or 120 monthly payments. If you die before the end of the guarantee period, your spouse, or
beneficiary, as provided under the annuity contract, receives the balance of the payments. No benefits
are payable to your spouse or beneficiary if you die after the guarantee period. Please note that if
you have a spouse and wish to elect a guaranteed life annuity, you must obtain a waiver from your
spouse.
	 
	 	 
	JOINT AND SURVIVOR ANNUITY

	 	After your death, your spouse receives a life annuity equal to a percentage of yours, for example, 60%.





An indexed annuity may be combined with any of these options. This annuity increases by a
specific percentage each year and provides a certain degree of inflation protection during your
retirement.



Other combinations of these options are also possible. Your decision only needs to be made at
retirement.







 









 







Life income fund (LIF)



A LIF is an authorized retirement income vehicle from which you make withdrawals each year,
subject to a minimum and a maximum established by law. The purpose of this legal requirement is to
ensure that you will continue to receive a retirement income for the rest of your life.



You may transfer your LIF to another financial institution, according to the terms of the LIF.



In the event of your death, the balance of your LIF is payable to your spouse or beneficiary.



Locked-in retirement account (LIRA)



A LIRA is a locked-in retirement savings vehicle similar to an RRSP but from which you cannot
make withdrawals. You can however transfer your LIRA from one financial institution to another, in
compliance with the terms of the LIRA.



In the event of your death, the balance of your LIRA is payable to your spouse or beneficiary.



Locked-in retirement income fund (LRIF)



A LRIF is only available in Newfoundland and Labrador. A LRIF is similar to a LIF but offers
more flexibility. Members are not required to convert the LRIF into a life annuity.



Spouse



The definition of spouse under a registered pension plan, such as the DC Plan, varies by
province. Your spouse is the person who meets the definition at the time of your retirement (or
death, if before retirement). Detailed definitions are provided below.




New Brunswick




          The person of the opposite sex who:





	 	v	 	Is married to you; or
	 
	 	v	 	Is married to you by a marriage that is voidable and has not been avoided
by a declaration of nullity; or
	 
	 	v	 	Has gone with you, in good faith, through a form of marriage that is void
and who has cohabited with you within the preceding year; or
	 
	 	v	 	Without being married to you, has cohabited with you in a conjugal
relationship continuously for at least three years, and part of this three year period
was within the preceding year, provided that one of you has been substantially
dependent upon the other for support; or
	 
	 	v	 	Without being married to you, has cohabited with you in a relationship of
some permanence within the preceding year, if you jointly are the natural parents of a
child.





 









 





Newfoundland and Labrador




          The person who:





	 	v	 	Is not married to you and:






	 	–	 	if you are not married to someone else, has cohabited continuously with
you in a conjugal relationship for a period of at least one year; or
	 
	 	–	 	if you are married to someone else, has cohabited continuously with you
in a conjugal relationship for a period of at least three years,






	 	v	 	And is cohabiting, or has cohabited with you within the preceding year; or





          If there is no person that qualifies as a spouse under the above definition, the person who:





	 	v	 	Is married to you; or
	 
	 	v	 	Is married to you by a marriage that is voidable, which has not been
voided by a judgment of nullity; or
	 
	 	v	 	Has, in good faith, gone through a form of marriage with you that is void
and is cohabiting or has cohabited with you within the preceding year.





Nova Scotia




          The person who:





	 	v	 	Is not living separate and apart from you and:






	 	–	 	Is married to you;
	 
	 	–	 	Is married to you by a marriage that is voidable and has not been
annulled by a declaration of nullity;
	 
	 	–	 	With whom you have gone through a form of marriage, in good faith, that
is void and who is cohabiting with you or, if you have ceased to cohabit, has
cohabited with you within the immediately preceding 12-month period;
	 
	 	–	 	Is your “registered domestic partner” under the Nova Scotia Vital
Statistics Act; or






	 	v	 	If there is no person to whom the above definitions apply, the person who
has cohabited with you in a conjugal relationship for at least two years, provided that
neither of you is the spouse of another person as defined in the points mentioned
above.





Ontario




          The person who:





	 	v	 	Is married to you and is living with you; or
	 
	 	v	 	Is not married to you and has been living with you,






	 	–	 	In a conjugal relationship continuously for a period of at least three years; or
	 
	 	–	 	In a conjugal relationship of some permanence if you both are the
natural or adoptive parents of a child.





 









 





Quebec





	 	v	 	The person who is married to you and is not legally separated from bed and
board from you or is in a civil union with you; or
	 
	 	v	 	If you are neither married nor in a civil union with anyone, a person of the
opposite sex or the same sex who has been living in a conjugal relationship with you for a
period of at least three years, or for a period of at least one year if:






	 	–	 	At least one child is born, or to be born, of your union;
	 
	 	–	 	You have jointly adopted at least one child; or
	 
	 	–	 	One of you has adopted at least one child of the other.